4.

Employers

Art. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of or injuries to their laborers, workmen, mechanics or other
employees, even though the event may have been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the
course of the employment. The employer is also liable for compensation if the employee contracts any illness or disease caused by such employment or as the
result of the nature of the employment. If the mishap was due to the employee's own notorious negligence, or voluntary act, or drunkenness, the employer shall not
be liable for compensation. When the employee's lack of due care contributed to his death or injury, the compensation shall be equitably reduced.

5. Nuisance

I. Definition

Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or
(5) Hinders or impairs the use of property.

ii. Kinds

Art. 695. Nuisance is either public or private. A public nuisance affects a community or neighborhood or any considerable number of persons, although the extent
of the annoyance, danger or damage upon individuals may be unequal. A private nuisance is one that is not included in the foregoing definition.

ILOILO COLD STORAGE V. MUNICIPAL COUNCIL OF ILOILO

A municipal body has the power to declare and abate nuisances but it has no power to find as fact that a particular thing is a nuisance. The determination of
whether or not a nuisance exists is a judicial function, because to declare something a nuisance is to deprive its use.

Facts: Iloilo Ice and Cold Storage Company, upon authority granted by the Municipal Council of Iloilo, constructed an ice and cold storage plant in Iloilo. After the
plant had been completed and was in operation, nearby residents made complaints to the defendant that the smoke from the plant was very injurious to their
health and comfort. An investigation was conducted and found that the complaints are well-founded.

The Iloilo Ice and Cold Storage Company, through a resolution by the Municipal Council, was given one month to proceed with elevation of smokestacks and if not
done, the current operations will be suspended or closed.

Ice Company commenced an action in the Court of First Instance to enjoin the Municipal council from carrying into effect the said resolution contending that that
the Council intend and threaten to require compliance with said resolution administratively and without the intervention of the court, and by force to compel the
closing and suspension of operations of the Ice Company's machinery and consequently of the entire plant, should they fail to follow the mandates of the
resolution. A preliminary injunction was issued. Ice Company claims that the intervention of the courts is necessary to find property a nuisance.

Issue: Whether a municipal council may declare and abate nuisances.

YES.

Ratio:
Even if the Ice Company business is lawful, it can still be a nuisance insofar as it substantially affects the comfort and enjoyment of others.

A nuisance is anything that worketh hurt, inconvenience, or damages. It has two classes: Nuisances per se, and nuisances per accidens. To the first belong those
which are unquestionably and under all circumstances nuisances. The other are considered nuisances because of particular facts and circumstances surrounding

The municipal council is, under the Municipal Code, specifically empowered to declare and abate nuisances. However it is equally clear that they do not have the
power to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per se; nor can they authorize the extrajudicial condemnation and
destruction of that as a nuisance which in its nature, situation, or use is not such.

Question of nuisance can conclusively be decided by the established courts of law or equity alone. The council may not by a mere resolution or motion, declare
any particular thing a nuisance which has not theretofore been pronounced to be such by law, or so adjudged by judicial determination.

The ice factory of the plaintiff is not a nuisance per se. It is a legitimate industry. If it be in fact a nuisance due to the manner of its operation, that question cannot
be determined by a mere resolution of the board. The petitioner is entitled to a fair and impartial hearing before a judicial tribunal.

If no compelling necessity requires the summary abatement of a nuisance, the municipal authorities under their power to declare and abate nuisances, dont have
the right to compel the abatement of a particular thing or act as a nuisance without reasonable notice to the person alleged to be maintaining or doing the same of
the time and place of hearing before a tribunal authority to decide whether the thing is a nuisance or not.

BENITO TAN CHAT, ET AL vs. THE MUNICIPALITY OF ILOILO

G.R. No. L-39810
August 31, 1934

DOCTRINE: The power of the municipalities, in the exercise of their police power, to regulate and abate public nuisances is indisputable, when the measure taken
that end is sound and reasonable, and redounds to the benefit of the locality. Such power has been expressly delegated by the Legislature. The abatement of
nuisances by municipal corporations is a governmental function.

Petitioners: Benito Tan Chat, et al.

Respondents: The Municipality of Iloilo

FACTS:
On December 14, 1931, the municipal council of Iloilo, Province of Iloilo, passed Ordinance No. 10 amending Ordinance No. 7, which prohibited the storage and
sale of lumber on certain streets in the Municipality, as the lumber trade was considered by the Municipal Council as (a) public nuisance. The ordinance also
provided for a punishment of a sum of money not exceeding 200.00, or imprisonment not exceeding 6 months, or both, for those found in violation of the
ordinance.

Tan Chat et al, merchants in the Municipality with businesses in one of the streets covered by the ordinance (Iznart Street), filed a complaint in the CFI Iloilo to
annul the ordinance, alleging that the ordinance was illegal and was in violation of their rights. Upon posting a bond, the CFI issued a writ of preliminary injunction
in favor of Tan Chat.

It must be noted that lumber merchants on Iznart Street were already present prior to the ordinances enactment in 1931. The merchants businesses were housed
in buildings of strong material with galvanized iron roofing, some of them built on their own land and others on leased land. Sawed lumber was stored and
deposited in these premises. Meanwhile, Tan Chat operated a small sawmill, whose services were availed to by the other businessmen. The loading of sawed
lumber sold was done within their premises, without any trouble caused to the neighbors or passers-by.

Meanwhile, the Municipality proffered its defenses, alleging that the streets named in the Ordinance constitute the most important commercial and residential zone
and the most thickly populated section of the downtown district of the municipality, which was also the capital of Iloilo. Furthermore, one of the streets (Iznart
Street) was considered to be very important because there were numerous and important commercial establishments and beautiful and costly commercial and
residential buildings in the area. Also, Iznart Street was the principal thoroughfare used by the residents of the downtown district. Also, the streets enumerated
were also covered in previous ordinances, declaring them as zones for beautification and urbanization. Furthermore, there were improvements in public safety that
the Municipality wanted to implement in the enumerated streets, particularly strengthening and fire-proofing. Finally, the Municipality stated that it has given the
merchants ample and reasonable time to transfer their lumber stores and sawmills to some other place not prohibited by the ordinance, but they refused and still
refuse to do so without legal excuse or justification.

The CFI, however, ruled in favor of Tan Chat, in holding that the ordinance was null, illegal and unconstitutional. Hence, the appeal by the Municipality.

ISSUES:
WON the ordinance in question was properly enacted by the Municipality in the exercise of its police power including the power to abate public nuisances (such as
lumber mills and storage businesses) and to divide its territory into commercial and residential zones.

HELD: YES. Court upheld the legality and validity of the ordinance and reversed the CFI.

RATIO:

1. The Court noted that such powers were granted to the Municipality by the Revised Administrative Code (RAC), Sections 2238, 2242 and 2243.

Sec. 2238. General power of council to enact ordinances and make regulations. The municipal council shall enact such ordinances and make such regulations,
not repugnant to law, as may be necessary to carry in effect and discharge the powers and duties conferred upon it by law and such as shall seem necessary and
proper to provide for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and the
inhabitants thereof, and for the protection of property therein.

Sec. 2242. Certain legislative powers of mandatory character.It shall be the duty of the municipal council, conformably with law:
xxx xxx xxx
(h) To declare and abate nuisance.

Sec. 2243. Certain legislative powers of discretionary character.The municipality council shall have authority to exercise the following discretionary powers:
xxx xxx xxx
(c) To establish fire limits in populous centers, prescribe the kinds of buildings that may be constructed or repaired within them, and issue permits for the
erection or repair thereof, charging a fee which shall be determined by the municipal council and which shall not be less than two pesos for each building
permit and one peso for each repair permit issued. The fees collected under the provisions of this subsection shall accrue to the municipal school fund.

By virtue of the police power of the State and the express provisions of section 2242(h) of the RAC, there is no question that the municipalities indeed have power
to enact ordinances for the purpose of abating public nuisances.

2. The Court held that the power of the municipalities, in the exercise of their police power, to regulate and abate public nuisances is indisputable, when the
measure taken that end is sound and reasonable, and redounds to the benefit of the locality. Such power has been expressly delegated by the Legislature.

The abatement of nuisances by municipal corporations is a governmental function. The legislature may, and often does, confer such power upon them. The power
may arise by express grant or by necessary implication. It usually is enjoyed as part of the police power, especially that part of the police power dealing with the
protection of the health and of the inhabitants of the municipal corporation. And the exercise of the power is generally considered as a proper municipal function
which is the duty of municipal corporations to exercise. The power to abate nuisances may extend to abate nuisances created by public utilities.
Primarily, it is within the power of the municipal authorities to determine and declare what shall constitute a nuisance. Therefore, municipalities are given a large
amount of discretion in determining what constitutes nuisances.

However, such power must be exercised reasonably and not arbitrarily. The declaration by municipal authorities that a thing is a nuisance is not a final
determination of the question, and it is subject to review by the courts both as to its reasonableness and as to the thing inveighed against being in fact a nuisance.

Things which are not in their nature nuisances but which may become so by reason of their locality, surroundings, or the manner in which they may be conducted,
managed, etc., may, and can only, be declared nuisances by municipal corporations when they are such in fact. The power does not extend to include the power to
suppress acts merely vicious or immoral. But the power of the municipal corporation over nuisances may tend to authorize it to prevent a condition likely to
become detrimental to the public health as much as it is to abate such conditions after the evil consequences appear. In so far as the legislature may declare
nuisances, a municipal corporation may be empowered to declare by ordinance or by-law things or acts nuisances, although they may not be such in the absence
of such ordinance or by-law.
Nevertheless, the Court agreed with the notion of the Municipality that the lumber businesses were indeed a nuisance, citing several cases such as State vs.
Rosenstein from American jurisprudence, stating that lumber works and businesses are indeed a source for danger and destruction of surrounding property, due to
such businesses becoming a fire hazard as well as a rendezvous for thieves.

It must be noted, that the Court found Tan Chats argument that the provisions of ordinance giving the plaintiffs a fixed a period to move their sawmill and lumber
stores to some other adequate place to be unconstitutional, on the ground that said measure is confiscatory and does not provide adequate compensation, as
untenable. The reason is that, in the case of Iloilo, the municipality does not take over the ownership of said business within the limits established in the ordinance.
In enacting the ordinance in question the municipality has done nothing but to safeguard the health, safety, and welfare of its inhabitants, and it is perfectly fair that
Tan Chat should abide by the provisions thereof, in accordance with the maxim, salus populi suprema lex.

RAMCAR, INC., petitioner, vs. EUSEBIO S. MILLAR, ET AL., respondents.

G.R. No. L-17760 | October 31, 1962 | REYES, J.B.L., J.:

Facts:

Ramcar operates and maintains an auto repair and body building shop at No. 1241 General Luna Street, Ermita, Manila (Used to be in Hidalgo Street however this
old location was within the 100-m radius from Jose Rizal College in violation of city ordinances.)

The nature of the corporation's activities, actually engaged in, consists in repairing and building bodies of motor vehicles, and involves the use of tools and
machinery that give rise to much noise and annoyance during all hours of the day up to nighttime; and its employees oftentimes work on Sundays and holidays.
Private respondents reside near and around the shop. At the time of the transfer, respondent Eusebio S. Millar and his family were already residing on his own
land adjacent to that of Ramcar, Inc. He and his co-respondents repeatedly petitioned the city authorities for the closure of the shop to no avail, because city
authorities were "at loggerheads as to whether the immediate vicinity where the business of Ramcar, Inc. is located is a residential or a commercial zone". CA:
Place is commercial since the business would have been permitted in a residential zone.

Millar et al brought an action before the CFI of Manila to abate the said establishment as a nuisance.

TC: Dismissed complaint. CA: Reversed. Ruled that Ramcars establishment is a public nuisance and ordered the removal of the establishment and all the
buildings and structures within 30 days from finality of judgement + P10,000 special damages and P2,000 as attys fees.

Issue:
WON Ramcars business constitutes a nuisance. YES Public nuisance (per its location). Ramcar enjoined from operating from its current location. No need to
demolish existing buildings in all other respects
Ratio:
Ramcar: Claims to have been granted a license and permit to operage a garage which entitles it to conduct body building business and that Sec 5 of Ord. #2830
(am. By Ord # 2906 City of Manila) allows it to conduct its business at the present site.

SC: A body building shop is not within the purview of "garage", which designates a shop for storing, repairing and servicing motor vehicles, being merely a modern
substitute for the ancient livery stable It is clear that the business of Ramcar, Inc. is not a mere garage or automobile repair and painting shop, much less, a
gasoline service station, within the contemplation of the City Ordinances. Besides the usual services of vehicle storage, of supplying gas, and of making repairs,
the shop also assembles and rebuilds car and truck bodies which require more than ordinary labor and skill and involves the use of tools and machinery with the
concomitant noise created by the use of those tools and machines. To repair presupposes decay, dilapidation which is different from building or remodelling of
bodies or structures.

Ramcar: Its business is not a nuisance in its present location based on documentary and testimonial evidence of some neighbors of non-molestation. Only the
City, under its charter can determine whether a business, occupation, act, or building is a nuisance or not.

SC: Whether a particular thing is or is not a nuisance is a question of fact. While Section 18 of Republic Act 409 grants legislative powers to the municipal board to
declare, prevent, and provide for the abatement of nuisances, inaction by the board does not preclude the ultimate power of courts to determine the existence of a
nuisance in a particular case tried before them.

Ramcar: The award of damages was not valid since business was done with a license.

SC:The zoning ordinance prohibited the body building operations of petitioner. Civil code provides Art 697 The abatement of a nuisance does not preclude the right
of any person injured to recover damages for its past existence.; and on damages ART. 2196. The rules under this Title are without prejudice to special provisions
on damages formulated elsewhere in this Code . . .
However, the business of the petitioner is not a nuisance per se. It is only on account of its location that it is a public nuisance. To abate it, it is not necessary, as
the appealed decision decrees, to remove all building an structures built in the place where it is presently located as these, or parts thereof, may be utilized for
pursuit that are not forbidden by law or ordinance.

Pedro Velasco v Manila Electric Co, et al.

GR No. L-18390, August 6, 1971

Facts:
1948: Velasco bought 3 lots from Peoples Homesite and Housing Corp at the corner of South D and South 6 Streets, Diliman, QC, zoned out as a first
residence district. He sold 2 lots to Meralco and retained the 3rd lot farthest from the street corner.
September 1953: Meralco started construction of a substation and finished it in November, without prior building permit or authority from Public Service
Commission. A sound unceasingly emanates from the substation
Velasco filed an action, contending the sound was an actionable nuisance under Art. 694, seeking compensator, moral, and other damages under Art.
2202 for impairing his health, disturbing his concentration and sleep, lowering value of his property.
CFI: dismissed complaint, finding the sound was unavoidable, not nuisance.

Issue: WoN sound from the substation constituted an actionable nuisance

Held: Yes.

The general rule is that everyone is bound to bear the habitual or customary inconveniences that result from the proximity of others, and so long as this level is not
surpassed, he may not complain against them. But if the prejudice exceeds the inconveniences that such proximity habitually brings, the neighbor who causes
such disturbance is held responsible for the resulting damage, being guilty of causing nuisance.
While no previous adjudications on the specific issue have been made in the Philippines, our law of nuisances is of American origin, and a review of authorities
clearly indicates the rule to be that the causing or maintenance of disturbing noise or sound may constitute an actionable nuisance

Inquiry must be directed at the character and intensity of the noise generated by the particular substation.
Velasco is exaggerating, characterizing the sound as of a reactivated about-to-explode volcano, perhaps like the nerve wracking noise of the torture
chamber in Germany's Dachau or Buchenwald HAHA BENTA.
Other witnesses are vague and imprecise, fail to give a definite idea of the intensity of the sound (e.g. only noticeable when I concentrate; like a high pitch
noise; like an approaching airplane; we can hear it very well; etc.)
Meralco sound samplings: 43-47 decibels
[Impartial] Dr. Jesus Almonte under instructions of Director of Health: 46-80 decibels.

The conclusion must be that, contrary to the finding of the trial court, the noise continuously emitted, day and night, constitutes an actionable nuisance for which
the appellant is entitled to relief, by requiring Meralco to adopt the necessary measures to deaden or reduce the sound at the plaintiff's house, by replacing the
interlink wire fence with a partition made of sound absorbent material, since the relocation of the substation is manifestly impracticable and would be prejudicial to
the customers of Meralco who are being serviced from the substation.

The fact that the Meralco had received no complaint although it had been operating hereabouts for the past 50 years with substations similar to the one in
controversy is not a valid argument. The absence of suit neither lessens the company's liability under the law nor weakens the right of others against it to demand
their just due.

Even if substation is needed to serve Meralcos customers, there is no reason why it should be operated to the detriment and discomfort of others.

Cassis (Property): I like this case because its one of the few instances the Court actually does something / relies on quantitative measurements. Also Velasco was
there first. Meralco built on residential area.

FOR THE FOREGOING REASONS, the appealed decision is hereby reversed in part and affirmed in part. Meralco is hereby ordered to either transfer its
substation at South D and South 6 Streets, Diliman, Quezon City, or take appropriate measures to reduce its noise at the property line between the defendant
company's compound and that of the plaintiff-appellant to an average of forty (40) to fifty (50) decibels within 90 days from finality of this decision; and to pay the
said plaintiff-appellant P20,000.00 in damages and P5,000.00 for attorney's fees. In all other respects, the appealed decision is affirmed. No costs.

G.R. No. L-3422 June 13, 1952

HIDALGO ENTERPRISES, INC., petitioner, vs. GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT OF APPEALS, respondents.

FACTS: Petitioner Hidalgo Enterprises, Inc. is the owner of an ice-plant factory in San Pablo, Laguna, in whose premises were installed two tanks full of water,
nine feet deep, for cooling purposes of its engine. While the factory compound is surrounded with fence, the tanks themselves are not provided with any kind of
fence or top covers. The edges of the tanks are barely a foot high from the surface of the ground. Through the wide gate entrance, which is continually open, motor
vehicles hauling ice and persons buying said commodity passed, and anyone could easily enter the said factory. There was no guard assigned on the gate. At
about noon of April 16, 1948, plaintiff's son, Mario, a boy barely 8 years old, while playing with and in company of other boys entered the factory premises through
the gate, to take a bath in one of said tanks; and while thus bathing, Mario sank to the bottom of the tank, only to be fished out later, already a cadaver, having died
of "asphyxia secondary to drowning."

CFI and CA held that petitioner maintained an attractive nuisance (the tanks), and neglected to adopt the necessary precautions to avoid accidents to persons
entering its premises. The doctrine of attractive nuisance may is when: One who maintains on his premises dangerous instrumentalities or appliances of a
character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of
tender years who is injured thereby, even if the child is technically a trespasser in the premises.

ISSUE: Whether or not the water tanks attractive nuisance

HELD: No. The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as well as natural, in the absence of some unusual condition or
artificial feature other than the mere water and its location.

Nature has created streams, lakes and pools which attract children. Lurking in their waters is always the danger of drowning. Against this danger children are early
instructed so that they are sufficiently presumed to know the danger; and if the owner of private property creates an artificial pool on his own property, merely
duplicating the work of nature without adding any new danger, he is not liable because of having created an "attractive nuisance." (citing Anderson vs. Reith-Riley)

Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the petitioner had taken reasonable precautions becomes
immaterial. The other issue submitted by petitioner that the parents of the boy were guilty of contributory negligence precluding recovery, because they left for
Manila on that unlucky day leaving their son under the care of no responsible individual needs no further discussion.

The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved from liability.

Iii. Abatement

Art. 696. Every successive owner or possessor of property who fails or refuses to abate a nuisance in that property started by a former owner or possessor is
liable therefor in the same manner as the one who created it.
Art. 697. The abatement of a nuisance does not preclude the right of any person injured to recover damages for its past existence.
Art. 698. Lapse of time cannot legalize any nuisance, whether public or private.
Art. 699. The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local ordinance: or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
Art. 700. The district health officer shall take care that one or all of the remedies against a public nuisance are availed of.
Art. 701. If a civil action is brought by reason of the maintenance of a public nuisance, such action shall be commenced by the city or municipal mayor.
Art. 702. The district health officer shall determine whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance.
Art. 703. A private person may file an action on account of a public nuisance, if it is specially injurious to himself.
Art. 704. Any private person may abate a public nuisance which is specially injurious to him by removing, or if necessary, by destroying the thing which constitutes
the same, without committing a breach of the peace, or doing unnecessary injury. But it is necessary:
(1) That demand be first made upon the owner or possessor of the property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district health officer and executed with the assistance of the local police; and
(4) That the value of the destruction does not exceed three thousand pesos.
Art. 705. The remedies against a private nuisance are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.
Art. 706. Any person injured by a private nuisance may abate it by removing, or if necessary, by destroying the thing which constitutes the nuisance, without
committing a breach of the peace or doing unnecessary injury. However, it is indispensable that the procedure for extrajudicial abatement of a public nuisance by a
private person be followed.
Art. 707. A private person or a public official extrajudicially abating a nuisance shall be liable for damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not a real nuisance.
 JOSE "PEPITO" TIMONER, petitioner, vs.THE PEOPLE OF THE PHILIPPINES AND THE HONORABLE COURT OF APPEALS, IV DIVISION, respondents.
1983

FACTS: Petitioner Timoner was found guilty of crime of grave coercion

Background: At about 10:00 in the evening of December 13, 1971, petitioner, then Mayor of Daet, Camarines Norte, accompanied by two uniformed policemen,
arrived in front of the stalls along Maharlika highway
Upon order, laborers proceeded to nail together rough lumber slabs to fence off the stalls which protruded into the sidewalk of the Maharlika highway
Among the structures thus barricaded were the barbershop of Pascual Dayaon, the complaining witness and the store belonging to one Lourdes Pia-Rebustillos.
These establishments had been recommended for closure by the Municipal Health Officer, Dra. Alegre, for non-compliance with certain health and sanitation
requirements.

Thereafter, petitioner filed a complaint in the Court of First Instance of Camarines Norte against Lourdes Pia-Rebustillos and others for judicial abatement of their
stalls.

Timoner alleged that this stall constituted public nuisances as well as nuisances per se. Dayaon was never able to reopen his barbershop business.

On appeal, the Court of Appeals affirmed in full the judgment of the trial court. Hence, the present recourse.

Timoners argument was that the sealing off of complainant Dayaon's barbershop was done in abatement of a public nuisance and, therefore, under lawful
authority.

ISSUE: W/N the conviction of the court of appeals that the petitioner committed grave coercion is correct (based on WON complainants were public nuisance)
NO (Yes they were a nuisance)

ART. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or
(5) Hinders or impairs the use of property.
ART. 695. Nuisance is either public or private. A public nuisance affects a community or neighborhood or any considerable number of persons, although the
extent of the annoyance, danger or damage upon individuals may be unequal A private nuisance is one that is not included in the foregoing definition.

RATIO: The barbershop occupied a portion of the sidewalk of the poblacion's main thoroughfare and had been recommended for closure by the Municipal Health
Officer. In fact, the Court of First Instance of Camarines Norte, in its decision in Civil Case No. 2257, declared said barbershop as a nuisance per-se.

Under the facts of the case, as well as the law in point, there is no semblance of any legality or right that exists in favor of the defendants to build a stall and
conduct their business in a sidewalk, especially in a highway where it does not only constitute a menace to the health of the general public passing through the
street and also of the unsanitary condition that is bred therein as well as the unsightly and ugly structures in the said place.
But even without this judicial pronouncement, petitioner could not have been faulted for having fenced off said barbershop. Paragraph 3, Article 699 of the Civil
Code authorizes the abatement of a public nuisance without judicial proceedings.

ART. 699. The remedies against a public nuisance are:

[l] A prosecution under the Penal Code or any local ordinance; or
[2] A civil action; or
[3] Abatement, without judicial proceedings.
In the case at bar, petitioner, as mayor of the town, merely implemented the aforesaid recommendation of the Municipal Health Officer. Having then acted in good
faith in the performance of his duty, petitioner incurred no criminal liability.

On Crim issue: Third element of Grave coercion was absent. (that the person who restrained the will and liberty of another had no right to do so, or, in other words,
that the restraint was not made under authority of law or in the exercise of a lawful right)

Decision: Acquitted

iv. Easement against Nuisance

Art. 682. Every building or piece of land is subject to the easement which prohibits the proprietor or possessor from committing nuisance through noise, jarring,
offensive odor, smoke, heat, dust, water, glare and other causes.

Art. 683. Subject to zoning, health, police and other laws and regulations, factories and shops may be maintained provided the least possible annoyance is caused
to the neighborhood.

PART II DAMAGES

A. Concept

FRANCISCO L. LAZATIN, plaintiff-appellant, vs. ANGEL C. TWAO and GREGORIO T. CASTRO, defendants-appellees.; PAREDES, J.:

FACTS:
Angel C. Twao and Gregorio T. Castro filed for the recovery of P35,000 plus interest against F. L. Lazatin, et al. for their purchase from the U.S.
government of 225 auto-trucks.
CFI: dismissed the complaint as well as intervention
CA: reversed - Twao and Castro are co-owners in the business of buying and selling surplus auto-trucks, and ordered the Lazatin to pay P10K so it was
levied on his properties and was subsequently sold at the public auction where Twao and Castro were the purchasers
Before the expiration of the redemption period, Lazatin deposited the redemption price
Lazatin filed to recover from Twao and Castro the balance of P19,676.09 representing the proceeds of auto-trucks sold directly to the purchasers
by Twao and Castro. Pets. also secured a writ of attachment alleging that there was no security whatsoever for the payment claimed in the complaint and
that they are removing or are about to remove or dispose of their property with intent to defraud their creditors and that the sheriff refused to deliver the
amount deposited
Lower court granted the Urgent Motion to Dissolve the Writ of Preliminary Attachment and dissolved the writ
May 9, 1953: Lazatin died.
March 10, 1954: Gil Gotiangco was appointed and qualified as administrator of plaintiff's estate
RTC: Estate of Lazatin to pay:
(1) P3,000.00 for the fees of Attorney Manuel O. Chan;
(2) P,500.00 for moral damages to each of the defendants;
(3) Six percent (6%) interest on the amount of P13,849.88 from August 6, 1952 until said amount is actually delivered to and receipted by the defendants;
and
(4) To pay the costs.

Judgment is also rendered against the Central Surety and Insurance Co., which is solidarily liable with the Estate of the deceased plaintiff Francisco L. Lazatin on
its bond for the sum of P20,000.00, filed by said Company for the issuance on the writ of attachment for the amounts mentioned in Nos. (2) and (3) of the
dispositive part of this decision.
CA: affirmed

ISSUE: W/N Lazatin is liable for the damages

HELD: YES.
Affirmed with modification: elimination of moral damages

The law on damages is found on Title XVII of the Civil Code (Arts. 2195 to 2235). The rules governing damages laid down in other laws, and the principles of the
general law on damages are adopted in so far as they are not in consistent with the Code (Arts. 2196 and 2198). Article 2197 mentions the kind of damages
recoverable, among which are (1) actual or compensatory and (2) moral Article 2219 provides that moral damages may be recovered in the following and
analogous cases . . . (3) malicious prosecution. There is an abundance of case holding that the action to recover damages from the attachment plaintiff, for the
wrongful issuance and levy of an attachment (malicious attachment) is identical or is analogous to the ordinary action for malicious prosecution

ON MORAL DAMAGES
Based on jurisprudence: It may logically be inferred that in order that moral damages may be recovered in connection with the writ of attachment under
consideration, malice is an essential ingredient thereof-> Here, the court did not make any finding that the said petition was maliciously sued out therefore not
entitled to moral damages

Note: Defendants invoked Sec. 4 of Rule 59 of the ROC, mainly pointing out that all damages must be paid
SEC. 4. Bond required from plaintiff. The party applying for the order must give a bond executed to the defendant in amount to be fixed by the judge, not
exceeding the plaintiff claim that the plaintiff will pay all the costs which it may be adjudged to the defendant and all damages which he may sustain by reason of
the attachment, if the court shall finally adjudge that the plaintiff was not entitled thereto.

The SC disagreed. It explained that: Sec. 4 of Rule 59, does not prescribe the remedies available to the attachment defendant in case of a wrongful attachment,
but merely provides an action for recovery upon the bond, based on the undertaking therein made and not upon the ability arising from a tortious act, like the
malicious suing of an attachment. Under the first, where malice is not essential, the attachment defendant, is entitled to recover only the actual damages sustained
by him by reason of the attachment. Under the second, where the attachment is maliciously sued out, the damages recoverable may include a compensation for
every injury to his credit, business or feelings. It also reiterated that that the ROC is older than the CC so its rules should be encompassed in the CC. -> "all
damages", refers to the damages resulting from the undertaking itself, the recovery of which is subject to "the principles of the general law on damages"

ON OTHER FEES:
In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be covered, except:

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff.
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered." (Art. 2208, Civil Code).

This case is based on (4). Here, there was no showing in the decision appealed from that plaintiffs' action is "clearly unfounded". Yes, yes Plaintiffs-appellants'
complaint was not dismissed because the facts alleged therein were found untrue, but on purely technical grounds; the special defenses of prescription of the
action and res adjudicata. While it may appear also that the move was a scheme to prevent the defendants-appellees from reaping the benefits of the final
judgment rendered in their favor in said case, still one cannot nullify, without cause, the good and honest motive, which should be presumed, when a litigant goes
to court for the determination of his alleged right.

Considering the fact that defendants-appellees were drawn into this litigation by plaintiff-appellant and were compelled to hire an attorney to protect and defend
them, and taking into account the work done by said attorney, as reflected in the record, throughout the proceedings, SC deemed it just and equitable to award at
attorney's fees for defendants-appellees

It appears that plaintiffs-appellants have abandoned their appeal with respect to the payment of 6% interest in the amount of P13,849.88.

HEIRS OF SIMEON BORLADO, namely, ADELAIDA BORLADO, LORETO BORLADO, REYNALDO BORLADO, RICARDO BORLADO, FRANCISCO
BORLADO and ALADINO DORADO, petitioners,
vs. COURT OF APPEALS, and SALVACION VDA. DE BULAN, BIENVENIDO BULAN, JR., NORMA B. CLARITO and THE PROVINCIAL SHERIFF OF
CAPIZ, respondents.
GR 114118 ; 28 Aug 2001 ; J. Pardo

Facts: P Borlados and R Bulans are fighting over a parcel of land in Capiz. P Borlados claim to have a right over the property by virtue of them being the heirs of
the original owner of said lot, Serapio Borlado.

R Bulans, on the other hand, trace their title to a Deed of Sale between Serapio Borlado and Bacero dated 15 April 1942. When Bacero died, his widow sold the
same lot to the R Bulans in 1954. Bulans were in actual peaceful possession of the lot up to 1972.

It was in 1972 that the R Bulans possession was interrupted, when the Ps entered said lot and occupied it. Hence, the R Bulans filed an ejectment suit against the
Ps at the MTC. The MTC ruled in favor of the Bulans. Instead of appealing, the P Borlados filed another case for recovery of possession of said lot before the RTC.

RTC rendered a decision in favor of R Bulans, declaring them as the owners of said lot. As a form of damages, the RTC judge declared the P Borlados solidarily
liable to defendants the quantity of one hundred (100) cavans of palay every year from 1972 (when P Borlados unlawfully withheld the property from the R Bulans)
until plaintiffs vacate the premises of the land in question

Issue: WON the award of damages in the form of delivery of palay was proper

Held: No

Ratio: As a matter of law, the RTC and CA erred in holding P Borlados liable to pay R Bulans one hundred (100) cavans of palay every year from 1972 until they
vacate the premises of the land in question. The one hundred cavans of palay was awarded as a form of damages. We cannot sustain such award. Palay is not
legal tender currency in the Philippines.

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROMEO DIANOS, accused-appellant.

FACTS: In this case, Romeo Dianos was charged with five separate informations for MURDER, ATTEMPTED MURDER and FRUSTRATED MURDER. At his
arraignment, accused Dianos entered a plea of not guilty to all the charges. His co-accused remained at large.
STORY: Nancy Ortiz Dasudas (Nancy) saw the accused throw a hand grenade near the house of her parents. Josie, who was standing near the site of the
explosion was hit. Later that day, the accused, was seen traversing the Cypress Point Road. Following closely behind was his passenger jeepney with three
unidentified men on board. Teresita, together with her husband, Virgilio Ortiz (Virgilio), her daughter, Corazon Ortiz Ihanda (Corazon), her brother, Ricardo Pablo
(Ricardo), and her son, Zaldy Ortiz (Zaldy), were on the terrace of their new house waiting for the other Ortiz children to arrive in time for the New Year's eve
celebration. Ricardo met the accused near the waiting shed. Without any warning, the latter suddenly struck Ricardo on the face with the butt of an armalite
causing him to fall to the ground. The accused then fired at Ricardo, hitting him on the chest and left arm. The accused then directed his armalite at Virgilio. The
latter was hit on the buttocks. The accused thereupon fired indiscriminately at the house of Zaldy. Zaldy received a bullet injury in his right thigh, while his
daughter, Lizette Ortiz (Lizette), was hit in her abdomen and wrist. The accused moved towards the direction of the new house and fired at the terrace. Teresita
took a bullet wound on the neck from the volley of shots, while Corazon escaped unscathed. The accused, right after the shooting, boarded his jeep and sped
towards Baguio City.
In the aftermath, two were found dead, namely, Teresita and Ricardo, while three others, Virgilio, Zaldy and Lizette, sustained injuries. The latter were all rushed to
the Baguio General Hospital where they were treated for gunshot wounds.

Virgilio testified that he had spent P1,000 for medications for his thigh injury. A riprap contractor, he was not able to work for seven months depriving him of his
monthly income of P2,000 for the period or the total amount of P14,000. He asserted that he had incurred P110,000.00 for funeral services for his wife
Teresita. Nenita Pablo (Nenita) said in her testimony that she had spent P15,000.00 for the autopsy and coffin of Ricardo, P3,000.00, by way of doctor's fee
and P8,000.00 for the wake. Zaldy testified that he had spent P500 for the treatment of his injury.

RTC: Accused guilty beyond reasonable doubt of the crimes with which he was charged and to indemnify the heirs of deceased Ricardo Pablo the sum
of P50,000.00 for his death and the sum of P23,000.00 as Actual Damages for expenses incurred for the wake, funeral and burial services, both indemnifications
being without subsidiary imprisonment in case of insolvency and to pay the costs.

ISSUE: WON DAMAGES WAS AWARDED CORRECTLY BY THE RTC- Modified

HELD: Anent the actual damages, the uncorroborated testimonies of private complainants cannot suffice. Such damages to be recoverable must not only be
capable of proof but must actually be proved with reasonable degree of certainty.

In Fuentes, Jr. vs. Court of Appeals: In crimes and quasi-delicts, the defendant is liable for all damages which are the natural and probable consequences of the
act or omission complained of. To seek recovery for actual damages it is essential that the injured party proves the actual amount of loss with reasonable degree
of certainty premised upon competent proof and on the best evidence available. Courts cannot simply rely on speculation, conjecture or guesswork in determining
the fact and amount of damages.
There is, however, no doubt that injury was sustained by private complainants due to appellant's actions. In the absence of competent proof on the specific
amounts of actual damages suffered, private complainants are entitled to nominal damages. The Court deems the amounts of P15,000.00 in Criminal Case Nos.
8524-R and 8528-R, P10,000.00 in Criminal Case No. 8527-R, and P5,000.00 in Criminal Case Nos. 8525-R and 8526-R to be reasonable given the
circumstances.

Finally, in accordance with prevailing jurisprudence relative to Article 2206 of the Civil Code, the award of P50,000.00 indemnity for each of the death of Teresita
Ortiz and Ricardo Pablo must be affirmed. Moral damages, in addition to the awards made by the trial court in favor of the injured victims, are also recoverable
under paragraph (3) of Article 2206, in relation to Article 2217 and paragraph (1) of Article 2219, of the Civil Code, which the Court hereby fixes at P30,000.00 for
each of the two deceased victims payable to their respective heirs.

On this score, the Court finds it opportune to clarify certain notions dealing on the recovery of these various damages.

There is a significant distinction, in the context of Book IV, Title XVIII, of the Civil Code on "Damages," between the terms "damages" and "damage." Damages
refer to 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 of either a breach of a contractual obligation or a tortuous or illegal act, while damage pertains to the actionable loss, hurt or harm which results from
the unlawful act, omission or negligence of another.[24] In fine, damages are the amounts recoverable or that which can be awarded for the damage done or
sustained.

An award of actual or compensatory damages requires actual proof of pecuniary loss. An exception from the rule, pursuant to Article 2206 of the Civil Code, are
"damages for death caused by a crime or quasi-delict" which can be awarded forthwith to the heirs of the victim by proof alone of such fact of death. No proof of
pecuniary loss is likewise necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated,[25] and it is quite enough that
proof of damage or injury is adduced. Being incapable of exact pecuniary estimation, the assessment of such damages, except for liquidated damages which the
parties themselves fix, is left to the sound discretion of the court.

Akin to, but not exactly in the same category as actual or compensatory damages, is the civil indemnity ex delicto particularly so referred to in paragraph 3 of
Article 104, in relation to Article 100, of the Revised Penal Code as "indemnification for consequential damages."[26] These two species of damages differ basically
in that civil indemnity ex delicto can be awarded without need of further proof than the fact of commission of the felony itself while actual or compensatory
damages to be recoverable must additionally be established with reasonable degree of certainty (except, as aforesaid, in the case of the indemnity for death under
Article 2206[27] of the Civil Code). In fine, the first species merely requires proof of damage or injury (similar to that needed in an award of moral damages) to be
recoverable; the second kind requires, in addition, proof of damages or pecuniary loss in order to warrant recovery.

WHEREFORE, the assailed decision is AFFIRMED with modifications in that the actual damages awarded to Virgilio Ortiz, Nenita Pablo and Zaldy Ortiz are
deleted and in lieu thereof nominal damages in the following amounts are hereby awarded: P15,000.00 in Criminal Case No. 8524-R and No. 8528-R; P10,000.00
in Criminal Case No. 8527-R; and P5,000.00 in Criminal Case No. 8525-R and No. 8526-R. Moral damages in the amount of P30,000.00 are also hereby awarded
to the heirs of each of the two deceased victims.

B. 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.

1. Requisites
I. Alleged and proved with certainty

SCOTT CONSULTANTS & RESOURCE DEVELOPMENT CORP VS CA (1995)

FACTS:
Plaintiff is a corporation organized under Philippine laws. It entered into an Option Agreement for a 12-month period with Lourdes Yaneza, a representative of
Kadakilaan Estate, owner of a mining claim which was registered with the Office of the Mining Recorder of the DENR to develop, operate, mine and market the
products and also to exploit properties under government laws and regulations and under the terms and conditions of the Option Agreement.

Plaintiff and Juana Santos, a duly authorized representative of San Mateo Mines Exploration (SMMEI), an entity that has the possession and beneficial use of the
mining claim, entered into an agreement granting the plaintiff exclusive and irrevocable right to do all and any of the acts mentioned in the Agreement. The said
agreement was registered with the Mines and Geosciences Sector, DENR.

Defendant used to hold an operating agreement with the SMMEI, a holder of an Industrial Permit No. 40 and Commercial Permit No. 968 for a 5-year period.

After some time, SMMEI notified the defendant of the termination of their operating agreement for the reasons states in the letter. But defendants prevented
plaintiff from gaining access, occupying, exploring and developing the existing mining claims and despite a cease and desist order and a letter from Bureau of
Mines, defendants prevented plaintiff access to its legitimate area of activity.

Defendants denied the allegations and averred that the Puray Plant was constructed on the land of Eligio Bautista, who had a lease contract with Philrock. The site
where the defendants performs extraction process of retrum materials from the aggregate products is located 500m from the nearest national road the land to be
traversed from the national road to the plant site and from the latter to the extraction site, are privately owned. The acquisition of easement rights from the owners
of the land in favor of the defendant, the latter constructed access routes which is exclusive and before any 3rd party make use of these routs, they must first
secure written permission from the defendants.

Court granted the Motion for Leave to File 3rd Party Complaint and the Motion for Intervention and admitted the 3rd Party Complaint filed by the defendant
Philrock against the SMMEI and the Complaint in Intervention filed by the land owners. Philrock averred that the latter and the 3rd party defendant, SMMEI entered
into an agreement where Philrock shall extract gravel and sand materials for 5 years and that SMMEI sent a letter unilaterally terminating the agreement. SMMEI
then entered into a substantially the same agreement with the plaintiff for a higher consideration and that Philrock suffered damages.
Intervenors alleged that they have a legal interest in the matter since the mining claims being asserted by the plaintiff are located in their private property and that
the plaintiff had been using the same without the permission of the intervenors as owners. However, plaintiff alleged that it obtained a written permission from the
land owners on whose property exploration is currently conducted.

TC ruled that since plaintiff is the lessee of the 2 registered mining locators, Kadakilaan Estate and the SMMEI by virtue of the 2 contracts entered into by the
plaintiff, it is important to look at the contracts to determine the rights the plaintiff may have acquired. It ruled that the special law being cited by the Mines and Geo-
Sciences Bureau is PD 1281, creating the Bureau of Mines. Said decree grants the Bureau of Mines the ORIGINAL AND EXCLUSIVE JURIS to hear and decide
cases involving a mining property subject of different agreements. Hence, all parties are bound by the directive of the said Bureau. The remedy of plaintiff is to
seek a reconsideration of the directive before the Bureau. If denied, plaintiff may still enforce the warranty stipulated in its agreement against SMMEI. A party
cannot unilaterally terminate a contract without justifiable case. SMMEI's basis for unilaterally terminating the contract is the one-sidedness and partiality of said
agreement BUT SUCH IS NT A JUSTIFIABLE CAUSE!! A party's unilateral termination without legal justification makes it liable for damages suffered as per NCC
1170!!!

As regards the other contract (Kadakilaan), since the contract stipulated that such right shall be for a period of 12 months counted from the date of this
agreement, it sets a pre-condition on plaintiff- the delivery of a WRITTEN NOTICE to exercise the option within the 12 mo period before it may be given the
exclusive right to develop and mine the minerals found. And in this case, the pre-condition has never been met by the plaintiff. Option period expired already
without plaintiff exercising its option.

Since the agreement is clear that it did not vest on plaintiff the right to make use of these access routes, as these are not owned not built by Kadakilaan nor by
SMMEI, the remedy afforded to the plaintiff is to file the Eminent Domain to compel defendants to allow it to make use of the access routes and after payment of
just compensation. Or to just build their own after entering into arrangements with the landowners.

TC ruled that defendant's claim for actual damages must be granted! No doubt that the defendant sustained pecuniary loss due to the acts of the plaintiff, including
the filing of this complaint. And because of the filing of this complaint, it was shown that Philrock was ridiculed by the public. So TC granted actual, moral, and
exemplary damages. (But as SC pointed out, they just said this without any legal ground or basis, wala sinabi lang nila. Inaward lang nila)

CA affirmed the decision of the TC as to the actual damages but not the award of moral damages which it deleted on the ground that the testimonies of the
witnesses did not prove that private respondent's good reputation was besmirched. (CA naman used testimonies but SC said di naman enough)

ISSUE:
1) WON Philrock is not liable for damages because it did not illegally prevent petitioner from using the access roads YES
2) WON Petitioner is liable for damages NO

HELD:
1) Petitioner was unable to prove its right to use private respondent's access routes.
2) Just as in the case of moral damages, SC ruled that there was no credible poof of actual damages. The TC made no specific finding on the extent thereof.
They just said it in the disposition. CA used testimonies of Ayson which cites Prespondent's non-full operation bec Presp was unable to extract
aggregates from its own area due to the fence constructed by petitioner. Si San Juan naman said that attention, diverted to the entering of Scott
Consulatants to our area and lack of sleep and anxiety bec of public ridicule. How the award of P800k was arrived at was NEVER SHOWN. It remains a
speculation. CC 2199 provides that one is entitled to adequate compensation ONLY FOR SUCH PECUNIARY LOSS SUFFERED BY HIM AS IS DULY
PROVED.

Both decisions do not justify the award of P50k exemplary damages. CC 2229, exemplary or corrective damages are imposed by way of example of correction for
the public good, in addition to moral, temperate, liquidated or compensatory damages. CC 2234 provides that:

Art. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory
damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed
upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless, before the court may consider the question of
granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it
not for the stipulation for liquidated damages.

SC ruled that there is no legal basis for the award of exemplary damages since the Presp was not entitled to moral, temperate, or compensatory damages and
there was no agreement on stipulated damages.

No atty's fee (P50k) too. Since CC 2208 says that in the absence of stipulation, there can be no recovery of atty's fees and expenses of litigation other than judicial
costs except in the instances enumerated. The closest instance is Art 2208 (11) which provides for such recover where the court deems it just and equitable. But in
the body of the TC, theres no statement that it would be just and equitable eh.

The award of atty's fees is the exception rather than the rule and counsel's fees are not to be awarded every time a party wins a suit. Court may award atty's fees
under CC2208 but needs factual, legal and equitable justification; its basis cannot be left to speculation or conjecture. If granted, Court must explicitly state in the
body of the decision and not only in the dispositive portion, the legal reason for the award of atty's fees.
For lack of factual and legal bases, no atty's fees!

WHEREFORE, the instant petition is partly GRANTED and the awards of actual damages, exemplary damages, and attorney's fees in the challenged decision are
DELETED. In all other respects, the challenged decision is AFFIRMED.

Basilan Lumber Co vs Cagayan Timber Expert Co

FACTS
The plaintiff Basilan Lumber Company entered into a contract with the defendant Cagayan Timber Export Company, whereby the latter agreed to deliver to the
former 1,200,000 board feet of exportable logs not later than May 31, 1951. This contract is dated April 25, 1951. Subsequently, in an agreement dated July 3,
1951, the logs to be delivered were reduced to 500,000 board feet and the delivery thereof was to be made not later than July 15, 1951. But in another agreement
of August 22, 1951, the contract was again amended, increasing the amount to be delivered to 740,000 board feet of logs to be delivered on or about September
1,1951. In this contract, it was further agreed that a minimum of 50,000 board feet per gang per hatch per weather working day would be loaded.

The plaintiff sold the logs to a Japanese buyer, who had entered into a contract with the plaintiff through the East Asiatic Company, which acted as intermediary.
The logs were to be loaded on the "Kanatsu Maru" which was chartered by the Japanese buyer and which arrived in the Philippines on September 9, 1951, at the
place agreed upon for loading. It stayed in port for a total of 8 days, but was able to load only 483,672 board feet supplied by defendant.

There were four hatches in the vessel, hence the loading was to have lasted two and a half days, more or less. However, it actually took 7 days to load because no
sufficient logs were available at the place where the loading was to take place and because of the poor stevedoring service. Hence the demurrage amounted, as
per decision of the Court of First Instance, to $4,141.16. As to dead freight, which corresponds to the freight of the logs which were not delivered shipside, the
same amounted to $5,673.43. So, the total amount of demurrage and dead freight is $9,814.59, or P19,629.18.

CFI: Defendant liable for P19,629.18 as demurrage and dead freight charges + legal interest + attorney's fees.
CA: CFI reversed. The damages in question (demurrage and dead freight charges) are yet to be suffered and are not actual, but they may fall under the general
category of prospective damages which in this jurisdiction are not actionable yet since the rule is that no recovery of damages can be had without satisfactory
proof of the real existence of such damages.

ISSUE:
W/N In an action for breach of contract of sale of logs, caused by the failure of the supplier to furnish the agreed quantity, as a result of which the exporter of the
logs became liable for demurrage and dead freight, may the exporter be allowed to recover the amount of demurrage and dead freight even if the same has not
been actually paid for by the exporter
HELD:
NO. CA affirmed.

No award for speculative damages

Article 2199 of the Civil Code of the Philippines to the effect that damages must be "duly proved denies the grant of speculative damages, damages not actually
proved to have existed and to have been caused to the party claiming the same.

In the case at bar the evidence shows that actual damage was caused to the agent through which petitioner sold the logs to a Japanese buyer, as said agent had
already paid the same to the latter. However, there is no proof that respondent had already paid the agent said damages, or that it had already been required to
pay the same, and while these have not happened the damage to the petitioner may not, under the above-cited article of the Civil Code, be deemed to have
actually been caused to him.

No express stipulation for liability in case of breach

It is also argued that the contract between the plaintiff and the defendant contains the following terms:
In case of non-compliance by the SELLER with the amended contract conditions, the SELLER hereby agrees to indemnify the BUYER for whatever damages the
BUYER would be held liable to their buyers in Japan as a Consequence thereof, . . . (Exhibit "O").

All other terms and conditions enumerated in the original agreement of April 21, 1951, and amendments thereto dated June 18th and July 3rd 1951, remain
unchanged." (Exhibit "D").

. . . any claims arising out of default or failure of the SELLER to comply with loading capacity of the vessel shall be for account of the SELLER. (Exhibit "F") (See
Petitioner's brief, page 11.)

from which, the intention of the parties to make the seller liable to plaintiff for the valid claims of Japanese buyers, is evident.

Court ruled however that the same are merely declaratory of the obligation assumed, not an obligation which the obligee may demand in compliance with upon
breach of the terms of the contract and even before actual payment of damages by the one who breached the agreement, because the obligee has not yet actually
suffered the damage or paid the same to the person to whom damage was caused. It is only when the obligee actually suffers the damage, that compliance, with
the obligation may be demanded.

MCC INDUSTRIAL SALES CORPORATION, petitioner, vs.SSANGYONG CORPORATION, respondents.

G.R. No. 170633 || October 17, 2007 || NACHURA, J.:

FACTS: (super concise na po nito haha)

P is engaged in the business of importing and wholesaling stainless steel products. One of its suppliers is R, whose head office is in Seoul, SK. Their business
correspondences involve telephone calls, fax, etc. The process would be that R would send the pro forma invoices containing the details of the steel product to P;
if P conforms, its representatives would send it back with their signature to R.

The crux (LOL) of this controversy is with regard to an order made by Ps Manager, Gregory Chan (also President of Seiko Stainless Steel Corp.) of 220 metric
tons (MT) of hot rolled stainless steel, the order having been accepted by both parties according to the process above. The pro forma invoice provided that the
order would be paid through an irrevocable letter of credit (L/C) in favor of R. After the opening of which, delivery of the products would be made. Because of Ps
order, R also placed an order with POSCO, its steel manufacturer, and has also paid the same. However, P could only open a partial L/C, so the order of 220MT
was split into two.

R informed P that it was ready to ship the steel products, and so it requested that the opening of the L/C be made. However, despite several letters reiterating their
request for the L/C to be opened, no action was done by P. R even told P that its steel manufacturer was already in a difficult situation because of Ps failure to
open an L/C.

The following day, R received a letter signed by Chan asking for an extension of time to open the L/C because Ps credit line with the bank had been fully availed
of already and they were waiting for an additional credit line. R replied with a request that they be informed at the earliest possible time when the L/C would be
opened because it was already incurring warehousing costs. In view of their good business relationship, R even offered to negotiate with POSCO for a discounted
price.
However, despite Rs letters with regard to the L/C, P wasnt able to open one. This prompted R to write a letter to P, through its counsel, that if an L/C would not
be opened, they would be compelled to cancel the contract and hold P liable for breach and damages (warehouse expenses, interests, charges, etc.)
Later, two invoices were sent by R to P, now officially covering 100MT per invoice and also with a reduced price. The invoices both bear the signature of Chan. P
finally was able to open an L/C for the first invoice and so the goods were shipped to P. P then requested R for a reduced price as to the second invoice
considering the prevailing price of steel at that time and the recent strike that P suffered.

R rejected the request and stated that if P would not be able to open the second L/C, they would be compelled to cancel the contract and hold them liable for
damages. Chan failed to reply.

Exasperated, R sent a letter to P cancelling the contract and demanding payment for losses, warehousing expenses, interests and charges. R also filed a civil
action for damages and breach against P. On the other hand, P attacked the failure of R to present the original pro forma invoices (only the photocopies were
adduced). TC: docs admissible according to the E-Commerce Act of 2000. TC also ruled in favor of R, holding P, Seiki and Chan liable. CA affirmed but absolved
Chan. However, P was contesting the award of actual damages and attorneys fees.

ISSUES:
1) Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence and admissible as such;
2) Whether there was a perfected contract of sale between MCC and Ssangyong, and, if in the affirmative, whether MCC breached the said contract; and
3) Whether the award of actual damages and attorney's fees in favor of Ssangyong is proper and justified.

RATIO:
Re: Admissibility of the photocopied documents
First question is W/N the documents are deemed electronic data messages or electronic documents within the context of the E-Commerce Act before ruling W/N
the photocopies can be covered by the law.

ANG HABA NG EXPLANATION pero basta ang sinasabi lang nila e hindi electronic data message or electronic document ang fax, therefore, not covered by the E-
Commerce Act inadmissible if mere photocopies. However, there were some photocpoied invoices that were not challenged by P. Therefore, these can be
admitted.

Re: Perfected Contract of Sale

BUT R was able to prove the existence of a contract of sale by preponderance of evidence. R presented several pro forma invoices with the conforme (signature)
of Chan, several letters of R requesting that P open an L/C, letters from Chan requesting for an extension of time, demand letters, etc.
The conduct of both parties also proved the perfection of a contract of sale. Therefore, P's inability to open a second L/C is a breach of contract. Damages for such
breach may include loss of profit which the seller would reasonably have made.

Re: Damages
However, the Court disagrees with the award of actual damages. Such 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. It is hornbook doctrine that to be able to recover actual damages, the claimant bears the onus of presenting before the court actual
proof of the damages alleged to have been suffered, thus:
A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him as he has duly proved. Such damages, to be recoverable, must
not only be capable of proof, but must actually be proved with a reasonable degree of certainty. We have emphasized that these damages cannot be presumed
and courts, in making an award must point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne.

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 following documents submitted in evidence by the respondent: (1)
Exhibit "U," the Statement of Account dated March 30, 2001; (2) Exhibit "U-1," the details of the said Statement of Account); (3) Exhibit "V," the contract of the
alleged resale of the goods to a Korean corporation; and (4) Exhibit "V-1," the authentication of the resale contract from the Korean Embassy and certification from
the Philippine Consular Office.

The statement of account and the details of the losses sustained by respondent due to the said breach are, at best, self-serving. It was respondent Ssangyong
itself which prepared the said documents. The items therein are not even substantiated by official receipts. In the absence of corroborative evidence, the said
statement of account is not sufficient basis to award actual damages. The court cannot simply rely on speculation, conjecture or guesswork as to the fact and
amount of damages, but must depend on competent proof that the claimant had suffered, and on evidence of, the actual amount thereof.

Furthermore, the sales contract and its authentication certificates, Exhibits "V" and "V-1," allegedly evidencing the resale at a loss of the stainless steel subject of
the parties' breached contract, fail to convince this Court of the veracity of its contents. The steel items indicated in the sales contract with a Korean corporation are
different in all respects from the items ordered by petitioner MCC, even in size and quantity.

From the foregoing, we find merit in the contention of MCC that Ssangyong did not adequately prove that the items resold at a loss were the same items ordered
by the petitioner. Therefore, as the claim for actual damages was not proven, the Court cannot sanction the award.

Nonetheless, the Court finds that petitioner knowingly breached its contractual obligation and obstinately refused to pay despite repeated demands from
respondent. Petitioner even asked for several extensions of time for it to make good its obligation. But in spite of respondent's continuous accommodation,
petitioner completely reneged on its contractual duty. For such inattention and insensitivity, MCC must be held liable for nominal damages. "Nominal damages are
'recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where
there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown.'" Accordingly, the Court awards nominal
damages of P200,000.00 to respondent Ssangyong.

As to the award of attorney's fees, it is well settled that no premium should be placed on the right to litigate and not every winning party is entitled to an automatic
grant of attorney's fees. The party must show that he falls under one of the instances enumerated in Article 2208 of the Civil Code.118 In the instant case, however,
the Court finds the award of attorney's fees proper, considering that petitioner MCC's unjustified refusal to pay has compelled respondent Ssangyong to litigate and
to incur expenses to protect its rights.

WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 82983 is MODIFIED in
that the award of actual damages is DELETED. However, petitioner is ORDERED to pay respondent NOMINAL DAMAGES in the amount of P200,000.00, and the
ATTORNEY'S FEES as awarded by the trial court.

ii. Proximate

LAMBERTO SONGCO, plaintiff-appellee, vs. GEORGE C. SELLNER, defendant-appellant (1917; GR No. L-11513; J. Street)
FACTS:
In December 1915, Sellner owned a farm at Floridablanca, Pampanga, which was contiguous to a farm owned by Songco. Both properties had a considerable
quantity of Sugar cane ready to be cut.

At Dinalupijan, a short distance away, there was a sugar central. Sellner desired to mill his cane at this central. However, the owners of the central were not sure if
they could mill his cane and would not promise to take it. Sellner, however, upon learning that the central was going to mill Songco's cane, thought of buying the
cane of the latter, expecting to run his own cane in that same time the other should be milled. He also thought of getting a right of way over Songco's land for
converting his own sugar to the central.

Accordingly Sellber bought Songco's cane for P12K and executed therefor 3 promissory notes (PN) of P4K/each. Two of these notes were paid.

An action to recover upon the third PN was commenced where the judgment was in favor of Songco. Sellner appealed. Thus, the instant case.

Sellner denied all the allegations in the complaint. He also asserted, by by way of special defense, that the PN in question was obtained from the defendant by
means of certain false and fraudulent representations therein specified.
TORTS An incident of this action was that Songco sued out an attachment against Sellner, at the time of the institution of the suit, upon the ground that he was
disposing of his property in fraud of his creditors. This charge was completely refuted by proof showing that Sellner is a man of large resources and had not
attempted to convey away his property as alleged. The court below therefore found that this attachment had been wrongfully sued out, and awarded damages to
Sellner equivalent to the amount actually paid out by him in procuring the dissolution of the attachment. No appeal was taken from this action of the court by the
Songco.

Sellner assigns error to the action of the court in refusing to award to him further damages for the injury done to his credit. In this connection he shows that one of
his creditors, being appraised of the fact that the defendant had been made the subject of an attachment, withheld further credit and forced him to sell a large
quantity of sugar at a price much lower than he would have received if he could have carried it a few weeks longer.

ISSUE:
WON further damages (i.e. damages other than the cost he incurred in procuring the dissolution of said attachment) should be awarded to Sellner in view of the
attachment wrongfully sued out against him

RULING: NO.
Re. Damages
The court below committed no error in refusing to award damages upon this ground, as such damages were REMOTE and SPECULATIVE. It could hardly be
foreseen as a probable consequence of the suing out of this attachment that the hands of the creditors would come down upon their unfortunate client with such
disastrous results; and Songco certainly cannot be held accountable for the complications of Sellner's affairs which made possible the damage which in fact
resulted.

The court below also refused to award punitive damages claimed by Songco on the ground that the attachment was maliciously sued out. The action of the court in
this respect will not be here disturbed.
==
Other issues resolved by the Court
1. A general denial of a complaint does not raise a question as to the genuineness or due execution of a written instrument. It is necessary that the
genuineness and due execution of the instrument shall be specifically denied before an issue is raised up on this point. This means that Sellner must
declare under oath that he did not sign the document or that it is otherwise false or fabricated.
Neither does the statement of the answer to the effect that the instrument was procured by fraudulent representation raise any issue as to its genuineness or due
execution. On the contrary such a plea is an admission both of the genuineness and due execution thereof, since it seeks to avoid the instrument upon a ground
not affecting either. Furthermore, in this particular case the the answer expressly admits the execution of the instrument by Sellner.

2. re: Songcos alleged fraudulent representation

Sellner: Songco estimated that the uncut cane standing in the fields would produce 3,000 piculs of the sugar and that Sellner bought the crop believing this
estimate to be substantially correct. As the crop turned out, it produced 2,017 piculs, gross, and after the toll for milling was deducted the net left to Sellner was
very much less.

SC: It appears that in the course of negotiations Sellner requested Songco to guarantee the quantity which the latter claimed to be in fields but he would not do so.
He, however, repeated that he was sure the fields contained the quantity estimated by him.

It is fairly shown by the evidence that Songco knew at the time he made the representation in question that he was greatly exaggerating the probable produce of
his fields, and it is impossible to believe that his estimate honestly reflected his true opinion. He knew what these same fields had been producing over a long
period of years; and he knew that, judging from the customary yield, the harvest of this year should fall far below the amount stated.

Notwithstanding the fact that Songco's statement as to the probable output of his crop was disingenuous and uncandid, Sellner must pay the price stipulated. The
representation in question can only be considered matter of opinion as the cane was still standing in the field, and the quantity of the sugar it would produce could
not be known with certainty until it should be harvested and milled. Undoubtedly Songco had better experience and better information on which to form an opinion
on this question than Sellner. Nevertheless the latter could judge with his own eyes as to the character of the cane, and it is shown that he measured the fields and
ascertained that they contained 96 1/2 hectares.

3. The law allows considerable latitude to seller's statements, or dealer's talk. The refusal of the seller to warrant his estimate should have admonished the
purchaser that that estimate was put forth as a mere opinion; and we will not now hold the seller to a liability equal to that which would have been created
by a warranty, if one had been given.

Assertions concerning the property which is the subject of a contract of sale, or in regard to its qualities and characteristics, are the usual and ordinary means used
by sellers to obtain a high price and are always understood as affording to buyers no ground for omitting to make inquiries. A man who relies upon such an
affirmation made by a person whose interest might so readily prompt him to exaggerate the value of his property does so at his peril, and must take the
consequences of his own imprudence.

ABESAMIS v WOODCRAFT
28 November 1969 || Makalintal, J.

FACTS

P doing business as "East Samar Lumber Mills," owned a timber concession and sawmill at Dolores, Samar. On November 8, 1950 R entered into an agreement
to purchase from P 300,000 board feet of Philippine round logs at P60.00 per thousand board feet. Due to bad weather and the failure of R to send the necessary
vessels to Samar, only 13,068 board feet of logs were delivered.

January 22, 1951 they made a new contract. Old was one cancelled and P waived all his claims thereunder. Advances given by R to P of P9,000.00, were
transferred to and considered as advances on the new contract. R would now purchase 1,700,000 board feet of logs at P78.00 per thousand and the rest at
P70.00. The shipment was to be "before the end of July, but will not commence earlier than April with the option to make partial shipment depending on the
availability of logs and vessels."
Only two shipments were made amounting to 333,832 board feet and 128,825 board feet. P filed an action for rescission of the contract of January 22, 1951 and
for recovery of damages in the sum of P155,000.00 by reason of Rs failure to send vessels to accept the shipments made by P.

CFI ruled in favor of P, rescinded the contract and awarded damages in the amount of P145,623.03, plus the amount of P50,000.00 representing the plaintiff's
actual loss of credit in the operation of his business, and, another sum of P5,000.00 as attorney's fees. The defendant is likewise ordered to pay the costs.

ISSUE
WON R failed to comply with its obligation to furnish the vessel to receive the shipment of logs from appellee making them liable for damages

RULING
The contract does not expressly provide as to which of the parties should furnish the vessel. But it does contain provisions which show clearly, albeit only by
implication, that the obligation to do so devolved upon R, thus:
Fees & Charges: Bureau of Forestry inspection charges and Philippine Government wharfage fees are for account of Woodcraft Works, Ltd.
Dispatch of Ship: Immediately upon arrival of the vessel at Dolores, Samar, you will commence loading at the rate of 200,000 bd. ft. per working day per four
hatches. Should the weather be unfavorable, be sure to have a certificate signed by the captain confirming time idle due to this fact. Furthermore, in the event the
ship's gears are not functioning well, kindly do likewise and get a statement from the captain.

Demurrage: Failure to load 200,000 bd. ft. per working day, you agree to pay us the sum of P800.00 per day pro-rata.

The wharfage dues, demurrage and condition of the weather and of the ship's machinery, would have been of little concern to R and would not have been imposed
by it if P were the one to furnish the vessel. Besides, the contemporaneous and subsequent acts of the parties, which determine intention point unequivocally to
the same conclusion. In the two shipments of logs in March and April the vessels "SS AEULUS" and "SS DON JOSE" were furnished by R. In several telegraphic
communications exchanged between the parties it was invariably P who requested information as to the arrival of the vessels. It was R, through witness Irza Toeg,
who explained at trial its failure to furnish the necessary vessels, as follows:

A. Well, when the shipping firms in Manila learned about the failures of the vessels which we sent to Dolores, Samar to load, and news travels fast from one
shipping company to the other, the other shipping companies were very hesitant when we asked for a vessel to call at the port of Dolores because shipping
companies as a rule do not want to gamble and sent vessels to a loading port when they know of the place and they know that the people operating there would
not be able to handle the loading of the vessels judging from their past performances. The vessels used were only attained through personal connections.

R also says P was not in a position to comply with his own obligation to ship the quantities of logs because of a certificate issued by the Bureau of Forestry
showing that production amounted only to 816,795 board feet of logs, which was short by 833,205 board feet. but this was satisfactorily explained by P, saying that
this number was merely what was reported, and not the amount produced. P categorically stated on the witness stand that by the end of July 1951 he had
1,300,000 board feet of logs available.

DAMAGES

P divides his claim for damages into three categories, each based on a separate breach of contract by appellant.

First, P maintains that due to the failure of R a storm in May 1951 swept away almost all the logs then awaiting shipment, amounting to 410,000 board feet, valued
at P73,537.77. Shipment was to be made before the end of July 1951, but not to commence earlier than April of the same year. The obligation between the parties
was a reciprocal one, appellant to furnish the vessel and appellee to furnish the logs. The obligation being reciprocal and with a period, neither party could demand
performance nor incur in delay before the expiration of the period. Consequently, when the typhoon struck on May 5, 1951 there was yet no delay on the part of R,
and the corresponding loss must be shouldered by P.
Second, after the storm of May 5, 1951 P continued logging. R was urged to send a vessel to take delivery but the vessel did not arrive. 60,000 board feet of logs
which had been rafted broke loose and were lost amounting to P7,685.26, representing the value of the logs lost, the cost of rafting and other incidental expenses.
Although the obligation would not become due until July 31, 1951 R waived the benefit of the period by assuring P that it would take delivery of the logs on June
25, 1951. R should bear the corresponding loss.

Third by the end of July 1951 appellee had sufficient logs ready for shipment in accordance with the contract. But R, failed to send a vessel on the aforesaid date.
There is no evidence that such failure was due to circumstances beyond control. As a result logs totalling 800,000 board feet were destroyed by marine borers,
causing a loss of P62,000.00, for which R should be held liable.
CFI sentenced R to pay P50,000.00 representing loss of credit in the operation of his business. The decision does not say upon what evidence the award is based.
Nor is there any attempt in Ps brief to justify the amount awarded. Actual or compensatory damages must be established by clear evidence.

Judgment appealed from is affirmed, with the modification that R is sentenced to pay the aggregate sum of P69,685.26 by way of damages, plus P5,000 as
attorney's fees, without costs in this instance.

Iii. Not Speculative

SEAVAN CARRIER, INC. and RENATO GACHO, petitioners, vs. GTI SPORTSWEAR CORPORATION (formerly GRI Garments International Corp) and THE
HON. ABELARDO DAYRIT, in his capacity as Judge of CFI Manila Branch 39, respondents
G.R. L-65953 || July 16, 1985

FACTS:
- Seavan Carrier lost 100 cartons of denim jeans in transit. Petitioners and private respondents were parties in Civil Case No. R-83-3585 entitled GTI
Sportswear Corporation, plaintiff, v. Seavan Carrier, Inc., et al., defendants, for recovery of a sum of money and damages in the defunct Court of First
Instance of Manila.
- On September 14, 1981, the trial court rendered a decision in favor of the plaintiffs, the private respondents herein. The defendants below, now petitioners
herein were ordered to pay to the plaintiff:
a. P182,053.92 representing the value of 100 cartons of denim jeans lost plus legal rate of interest;
b. P160,755.00 representing tariff and customs duties paid by the private respondent on the lost items;
c. P2,400,000.00 representing losses in the goodwill of plaintiff (based on possible gross earnings, had its foreign customers not learned about
the loss);
d. 20% of said amount as attorney's fees; and
e. Costs of the proceedings.
- This decision, among others, was sought to be reconsidered in an earlier case filed by the petitioners before this Court in connection with Civil Case No.
R-83-3585. In that petition (G.R. No. 62130), this Court, on January 12, 1983, issued the following resolution, to wit:

After deliberating on the petition, the comment filed by the respondents, and the petitioners' reply to the respondents' comment, the Court Resolved to GIVE
LIMITED DUE COURSE to the petitioner only insofar as the allegedly excessive damages awarded by the respondent court in the amount of P2,400,000.00
representing purported losses in the goodwill of the private respondent are concerned and to REQUIRE the parties to submit simultaneously their respective
memoranda on the above specific issue within fifteen (15) days from notice hereof. Except for the above issue, the petition is DENIED due course and, therefore,
execution may issue upon finality hereof as to the judgment award of P182,053.92 representing the value of 100 cartons of denim jeans lost plus legal rate of
interest; the P160,755.00 representing tariff and customs duties paid by the private respondent on the lost items; 20% of the said amount as attorney's fees; and
costs of proceedings.

- Pursuant to this resolution, the trial court issued an order of partial execution of judgment. In the subsequent public sale, the respondents emerging as the
highest bidder offering the sum of P462,000.00 for eleven units of trucks and accessories.
- Seavan Carrier, Inc. was given forty-five (45) days to come up with the entire obligation to GTI Inc. in the amount of six hundred ninety-seven thousand
 one hundred forty- two & 58/100 (P697,142.58) including interest (P21,896.48 per month) and expenses at the time of payment shall reconvey to Seavan
Carrier, Inc. the aforesaid eleven (11) units in full satisfaction of the judgment.
- On April 25, 1983, the petitioners filed an urgent motion for protective order. The motion alleged that on April 18, 1983, the defendant-company through its
president tried to tender the sum of P697,142.58 to secure release of the eleven (11) units of trucks and accessories per agreement but instead, the
plaintiffs through counsel were demanding P1,014,585.84; the petitioners prayed that the respondents be made to comply with the collateral agreement
and that the deputy sheriff be required to make his return itemizing the amounts due and lawful charges incident to the sale.
- On May 30, 1983, the trial court issued an order denying the aforesaid motion.
- On September 28, 1984, this Court promulgated a decision in G.R. No. 62130 modifying the trial court's decision insofar as the P2,400,000.00 award
representing losses in the goodwill of respondents was concerned. Except for this award, which was deleted, all the other money awards in Civil Case No.
R-8335185 were affirmed.
- The petitioners maintain that there was an irregular execution of the judgment and, therefore, in accordance with the accepted principle that the court has
control over the execution of a judgment, there is reason to issue the corresponding protective order to prevent injustice to them. They cite Rule 135 of the
Rules of Court. The petitioners contend that (1) the total amount of the awards under the judgment is much less than the total bid of the private
respondents in the sheriff's sale iii the amount of P462,000.00 and (2) "petitioners had always demanded for the production of the receipt of payment to the
Bureau of Customs of the sum of P160,155.00 representing duties and taxes; and this is material because the ratio decidendi of the decision of the court a
quo that held that there was no exportation of the stolen materials.
- The trial court denied the urgent motion for protective order and notice of appeal on the ground that under the circumstances it had no more jurisdiction
over the case, the execution proceedings therein having been terminated

ISSUE:
- WON there was an irregular execution of the judgment
- WON they are entitled to the P2.4M representing losses for goodwill

HELD:
- The general rule is "A case in which an execution has been issued is regarded as still pending because proceedings on the execution are proceedings in
the suit. The execution proceedings of the subject judgment had not yet been terminated when the petitioners filed their urgent motion for protective order.
The certificate of sale issued by the deputy sheriff in favor of the private respondents was only for the satisfaction of P462,000.00 which obviously is not a
full satisfaction of the judgment. This can be gleaned from the fact that a total amount of P608,000.00 to be recovered from the petitioners by the private
respondents pursuant to the judgment was arrived at by the deputy sheriff as evidenced by the "notice of sale of personal property." (Annex 2,
Memorandum for private respondents) Moreover, the parties' collateral agreement itself shows that the P462,000.00 was but a partial satisfaction of the
judgment.
- Hence, the trial court, pursuant to its supervisory control over the execution of the judgment should have ordered a hearing on the motion to determine the
actual amount to be recovered by the private respondents for the full satisfaction of the judgment. The determination of the exact liability of the petitioners
in faithful compliance with the judgment of the court is vital considering that the judgment itself did not fix the exact liability due to the private respondents
and that the petitioners in the motion alleged that the private respondents were asking for more than the legal rate of interest. Obviously, these are
questions of fact and law which are directly involved in the execution of the judgment. The amount of 2.4M is speculative. No evidence was presented to
show the average actual profits realized to enable the court to reasonably ascertain the amount of actual damages GTI suffered.
- It is to be emphasized, however, that the petitioners at this stage of the proceedings may no longer question the propriety of the P462,000.00 bid of the
private respondents in relation to the properties sold at public auction. At no instance did the petitioners raise an objection to the P462,000.00 bid of the
private respondents on the levied properties. In fact, as observed by the court, the president of the petitioner company signified his conformity with the bid
as evidenced by the "notice of sale on execution of personal property."
Moreover, a certificate of sale on these properties in favor of the private respondents had already been issued on April 12, 1983 for a partial satisfaction of the
judgment. In effect, this part of the judgment, having been satisfied, has passed beyond review. It is this part of the execution proceedings involving the auction
sale of the levied properties in the amount of P462,000.00 over which the trial court has lost its jurisdiction but not the entire proceedings.

CARMEN SIGUENZA and HELENA SIGUENZA, petitioners, vs. HON. COURT OF APPEALS and SPS. PEDRO and LEONADIZA QUIMBO, respondents
 G.R. L-44050 || July 16, 1985

FACTS:
- Petitioners entered into a contract with the spouses Quimbo for the sale of two lots purportedly owned by Carmen and Helena Siguenza, and which were
Identified as Lot Nos. 1 and 2, Block 1, Phase II of the Clarita Village; that the said lots were to be paid in the total amount of P15,200.00 of which the
amount of P3,040.00 was to be paid upon the execution of the contract of sale and the balance of P12,160.00 to be paid in monthly installments and that
subsequently, however, the spouses Quimbo discovered that as early as 1969, the petitioners had already sold and conveyed the same lots to Irenea D.
Maningo and that both are now covered by Transfer Certificates of Titles Nos. T-48546 and T-48547 in the name of the latter. The complaint further alleged
that because of this double sale, the spouses Quimbo demanded from the petitioners the return of their downpayment but the latter refused and that as a
consequence of the. deceit and mis-representation employed upon them by said petitioners, the spouses were also prevented from constructing their
house worth P100,000.00 on the lots which if constructed at the present would cost them three hundred (300%) percent more than the original amount.

- In their answer, petitioners admitted the sale of the lots to the spouses but argued that they had nothing to do with the sale as the one responsible was
Bert Osmea and Associates. Petitioners also alleged that the impleading of Carmen Siguenza as a party defendant had no basis because the lots in
dispute were originally registered only in the name of Helena Siguenza.

- The other defendant, Bert Osmea and Associates admitted the sale of the lots to Irenea Maningo but countered that such sale was only for the purpose of
enabling the latter to obtain a loan from the Government Service and Insurance System. Since the loan did not materialize. the whole transaction
collapsed and during the process of reverting the lots back to the subdivision, the spouses Quimbo showed interest and deposited money for the lots
although they were fully aware of the status of the said lots. Bert Osmea and Associates also alleged that after the downpayment no further installments
were paid by the spouses

- RTC ruled in favor of Sps. Quimbo. In their Motion for Reconsideration, the petitioners made an enumeration of the findings and conclusions of the lower
court which were allegedly not supported by evidence. The petitioners also attached a "Deed of Partition" dated February 25, 1969 for the purpose of
showing that petitioner Carmen Siguenza had no more right over the disputed lots at the time of the sale to the spouses Quimbo, and therefore, should not
have been made a party defendant in the complaint.

- On May 20, 1975, the trial court issued an order denying the motion for reconsideration on the ground that the same were "pro forma based as it is on a
forgotten evidence a so-called deed of partition supposedly executed in 1969, which was not introduced by defendants Carmen and Helena Siguenza; ..."
A writ of execution was then issued. CA affirmed, saying petitioners have lost their right to appeal, as they have to perfect it on June 17, 1975, but they
filed it only on June 30 of the same year.

ISSUE:
- WON petitioners have lost their right to appeal
- WON the demand for P100,000.00 for compensatory damages may rightfully be awarded

HELD:
- YES they have, but to serve the ends of substantial justice, it may be ruled upon by this court. In the case at bar, the petitioners' delay in filing their record
on appeal should not be strictly construed as to deprive them of the right to appeal especially since on its face the appeal appears to be impressed with
merit. A prompt disposition of this present petition would, therefore, enable the private respondents to collect from the petitioners whatever amounts Bert
Osmea and Associates have not yet paid to fully satisfy the liability adjudged against the latter which may be rightly demanded from herein petitioners but
not duplicated as this would be unjust enrichment on the part of the respondents.

- Resolving now the merits of the case, we find that the orders of the trial court ordering the petitioners to pay the private respondents P100,000.00 for
compensatory damages is patently erroneous because no proof whatsoever was presented or could be presented by the private respondents to show that
 they had actually suffered pecuniary loss in that amount. In fact, the whole amount of P100,000.00 had no basis at all except the respondents' mere
allegation that they, absent the malice, bad faith, and unlawful and deceitful acts of the petitioners, "could have then constructed a residential house worth
P100,000.00; that the same residential house cannot now be constructed at that amount, but very likely at more than three hundred percent more; such
difference constitutes an actual damage on the part of the plaintiffs (respondents) which are directly logically and naturally caused by the aforesaid acts of
defendants (petitioners) for which said defendants are liable."

- In the case of Sy v. Court of Appeals (131 SCRA 127), we ruled that an alleged loss of income is not recoverable for being speculative as no receipt or any
kind of evidence on the matter was presented to prove it. Likewise, in the case of Seavan Carrier, Inc. v. GTI Sportswear Corp. (132 SCRA 314-315),
quoting G.A. Machineries, Inc. v. Yaptinchay (126 SCRA 87), we ruled that for damages under Article 2200 of the Civil Code to be recovered, the best
evidence obtainable by the injured party must be presented
- In the present case, the respondents were not able to prove any actual losses suffered as a result of the petitioners' wrongful acts because they have not
even started the construction of their house on the disputed lots. Any alleged pecuniary loss which they claim to have suffered because of the delay in the
commencement of construction is purely speculative and cannot be the basis of compensatory damages as provided by law.

2. Component Elements

I. Value of Loss; Unrealized profits

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. 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.

GENERAL ENTERPRISES, INC., plaintiff-appellee vs. LIANGA BAY LOGGING CO., INC., defendant-appellant
August 31, 1964 (Bautista Angelo, J.)

FACTS

Lianga Bay Logging (producer of logs from a timber concession) and General Enterprises entered into a contract where Lianga designated General as distributor
of a portion of its log production to Korea and Europe on condition that it would pay General a commission of 13% of the gross f.o.b. value of the logs exported.
Their agreement provides, in part:
xxx
5. DISTRIBUTOR hereby agrees and obliges to market, sell, export and dispose under this agreement at least ONE MILLION (1,000,00) BOARD FEET
BREARETON SCALE for PRODUCER every month during the first months of the term of this agreement: and the PRODUCER hereby agrees and obliges that
each month thereafter, beginning September, 1959, PRODUCER will make available not less than 2,000,000 bd. ft. per month for export to the sales area.
xxx

8. It is mutually agreed as follows:

(a) That if either party shall be unable, by reason of the happening of any one or more of the causes set forth in the next succeeding paragraph marked "(b)" to
carry out its obligations under this contract, either wholly or partly, the party so failing shall give notice and full particulars of such cause or causes in writing to the
other party as soon as possible after the occurrence of any such cause; and, thereupon, such obligation shall be suspended during the continuance of such
causes, which, however, shall be removed or remedied as soon as possible, and the obligations terms and conditions of this contract shall be extended for such
period as may be necessary for the purpose of making good any suspension so caused:
(b) That the cause or causes of suspension herein before referred to shall be taken to mean fire, flood, casualty, unavoidable accident, strikes, labor conditions,
lockout acts of God, the enactment of any national or local law or ordinance, or the issuance of any executive or judicial order, the issuance of any prohibitive or
restrictive order, rule or regulation by the Central Bank of the Philippines or other government agency, accident to machinery, or any other cause not within the
control of the party making relief from any of the requirements of this contract, and that, by the exercise of due care and diligence, the said party is unable to
prevent or overcome.
xxx

On October 1959, Lianga sent a notice to General stating that after the November shipment, there will no longer be logs available for export to Korea and Europe
unless the price becomes comparable to what is expected to be received in the way of returns from lumber and veneer of barterable and exportable grades.

General reminded Lianga that it had a contact to fulfill relative to its log production otherwise it would be held responsible for the consequences of the breach it
may ensue, but Lianga did not heed this. Hence, General filed an action before the CFI RIzal alleging breach of contract and praying for actual and compensatory
damages.

CFI decided in favor of General and against Lianga, ordering ordering the latter to pay the sum of P400,000.00 as actual damages, P100,000.00 as exemplary
damages, and P400,000.00 as attorney's fees and expenses of litigation.

This is an appeal from said decision.

Lianga contends that the actual damages awarded to General are unwarranted inasmuch as the latter failed to adduce evidence to substantiate them even
assuming arguendo that Lianga failed to supply the additional monthly 2M board feet for the remainder of the period agreed upon in the contract. Lianga argues
that for General to be entitled to demand payment of sales that were not effected, it should have proved that (1) there are actual sales made of General's logs
which were not fulfilled, (2) that it had obtained the best price for such sales, (3) that there are buyers ready to buy at such price stating the volume they are ready
to buy, and (4) General could not cover the sales from the logs of other suppliers. Since these facts were not proven, General's right to unearned commissions
must fail.

ISSUE relevant to damages:

Is the lower court's adjudication of actual damages, exemplary damages and attorney's fees justified?

RULING: ACTUAL & ATTYS FEES YES; EXEMPLARY REDUCED

Under Article 2200 of the Civil Code, indemnification for damages comprehends not only the value of the loss suffered but also at of the profits which the creditor
fails to obtain. In other words, lucrum cessans is also a basis for indemnification. The question then that arises is: Has appellee failed to make profits because of
appellant's breach of contract, and in the affirmative, is there here basis for determining with reasonable certainty such unearned profits?

From Lianga's memorandum, it appears that during the period of June-December 1959, in spite of the short delivery incurred by Lianga, General had been earning
its commission whenever logs were delivered to it. But from January 1960, General has ceased to earn commission because Lianga failed to deliver any log in
violation of their agreement. Had Lianga continued to deliver the logs as it was bound to pursuant to the agreement, it is reasonable to expect that it would have
continued earning its commission in much the same manner as it used to in connection with the previous shipments of logs, which clearly indicates that it failed to
earn the commissions it should earn during this period of time. And this commission is not difficult to estimate.

Thus, during the seventeen remaining months of the contract, at the rate of at least 2M board feet, Lianga should have delivered 34M board feet. If we take the
number of board feet delivered during the months prior to the interruption, namely 7,405,861 board feet, and the commission received by General thereon, which
amounts to P79,580,82, we would have that General received a commission of P.0107456 per board feet. Multiplying 34M board feet by P.0107456, the product is
P365,350.40, which represents the lucrum cessans that should accrue to General. The award therefore, made by the trial court of P400,000.00 as compensatory
damages is not speculative, but based on reasonable estimate.

However, the exemplary damages in the amount of P100k is somewhat excessive as Lianga, in suspending the operation of the contract, has not acted in a
wanton, oppressive or malevolent manner (Art. 2232 NCC) The most that can be said is that Lianga has availed to certain misstatements or half truths in an
attempt to justify its desistance from the contract. While reprehensible, it is not a wanton or malevolent perversion of the truth. Hence, award should be mitigated in
the amount of P50k.

Wrt the amount of attorney's fees awarded, the SC found the same to be reasonable considering the importance of the litigation and the amount of time and effort
involved therein. This is justified under Art. 2208 NCC.

CA DECISION MODIFIED only wrt the amount of exemplary damages.

RESOLUTION (November 28, 1964 --nilagay ko na rin dito pero Aug 31 talaga yung SCRA ref na nasa syllabus)

Lianga assailed the award of P400k as lucrum cessans, on the ground that the award is not justified considering the evidence + the obligation to supply the
monthly 2M board feet was conditional + its right to suspend the operation of the agreement under par. 8.

SC ruled that since defendant is guilty of breaking the agreement for reasons purely of its own, in disregard of its express covenant, it held itself liable for all
consequential damages that may result from such breach, whether foreseen or unforeseen, and one of the items that may be considered in determining said
damages is the failure to realize whatever profits could have been earned during the remaining life of the agreement. It is not, therefore, proper to base such
damages purely in transactions that had been accomplished in the past and ignore those that could have been accomplished in the future. As the law says, in case
of fraud or bad faith, "the obligor shall be responsible for all damages that may be reasonably attributed to the non-performance of the obligation" (Article 2201
NCC).

However, the lucrum cessans was eventually reduced the commission paid by General to Frinat Int'l, sub-agent was deducted from the award made in its favor.
The rate of commission plaintiff had paid in its previous sales to Frinat Int' was 2%. Multiplying 34 million board feet by P.0107456, the product is P365,350.40.
Deducting therefrom the 2 % commission that corresponds to Frinat International, which amounts to P56,207.76, the balance is P309,142.64, which should be the
lucrum cessans to which plaintiff is entitled.

+ No interest upon damages awarded as under Art. 2210, such award is in the discretion of hte court and considering the circumstances, the SC does not deem it
justified to further charge interest on the damages involved.

AUGUST 31 DECISION modified: P309, 142.64 as lucrum cessans awarded

VICTORINO MAGAT, JR. substituted by heirs, OLIVIA D. MAGAT, and minors MA. DULCE MAGAT, MA. MAGNOLIA MAGAT, RONALD MAGAT and
DENNIS MAGAT, petitioners, vs. COURT OF APPEALS and SANTIAGO A. GUERRERO, respondents.
4 August 2000 | Parido, J.:

FACTS: Guerrero Transport Services, of which Santiago A. Guerrero was President and Chairman of, won a bid for the operation of a fleet of taxicabs within the
Subic Naval Base, in Olongapo. As highest bidder, Guerrero was to provide radio-controlled taxi service within the U. S. Naval Base, Subic Bay, utilizing as
demand requires 160 operational taxis consisting of four wheel, four-door, four passenger, radio controlled, meter controlled, sedans, not more than one year
With the advent of martial law, President Ferdinand E. Marcos issued Letter of Instruction No. 1 1 and Administrative Circular No. 4.2
Guerrero and Victorino D. Magat, as General Manager of Spectrum Electronic Laboratories, a single proprietorship, executed a letter-contract for the purchase of
transceivers at a quoted price of US$77,620.59, FOB Yokohoma. Victorino was to deliver the transceivers within 60 to 90 days after receiving notice from Guerrero
of the assigned radio frequency, taking note of Government Regulations. The contract was signed and Victorino contacted his Japanese supplier, Koide & Co.,
Ltd. And placed an order for the transceivers. Later, Navy Exchange Officer, A.G. Mason confirmed that Guerrero won the bid for the commercial transportation
contract.

Middleman and broker Isidro Aligada of Reliance Group Engineers, Inc. wrote Victorino, informing him that a radio frequency was not yet assigned to Guerrero and
that government regulations might complicate the importation of the transceivers. In the same letter, Victorino was advised to advise his supplier to proceed (with)
production pending frequency information. Victorino was alaso assured of Guerreros financial capability to comply.

Guerrero informed Aligada of the frequency number assigned by Subic Naval Base authorities, and the latter was instructed to proceed with the order thru
Spectrum Electronics Laboratories. Aligada informed Magat of the assigned frequency number and advised Vicotrino to proceed upon receipt of letter of credit.
Guerrero applied for a letter of credit with the Metropolitan Bank and Trust Company but this was not pursued.

Victorino, represented by his lawyer, Atty. Sinesio S. Vergara, informed Guererro that the order with the Japanese supplier has not been canceled. Should the
contract be canceled, the Japanese firm would forfeit 30% of the deposit and charge a cancellation fee in an amount not yet known, Guerrero to bear the loss.
Further, should the contract be canceled, Victorino would demand an additional amount equivalent to 10% of the contract price.

Unable to get a letter of credit from the Central Bank due to the refusal of the Philippine government to issue a permit to import the transceivers, Guerrero
commenced operation of the taxi cabs within Subic Naval Base, using radio units borrowed from the U.S. government (through the Subic Naval Base authorities).
Victorino thus canceled his order with his Japanese supplier.
Victorino filed a complaint for damages arising from breach of contract against Guerrero.

RTC: Granted motion to dismiss filed by Guerrero and dismissed complaint

SC: Set aside order of dismissal and remanded case to trial court for further proceedings.

RTC: ordered case be archived for failure of Victorino to prosecute.

Petitioners (heirs of Victorino) moved to reinstate the case and to substitute Victorino in its prosecution as the latter had already died. TC granted this motion and
decided in favor of the heirs. It ordered Guerrero to pay temperate, moral and exemplary damages, and attorneys fees.

1
Letter of Instruction No. 1: "SUBJECT: SEIZURE AND CONTROL OF ALL PRIVATELY OWNED NEWSPAPERS, MAGAZINES, RADIO AND TELEVISION FACILITIES AND ALL OTHERMEDIA OF
COMMUNICATION.
...in my capacity as commander in chief of all the armed forces of the Philippines and in order to prevent the use of privately owned newspapers, magazines, radio and television facilities and all other
media of communications, for propaganda purposes against the government and its duly constituted authorities or for any purpose that tend to undermine the faith and confidence of the people in our
government and aggravate the present national emergency, you are hereby ordered forthwith to take over and control or cause the taking over and control of all such newspapers, magazines, radio
and television facilities and all other media of communications, wherever they are, for the duration of the present national emergency, or until otherwise ordered by me or by my duly designated
representative.
2
Administrative Circular No. 4: SUBJECT: SUSPENDING THE ACCEPTANCE AND PROCESSING OF APPLICATIONS FOR RADIO STATION CONSTRUCTION PERMITS AND FOR PERMITS TO
OWN AND/OR POSSESS RADIO TRANSMITTERS OR TRANSCEIVERS.
"In view of the existence of a state of emergency and the declaration by the President of martial law in the entire country under Proclamation No. 1081 dated September 21, 1972, effective
immediately the acceptance and processing by the radio control office of applications for radio stations constructions permits and for permits to possess, own, transfer, purchase and sale of radio
transmitters and transreceivers as well as manufacturers and dealers permits of said equipment is hereby suspended. "Exempted from this circular are applications for radio station construction
permits and for permits to possess, own, transfer, purchase and sell radio transmitters and transceivers for the following radio stations:
"1. Aeronautical Stations;
" 2. Aeronautical Fixed Stations;
" 3. Aircraft Stations;
"4. Coastal Stations; and
"5. Ship Stations.
"This circular shall be strictly observed until lifted upon proper instructions from higher authorities."
1. Ordering defendant to pay substituted plaintiffs the sum of P25,000.00 for temperate damages for injury to plaintiffs business dealings with foreign and local
businessmen;
2. P50,000.00 as moral damages;
3. P25,000.00 as exemplary damages; and
4. P20,000.00 as attorneys fees.
CA: dismissed the complaint, and denied MR.

ISSUES:
1) W/N the contract was valid
2) W/N there was a breach of contract
3) W/N damages may be awarded.

RULING:
1) Yes, the contract was valid as the radio transceivers subject of the contract were not contraband. "Contraband" generally refers to "any property which is
unlawful to produce or possess." It refers to goods which are exported and imported into a country against its laws. Nowhere in the LOI and Admin.
Circular is there an express ban on the importation of transceivers. The LOI and Administrative Circular did not render radios and transceivers illegal per
se. The Administrative Circular merely ordered the Radio Control Office to suspend the "acceptance and processing of applications... for permits to
possess, own, transfer, purchase and sell radio transmitters and transceivers... Therefore, possession and importation of the radio transmitters and
transceivers was legal provided one had the necessary license for it. Transceivers were not prohibited but merely regulated goods. The LOI and
Administrative Circular did not render the transceivers outside the commerce of man. They were valid objects of the contract.

2) No, there was no breach in accordance with Article 1267 of the Civil Code. Guerrero testified that a permit to import the transceivers from Japan was
denied by the Radio Control Board. He stated that he, together with Aligada, Victorino and a certain John Dauden personally went to the Radio Control
Office, and were denied a permit to import. They also went to the Office of the President, where Secretary Ronaldo B. Zamora explained that radios were
"banned like guns because of martial law." Guerrero testified that this prevented him from securing a letter of credit from the Central Bank. This testimony
was not rebutted.
The law provides that [w]hen the service (required by the contract) has become so manifestly beyond the contemplation of the parties, the obligor may
also be released therefrom, in whole or in part. Here, Guerrero's inability to secure a letter of credit and to comply with his obligation was a direct
consequence of the denial of the permit to import. For this, he cannot be faulted. Even if we assume that there was a breach of contract, damages cannot
be awarded. Damnum absque injuria.

3) True, Guerrero borrowed equipment from the Subic Naval Base authorities at zero cost. This does not automatically translate to bad faith. Guerrero was
faced with the danger of the cancellation of his contract with Subic Naval Base. He borrowed equipment as a prudent and swift alternative. There was no
proof that he resorted to this option with a deliberate and malicious intent to dishonor his contract with Victorino. An award of damages surely cannot be
based on mere hypotheses, conjectures and surmises. Good faith is presumed, the burden of proving bad faith rests on the one alleging it. Petitioners did
not effectively discharge the burden in this case.

MORAL DAMAGES: the breach must be palpably wanton, reckless, malicious, in bad faith, oppressive or abusive. This is not the case here.

EXEMPLARY DAMAGES: Guerrero did not act in a wanton, fraudulent, reckless, oppressive or malevolent manner.

ACTUAL DAMAGES: True, indemnification for damages contemplates not only actual loss suffered (damnum emergens) but unrealized profits (lucrum
cessans) as well. However, to be entitled to adequate compensation for pecuniary loss, the loss must be actually suffered and duly proved. The amount of loss
must not only be capable of proof, but must be proven with a reasonable degree of certainty. The claim must be premised upon competent proof or upon the best
evidence obtainable, such as receipts or other documentary proof.
Only the testimony of Aligada was presented to substantiate petitioners' claim for unrealized profits. Aligada testified that as a result of the cancellation of the
contract, Victorino had to suspend transactions with his Japanese supplier for six (6) months. Aligada stated that the volume of Victorino's business with Subic
Naval Base also diminished significantly. Aligada approximated that Victorino's unrealized business opportunities amounted to P400,000.00. Being a witness for
Victorino's heirs and standing to gain from the contract's fulfillment, Aligada's testimony is self-serving. It is also hearsay. We fail to see how this "evidence" proves
actual damages with a "reasonable degree of certainty." If proof is "flimsy", we cannot award actual damages.

ii. Attorney's fees and expenses of litigation

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.

SOLID HOMES vs CA

Private respondents sold 6 parcels of land to Solid Homes under a contract to sell for the total amount of P10,211,075.00, to be paid in installments. Default on
payments incur a 1% monthly interest on the defaulted amount.

Solid Homes violated the terms of the agreement by refusing to pay the balance of P4,800,282.91 and by failing to negotiate a settlement with the tenants and
squatters of the property despite its receipt from Investco (respondent) of P350,000 for that purpose.

Both the Trial Court and Court of Appeals awarded payment of the balance with the corresponding interest to private respondents, plus attorney's fees. Solid
Homes argues that the award of attorney's fees is not justified.

ISSUE: w/n the award of attorney's fees is justified

HELD: NO, award of attorney's fees is deleted
Solid Homes' act of withholding payment of the balance is justified, as there is still disagreement between the parties on the demandability of the amount due and
the accrual date of the interest due to supervening circumstances and inexplicitness of the contract. To wit, the TC and the CA have arrived at different conclusions
on the date the interest rate should start to run (TC: Feb. 23, 1981, CA: March 28, 1982).
Article 2208 of the Civil Code only allows the award of attorney's fees when the claimant is compelled to litigate with third persons or to incur expenses to protect
his interest by reason of an unjustified act or omission of the party from whom it is sought. While judicial discretion is here extant, an award thereof demands,
nevertheless, a factual, legal or equitable justification.
In the case at bench, the records do not show enough basis for sustaining the award for attorney's fees and to adjudge its payment by petitioner.

FIRST METRO INVESTMENT CORPORATION, petitioner, vs. ESTE DEL SOL MOUNTAIN RESERVE, INC., VALENTIN S. DAEZ, JR., MANUEL Q.
SALIENTES, MA. ROCIO A. DE VEGA, ALEXANDER G. ASUNCION, ALBERTO* M. LADORES, VICENTE M. DE VERA, JR., and FELIPE B.
SESE, respondents.
Facts: On January 31, 1978, petitioner FMIC granted respondent Este del Sol a loan of P7,385,500.00 to finance the construction and development of the Este
del Sol Mountain Reserve, a sports/resort complex project located at Barrio Puray, Montalban, Rizal. In accordance with the terms of the loan agreement, R
executed several documents as security for paymentreal estate mortgage, individual suretyship agreements by co-respondents, as well as an Underwriting
Agreement. Since respondent Este del Sol failed to meet the schedule of repayment in accordance with a revised Schedule of Amortization, it appeared to have
incurred a total obligation of P12,679,630.98. Accordingly, P foreclosed mortgage and instituted collection suit against Rs to collect the alleged deficiency balance
of P6,863,297.73 plus interest thereon and attorneys fees (WHICH THEY PEGGED AT AROUND P3M). In their Answer, Rs sought the dismissal of the case and
set up several special and affirmative defenses, foremost of which is that the Underwriting and Consultancy Agreements executed simultaneously with and as
integral parts of the Loan Agreement and which provided for the payment of Underwriting, Consultancy and Supervision fees were in reality subterfuges resorted to
by P and imposed upon respondent Este del Sol to camouflage the usurious interest being charged by P.

RTC ruled in favor of R, CA reversed, declared that the fees provided for in the Underwriting and Consultancy Agreements were mere subterfuges to camouflage
the excessively usurious interest charged by the petitioner FMIC on the loan of R Este del Sol; and that the stipulated penalties, liquidated damages and attorneys
fees ( were excessive, iniquitous, unconscionable and revolting to the conscience, and declared that in lieu thereof, the stipulated one time 20% percent penalty
on the amount due and 10% of the amount due as attorneys fees would be reasonable and suffice to compensate P for those items.
Issue: WoN the CA erred.

Held: No. There was a usurious loan! The Underwriting Agreements which were executed and delivered contemporaneously with the Loan Agreement on January
31, 1978 were exacted by petitioner FMIC as essential conditions for the grant of the loan. An apparently lawful loan is usurious when it is intended that additional
compensation for the loan be disguised by an ostensibly unrelated contract providing for payment by the borrower for the lenders services which are of little value
or which are not in fact to be rendered, such as in the instant case. In this connection, Article 1957 of the New Civil Code clearly provides that:

Art. 1957. Contracts and stipulations, under any cloak or device whatever, intended to circumvent the laws against usury shall be void. The borrower may
recover in accordance with the laws on usury.

With regard to attorneys feesWe find the stipulated penalties, liquidated damages and attorneys fees, excessive, iniquitous and unconscionable and revolting to
the conscience as they hardly allow the borrower any chance of survival in case of default. And true enough, R folded up when the appellee extrajudicially
foreclosed on Rs development project and literally closed its offices as both the appellee and R were at the time holding office in the same building. Accordingly,
we hold that 20% penalty on the amount due and 10% of the proceeds of the foreclosure sale as attorneys fees would suffice to compensate the appellee,
especially so because there is no clear showing that the appellee hired the services of counsel to effect the foreclosure; it engaged counsel only when it was
seeking the recovery of the alleged deficiency.

Attorneys fees as provided in penal clauses are in the nature of liquidated damages. So long as such stipulation does not contravene any law, morals, or public
order, it is binding upon the parties. Nonetheless, courts are empowered to reduce the amount of attorneys fees if the same is iniquitous or
unconscionable. Articles 1229 and 2227 of the New Civil Code provide that:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has
been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.
Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.
In the case at bar, the amount of P3,188,630.75 for the stipulated attorneys fees equivalent to 25% percent of the alleged amount due, as of the date of the
auction sale on June 23, 1980, is manifestly exorbitant and unconscionable. Accordingly, we agree with the appellate court that a reduction of the attorneys fees
to 10% appropriate and reasonable under the facts and circumstances of this case.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK v JOSEPH ANTHONY M. ALEJANDRO
September 21, 2007 Ynares-Santiago, J.
FACTS:
- October 23, 1997: PCIB filed against Alejandro a complaint for a sum of money with prayer for the issuance of a preliminary attachment
 o The claim alleges that on Sept. 10, 1997, Alejandro, a resident of Hongkong executed a promissory note obligating himself to pay 249M plus interest

o In view of the fluctuations of the foreign exchange rates, which resulted in the insufficiency of the deposits assigned by the respondent as security for the
loan, petitioner requested the latter to put up additional security for the loan.

o Alejandro, on the other hand, sought a reconsideration of the said request pointing out petitioners alleged mishandling of his account due to its failure to
carry out his instruction to close his account as early as April 1997 when the prevailing rate of exchange of the US dollar to yen was JPY127 (loans were
made in yen)

- PCIB prayed for a writ of preliminary attachment which was granted by the TC. On the same date, the bank deposits of Alejandro in RCBC were garnished.
o Alleged that Alejandro fraudulently withdrew his unassigned deposits and that he is not a resident of the PH
o PCIB posted an 18M bond.

- Subsequently, Alejandro filed a motion to quash the writ of contending that the withdrawal of his unassigned deposits was not fraudulent as it was approved by
PCIB. He also said that they knew that his permanent residence is in QC, and his office address is in Romulo Mabanta law office in Makati.
o He added that he is a managing partner of the HK branch of the said law firm and that his stay in HK is only temporary and he frequently travels back to
the PH

- TC then issued an order quashing the writ and holding that the withdrawal of respondents unassigned deposits was not intended to defraud PCIB.

- Meanwhile, Alejandro filed a claim for damages in the amount of 25M on the attachment bond on the account of the wrongful garnishment of his deposits
o Presented evidence that the attorneys fees in the amount of 150k was dishonored because of the garnishment of his deposits.
o Also testified that he graduated from Ateneo with a double degree in Economics and Management Engineering and UP Law.
o Also presented witnesses to the effect that he is a well-known lawyer in the business community both in the Philippines and HK.
o PCIB presented the lone witness who claimed that they acted in GF in claiming that he is a resident of JK

- RTC: granted Alejandros claim for damages arising from petitioner PCIBs invalid garnishment of the said account.
o Awarded damages of 25M without specifying the basis thereof.
o Considering that the bond is insufficient to fully satisfy the award, then ordered to pay additional 6M.

- CA affirmed the TC but modified the award of damages. 25M damages deleted.
o 2M as nominal damages
o 5M as moral damages
o 1M as attorneys fees
o MfR granted and awarded additional 5M as exemplary damages.

ISSUE/HELD: WON the bank is liable for damages for the improper issuance of a writ of attachment against respondent YES

RATIO:
- Notwithstanding the final and executor judgment of the lower courts as to the misrepresentation and suppression of facts, PCIB contends that it had acted in
good faith.
o Contends that even if respondent is considered a resident of the Ph, attachment is still proper under Sec. 1, par(f), Rule 57 of the ROC which says that
since he is a temporary resident, then service of summons may be effected by publication.

o SC finds that the contention is without merit because the lower court found them to have acted in bad faith by resorting to the deliberate strategy to
 mislead the court because they transacted with him through his permanent residence in the PH, showing that they knew that he lives here.

o The second ground of attachment of the properties is missing because the withdrawal was not intended to defraud the creditors because it was not part of
the peso deposits assigned to secure the loan. Hence, they resorted to the misrepresentation that he was residing out of the Ph.

- Where defendant is a resident of the Philippines, attachment of his/her property in an action in personam is not always necessary in order for the court to
acquire jurisdiction to hear the case instead use substituted service whereby service of summons may be effected by leaving copies of the summons at the
defendants residence with some person of suitable discretion or leaving copies at the defendants office or regular place of business.

- In the instant case, it must be stressed that the TC issued the writ mainly on the representation that he is not a resident of the Philippines.

o Obviously, the writ was for the sole purpose of acquiring jurisdiction to hear and decide the case.
o Had the allegations in the complaint disclosed that he has a residence in QC and office in Makati, then the TC, in acquiring jurisdiction, should have
served substituted service on the same address.
o Misrepresentation that he does not live in the PH was thus a deliberate move to ensure that the application for the writ will be granted.

On Damages
- Actual damages: CA was correct in not awarding the same because respondent failed to establish the amount garnished by pet.
o Well settled that the one who has been injured by a wrongful attachment can recover damages for the actual loss resulting therefrom.

- Nominal damages: May be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that
right, and not for indemnifying the plaintiff for any loss suffered by him.
o Award of nominal damages is proper in this case, considering that his right to use his money has been violated by its garnishment.
o Amount of nominal damages may be reduced from 2M to 50k considering the short period of two months as well as the lack of evidence on the amount
garnished.

- Attorneys fees: proper when a party is compelled to litigate/incur expenses to lift a wrongfully issued attachment
o Basis of the award is the amount garnished and the length of time respondents have been deprived of the use of their money by reason of the wrongful
attachment
o May also be based upon:
(1) the amount and the character of the services rendered;
(2) the labor, time and trouble involved;
(3) the nature and importance of the litigation and business in which the services were rendered;
(4) the responsibility imposed;
(5) the amount of money and the value of the property affected by the controversy or involved in the employment
(6) the skill and the experience called for in the performance of the services;
(7) the professional character and the social standing of the attorney;
(8) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not
- Considering the short period of time it took to have the writ lifted, the favorable decisions of the court below, the absence of evidence as to the professional
character and social standing of the attorney handling the case and the amount garnished, the award of attorneys fees should be fixed not at 1M but only at
200k.

- On Moral Damages award of 5M is excessive 500k.

Prudential Bank vs Tupasi-Valenzuela

Facts: Herein private respondent deposited in her Prudential Bank savings account Check No. 666B the amount of P35,271.60 which would make her account
accumulate total deposits of P36,770.4. Private respondent issued Prudential Bank Check No. 983395 in the amount of P11,500.00 post-dated June 20, 1988, in
favor of one Belen Legaspi. It was issued to Legaspi as payment for jewelry which private respondent had purchased. Legaspi, who was in jewelry trade, endorsed
the check to one Philip Lhuillier, a businessman also in the jewelry business. When Lhuillier deposited the check in his account with the PCIB, Pasay Branch, it
was dishonored for being drawn against insufficient funds. PR was informed.

She asked why her check was dishonored when there were sufficient funds in her account as reflected in her passbook. She wasnt given a clear answer. Later, it
was found out that check 666B in the amount of P35,271.60 deposited by private respondent on June 1, 1988, was credited in her savings account only on June
24, 1988, or after a period of 23 days. Thus the P11,500.00 check post-dated June 20 was redeposited by Lhuillier on June 24, 1988, and properly cleared on June
27, 1988.

Since this was not the first incident private respondent had experienced with the bank, private respondent was unmoved by the bank's apologies and she
commenced the present suit for damages

RTC: complaint dismissed

CA: reversed RTC. ordering herein petitioner to pay private respondent the sum of P100,000.00 by way of moral damages; P50,000.00 exemplary damages;
P50,000.00 for attorney's fees; and to pay the costs.

Issue: WHETHER OR NOT THE RESPONDENT COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION WHERE EVEN IN THE ABSENCE OF
EVIDENCE, AWARDED ATTORNEY'S FEES.

MAIN DISH: The award of attorney's fees is also proper when exemplary damages are awarded and since private respondent was compelled to engage the
services of a lawyer and incurred expenses to protect her interest. (Art. 2208 NCC)The standards in fixing attorney's fees are: (1) the amount and the character of
the services rendered; (2) labor, time and trouble involved; (3) the nature and importance of the litigation and business in which the services were rendered; (4) the
responsibility imposed; (5) the amount of money and the value of the property affected by the controversy or involved in the employment; (6) the skill and the
experience called for in the performance of the services; (7) the professional character and the social standing of the attorney; (8) the results secured, it being a
recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not. In this case, all the aforementioned weighed, and
considering that the amount involved in the controversy is only P36,770.41, the total deposit of private respondent which was misposted by the bank, we find the
award of respondent court of P50,000.00 for attorney's fees, excessive and reduce the same to P30,000.00.

SIDE DISH: Moral damages: Bank is under obligation to treat the accounts of its depositors with meticulous care whether such account consists only of a few
hundred pesos or of millions of pesos. Responsibility arising from negligence in the performance of every kind of obligation is demandable. While petitioner's
negligence in this case may not have been attended with malice and bad faith, nevertheless, it caused serious anxiety, embarrassment and humiliation". Hence we
ruled that the offended party in said case was entitled to recover reasonable moral damages. P100,000 is reasonable considering the reputation and social
standing of private respondent.

Exemplary damages: The law allows the grant of exemplary damages by way of example for the public good.The public relies on the banks' sworn profession of
diligence and meticulousness in giving irreproachable service. Reduced to P20,000.

Iii. Interest

Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the
contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum. (1108)
Art. 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract.
Art. 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper case, be adjudicated in the discretion of the court.
Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. (1109a)
Art. 2213. Interest cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonably certainty.

BSP-MB Circular No. 799 (2013)

Section 1. The Rate of interest for the loan or forebearance of any money, goods or credit and the rate allowed in judgments, in the absence of an express
contract as to such rate of interest, shall be six percent (6%) per annum
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3, and 4303P.1 of the Manual of
Regulations for Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on July 1, 2013

PACITA F. REFORMINA and HEIRS OF FRANCISCO REFORMINA, vs. THE HONORABLE VALERIANO P. TOMOL, JR., as Judge of the Court of First
Instance, Branch XI, CEBU CITY, SHELL REFINING COMPANY (PHILS.), INC., and MICHAEL, INCORPORATED

FACTS:
On June 7, 1972, judgment was rendered by the CFI Cebu in favor of the petitioners herein and against respondent Shell Refining Company and Michael
Incorporated. The Court ordered respondents to pay jointly and severally the petitioners in the sum of P131,084.00 which is the value of the boat F B Pacita Ill
together with its accessories, fishing gear and equipment minus P80,000.00 which is the value of the insurance recovered and the amount of P10,000.00 a month
as the estimated monthly loss suffered by them as a result of the fire of May 6, 1969 up to the time they are actually paid or already the total sum of P370,000.00
as of June 4, 1972 with legal interest from the filing of the complaint until paid and to pay attorney's fees of P5,000.00 with costs against defendants and third party
plaintiffs.

The Court of Appeals modified the judgment by awarding compensatory and moral damages of 100,000 pesos with legal interests from the filing of the complaint
and 41,000 pesos for the value of the lost boat with legal interest from the filing of the complaint until fully paid.

The said decision became final and the case was remanded to the lower court for execution. Petitioners claim that the "legal interest" should be at the rate of
twelve (12%) percent per annum, invoking in support of their aforesaid submission, Central Bank of the Philippines Circular No. 416 which states that the rate of
interest for the loan or forbearance of any money, goods, or credits and the rate allowed in judgments, in the absence of express contract as to such rate of
interest, shall be twelve (12%) per cent per annum.
Upon the other hand, private respondents insist that said legal interest should be at the rate of six (6%) percent per annum, in accordance with Article 2209 of the
New Civil Code in relation to Articles 2210 and 2211 thereof.

ISSUE: Whether or not the present case falls within the judgments mentioned in Circular No. 416?

HELD: NO.

Central Bank Circular No. 416 which took effect on July 29, 1974 was issued and promulgated by the Monetary Board pursuant to the authority granted to the
Central Bank by P.D. No. 116, which amended Act No. 2655, otherwise known as the Usury Law.

Acting pursuant to this grant of authority, the Monetary Board increased the rate of legal interest from that of six (6%) percent per annum originally allowed under
Section I of Act No. 2655 to twelve (12%) percent per annum. It will be noted that Act No. 2655 (from which the present circular was based) deals with interest on
(1) loans; (2) forbearances of any money, goods, or credits; and (3) rate allowed in judgments.

The judgments spoken of and referred to are Judgments in litigations involving loans or forbearance of any money, goods or credits. Any other kind of monetary
judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits does not fall within the coverage of the said law for it is
not within the ambit of the authority granted to the Central Bank.
The Monetary Board may not tread on forbidden grounds. It cannot rewrite other laws. That function is vested solely with the legislative authority. It is axiomatic in
legal hermeneutics that statutes should be construed as a whole and not as a series of disconnected articles and phrases. In the absence of a clear contrary
intention, words and phrases in statutes should not be interpreted in isolation from one another.

Coming to the case at bar, the decision herein sought to be executed is one rendered in an Action for Damages for injury to persons and loss of property and does
not involve any loan, much less forbearances of any money, goods or credits. As correctly argued by the private respondents, the law applicable to the said case is
Article 2209 of the New Civil Code.

That being said, the legal interest applicable to the petitioners is 6%.

G.R. No. 96372 May 22, 1995 (FELICIANO, J.)

ANTONIO L. CASTELO, BERNABE B. BANSON, LOURDES A. BANSON, and POMPEYO DEPANTE vs THE COURT OF APPEALS, 12th Division, and
MILAGROS DELA ROSA

FACTS:
15 October 1982 - Ps Antonio Castelo, Bernabe Banson, Lourdes Banson and Pompeyo Depante entered into a contract denominated as a "Deed of
Conditional Sale" with PR Milagros Dela Rosa involving a parcel of land located in 1524 Espaa Street, Sampaloc, Manila, 84.19 square meters in area. The
agreed price of the land was P269,408.00. Upon signing the contract, PR paid P P106,000.00 leaving a balance of P163,408.00
The Deed of Conditional Sale also stipulated that: (b) The balance of P163,408.00 to be paid on or before December 31, 1982 without interest and penalty
charges; (c) Should the said balance [remain unpaid] by the VENDEE, the VENDORS hereby agree to give the VENDEE a grace period of SIX (6) months or
up to June 30, 1983 to pay said balance provided that interest at the rate of 12% per annum shall be charged and 1% penalty charge a month shall be
imposed on the remaining diminishing balance.
PR Dela Rosa was unable to pay the remaining balance on or before 30 June 1983.
29 July 1983 - Ps filed an action for specific performance with damages in the RTC Manila against PR Dela Rosa. RTC rendered a decision ordering the
rescission of the Deed of Conditional Sale.
Ps then went on Certiorari to the Court of Appeals questioning the trial court's decision rescinding the Deed of Conditional Sale. They claimed that rescission of
the contract was only an alternative relief available under the Civil Code, while they, in their complaint before the RTC, had asked for specific performance with
damages.
21 Nov 1986 CA(BARTOLOME): annulled and set aside the RTC's decision (par. 2) ordering PR to comply with her obligation under the conditional sale to
pay the balance of the conditional sale in the amount of P163,408.00, to pay interest and in default thereof the rescission thereof is the alternative.
Ps filed a motion for execution of the judgment. PR opposed this motion.
RTC issued writ of execution. Accordingly, a Sheriff's Notice to Pay Judgment was served on PR Dela Rosa requiring her to pay Ps a total of P197,723.68.
Ps filed a MfR and a separate motion for alias writ of execution contending that the sum of P197,723.68, based on the Sheriff's own computation, was
erroneous. They argued that the obligation of PR was to pay (a) interest at the rate of twelve percent (12%) per annum plus (b)one percent (1%) penalty
charge per month, from default, i.e. from 1 January 1983:
a. That the amount to be paid by PR should be P398,814.88 instead and not P197,723.68 or a difference of P201,091.20; (detailed computation in case)
Ps also claimed that the amount arrived at by the Sheriff was inconsistent not only with the CAs, but also the stipulations in the "Deed of Conditional Sale."
RTC denied the motion for alias writ of execution and MfR. RTC stated that it did not have authority to enlarge the scope of the dispositive portion of the CAs
decision which was the subject of execution. Moreover, the phrase "to pay interest" found in the dispositive portion of the CAs decision did not refer to the
stipulation in the "Deed of Conditional Sale" but rather to the legal rate of interest imposed by CA which started to run from 12 February 1987, the date of entry
of judgment. Had it intended otherwise, CA would have declared so.
P moved for reconsideration of the Order, without success. Ps then went on Certiorari for the second time to CA claiming that RTC had acted with grave abuse
of discretion in issuing its Orders. The petition was dismissed for lack of merit.
CA (LUNA): Indeed, what must be the subject of execution is the new decision of the CA wherein decreed in paragraph "2" of the dispositive portion, ordering
the "defendant . . . to pay the balance of the conditional sale in the amount of P163,408.00, to pay interest . . . . " Being a "new" judgment or decision, the
 computation of the "interest" on the balance of the conditional sale should commence from the date of its ENTRY on February 12, 1987, when the decision
became FINAL and EXECUTORY. It is the DECISION of this Court WHICH DECREED PAYMENT and ACCRUAL OF INTEREST.
Hence this Petition for Review contending that, CA had erred in ignoring the stipulation for payment of interest in case of default found in the "Deed of
Conditional Sale."

ISSUE/HELD: What is the correct interpretation of the phrase "to pay interest" set out in the dispositive portion of the 21 November 1986 decision of Castro-
Bartolome, J.?
WON there is an ambiguity or clerical error and inadvertent omission in the dispositive portion of the decision of Castro-Bartolome, J. dated 21 November 1986,
which may legitimately be clarified by referring to the body of the decision and perhaps even the pleadings filed before her. ErrNO. not in body.
under the circumstances which were before Castro-Bartolome, J., what should PR dela Rosa have been held liable for in accordance with law?

SC: must refer to the interest stipulated by the parties in the Deed of Conditional Sale which they had entered into on 15 October 1982

RATIO: The established doctrine is that when the dispositive portion of a judgment, which has become final and executory, contains a clerical error or an ambiguity
arising from an inadvertent omission, such error or ambiguity may be clarified by reference to the body of the decision itself.

[APPLICATION IN CASE] The dispositive portion itself failed to specify expressly whether Castro-Bartolome, J. was referring to the payment of interest in
accordance with the terms and conditions of the "Deed of Conditional Sale" or whether, as CA was to hold almost four (4) years later that the requirement of "to
pay interest" related, not to the interest provisions of the Conditional Sale Deed between Ps and PR, but rather to legal interest on the amount of the unpaid
balance of the purchase price of the land which would begin to accrue from the date of the entry of the Castro-Bartolome judgment on 12 February 1987.

It thus appears that the Castro-Bartolome decision was ambiguous in the sense that it was too cryptic. Examination of the body of that decision, however, sheds no
light on the reference intended by Castro-Bartolome, J. in directing private respondent "to pay interest." Luna, J. (CA ponente) himself had to resort to "fair
interpretation." We believe that, in these circumstances, we must assume that Mme. Justice Castro-Bartolome meant to decide in accordance with law; that we
cannot fairly assume that she was unfamiliar with the applicable law or that she had intended to grant Ps less than that they were entitled to under the law. Thus,
the important question is: under the circumstances which were before Castro-Bartolome, J., what should PR dela Rosa have been held liable for in accordance
with law? We believe and so hold that the phrase "to pay interest," found in the dispositive portion of the Castro-Bartolome decision must, under applicable law,
refer to the interest stipulated by the parties in the Deed of Conditional Sale which they had entered into on 15 October 1982. We note, in the first place, that the
phrase "to pay interest" comes close upon the heels of the preceding phrase "to comply with her obligation under the conditional sale to pay the balance of
P163,408.00." A strong inference thus arises that the "interest" required to be paid is the interest stipulated as part of the "obligation [of private respondent dela
Rosa] under the conditional sale [agreement] to pay the balance of [the purchase price of the land]." There is, in the second place, no question that PR dela Rosa
had failed to pay the balance of P163,408.00 on or before 31 December 1982. The applicable law is to be found in Article 2209 of the Civil Code 3.Under Article
2209, the appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum of money is the payment of penalty
interest at the rate agreed upon in the contract of the parties. In the absence of a stipulation of a particular rate of penalty interest, payment of additional interest at
a rate equal to the regular or monetary interest, becomes due and payable. Finally, if no regular interest had been agreed upon by the contracting parties, then the
damages payable will consist of payment of legal interest 10 which is six percent (6%) or, in the case of loans or forbearances of money, twelve percent (12%) per
annum. Applying Article 2209 to the instant case, we must refer to the "Deed of Conditional Sale" which, as already noted, had specifically provided for "interest at
the rate of 12% per annum" and a "1% penalty charge a month [to] be imposed on their remaining diminishing balance."

PR contends that Article 2209 of the Civil Code is not applicable in this case because the interest referred to therein is given as compensation for the use of
money, not for the incurring of delay as in the instant case. SC: Article 2209 governs transactions involving the payment of indemnity in the concept of damages
arising from delay in the discharge of obligations consisting of the payment of a sum of money. The "obligation consisting in the payment of a sum of money"
referred to in Article 2209 is not confined to a loan or forbearance of money. The Court has, for instance, consistently applied Article 2209 in the determination of
the interest properly payable where there was default in the payment of the price or consideration under a contract of sale as in the case at bar. Article 2209 has
3
If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and
in the absence of stipulation, the legal interest which is six percent (6%) per annum.
also been applied by this Court in cases involving an action for damages for injury to persons and loss of property; to actions for damages arising from unpaid
insurance claims; and an action involving the appropriate rate of interest on just compensation that is payable for expropriated lands.

The stipulation in the "Deed of Conditional Sale" requiring the payment of interest is not unlawful. The validity of the contract of conditional sale itself has not been
put to question by PR dela Rosa and there is nothing in the record to suggest that the same may be contrary to law, morals, good custom, public order or public
policy. Accordingly, the contractual stipulation must be regarded as binding and enforceable as the law between the parties.

EASTERN ASSURANCE AND SURETY CORPORATION vs CA

G.R. No. 127135 | January 18, 2000 | J. Mendoza

FACTS: On April 9, 1981, Vicente Tan insured his building in Dumaguete City against fire with Eastern Assurance and Surety Corporation (EASCO) for
P250,000.00. On June 26, 1981, the building was destroyed by fire. As his claim for indemnity was refused, Tan filed a complaint for breach of contract with
damages against EASCO.

The RTC ruled in favor of Tan and ordered EASCO to pay P250,000.00 representing the fire insurance claim of plaintiff plus legal rate of interest from June 26,
1981 until fully paid as well as attorneys fees, exemplary damages and insurance claim expenses. The CA affirmed but deleted the exemplary damages and
attorneys fees. This decision became final on August 5, 1993.
Thereupon, EASCO tendered payment of the money judgment in the amount of P250,000.00 plus interest of 6% per annum from June 26, 1981 to July 30, 1993.
However, Tan refused to accept payment on the ground that the applicable legal rate of interest was 12% per annum. Subsequently, EASCO brought the matter to
the Insurance Commission. On February 27, 1995, the parties agreed before the hearing officer of the commission that the interest should be computed from June
26, 1981 to September 30, 1994. EASCO would file with the trial court a motion to fix the legal rate of interest attaching thereto a check in the amount of
P250,000.00 with 6% interest per annum.
Accordingly, on March 17, 1995, EASCO filed the motion in court, together with a managers check for P448,750.00. The RTC then ruled that the applicable
interest rate is 12% for the period stipulated and the amount of the managers check would be in partial satisfaction of the obligation.

The CA modified the ruling as follows: 6% from June 26, 1981 to August 24, 1993 (for breach of contract) and 12% beginning August 25, 1993 until the money
judgment is paid.

ISSUE:
WON the legal interest set by the CA was correct
Yes except the part which says until the money judgment is paid should be changed to September 30, 1994 because it was the agreed cut-off date

HELD: When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts, is breached, the contravenor can be held liable for
damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.
Rules on Rate of Interest from the summary provided in Eastern Shipping Lines vs CA:
1. When the obligation is breached, and it consists in the payment of a sum of money, the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest
shall be 12% per annum to be computed from default (Art. 1169 NCC).

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to
run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages
may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally
adjudged.
 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1
or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.

EASCO also argues that the parties agreed on the "cut-off date" for the payment of legal interest, and that is from June 26, 1981 to September 30, 1984, which the
Court of Appeals should have respected. Court: We are inclined to believe the claim of EASCO. The resolution of May 10, 1995 of the trial court referred to such
an agreement, and Tan never questioned this resolution. The trial courts finding on this point is binding. Hence, the payment of 12% legal interest per annum
should commence from August 25, 1993, the date the decision of the trial court became final, up to September 30, 1994, the agreed "cut-off-date" for the payment
of legal interest.

International Container Terminal Services, Inc. v. FGU Insurance Corporation

G.R. No. 161539 | April 24, 2009 | J. Austria-Martinez

FACTS
In a Decision dated June 27, 2008, the Court denied the petition filed in this case and found the petitioner liable for the full amount of the shipment that was lost
while in its charge. Petitioner filed MR, which was denied by the Court.

Petitioner filed the present second motion for partial reconsideration where it solely assails the award and reckoning date of the 12% interest imposed by the RTC
on its adjudged liability.
Petitioner contends that the complaint filed before the RTC is not one for loan or forbearance of money, but one for breach of contract or damages; hence,
petitioner insists that the interest rate should be the legal rate of 6%, and not 12%.
Petitioner also argues that the RTC reckoned the date when interest should accrue on the date when respondent FGU Insurance Corporation paid the
amount insured, or on January 3, 1995. Petitioner contends that this is erroneous and the date should be reckoned from the time when respondent filed
the complaint with the RTC, which is on April 10, 1995.

ISSUE
WON the interest rate of petitioners liability should be 6% and reckoned from the time of the filing of the complaint

HELD
YES.

The interest rate of 6% should have been imposed, and not 12%, as affirmed by the Court. Also, it should have been reckoned from April 10, 1995, when
respondent filed by the complaint for sum of money, and not January 3, 1995, which was the date respondent paid the amount insured to the Republic Asahi Glass
Corporation (RAGC).

The claim in this case is one for reimbursement of the sum of money paid by FGU Insurance Corporation to RAGC. This is not one for forbearance of money,
goods or credit. Forbearance in the context of the usury law is a contractual obligation of lender or creditor to refrain, during a given period of time, from requiring
the borrower or debtor to repay a loan or debt then due and payable. Thus the interest rate should be as it is hereby fixed at 6%.

The interest rate of 6% shall be computed from the date of filing of the complaint (April 10, 1995). This is in accordance with the ruling that where the demand
cannot be established with reasonable certainty, the interest shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged.

DISPOSITION
 The second motion for partial reconsideration is GRANTED
The rate of interest on the principal amount of P1,875,068.88 shall be 6% per annum computed from the date of filing of the complaint or April 10, 1995
until finality of this judgment.
From the time this Decision becomes final and executory and the judgment amount remains unsatisfied, the same shall earn interest at the rate of 12% per
annum until its satisfaction.

Ileana Macalinao vs. BPI

GR No. 175490 | Sept. 17, 2009 | J. Velasco, Jr.

Facts:
P Macalinao was a cardholder of BPI Mastercard but she defaulted in paying for some purchases made using the credit card. On January 5, 2004, she received a
letter from R BPI demanding payment of P141,518.34.

Table 1
Statement Previous Purchases Penalty Finance Balance
Date Balance (Payments) Interest Charges Due
10/27/2002 94,843.70 559.72 3,061.99 98,456.41
11/27/2002 98,465.41 (15,000) 0 2,885.61 86,351.02
12/31/2002 86,351.02 30,308.80 259.05 2,806.41 119,752.28
1/27/2003 119,752.28 618.23 3,891.07 124,234.58
2/27/2003 124,234.58 990.93 4,037.62 129,263.13
3/27/2003 129,263.13 (18,000.00) 298.72 3,616.05 115,177.90
4/27/2003 115,177.90 644.26 3,743.28 119,565.44
5/27/2003 119,565.44 (10,000.00) 402.95 3,571.71 113,540.10
6/29/2003 113,540.10 8,362.50 323.57 3,607.32 118,833.49
(7,000.00)
7/27/2003 118,833.49 608.07 3,862.09 123,375.65
8/27/2003 123,375.65 1,050.20 4,009.71 128,435.56
9/28/2003 128,435.56 1,435.51 4,174.16 134,045.23
10/28/2003
11/28/2003
12/28/2003
1/27/2004 141,518.34 8,491.10 4,599.34 154,608.78

Under the Terms and Conditions Governing the Issuance and Use of the BPI Credit and BPI Mastercard, the charges or balance thereof remaining unpaid after the
payment due date indicated on the monthly Statement of Accounts shall bear interest at the rate of 3% per month and an additional penalty fee equivalent to
another 3% per month.

For Macalinaos failure to pay, BPI filed with MeTC-Makati a complaint for a sum of money against P and her husband. In the complaint, BPI prayed for payment of
P154,608.78 (see Table 1) PLUS 3.25% finance charges, late payment charges of 6% of the amount due from February 29, 2004, 25% of total amount due as
attorneys fees, and cost of suit.

The Macalinaos failed to file their answer so MeTC ruled in favor of BPI: Macalinaos to pay:
1. Amount of P141,518.34 PLUS interest and penalty charges of 2% per month from January 5, 2004 until full payment
2. P10,000 as attorneys fees
 3. Cost of suit

RTC: affirmed MeTC

CA: affirmed but modified total amount due and interest rate
1. Amount of P126,706.70 PLUS interest and penalty charges of 3% per month from January 5, 2004 until full payment
2. Same attorneys fees and cost of suit

The CA held that the amount of P141,518.34 (amount sought to be satisfied in the demand letter of BPI) already incorporated higher interest rates in the amount;
thus, it should not be the basis in computing Ps total obligation. It held, however, that the interest rate should be 3% pursuant to the credit card contract stipulation.

*Husband died so only Ileana is left as P.

Issue: How should Macalinaos total obligation be computed?

Held:
1) The interest rate and penalty charges of 3% per month (36% per annum) should be reduced to 2% per month (24% per annum).

BPI originally imposed the interest and penalty charges at 9.25% per month in its complaint, but this was declared unconscionable by the lower courts for
being too excessive it was reduced to 2%. The CA, however, modified it to 3% based on the credit card terms & conditions.

Even though the terms & conditions stipulate a 3% interest rate (36% per annum), it should be noted that in several cases, the Court has considered a 36% per
annum interest rate as excessive and unconscionable, and thus void for being contrary to morals. The same is true with the penalty charge, pursuant to Art. 1229.

P made partial payments to BPI as indicated in her Billing Statements (see Table 1). This circumstance may be appreciated in determining what an unconscionable
rate is. Hence, the Court finds it equitable to reduce the interest rate to 1% monthly (from CAs 1.5%) and penalty charge to 1% monthly as well (from CAs 1.5%)
for a total of 2% per month, in line with jurisprudence and in accordance with Art. 1229.

2) P is also asking for the cases dismissal as CAs computation was based on the amount of P94,843.70 (see starting balance on Table 1) which was not the
amount of the principal obligation but Court held that P cannot do so as she failed to file her answer at the start (so it was her fault) and that the dismissal
would cause great injustice to BPI.

The CA correctly used the beginning balance of P94,843.70 as basis for the re-computation of the interest as this was the 1st amount on the Statement of Account.
There is no other amount on which the re-computation could be based.

In view of the ruling of 1% monthly interest and 1% penalty charge to be applied to the beginning balance, P is ordered to pay BPI:
1. Amount of P112,309.52 PLUS interest and penalty charges of 2% per month from January 5, 2004 until full payment
2. P10,000 as attorneys fees
3. Cost of suit

Siga-an v. Villanueva

Facts:
Alicia Villanueva filed a complaint against Sebastian Sigaan because she wants a return of her money (the excess interest she paid). According to her,
Sigaan, the comptroller of the Philippine Navy, offered to loan money to her. She accepted because she needed capital for her office supply business venture. She
currently supplies office matl and equipment to the Phil Navy.
 She agreed to the loan of P540k. Loan was not in writing and there was no stipulation as to payment of interest. She issued a check worth P500; as partial
payment. 2 months later, she issues another check worth P200k. Sigaan (who now received P700k from Villanueva) said the excess money Villanueva paid would
be applied as interest. But Sigaan still kept pestering her for additional interest and threatened to block her transactions with the Phil Navy if she wont comply.
Fearing this, she paid additional amounts totalling to P1.2m. She asked for a receipt but was told that there was no need because they had mutual trust and
confidence.

She then consulted a lawyer who told her that Sigaan could not validly collect interest because there was no agreement of interest. She demands from
Sigaan the return of the P660k.

According to Sigaan, however, he did not offer to loan but was instead propositioned by Villanueva and insists that there was no overpayment, as that
there was a promissory note by Villanueva admitting to having borrowed P1.24m. As payment, Villanueva issued 6 postdated checks. Only 1 was honoured. He
filed criminal cases against Villanueva (BP 22). In this BP 22 case, Sigaan claims that Villanueva, in her testimony, admitted to having agreed to a 7% interest. This
should be an exception (to the rule that interests should be in writing) because it would be unfair since Villanueva already admits to the interest. He also claims that
Villanueva was already estopped from complaining because she was given several times to settle her obligation but failed.

Issue:
WON interest should be paid by Villanueva - NO

Held:
There are two kinds of interest, monetary and compensatory. Monetary interest is a compensation fixed by the parties for the use or forbearance of money,
while compensatory interest is imposed by law or by courts as penalty or indemnity. Said right to interest arises only by contract or by virtue of damages for delay
or failure to pay the principal loan.

Article 1956 refers to monetary interest and mandates that no interest shall be due unless stipulated in writing. So, it is allowed only if there was express
stipulation for interest payment and if the agreement was in writing.mIn this case, the parties did not agree. As explained by Villanueva, the presented promissory
note was in her handwriting because Sigaan told her to copy it and she did because she feared the threats of Sigaan to block her deals with the Phil Navy. Clearly,
there was no consent to the payment of interest, as she was coerced.

Sigaans claims that Villanueva admitting to the interest should be an exception. However there are only 2 instances where interest may be imposed in
absence of stipulation. Article 2209, if the obligation consists in payment of sum of money and debtor incurs delay, and Article 2212, where interest due shall earn
legal interest from the time it is judicially demanded. Under these 2 instances interest may be imposed only as penalty or damages for breach of contractual
obligations. These are only applicable to compensatory interests and not monetary. And in this case there was no proof that Villanueva defaulted in paying the
loan.

It was duly established that respondent paid interest to petitioner. Respondent was under no duty to make such payment because there was no express
stipulation in writing to that effect. There was no binding relation between petitioner and respondent as regards the payment of interest. The payment was clearly a
mistake. Since petitioner received something when there was no right to demand it, he has an obligation to return it, as the principle of solutio indebiti applies.

The court held in Eastern Shipping Lines, Inc. v. Court of Appeals, that when an obligation, not constituting a loan or forbearance of money is breached, an
interest on the amount of damages awarded may be imposed at the rate of 6% per annum. They further declared that when the judgment of the court awarding a
sum of money becomes final and executory, the rate of legal interest, whether it is a loan/forbearance of money or not, shall be 12% per annum from such finality
until its satisfaction, this interim period being deemed equivalent to a forbearance of credit.

In the present case, petitioners obligation arose from a quasi-contract of solutio indebiti and not from a loan or forbearance of money. Thus, an interest of
6% per annum should be imposed on the amount to be refunded as well as on the damages awarded and on the attorneys fees, to be computed from the time of
the extra-judicial demand on 3 March 1998, up to the finality of this Decision. In addition, the interest shall become 12% per annum from the finality of this Decision
up to its satisfaction.

Nacar v. Gallery Frames

(This is actually a labor case but important for application of interest)

IMPORTANT NOTE REGARDING APPLICABLE INTEREST
Central Bank Circular 416 imposing a 12% per annum interest rate on all loans or forbearances of money, goods, or credit, and 6% per annum
interest rate on all other obligations applies in the cases below. However, effective 1 July 2013, BSP Monetary Bank Circular No. 799-2013 was
issued, providing that the legal interest for loans or forbearances of money shall be 6%, thereby creating the 6-6-6 rule. This was applied in Nacar v.
Gallery Frames (G.R. No. 189871; 13 August 2013).
6-12-6 (Eastern Assurance 6-6-6 (Nacar rules, applying
three-step rule) new Circular 799-2013)
1. When the obligation is breached, 1. When the obligation is breached,
and it consists in the payment of a and it consists in the payment of a
sum of money, i.e., a loan or sum of money, i.e., a loan or
forbearance of money, the interest forbearance of money, the interest
due should be that which may have due should be that which may have
been stipulated in writing. been stipulated in writing.
Furthermore, the interest due shall Furthermore, the interest due shall
itself earn legal interest from the time itself earn legal interest from the time
it is judicially demanded. In the it is judicially demanded. In the
absence of stipulation, the rate of absence of stipulation, the rate of
interest shall be 12% per annum to interest shall be 6% per annum to be
be computed from default, i.e., from computed from default, i.e., from
judicial or extrajudicial demand under judicial or extrajudicial demand
and subject to the provisions of Art. under and subject to the provisions
1169 of the Civil Code. of Art. 1169 of the Civil Code.
2. When an obligation, not 2. When an obligation, not
constituting a loan or forbearance of constituting a loan or forbearance of
money, is breached, an interest on money, is breached, an interest on
the amount of damages awarded the amount of damages awarded
may be imposed at the discretion of may be imposed at the discretion of
the court at the rate of 6% per the court at the rate of 6% per
annum. No interest, however, shall annum. No interest, however, shall
be adjudged on unliquidated claims be adjudged on unliquidated claims
or damages except when or until the or damages, except when or until the
demand can be established with demand can be established with
reasonable certainty. Accordingly, reasonable certainty. Accordingly,
where the demand is established with where the demand is established
reasonable certainty, the interest with reasonable certainty, the interest
shall begin to run from the time the shall begin to run from the time the
claim is made judicially claim is made judicially or
orextrajudicially (Art. 1169) but when extrajudicially (Art. 1169), but when
such certainty cannot be so such certainty cannot be so
reasonably established at
the time the demand is made, the
interest shall begin to run only from
the date the judgment of the court is
made (at which time the
quantification of damages
may be deemed to have been
reasonably ascertained). The actual
base for the computation of legal
interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court
awarding a sum of money becomes
final and executory, the rate of legal
interest, whether the case falls under
paragraph 1 or paragraph 2, above,
shall be 12% per annum from such
finality until its satisfaction,
this interim period being deemed to
be by then an
equivalent to a forbearance of credit.
reasonably established at
the time the demand is made, the
interest shall begin to run only from
the date the judgment of the court is
made (at which time the
quantification of damages
may be deemed to have been
reasonably ascertained). The actual
base for the computation of legal
interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court
awarding a sum of money becomes
final and executory, the rate of legal
interest, whether the case falls under
paragraph 1 or paragraph 2, above,
shall be 6% per annum from such
finality until its satisfaction, this
interim period being deemed to be
by then an
equivalent to a forbearance of credit.

FACTS: Dario Nacar filed a labor case against Gallery Frames and its owner Felipe Bordey, Jr. Nacar alleged that he was dismissed without cause by Gallery
Frames on January 24, 1997.

On October 15, 1998, the Labor Arbiter (LA) found Gallery Frames guilty of illegal dismissal hence the Arbiter awarded Nacar P158,919.92 in damages consisting
of backwages and separation pay.
Gallery Frames appealed all the way to the Supreme Court (SC). The Supreme Court affirmed the decision of the Labor Arbiter and the decision became final on
May 27, 2002.

After the finality of the SC decision, Nacar filed a motion before the LA for recomputation as he alleged that his backwages should be computed from the time of
his illegal dismissal (January 24, 1997) until the finality of the SC decision (May 27, 2002) with interest.

The LA denied the motion as he ruled that the reckoning point of the computation should only be from the time Nacar was illegally dismissed (January 24, 1997)
until the decision of the LA (October 15, 1998). The LA reasoned that the said date should be the reckoning point because Nacar did not appeal hence as to him,
that decision became final and executory.

ISSUE: Whether or not the Labor Arbiter is correct.

HELD: No. There are two parts of a decision when it comes to illegal dismissal cases (referring to cases where the dismissed employee wins, or loses but wins on
appeal). The first part is the ruling that the employee was illegally dismissed. This is immediately final even if the employer appeals but will be reversed if
employer wins on appeal. The second part is the ruling on the award of backwages and/or separation pay. For backwages, it will be computed from the date of
illegal dismissal until the date of the decision of the Labor Arbiter. But if the employer appeals, then the end date shall be extended until the day when the appellate
courts decision shall become final. Hence, as a consequence, the liability of the employer, if he loses on appeal, will increase this is just but a risk that the
employer cannot avoid when it continued to seek recourses against the Labor Arbiters decision. This is also in accordance with Article 279 of the Labor Code.
Anent the issue of award interest in the form of actual or compensatory damages, the Supreme Court ruled that the old case of Eastern Shipping Lines vs CA is
already modified by the promulgation of the Bangko Sentral ng Pilipinas Monetary Board Resolution No. 796 which lowered the legal rate of interest from 12% to
6%. Specifically, the rules on interest are now as follows:

1. Monetary Obligations ex. Loans:

a. If stipulated in writing:
a.1. shall run from date of judicial demand (filing of the case)
a.2. rate of interest shall be that amount stipulated

b. If not stipulated in writing

b.1. shall run from date of default (either failure to pay upon extra-judicial demand or upon judicial demand whichever is appropriate and subject to the provisions
of Article 1169 of the Civil Code)
b.2. rate of interest shall be 6% per annum

2. Non-Monetary Obligations (such as the case at bar)

a. If already liquidated, rate of interest shall be 6% per annum, demandable from date of judicial or extra-judicial demand (Art. 1169, Civil Code)
b. If unliquidated, no interest
Except: When later on established with certainty. Interest shall still be 6% per annum demandable from the date of judgment because such on such date, it is
already deemed that the amount of damages is already ascertained.

3. Compounded Interest
- This is applicable to both monetary and non-monetary obligations
6% per annum computed against award of damages (interest) granted by the court. To be computed from the date when the courts decision becomes final
and executory until the award is fully satisfied by the losing party.

4. The 6% per annum rate of legal interest shall be applied prospectively:

- Final and executory judgments awarding damages prior to July 1, 2013 shall apply the 12% rate;
Final and executory judgments awarding damages on or after July 1, 2013 shall apply the 12% rate for unpaid obligations until June 30, 2013; unpaid
obligations with respect to said judgments on or after July 1, 2013 shall still incur the 6% rate.

HERMOJINA ESTORES vs. SPOUSES ARTURO AND LAURA SUPANGAN

G.R. No. 175139 April 18, 2012

DOCTRINE: The general rule is that the applicable rate of interest shall be computed in accordance with the stipulation of the parties. Absent any stipulation, the
applicable rate of interest shall be 12% per annum when the obligation arises out of a loan or a forbearance of money, goods or credits. In other cases, it shall be
six percent (6%).

A forbearance of money, goods or credits refers to arrangements other than loan agreements, where a person acquiesces to the temporary use of his money,
goods or credits pending happening of certain events or fulfillment of certain conditions.

Petitioners: Hermojina Estores

Respondents: Spouses Arturo and Laura Supangan

FACTS: On October 3, 1993, Hermojina and spouses Arturo and Laura entered into a Conditional Deed of Sale, whereby Hermojina offered to sell, and the
spouses Supangan offered to buy, a parcel of land covered by TCT No. 98720 located at Naic, Cavite for 4.7 million. The parties also stipulated other conditions
such as the right to demand return of full amount of downpayment by the vendor Hermojina if she fails to complete the necessary documentation and clearances
with DAR and the Land Registration Commission (LRC) and other needed to register the title to the spouses Supangan.

Despite the passage of almost seven years from the time of the execution of the contract, and notwithstanding payment of 3.5 million on the part of the spouses
Supangan, Hermojina still failed to comply with her obligations, including the obligation to complete the necessary paperwork to register the title to the Supangans.
Hence, in a letter dated September 27, 2000, the spouses demanded the return of the amount of 3.5 million within 15 days from receipt of the letter. Hermojina
acknowledge the receipt of the money and promised to return the same within 120 days. The Supangans were amenable to the proposal and provided for 12%
interest to be compounded annually.

Due to the failure of Hermojina to return the amount despite demand, the spouses filed a complaint in the RTC Malabon against Hermojina and her alleged agent,
Roberto Arias. In their complaint, the spouses prayed for the principal amount of 3.5 million, plus 12% interest compounded annually starting October 1993
(reaching the amount of 8.56 million), plus moral, actual and exemplary damages, attorneys fees (plus 20% of the recoverable amount to be added to the
attorneys fees) and costs of suit.

In their Answer, Hermojina claimed that they were willing to return the 3.5 million but without any interest, as (according to them) the interest was not agreed
upon. Subsequently, in their Pre-Trial Brief, they reiterated that the only remaining issue between the parties is the imposition of interest. They argued that since
the Conditional Deed of Sale provided only for the return of the downpayment in case of breach, they cannot be held liable to pay legal interest as well.

RTC (Pre-Trial Order): parties agreed that the principal amount of 3.5 million should be returned to the Supangans. The issue remaining is whether the
Supangans are entitled to legal interest thereon, damages and attorneys fees.
Trial ensued, however Hermojina and Roberto were not able to appear despite several postponements, and consequently the case was automatically submitted for
decision.

RTC ruling: the Supangans were entitled to interest but only at the rate of 6% per annum and not 12% as prayed by them. It also found the Supangans entitled to
attorneys fees as they were compelled to litigate to protect their interest.

CA: affirmed the RTCs ruling. 6% interest proper, and if the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall
be adjusted to twelve percent (12%) per annum. Attorneys fees were reduced to 100,000.00 as 50,000.00 plus 20% recoverable amount was found to be
excessive.

ISSUES: WON the imposition of interest and attorneys fees is proper.

HELD: YES. CA affirmed. Rate of interest shall be twelve percent (12%) per annum, computed from September 27, 2000 until fully satisfied. However, attorneys
fees is further reduced to 50,000.00.

RATIO: The Court held that it is proper to impose interest notwithstanding the absence of stipulation in the contract. Art. 2210 of the New Civil Code expressly
provides that interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract.

In the case of Hermojina, there is no question that she is legally obligated to return the 3.5 million because of her failure to fulfill the obligation under the
Conditional Deed of Sale, despite demand. She has in fact admitted that the conditions were not fulfilled and that she was willing to return the full amount but has
not actually done so. She already enjoyed the use of the money from the time it was given to her until now. Thus, she is already in default of her obligation from the
date of demand, i.e., on September 27, 2000.

With regard to the interest rate applicable, the general rule is that the applicable rate of interest shall be computed in accordance with the stipulation of the parties,
as per the cited case of Crismina Garments, Inc. v. Court of Appeals. Absent any stipulation, the applicable rate of interest shall be 12% per annum when the
obligation arises out of a loan or a forbearance of money, goods or credits. In other cases, it shall be six percent (6%). In this case, the parties did not stipulate as
to the applicable rate of interest.
The only question remaining therefore is whether the 6% (as provided under Article 2209 of the New Civil Code), or 12% (under Central Bank Circular No. 416),
shall apply.

The contract involved in this case is admittedly not a loan but a Conditional Deed of Sale. However, the contract provides that the seller (Hermojina) must return
the payment made by the buyer (the spouses Supangan) if the conditions are not fulfilled. There is no question that they have in fact, not been fulfilled as the
seller Hermojina has admitted this. The Crismina case, however, states that a forbearance of money, goods or credits refers to arrangements other than loan
agreements, where a person acquiesces to the temporary use of his money, goods or credits pending happening of certain events or fulfillment of certain
conditions.

In this case, the Supangans parted with their money even before the conditions were fulfilled. They have therefore allowed or granted forbearance to the seller
(Hermojina) to use their money pending fulfillment of the conditions. They were deprived of the use of their money for the period pending fulfillment of the
conditions and when those conditions were breached, they are entitled not only to the return of the principal amount paid, but also to compensation for the use of
their money. The compensation for the use of their money, absent any stipulation, should be the same rate of legal interest applicable to a loan since the use or
deprivation of funds is similar to a loan.
Hermojinas unwarranted withholding of the money that rightfully pertains to the spouses amounts to forbearance of money that can be considered as an
involuntary loan. Thus, the applicable rate of interest is 12% per annum.

[SIDE NOTE]
Under Art. 2208 of the Civil Code, attorneys fees may be recovered:
xxxx
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
xxxx
(11)In any other case where the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered.

In all cases, the attorneys fees and expenses of litigation must be reasonable.
Considering the circumstances of the instant case, we find that the spouses Supangan were entitled to recover attorneys fees. There is no doubt that they were
forced to litigate to protect their interest, i.e., to recover their money. However, the Court found that the amount of 50,000.00 was more appropriate, in line with
the policy enunciated in Art. 2208 of the Civil Code that the award of attorneys fees must always be reasonable.

PCI Leasing and Finance, Inc. vs. Trojan Metal Industries Inc. Sps. Dizon and John Doe
G.R. No. 176381 | December 15, 2010 | Carpio J.

Facts: (sale with lease agreement)

Trojan came to PCI Leasing to seek a loan. PCI Leasing offered to buy various equipment owned by Trojan instead (hydraulic press with cushion, various
powerpress, lathe machine, milling machine and a radial drill). Trojan agreed and they executed deeds of sale for the various equipment for a total of P2,865,070.

Trojan and PCI Leasing entered into a lease agreement later where Trojan leased from PCI leasing the various equipment (Trojan owner turned lessee). Trojan
issued post dated checks (24 month instalments) for the monthly rental of the equipment.

Trojan was also required to give a guaranty deposit of P1,030,350 to be automatically forfeited should equipment be returned before lease agreement expires.
Spouses Dizon (Trojans Pres and VP) executed a Continuing Guaranty of Lease obligations where they agreed to pay in case Trojan defaults.

Trojan used the leased equipment as temporary collateral to obtain additional loan from another financing company. PCI Leasing considered the second mortgage
a violation of the lease agreement. Trojans partial payments reached P1,717,091 at this time. PCI Leasing sent a demand letter to Trojan for the payment of the
outstanding obligation which Trojan did not heed.
PCI Leasing filed in the RTC a complaint against Trojan, sps Dizon and John Doe [TROJAN] for the recovery of sum of money and personal property and for the
issuance of a writ of replevin.

RTC issued the writ of replevin. PCI Leasing sold the leased equipment to a third party and collected P1,025,000.

TROJAN: sale with lease agreement was to facilitate financial lease. The simulated financial lease should be reformed to show the true agreement: a loan secured
by chattel mortgage.

RTC: Sale and leaseback as financial lease VALID. PCI entitled to possession. TROJAN should pay remaining rentals of P888,434.48 plus legal interest from date
of filing the complaint + Atty Fees P50,000

CA: Loan secured by chattel mortgage. PCI collected (Guaranty Deposit P1,030,000 and Proceeds from sale of equip to 3P P1,025,000) total of P2,055,250 as
against TROJANs remaining obligation of P888,423.48 or an excess of P1,166,826.52 which should be returned to TROJAN [ChattelMortgageLaw]
PCI Leasing filed a petition for review in the SC

Issues:
1) WON sale with lease agreement is a finance lease or a loan secured by chattel mortgage. LOAN secured by chattel mortgage
2) WON PCI should refund the P1,166,826.52. To be recomputed. Remanded to RTC (see discussion on interest below)
Ratio:
It was a loan secured by chattel mortgage

In a true financial leasing, whether under RA 5980 or RA 8556, a finance company purchases on behalf of a cash-strapped lessee the equipment the latter wants
to buy but, due to financial limitations, is incapable of doing so. The finance company then leases the equipment to the lessee in exchange for the latters periodic
payment of a fixed amount of rental.

In this case, however, TROJAN already owned the subject equipment before it transacted with PCI Therefore, the transaction between the parties in this case
cannot be deemed to be in the nature of a financial leasing as defined by law. It is simply a loan secured by various equipment owned by TROJAN.

Upon TROJANs default, PCI was entitled to seize the mortgaged equipment, not as owner but as creditor-mortgagee for the purpose of foreclosing the chattel
mortgage. PCIs sale to a third party of the mortgaged equipment and collection of the proceeds of the sale can be deemed in the exercise of its right to foreclose
the chattel mortgage as creditor-mortgagee.

On the amount of refund and interest

CA should have considered the proceeds from the sale to PCI.

Records show that PCI paid Trojan P2,865,070.0027 as consideration for acquiring the mortgaged equipment. In turn, Trojan gave PCI a guaranty deposit of
P1,030,350.00.28 Thus, the amount of the principal loan was P1,834,720.00, which was the net amount actually received by Trojan.
Against the principal loan of P1,834,720.00 plus the applicable interest should be deducted loan payments, totaling P1,717,091.00.29

However, the exact date of the sale of the mortgaged equipment, which is needed to compute the interest on the remaining balance of the principal loan, cannot be
gleaned from the facts on record. We thus remand the case to the RTC for the computation of the total amount due from the date of demand on 8 December 1998
until the date of sale of the mortgaged equipment to a third party, which amount due shall be offset against the proceeds of the sale.

In the absence of stipulation, the applicable interest due on the remaining balance of the loan is the legal rate of 12% per annum, computed from the date PCI sent
a demand letter to TROJAN on 8 December 1998. No interest can be charged prior to this date because TROJAN was not yet in default prior to 8 December 1998.
The interest due shall also earn legal interest from the time it is judicially demanded, pursuant to Article 2212 of the Civil Code.

Applying the rules in the computation of interest, the remaining balance of the principal loan subject of the chattel mortgage must earn the legal interest of 12% per
annum, which interest, as long as unpaid, also earns legal interest of 12% per annum, computed from the filing of the complaint on 7 May 1999.
In accordance with the rules laid down in Eastern Shipping Lines, Inc. v. Court of Appeals, we derive the following formula for the RTCs guidance:

TOTAL AMOUNT DUE = [principal partial payments made] + [interest + interest on interest], where:
Interest = remaining balance x 12% per annum x no. of years from due date (8 December 1998 when demand was made) until date of sale to a third party
Interest on interest = interest computed as of the filing of the complaint on 7 May 1999 x 12% x no. of years until date of sale to a third party

From the computed total amount should be deducted P1,025,000.00 representing the proceeds of the sale to third party already in PCIs hands. The difference
represents overpayment by Trojan, which the law requires PCI to refund to Trojan. [ChattelMortgageLaw: excess refunded to debtor]

TROJANs right to the refund accrued from the time PCI received the proceeds of the sale of the mortgaged equipment. However, since TROJAN never made a
counterclaim or demand for refund due on the resulting overpayment after offsetting the proceeds of the sale against the remaining balance on the principal loan
plus applicable interest, no interest applies on the amount of refund due. Nonetheless, in accord with prevailing jurisprudence, the excess amount PCI must refund
to TROJAN is subject to interest at 12% per annum from finality of this Decision until fully paid.

3. Extent or scope of actual damages

I. Contracts and Quasi-contracts

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)

Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the damages under circumstances other than the case referred to in
the preceding article, as in the following instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) That the plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury.

Jose Mendoza v Philippine Airlines, Inc.

GR No. 140553, December 7, 2011

Facts:
1948: Mendoza owner of Cita Theater in Naga, CamSur. Good businessman.
September 17-18: town fiesta, many attend because Patron Saint of Pena Francia believed to be miraculous
August 1948 (1 month before fiesta) Mendoza contracted with LVN Pictures for him to show Himala ng Birhen during town fiesta. He made extensive
preparations, had 2k posters, advertised in weekly general circulation, posters saying movie will be shown in Cita Theater on September 17 and 18
September 17, 1948: LVN delivered to PAL a can containing the film. PAL issued Air Way Bill. Can loaded on flight 113, arrived at Pili Airport after 4 PM.
But the can of film was not unloaded at Pili, it was brought back to Manila due to the fault of the employees/agents.
Mendoza went to airport and inquired about his can of film. Station master could not explain why the film was not unloaded. Film was only located the next
day then shipped to Pili Airport on September 20.
 Mendoza received it and showed the film but lost his opportunity to get a bigger profit as the people after the fiesta had already left for their towns. Brought
action against PAL for breach of contract, Code of Commerce! Obligations of a common carrier to make prompt delivery of goods given to it under a
contract of transportation.
o Answer: Terms and conditions of Air Way Bill, The Carrier does not obligate itself to carry the Goods by any specified aircraft or on a specified
time. Said Carrier being hereby authorized to deviate from the route of the shipment without any liability therefor.
CFI: because of failure to exhibit the film during the town fiesta, Mendoza suffered damages or rather failed to earn profits in the amount of P3,000.00, but
finding the PAL not liable for said damages, dismissed the complaint.
o Although PAL was not obligated to load the film on any specified plane or on any particular day, once said can film was loaded and shipped on one
of its planes to Camarines, then it assumed the obligation to unload it at its point of destination and deliver it to the consignee, and its unexplained
failure to comply with this duty constituted negligence. But fraud was not involved and the defendant was a debtor in GF.
o Not because Mendoza failed to realize profits in the sum of P3,000.00 due to the negligence of the defendant, should PAL be made to reimburse
him said sum. Applying Art. 1107 of the Civil Code which provides that losses and those foreseen, or which might have been foreseen, at the time
of constituting the obligation, and which are a necessary consequence of the failure to perform it, inasmuch as these damages suffered by
Mendoza were not foreseen or could not have been foreseen at the time that the defendant accepted the can of film for shipment, for the reason
that neither the shipper LVN Pictures Inc. nor the consignee Mendoza had called its attention to the special circumstances attending the shipment
and the showing of the film during the town fiesta of Naga, Mendoza may not recover damages sought.

Issue: WoN PAL should be liable for damages

Held: No. Cause of action is based on breach of contract, not on tort. No damages because no stipulation on date of delivery.

Uhm first Mendoza sues on breach of contract, then now on tort based on Art. 1902? Y U CHANGE THEORY?

Mendoza says that he was never a party to the contract of transportation and was a complete stranger to it, and that he is now suing on a tort or violation of his
rights as a stranger (culpa aquiliana). If he does not invoke the contract of carriage entered into with the defendant company, then he would hardly have any leg to
stand on. His right to prompt delivery of the can of film at the Pili Airport stems and is derived from the contract of carriage under which contract, PAL undertook to
carry the can of film safely and to deliver it to him promptly. Take away or ignore that contract and the obligation to carry and to deliver and the right to prompt
delivery disappear. Common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right of prompt delivery,
unless such common carriers previously assume the obligation.

The contract of carriage between the LVN and PAL contains the stipulations of the delivery to Mendoza as consignee. His demand for the delivery of the can of film
to him at the Pili Airport may be regarded as a notice of his acceptance of the stipulation of the delivery in his favor contained in the contract of carriage, such
demand being one of the fulfillment of the contract of carriage and delivery. In this case he also made himself a party to the contract, or at least has come to court
to enforce it. His cause of action must necessarily be founded on its breach.

Finding no reversible error in the decision appealed from, the same is hereby affirmed. No pronouncement as to costs. So ordered.

EDGARDO CARIAGA, ET AL., plaintiffs-appellants, vs. LAGUNA TAYABAS BUS COMPANY, defendant-appellant, MANILA RAILROAD COMPANY,
defendant-appellee G.R. No. L-11037 Dec. 29, 1960

FACTS: A bus of the Laguna Tayabas Bus, driven by Alfredo Moncada, left its station at Manila for Lilio, Laguna, with Edgardo Cariaga, a 4th year medical student
of UST, as one of its passengers. As the bus reached the poblacion of Bay, Laguna, where the national highway crossed a railroad track, it bumped against the
engine of a train then passing. The first six wheels of the train were derailed and the engine and the front part of the body of the bus was wrecked. The driver of the
bus died instantly, while many of its passengers, Edgardo among them, were severely injured. Edgardo was confined and was unconscious during the first 35 days
after the accident.
The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses incurred. LTB also agreed to give him a subsistence allowance of
P10.00 daily during his convalescence.

The present action was filed to recover from the LTB and the MRR Co. a total sum of P312K as actual, compensatory, moral and exemplary damages. For
Edgardos parents, the sum of P18K in the same concepts. The LTB disclaimed liability claiming that the accident was due to the negligence the Manila Railroad
Company, for not providing a crossing bar. They thus filed the corresponding cross-claim against Manila Railroad. The Manila Railroad Company, in turn, denied
liability upon the complaint saying that it was the reckless negligence of the bus driver that caused the accident.

LC: The negligence of the bus driver caused the accident. The cross-claim against the Manila Railroad Company is dismissed.

ISSUE: Whether or not the damages prayed for are proper

HELD: Only the decision for compensatory damages in favor of Edgardo is upheld. First, the Supreme Court upheld LCs finding that the driver of the bus was
negligent. The whistle of train was sounded four times but the driver of the bus in question totally disregarded the warning. There being a finding that LTB was
negligent, they are liable to pay damages as follows:

1. Re: Compensatory Damages >> The Cariagas claim that the award of P10K compensatory damages to Eduardo, and SC agrees. As a result of the injuries
suffered by Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his brain. Also, because of the physical
injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical student; he has become completely misfit for
any kind of work; that he can hardly walk around without someone helping him, and has to use a brace on his left leg and feet. The impression one gathers from
this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both physically and
mentally.

Sc also rules that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be
deemed to be within the category of actual damages because they could have reasonably been foreseen by the parties at the time he boarded the bus. At that
time he was already a fourth-year student in medicine in a reputable university. While his scholastic may not be first rate, it is, nevertheless, sufficient to justify the
assumption that he could have passed the board test in due time. Upon consideration of all the facts mentioned the compensatory damages awarded to Edgardo
Cariaga should be increased to P25K.

2. Re: Moral Damages >> Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court, saying: Plaintiffs' claim for moral damages
cannot be granted. Article 2219 of the Civil Code enumerates the instances when moral damages may be covered and the case under consideration does not fall
under any one of them. The present action cannot come under paragraph 2 of said article because it is not one of the quasi-delict and cannot be considered as
such because of the pre-existing contractual relation between the Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant Laguna Tayabas
Bus Company be held liable to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code on account of breach of its contract of carriage
because said defendant did not act fraudulently or in bad faith in connection therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in
the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor
in good faith.

In view of the foregoing the sum of P2K was awarded as moral damages by the trial court has to be eliminated.

3. Re: Damages in favor of parents not meritorious >> The claim made by the parents for actual and compensatory damages is without merit. As held by the trial
court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were not a party, and neither can
they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that they were not themselves injured as a result of the collision
between the LTB bus and train owned by the Manila Railroad Company.
Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in all other respects, with costs against appellant LTB.

Villa Rey Transit, Inc. v. CA (1970) Concepcion

Petitioner: Villa Rey Transit

Respondent: Trinidad Santos et al

Brief Facts: Policronio Quintos Jr., a passenger of a Villa Rey bus died in a collision between said bus and a bullcart. Villa Rey, in a petition for certiorari, assails
the computation for damages of the lower court. The Court held that life expectancy, although not the sole element determinative of the amount of damages, is an
important factor and cannot be disregarded.

Doctrine: Life expectancy is an important element in computing the damages to be awarded.

FACTS:
March 17, 1960, Policronio Quintos Jr. was aboard an Isuzu First Class passenger bus owned and operated by defendant and driven by Laureano Casim. The bus
left Lingayen, Pangasinan for Manila.

As the bus was approaching the northern part of the Sadsaran Bridge on the national highway in barrio Sto. Domingo in Minalin, Pampanga, its front hit the rear
side of a bullcart filled with hay. The end of the bamboo pole about 8 ft long from the cart pierced through the windshield of the bus. The end of the pole landed on
the face of Policronio, who was sitting in front of the bus, puncturing his left eye and fracturing the bone on the left side of his face. He suffered multiple wounds
and was rendered unconscious due to severe cerebral concussion. He was brought to the provincial hospital of Pampanga at San Fernando. However, he died on
the same day due to traumatic shock brought about by his cerebral injuries.

Respondents Trinidad, Prima an dJulita are the sisters and only surviving heirs of Policronio. They brought action against Villa Rey Transit Inc. as the owner and
operator of the said passenger bus, for breach of contract of carriage. The action seeks to recover P63,750.00 as damages including attorneys fees.

Petitioners defence was that the incident was brought about by a fortuitous event.

RTC: Villa Rey Transit is liable to pay damages

Mishap was not the result of a fortuitous event but due to the negligence if the driver of the defendant.

The complaint alleged a total damage of only P63,750.00 although as elsewhere shown in the decision that the damages for wake and burial expenses, loss of
income, death of the victim, and attorneys fee reach P79,615.96

Trial court assessed the damage at P63,750.00 as it was what was prayed for

CA: affirmed

ISSUE: How is the amount of damages recoverable by private respondents to be computed?

RATIO: Determination is based mainly upon 2 factors: (1) number of years in the basis on which the damages shall be computed (2) the rate at which the losses
sustained by the respondents shalle be fixed

The first factor was based by the trial court on the life expectancy of Policronio which was placed at 33 and 1/3 years, adopting the formula in the American
Expectancy Table of Mortality or the actuarial of Combined Experience Table of Mortality
Petitioner maintains that the trial court erred in adopting the said formula and not acting in accordance with Alcantara v Surro in which the damages were
computed on a 4 year basis, despite the fact that the victim was 39 years old and with a lifetime expectancy of 28.90 years

The case cited is not applicable. In Alcantara, none of the parties assailed the use of the four year basis. The only issue assailed was the non-inclusion of the
bonus that the victims employer provides its employees in the computation for damages.

The Alcantara case had not laid down any rule on the length of time to be used in the computation for damagers, stating that the determination had no fixed basis.
Much is left to the discretion of the court, considering that there can be no uniform rule for measuring the value of human life.

Life expectancy, however, is an important factor and cannot be dismissed. No cogent reason has been given to warrant the use of a purely arbitrary standard such
as the four year rule in the case at bar. CA did not err in basing the computation upon Policronios life expectancy

With respect to the rate at which the damages shall be computed, petitioner impugns the decision appealed from upon the ground that the damages awarded
therein will have to be paid now, whereas most of those sought to be indemnified will be suffered years later.

This argument is offset by the fact that although the payment of the award will have to take place upon the finality of the decision, the liability had been fized at a
rate of only P2,184.00 a year which is the annual salary of Policronio.

The lower courts did not consider Policronios potentiality and capacity to increase his income

The Court notes that determination of the damages sustained by the private respondents should consist not in the full amount of his earnings, but the support they
received or would have received. As such, his necessary living expenses should be deducted. It has long been held that earning capacity, as an element of
damages, should be the net earning capacity of the victim to acquire money.

All things considered, the Court is of the opinion that the determination of losses should be fixed at P1,184 a year, deducting the victims necessary and other
expenses. The loss of his sisters may roughly be estimated at P1,000.00 a year of P33,333.33 for the 33 and 1/3 years of his life expectancy.

The following should be added: (a) P12,000.00 pursuant to Arts. 104 and 107 of the RPC, (b) P1,725.95 actually spent by private respondents for medical and
burial expenses, (c) attorneys fees
Amount adjudged thus fixed at P49,561.28 with interest at the legal rate from December 29, 1961, date of promulgation of the decision of the trial court.

DISPOSITIVE: Judgment AFFIRMED with modification.

G.R. No. L-54470 May 8, 1990PHILIPPINE AIRLINES, INC., petitioner, vs.

HON. COURT OF APPEALS and NATIVIDAD VDA. DE PADILLA, substituted by her legal heirs, namely: AUGUSTO A. PADILLA, ALBERTO A. PADILLA,
CRESENCIO R. ABES (representing the deceased Isabel Padilla Abes) MIGUEL A. PADILLA and RAMON A. PADILLA, respondents.; GRIO-

FACTS: This was a 30 year old case before it got decided! How sad!

On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the Philippine Air Lines (hereafter PAL) took off from the Manduriao Airport in Iloilo, on its
way to Manila, with 33 persons on board, including the plane's complement. The plane did not reach its destination but crashed on Mt. Baco, Mindoro, one
hour and fifteen minutes after takeoff.

Among the fatalities was Mr. Atenean Nicanor Padilla who was a passenger on the star crossed flight. He was 29 years old, single. His mother, Natividad A.
Vda. de Padilla, was his only legal heir. Based on the evidence presented, Nicanor Padilla finished the elementary grades in 1943, high school in 1947,
graduated the Reserve Officer's Course (Infantry Basic Course) Armed Forces of the Philippines in 1949, and graduated with the degree of Bachelor of Literature
in 1951 and the degree of Bachelor of Laws in 1954, all in Ateneo de Manila. He was admitted by the Supreme Court of the Philippines to practice law on January
28, 1955, and from January 1958, to the time of his death on November 23, 1960, he was associated with the law offices of Senator Ambrosio Padilla, brother of
his father, Alberto R. Padilla. At the time of his death, he was the President and General Manager of the Padilla Shipping Co., Inc. He was also Vice-President and
Treasurer of the Allied Overseas Trading Co., Inc. He was a member of the Board of Directors of the Junior Chamber of Commerce (Jaycees) International and
Chairman of its Committee on Governmental Affairs for the term 1960-1961. This Committee on Governmental Affairs published a pamphlet entitled "Good
Government is our Business," for which the deceased was named "Jaycee of the Month of January 1960."

In addition to the stipulations of facts, private respondent Padilla testified that her son, Nicanor Padilla, prior to his death, was 29 years old, single, in good health,
President and General Manager of Padilla Shipping Company at Iloilo City, and a legal assistant of the Padilla Law Office; that upon learning of the death of her
son in the plane crash, she suffered shock and mental anguish, because her son who was still single was living with her; and that Nicanor had a life insurance of
P20,000, the proceeds of which were paid to his sister.

Anyway, as a result of her son's death, Mrs. Padilla filed a complaint against PAL, demanding payment of P600,000 as actual and compensatory damages, plus
exemplary damages and P60,000 as attorney's fees. The Trial Court ruled in favor of Mrs. Padilla and ordered PAL to pay the sum of P477,000.00 as award for
the expected income of the deceased Nicanor; P10,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the costs.

ISSUE: Whether or not the trial court erred in computing the awarded indemnity on the basis of the life expectancy of the late Nicanor A. Padilla rather
than on the life expectancy Natividad Padilla, and thus erred in awarding what appears to the petitioner as the excessive sum of P477,000 as indemnity for loss
of earnings.

HELD: No. Computation should be based on Nics life expectancy.

The law provides:

Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also
apply to the death of a passenger caused by the breach of contract by a common carrier.
Art. 2206. The amount of damages for death caused by a crime or quasi- delict shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death;

In the case of Davila vs. PAL, 49 SCRA 497 which involved the same tragic plane crash, this Court determined not only PALs liability for negligence or breach of
contract, but also the manner of computing the damages due the plaintiff therein which it based on the life expectancy of the deceased, Pedro Davila, Jr. This
Court held thus:

The deceased, Pedro Davila, Jr., was single and 30 years of age when he died. At that age one's normal life expectancy is 33-1/3 years, according
to the formula (2/3 x [80-30]) adopted by this Court 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.

Following the procedure used by the Supreme Court in the case of Davila vs. PAL, 49 SCRA 497, the trial court determined the victims gross annual income
to be P23,100 based on his yearly salaries of P18,000 from the Padilla Shipping Company and P5,100 from the Allied Overseas Trading Corporation.
Considering that he was single, the court deducted P9,200 as yearly living expenses, resulting in a net income of P13,900 (not P15,900 as erroneously
stated in the decision). Since Nicanor Padilla was only 29 years old and in good health, the trial court allowed him a life expectancy of 30 years.
Multiplying his annual net income of P13,900 by his life expectancy of 30 years, the product is P417,000 (not P477,000) which is the amount of death
indemnity due his mother and only forced heir (p. 58, Record on Appeal; p. 117, Rollo).

ii. Crimes and Quasi-delicts

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission
complained of. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant.
Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in
question.
Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened according to the aggravating or mitigating circumstances.
Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the damages under circumstances other than the case referred to in
the preceding article, as in the following instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) That the plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury.

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. SENEN PRADES, accused-appellant.

GR 127569 ; 30 July 1998 ; Per Curiam

Facts:
Prades was accused of rape by Emmie Rosales. Allegedly, during a bright moon night, while the beautiful 17 y.o. Rosales was sleeping inside her house, Prades
entered Emmies dwelling, lay atop the girl, poked a gun at her, and threatened to kill her should she fight back. Prades succeeded in having carnal knowledge of
Emmie on that fateful night. Since it was a bright moon night, Emmie was able to see and recognize the face of Prades during the dastardly act committed upon
her. She knew Prades as they were neighbors.

Later, Prades had the gall to send a letter to Emmie, begging her forgiveness, and offering to leave his wife for the beautiful Emmie Rosales. Infuriated by such
audacity, Emmie filed a criminal complaint against Prades for rape. An Info was filed, Prades was arraigned, and trial commenced. RTC found Prades guilty of rape
aggravated by dwelling, and was sentenced to death. He was also ordered to pay Emmie Rosales P50,000 by way of MORAL DAMAGES.

This case went to the SC on auto-review.

Issue: WON the damages awarded in this case were properly denominated

Held: No. Lower courts award of P50k moral damages was actually the mandatory compensatory damages. Emmie, however, is also entitled to moral damages
on top of compensatory damages.

Ratio: The lower court erred in classifying the award of P50,000.00 to the offended party as being in the character of moral damages. The award authorized by
the criminal law as civil indemnity ex delicto for the offended party, in the amount authorized by the prevailing judicial policy and aside from other proven actual
damages, is itself equivalent to actual or compensatory damages in civil law. For that matter, the civil liability ex delicto provided by the RPC (i.e. restitution,
reparation and indemnification), all corresponds to actual or compensatory damages in the Civil Code, since the other damages provided therein are moral,
nominal, temperate or moderate, liquidated, and exemplary or corrective damages which have altogether different concepts and fundaments.
Said civil indemnity is mandatory upon the finding of the fact of rape; it is distinct from and should not be denominated as moral damages which are based on
different jural foundations and assessed by the court in the exercise of sound discretion. Evidently, therefore, the lower court actually intended the award
of P50,000.00 as indemnification to be paid to the victim. Note, however, that at the time of the decision of this case, the civil indemnity to be awarded to the
offended party in the case at bar should actually be P75,000.00, pursuant to recent judicial prescriptions.

As for moral damages, the Court has resolved that in crimes of rape, moral damages may additionally be awarded to the victim in the criminal proceeding, in such
amount as the Court deems just, without the need for pleading or proof of the basis thereof as has heretofore been the practice. Indeed, the conventional
requirement of allegata et probata (Translation: The allegations made by a party to a suit, and the proof adduced in their support) in civil procedure and for
essentially civil cases should be dispensed with in criminal prosecutions for rape with the civil aspect included therein, since no appropriate pleadings are filed
wherein such allegations can be made. Besides, the fact that complainant has suffered the trauma of mental, physical and psychological sufferings which
constitute the bases for moral damages are too obvious to still require the recital thereof at the trial by the victim, since the Court itself even assumes and
acknowledges such agony on her part as a gauge of her credibility. What exists by necessary implication as being ineludibly present in the case need not go
through superfluity of still being proven through a testimonial charade.

WHEREFORE, RTC judgment is AFFIRMED, with the MODIFICATION. Accused Senen Prades is ordered to indemnify Emmie in the amount ofP75,000.00 as
compensatory damages, and to pay the additional amount of P50,000.00 as moral damages, with costs in all instances.

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. DANTE CEPEDA y SAPOTALO, accused-appellant.

FACTS: (MASAHE DI UMANO) Conchita Mahomoc went to the PNP Station of Magallanes to complain that she was raped by Dante Cepeda. She claims that
Dante Cepeda went to her and asked her to [go to] his house to massage (hilot) his wife who was suffering from stomach ache. Cepeda was at his kitchen door
when they reached his house. Cepeda led the complainant to his bedroom. At the door, Conchita peeped inside and saw a figure covered by a blanket whom she
presumed was Cepeda's wife. At that instance, accused immediately placed his left arm around her shoulders and pointed a knife at the pit of her stomach saying:
"Just keep quiet, do not make any noise, otherwise I will kill you." She elbowed him, stooped and shouted "Help!" three times but Cepeda covered her mouth then
carried her to the room by her armpits. Inside the room, he threatened her with a knife and ordered her to remove her panty and lie on the bed. Afraid, she did as
ordered and the accused also removed his pants and brief. He placed himself on top of her, spread her legs with his legs, inserted his penis inside her vagina and
had sexual intercourse with her at the same time embracing and kissing her. After he was through, she ran towards the kitchen with Cepeda chasing her.
DEFENSE: Accused claiming that he and Conchita are lovers. They had sexual intercourse. She asked him to leave his wife to elope with her as she would also
leave her husband. He rejected this proposal because he loved his wife and Conchita had three daughters. Tas nagulat nalang sya na hinuli sya ng police.
According to him, his request to private complainant that the latter massage his allegedly ill wife "is a pre-arranged lie between the accused-appellant and private
complainant in order to mislead Regina Carba" the truth being that accused-appellant "purposely went to the house of private complainant to invite her to his
house, their place of rendezvous for their passionate affair.

RTC: Accused guilty beyond reasonable doubt of the crime of rape. In addition, the accused is ordered to pay the offended party moral damages in the sum of
P50,000.00.[4] The accused is entitled to the full benefits of his preventive imprisonment if he agrees to abide by the same disciplinary rules imposed upon
convicted prisoners, conformably with Article 29 (as amended) of the Revised Penal Code. Accused is also ordered to pay the costs.

ISSUE: WON the trial court's award of damages should be modified

HELD: YES. With regard to the civil liability, the trial court's award of damages should be modified. Under controlling case law, an award of Fifty Thousand Pesos
(P50,000.00) as civil indemnity is mandatory upon the finding of the fact of rape.[37] This is exclusive of the award of moral damages of Fifty Thousand Pesos
(P50,000.00) without need of further proof.[38] The victims' injury is now recognized as inherently concomitant with and necessarily proceeds from the appalling
crime of rape which per se, warrants an award for moral damages.

WHEREFORE, with the sole MODIFICATION that accused-appellant Dante Cepeda y Sapotalo pay complainant the amount of Fifty Thousand Pesos
(P50,000.00) as civil indemnity consistent with controlling case law, aside from the award of Fifty Thousand Pesos (P50,000.00) as moral damages, the decision of
the trial court in Criminal Case No. 6246 finding accused Dante Cepeda y Sapotalo guilty beyond reasonable doubt of the crime of rape is hereby AFFIRMED in all
other respects.

ON RAPE: Accused-appellant's allegation of an illicit amorous relationship is too shopworn to deserve serious consideration and is totally unworthy of credence.
Even assuming ex gratia argumenti that accused- appellant and private complainant were indeed sweethearts as he claims, this fact alone will not extricate him
from his predicament. The mere assertion of a 'love relationship' would not necessarily rule out the use of force to consummate the crime. It must be stressed that
in rape cases, the gravamen of the offense is sexual intercourse with a woman against her will or without her consent. Thus, granting arguendo that the accused
and the victim were really lovers this Court has reiterated time and again that "[A] sweetheart cannot be forced to have sex against her will. Definitely, a man
cannot demand sexual gratification from a fiancee, worse, employ violence upon her on the pretext of love. Love is not a license for lust."

PEOPLE VS ALFONSO BALGOS (2000)

FACTS: Crisselle Fuentes, a 6-year old child, accused Alfonso Balgos Lupog of the crime of rape. She alleged that at around 2pm, Criselle went to the house of
the accused to play with the 2 nieces of the accused. They were playing by the window to watch the small crabs in the river beside their house when accused
asked his nieces to go out and buy cheese curls. When he was alone with Criselle, he removed her shorts and undies and then took off his pants and brief. He
directed his penis towards the opening of her vajeyjey; made a push and pull movement but he could not penetrate. Tried again but di talaga mapasok. Eh nakita
niya sa window na paparating na yung 2 na bumili ng cheesecurls. Ayun, tinakpan nalang ng kumot si Crisselle tapos pina suot ulit yung panty. Tapos nagdamit na
din siya.

She never told this to anyone. BUTTT her older brother, Crisart, told his mom that the 2 nieces had informed him that Crisselle was raped by the accused. Bistado
si gago. Mom asked the nieces, confirmed. So she asked Crisselle, ayun naiyak siya, inamin. So sinabi ni mom kay dad. They went to their Barangay Captain to
report. But accused, when brought to the Barangay Hall for questioning, denied the accusation. The next day, they went to the hospital for medical examination.
According to the examination, the vajeyjey, can admit one index finger with ease.

Defense of the Accused:

1) He didn't rape her! He only inserted his index finger since he was horny at that time
2) If he really inserted his 3 inches penis, the laceration would have been bigger and not just 0.2 cm
3) He was not alone at time because his first cousin and his uncle were also inside the house listening to the radio
4) Admitted that he covered her with a blanket but said it was not only Crisselle who was under the blanker but also himself and his 2 nieces
TC convicted the accused of the crime of rape and imposed death penalty!!!! WHY?
1) His admission that he asked his nieces to buy food and leave showed his intention to create an opportunity to commit his beastly act
2) Why was he playing with young girls
3) His admission that he was sexually aroused exposed his lustful desire for flesh
4) Failure to show that Crisselle was motivated by ill-will in fabricating her accusation
Went up to SC for automatic review.
ISSUE: WON accused is guilty of the crime of rape and not acts of lasciviousness YES

HELD: YES.
No reason to disturb the findings of the TC. The evidence clearly established the guilt of the accused beyond reasonable doubt. TCs evaluation of the testimonies
of the witnesses is given great respect in the absence of proof that it was arrived at capriciously. Why? Since the credibility of a witness can best be determined by
the TC since is has the opportunity o observe the candor and demeanor of the witnesses.

In her testimony, it was straightforward, clear and convincing that he was raped by the accused. Her testimony is very typical of an innocent child whose virtue has
been violated. She said that it was not his finger because he fingered her before in their neighbors house! Wild.
The testimony of the accused is contrary to the evidence. Why would he have to pull down the zipper of his pants? Why lay himself on top of her? Move it in and
out? Medical examination also showed a lacerated wound in her order at 3oclock. Also there were inconsistencies. Said that he was just persuaded by counsel,
Atty Potato (guys legit to haha) to admit that he just fingered her so that its not rape; and then claimed that he was out fishing. Di tuloy pinaniwalaan ni court.

SC ruled that even if his organ merely touched the hole, this already constitutes rape since the complete penetration is not necessary.
SC ruled that TC is correct in imposing the supreme penalty of death on the accused. RPC 335 states that death penalty shall be imposed if the crime of rape is
committed against a child below 7YO.

RE Award of damages:
If the commission of rape is effectively qualified by any of the circumstances under which the death penalty may be imposed, the civil indemnity for the victim shall
not be less than P75k. TCs award of P50k as civil indemnity should be increased to P75k. Moreover, the victim is entitled to moral damages under CC2219,
without the necessity for pleading or proof of the basis thereof. Accused appellants victim is entitled to moral damages of P50k.

People v. De Los Santos

FACTS
RTC finds the accused Felipe delos Santos guilty beyond reasonable doubt of the crime of Rape defined and penalized in Article 335 of the Revised Penal Code,
as amended and sentences him to suffer the penalty of DEATH and to pay the costs. The accused is hereby ordered to indemnify the victim, Nhanette delos
Santos the amount of P50,000.00 as moral damages. Victim was his 13 years old estranged daughter.

Automatic review to SC: Accused questions everything crim-related but are irrelevant to our class. Usual no penetration cause my dick too big and girl is a liar
bullshit.

ISSUE
W/N the award for damages by RTC is enough

HELD
NO. RTC modified to include civil indemnification.

Moral damages
The award of P50,000.00 granted by the trial court as and for moral damages is sustained following and adhering to the recent ruling in People vs. Prades , that
moral damages may additionally be awarded to the victim in rape cases, in such amount as the court deems just, without the necessity for pleading or proof of the
basis thereof.

Civil Liabity ex delicto

The Court believes that, on like considerations, the jurisprudential path on the civil aspect should follow the same direction. Hence, as stated in People v. Victor, if
the crime of rape is committed or effectively qualified by any of the circumstances under which the death penalty is authorized by the present amended law, the
indemnity for the victim shall be in the increased amount of not less than P75,000.00. This is not only a reaction to the apathetic societal perception of the penal
law and the financial fluctuations over time, but also an expression of the displeasure of the Court over the incidence of heinous crimes against chastity. Accused-
appellant therefore liable for P75k as indemnification.

Jurisprudence has elucidated that the award authorized by the criminal law as civil indemnity ex delicto for the offended party, in the amount authorized by the
prevailing judicial policy and aside from other proven actual damages, is itself equivalent to actual or compensatory damages in civil law.For that matter, the civil
liability ex delicto provided by the Revised Penal Code, that is, restitution, reparation and indemnification, all correspond to actual or compensatory damages in the
Civil Code, since the other damages provided therein are moral, nominal, temperate or moderate, liquidated, and exemplary or corrective damages which have
altogether different concepts and fundaments.
We reiterate here that said civil indemnity is mandatory upon the finding of the fact of rape; it is distinct from and should not be denominated as moral damages
which are based on different jural foundations and assessed by the court in the exercise of sound discretion.

ii. Crimes and Quasi-delicts resulting in death

Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such
indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the
defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of Article 291, the recipient who is not an heir called to the decedent's
inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period not exceeding five years,
the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the
death of the deceased.

HEIRS OF RAYMUNDO CASTRO, petitioners, vs. APOLONIO BUSTOS, respondent.

G.R. No. L-25913 || February 29, 1969 || BARREDO, J.:

R was charged with murder for killing Raymundo Castro (heirs are Ps).
TC: guilty of homicide only; two mitigating circumstances: passion/obfuscation and voluntary surrender; indemnify Ps with P6,000 without prejudice to what R is
entitled from GSIS as public school teacher.

CA modified the award of damages: In addition to the P6,000, P13,380 to compensate for the loss of earning of the deceased; obfuscation was changed to
vindication of a grave offense.

Upon MR of R (invoking CC 2204: In crimes, the damages to be adjudicated may be respectively increased or lessened according to the aggravating or mitigating
circumstances.), CA amended its decision: 2 MC w/o any AC - the award of moral and compensatory damages is eliminated.

ISSUE: W/N Ps are entitled to damages YES

RATIO:
The claim for damages was made in a criminal proceeding. Just the same, SC said, the indemnity would be the same if pursued in a civil case, except with regard
to attorney's fees and litigation expenses (only in a civil suit)
CA's original decision was correct with regard to its particularization of the damages but it didn't comply with the requirement that its legal/factual basis be clearly
stated. It gave the impression that the award is fully within the Court's discretion.

General Rule: 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. 2202)

Exceptions: When, however, the crime committed involves death, there is Art. 2206 which provides thus:

The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall
in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the recipient who is not an heir called to the decedent's inheritance by
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.

Stated differently, when death occurs as a result of a crime, the heirs of the deceased are entitled to the following 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, and even though there may have
been mitigating circumstances attending the commission of the offense.
2. As 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, the said indemnity to be assessed and awarded by the court as a matter of duty, unless the
deceased had no earning capacity at said time on account of permanent disability not caused by the accused. If the deceased was obliged to give support, under
Art. 291, Civil Code, the recipient who is not an heir, may demand support from the accused for not more than five years, the exact duration to be fixed by the
court.
3. As moral damages for mental anguish, an amount to be fixed by the court. This may be recovered even by the illegitimate descendants and ascendants of
the deceased.
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, the same
to be considered separate from fines.
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.

Ca erred in deleting the moral and compensatory damages for loss of earning capacity. SC said that the court, when moral damages are prayed for and proven,
has a duty to award such damages. On the other hand, compensatory damages, even if not specifically pleaded, may be awarded in the prayer for "actual
damages" and for "just and equitable reliefs" cc 2206 cf cc 1764)

As to the amount awarded, the CA did not state its factual basis. The Court can remand but it did not, for expediency purposes. The Court based its retention of the
amount by the fact that R did not appeal or interpose any objection to the amount. Also, Ps were only asking the Court to affirm in toto the CA decision, nothing
more, nothing less. However, additional claims by P cannot be awarded. They were only given the amount which the respondents did not contest. The appeal was
only up to specific portions of the civil indemnity, the court said they could have increased liability of R had the whole criminal case been up for review.

PEOPLE OF THE PHILS, plaintiff-appellee, vs. GUMERCINDO QUILATON y EBAROLA, defendant-appellant [1992; G.R. No. L-69666; J. Feliciano]

FACTS: Quilaton guilty of murder; sentenced to suffer reclusion perpetua; required to pay the heirs of offended party various amounts of money

Prosecution: Appellant worked in the Bureau of Forest Devt. assigned at the PROFEM Nursery in San Agustin, San Simon, Pampanga until June 3, 1983 when
his services were terminated. While still a laborer and occasionally after his termination, appellant would spend the night in one of the rooms of the PROFEM
office.
On Aug. 16, 1983, at around 6-9PM, Rolando Manahan, PROFEM officer-in-charge, admonished appellant to stop sleeping inside the office, sometimes with
women brought from the town. A heated exchange of words then ensued between Manahan and appellant.
With his bag of clothes, appellant left the office. Manahan, however, decided to follow appellant, to make sure that appellant would in fact leave the premises.
Lamberto Abugan, who had noticed Manahan leave the office, also went out to look after them. Abugan caught up with the 2 at the provincial road where he saw
Manahan kick appellant's shoes which were lying on the road; the heated altercation between the 2 continued. Moments later, appellant pulled a balisong from his
right hip and told Manahan: "this time I am going to kill you, I shall not forgive you." Manahan started to run away; appellant chased him.
Abugan also ran from the scene to seek help. When he returned, Manahan was lying on the road, already dead. Appellant, on the other hand, was found in
Sampaloc, Apalit, Pampanga where he was arrested and searched.

Defense: On the night of Aug. 16, 1983, when appellant left the PROFEM office, he became alarmed upon realizing that Manahan was following him. Appellant
walked faster but because the road was slippery, he fell on the ground and his shoes spilled onto the road. As Manahan came nearer, appellant ran away only to
be stopped in a fenced area. Manahan there attacked him with a bladed weapon but appellant was able to wrest possession of the bladed weapon. Appellant then
instinctively stabbed Manahan until the latter died.

After the incident, appellant walked towards Apalit, Pampanga to surrender as he did not know where the municipal building of San Simon, Pampanga was. He
was on his way to surrender when the police authorities arrested him.
Appellants principal contention: SELF-DEFENSE

ISSUES: WON appellant acted in self-defense NO

WON the killing was qualified by treachery NO
WON the award for damages are correct NO (except for actual damages)

RULING:
Re. self-defense
The evidence of appellant on his claim of self-defense consisted solely of his own testimony. The trial court rejected that testimony, firstly, because it was not
supported by convincing corroborative evidence and, secondly, because the trial court had perceived appellant to be a liar.

During trial, the prosecution had marked and offered in evidence the letter of the INP Station Commander in Dalaguete, Cebu informing the INP Station
Commander in San Simon, Pampanga that appellant had 2 pending cases in Dalaguete, Cebu. One of those cases was for murder and the other for double
murder. Certified true copies of the alias warrants for the arrest of appellant in both cases were also marked in evidence by the prosecution. On cross-examination,
appellant had denied the pendency of the cases.

The TC instead gave credence to the testimony of Abugan who had seen appellant initiate a deadly assault on the victim Roland Manahan by drawing a fan knife
from his right hip and by announcing his intention to kill Manahan.

Re. Treachery
Appellant should be convicted of homicide only. The information filed specified treachery and evident premeditation as qualifying circumstances. The trial court
disregarded evident premeditation, holding that the prosecution had not adequately proven it. But it considered appellant's act of stabbing the unarmed Rolando
Manahan as treachery.

Treachery cannot be appreciated in the absence of evidence of the mode of attack; it cannot be presumed but must be proven positively.

The testimony of Abugan offers no sufficient basis for reasonably inferring that treachery attended the commission of the crime. He did not witness the actual
stabbing by appellant of Rolando Manahan as he ran away just then to seek help. On the contrary, considering that the attack was preceded by a heated
argument, it cannot be fairly regarded as sudden and unexpected. The tense and hostile atmosphere should have sufficiently put Rolando Manahan on guard
against physical violence; Rolando Manahan should have been aware that he was in effect inviting trouble in following appellant into the provincial road and
kicking the latter's shoes that had fallen to the ground.
Re. Damages
Actual Damages: P26445
affirmed TC; interment related expenses incurred by Manahans heirs [submitted receipts to support their claim; Quilaton did NOT controvert claim & amount]
Indemnity for death: P50K
based on jurisprudence; from TCs P100K
======
The monetary liabilities of a person accused and convicted of a crime are specified in Art. 2206 of the Civil Code (please read the provision).
Aside, therefore, from the ordinary indemnity for death which is currently set by case law at P50K, appellant is obliged: (1) to compensate the heirs of Manahan for
the latter's loss of earning capacity; (2) to give support in the form of expenses for education to the sisters of Manahan who had been dependent on him therefor;
and (3) to pay the heirs of Manahan moral damages for the mental anguish suffered by them. In the instant case, the trial court lumped these monetary obligations
into what it called "moral damages."

Lost Earnings: P114K

The more important variables taken into account in determining the compensable amount of lost earnings are: (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. In Villa Rey-Transit, Inc. v. CA, the Court computed the first factor, i.e., life
expectancy, 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.

[Note: The formula used in Villa Rey Transit was based on a table derived from actuarial experience prior to 1970 when the decision in Villa Rey Transit was
promulgated. Actuarial experience subsequent to 1970 has, however, changed and indicates a longer life expectancy in the Phils. The 1970 mortality table was
updated in 1980 to reflect the changes of conditions.]

Considering that Manahan was 26 y/o at the time of death, he was expected to live for another 46 years. This is derived by using the generally accepted formula in
computing for life expectancy, based on the 1980 CSO table:
S (Lx + 1, Lx + 2, . . ., Lx + n), where n = 100 - x
x = age upon death
Lx L = no. of people in sample surviving after x no. of years

But a man does not normally continue working to earn money up to the final month/year of his life; hence 46 years could be reasonably reduced to 39 years.
Besides, Manahan was a govt. employee who is expected to retire at the age of 65.

If there are 261 working days in a year and Manahan was receiving P23/day, Manahan's gross earnings would be approximately P234K [261 working days x P23 x
39 years = P234,117]. A reasonable amount must be deducted therefrom that would represent Manahan's necessary expenses had he been living, in this case
P120K. The net or compensable earnings lost by reason of Manahan's death is, accordingly, P114K [P234,117 120,000 = P114,117].

Educational assistance to Manahans 2 sisters: P10K

no explanation as to how the Court arrived at this value
Moral damages: P20K (from TCs P250K)
The Court in the exercise of its discretion, considers it appropriate and reasonable to award the amount of P20K to Manahans heirs by way of moral damages.
Ruben Manahan, Rolandos brother, testified that their mother suffered a mild stroke upon learning of Rolando's slaying; this eventually resulted in the mother's
semi-paralysis.

SPS PERENA v SPS ZABARTE, PHILIPPINE NATIONAL RAILROAD

29 August 2012 || Bersamin, J.
FACTS
(We took this up before: Don Bosco School Bus-Train Collision)
Ps transported students from Paraaque City to Don Bosco, and back. They employed Clemente Alfaro (Alfaro) as driver of the van.

In June 1996, Rs contracted Ps to transport Aaron to and from Don Bosco. On August 22, 1996, as on previous school days, the van picked Aaron up around 6:00
a.m. Aaron took his place on the left side of the van near the rear door.

Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already running late because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. The path was marked by piles of construction materials and parked passenger
jeepneys, and the railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other responsible persons manning the crossing. In fact, the
bamboo barandilla was up, leaving the railroad crossing open to traversing motorists.

Train operated by Jhonny Alano (Alano), neared the railroad crossing, Alfaro drove the van across the railroad tracks, closely tailing a large passenger bus. His
view of the oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its horn to warn motorists of its approach. When the
train was about 50 meters away Alano applied the ordinary brakes of the train. He applied the emergency brakes only when he saw that a collision was imminent.
The train hit the rear end of the van, and the impact threw nine of the 12 students in the rear, including Aaron, out of the van. Aaron landed in the path of the train,
which dragged his body and severed his head, instantaneously killing him.

Rs claim against was upon breach of the contract of carriage and upon quasi delict for PNR.

In their defense, Ps adduced evidence to show that they had exercised the diligence of a good father of the family in the selection and supervision of Alfaro. PNR
tended to show that the proximate cause of the collision had been the reckless crossing of the van. RTC, CA ruled in favor of R.

ISSUE
I. The lower court erred when it upheld the trial courts decision holding the petitioners jointly and severally liable to pay damages with Philippine National Railways
and dismissing their cross-claim against the latter. SC UPHELD CA
II. The lower court erred in affirming the trial courts decision awarding damages for loss of earning capacity of a minor who was only a high school student at the
time of his death in the absence of sufficient basis for such an award. SC UPHELD CA
III. The lower court erred in not reducing further the amount of damages awarded, assuming petitioners are liable at all. SC UPHELD CA
RULING
Joint/several liability of P and PNR. We find no adequate cause to differ from the conclusions of the lower courts that the Pereas operated as a common carrier;
and that their standard of care was extraordinary diligence, not the ordinary diligence of a good father of a family.

Rs cite Phil. National Railways v. Intermediate Appellate Court, where the Court held the PNR solely liable for the damages caused to a passenger bus traversing
the railroad crossing. But the circumstances of that case and this one share no similarities. There, no evidence of contributory negligence was adduced against the
owner of the bus. Owner of the bus proved extraordinary diligence by preponderant evidence. In the present case, the records are replete showing negligence on
the part of both the Pereas and the PNR. Another distinction is that the passenger bus in Philippine National Railways v. Intermediate Appellate Court was
traversing the dedicated railroad crossing when it was hit by the train, but the Pereas school van traversed the railroad tracks at a point not intended for that
purpose.

At any rate, the lower courts correctly held both the Pereas and the PNR "jointly and severally" liable for damages arising from the death of Aaron. They had been
impleaded in the same complaint as defendants against whom the Rs had the right to relief, whether jointly, severally, or in the alternative, in respect to or arising
out of the accident, and questions of fact and of law were common as to the Ps. Although the basis of the right to relief (breach of contract of carriage) against the
Ps was distinct from the basis against the PNR (quasi-delict), they nonetheless could be held jointly and severally liable by virtue of their respective negligence
combining to cause the death of Aaron.

Loss of earning capacity. Both lower courts took into consideration that Aaron, while only a high school student, had been enrolled in one of the reputable schools
in the Philippines and that he had been a normal and able-bodied child prior to his death. The basis for the computation of Aarons earning capacity was not what
he would have become or what he would have wanted to be if not for his untimely death, but the minimum wage in effect at the time of his death. Moreover, the
RTCs computation of Aarons life expectancy rate was not reckoned from his age of 15 years at the time of his death, but on 21 years, his age when he would
have graduated from college.

We find the considerations taken into account by the lower courts to be reasonable and fully warranted.

Ps cite People v. Teehankee, Jr., where indemnity for loss of earning capacity as a pilot was deleted for being speculative due to his being only a high school
graduate.

In the present case, CA and the RTC were not speculating that Aaron would be some highly-paid professional, like a pilot in Teehankee. Fact that Aaron was
without a history of earnings should not be taken against his parents. Our law itself states that the loss of the earning capacity of the deceased shall be the liability
of the guilty party in favor of the heirs of the deceased, and 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."

Reduction of damages. The Pereas plead for the reduction of the moral and exemplary damages awarded to the Rs in the respective amounts of P 2,500,000.00
and P 1,000,000.00 on the ground that such amounts were excessive. The plea is unwarranted.

The moral damages were really just and reasonable under the established circumstances of this case because they were intended by the law to assuage deep
mental anguish and moral shock over the senseless accident. That amount would not be too much, considering that it would help the Rs obtain the means or
amusements that would alleviate their suffering for the loss of their child. At any rate, reducing the amount as excessive might prove to be an injustice, given the
passage of a long time from when their mental anguish was inflicted on them on August 22, 1996.

Anent the P 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render effective the desired example for the public good. As
a common carrier, the Rs needed to be vigorously reminded to observe their duty to exercise extraordinary diligence to prevent a similarly senseless accident from
happening again.