G.R. No. 107518 October 8, 1998 interest at the legal rate plus 25% thereof as attorney's fees.
est at the legal rate plus 25% thereof as attorney's fees. Meanwhile, during the
PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner,
vs.
HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING
CORPORATION, respondents.
ROMERO, J.:
A party is entitled to adequate compensation only for such pecuniary loss actually suffered
and duly proved.1Indeed, basic is the rule that to recover actual damages, the amount
of loss must not only be capable of proof but must actually be proven with a
reasonable degree of certainty, premised upon competent proof or best evidence
obtainable of the actual amount thereof.2 The claimant is duty-bound to point out
specific facts that afford a basis for measuring whatever compensatory damages
are borne.3 A court cannot merely rely on speculations, conjectures, or guesswork
as to the fact and amount of damages4 as well as hearsay5or uncorroborated
testimony whose truth is suspect.6 Such are the jurisprudential precepts that the
Court now applies in resolving the instant petition.
The records disclose that in the early morning of September 21, 1977, the M/V Maria
Efigenia XV, owned by private respondent Maria Efigenia Fishing Corporation, was
navigating the waters near Fortune Island in Nasugbu, Batangas on its way to
Navotas, Metro Manila when it collided with the vessel Petroparcel which at the time
was owned by the Luzon Stevedoring Corporation (LSC).
After investigation was conducted by the Board of Marine Inquiry, Philippine Coast
Guard Commandant Simeon N. Alejandro rendered a decision finding
the Petroparcel at fault. Based on this finding by the Board and after unsuccessful
demands on petitioner, 7 private respondent sued the LSC and
the Petroparcelcaptain, Edgardo Doruelo, before the then Court of First Instance of
Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two
pesos (P1,252.00) and the legal research fee of two pesos (P2.00). 8 In particular,
private respondent prayed for an award of P692,680.00, allegedly representing the
value of the fishing nets, boat equipment and cargoes of M/V Maria Efigenia XV, with
pendency of the case, petitioner PNOC Shipping and Transport Corporation sought
to be substituted in place of LSC as it had already acquired ownership of
the Petroparcel. 9
For its part, private respondent later sought the amendment of its complaint on the
ground that the original complaint failed to plead for the recovery of the lost value
of the hull of M/V Maria Efigenia XV. 10Accordingly, in the amended complaint, private
respondent averred that M/V Maria Efigenia XV had an actual value of P800,000.00
and that, after deducting the insurance payment of P200,000.00, the amount of
P600,000.00 should likewise be claimed. The amended complaint also alleged that
inflation resulting from the devaluation of the Philippine peso had affected the
replacement value of the hull of the vessel, its equipment and its lost cargoes, such
that there should be a reasonable determination thereof. Furthermore, on account
of the sinking of the vessel, private respondent supposedly incurred unrealized
profits and lost business opportunities that would thereafter be proven. 11
Subsequently, the complaint was further amended to include petitioner as a
defendant 12 which the lower court granted in its order of September 16,
1985. 13 After petitioner had filed its answer to the second amended complaint, on
February 5, 1987, the lower court issued a pre-trial order 14 containing, among other
things, a stipulations of facts, to wit:
1. On 21 September 1977, while the fishing boat "M/V MARIA
EFIGENIA" owned by plaintiff was navigating in the vicinity of Fortune
Island in Nasugbu, Batangas, on its way to Navotas, Metro Manila,
said fishing boat was hit by the LSCO tanker "Petroparcel" causing
the former to sink.
2. The Board of Marine Inquiry conducted an investigation of this
marine accident and on 21 November 1978, the Commandant of the
Philippine Coast Guard, the Honorable Simeon N. Alejandro,
rendered a decision finding the cause of the accident to be the
reckless and imprudent manner in which Edgardo Doruelo navigated
the LSCO "Petroparcel" and declared the latter vessel at fault.
3. On 2 April 1978, defendant Luzon Stevedoring Corporation
(LUSTEVECO), executed in favor of PNOC Shipping and Transport
Corporation a Deed of Transfer involving several tankers, tugboats,
barges and pumping stations, among which was the LSCO
Petroparcel.
4. On the same date on 2 April 1979 (sic), defendant PNOC STC again
entered into an Agreement of Transfer with co-defendant Lusteveco
whereby all the business properties and other assets appertaining to
the tanker and bulk oil departments including the motor tanker LSCO
Petroparcel of defendant Lusteveco were sold to PNOC STC.
5. The aforesaid agreement stipulates, among others, that PNOC-STC
assumes, without qualifications, all obligations arising from and by
virtue of all rights it obtained over the LSCO "Petroparcel".
6. On 6 July 1979, another agreement between defendant
LUSTEVECO and PNOC-STC was executed wherein Board of Marine
Inquiry Case No. 332 (involving the sea accident of 21 September
1977) was specifically identified and assumed by the latter.
7. On 23 June 1979, the decision of Board of Marine Inquiry was
affirmed by the Ministry of National Defense, in its decision
dismissing the appeal of Capt. Edgardo Doruelo and Chief mate
Anthony Estenzo of LSCO "Petroparcel".
8. LSCO "Petroparcel" is presently owned and operated by PNOC-
STC and likewise Capt. Edgardo Doruelo is still in their employ.
9. As a result of the sinking of M/V Maria Efigenia caused by the
reckless and imprudent manner in which LSCO Petroparcel was
navigated by defendant Doruelo, plaintiff suffered actual damages by
the loss of its fishing nets, boat equipments (sic) and cargoes, which
went down with the ship when it sank the replacement value of which
should be left to the sound discretion of this Honorable Court.
After trial, the lower court 15 rendered on November 18, 1989 its decision disposing
of Civil Case No. C-9457 as follows:
WHEREFORE, and in view of the foregoing, judgment is hereby
rendered in favor of the plaintiff and against the defendant PNOC
Shipping & Transport Corporation, to pay the plaintiff:
a. The sum of P6,438,048.00 representing the value of
the fishing boat with interest from the date of the filing
of the complaint at the rate of 6% per annum;
b. The sum of P50,000.00 as and for attorney's fees;
and
c. The costs of suit.
The counterclaim is hereby DISMISSED for lack of merit. Likewise,
the case against defendant Edgardo Doruelo is hereby DISMISSED,
for lack of jurisdiction.
SO ORDERED.
In arriving at the above disposition, the lower court cited the evidence presented by
private respondent consisting of the testimony of its general manager and sole
witness, Edilberto del Rosario. Private respondent's witness testified that M/V Maria
Efigenia XV was owned by private respondent per Exhibit A, a certificate of
ownership issued by the Philippine Coast Guard showing that M/V Maria Efigenia
XV was a wooden motor boat constructed in 1965 with 128.23 gross tonnage.
According to him, at the time the vessel sank, it was then carrying 1,060 tubs
(bañeras) of assorted fish the value of which was never recovered. Also lost with
the vessel were two cummins engines (250 horsepower), radar, pathometer and
compass. He further added that with the loss of his flagship vessel in his fishing
fleet of fourteen (14) vessels, he was constrained to hire the services of counsel
whom he paid P10,000 to handle the case at the Board of Marine Inquiry and
P50,000.00 for commencing suit for damages in the lower court.
As to the award of P6,438,048.00 in actual damages, the lower court took into
account the following pieces of documentary evidence that private respondent
proffered during trial:
(a) Exhibit A — certified xerox copy of the certificate of
ownership of M/V Maria Efigenia XV;
(b) Exhibit B — a document titled "Marine Protest"
executed by Delfin Villarosa, Jr. on September 22, 1977
stating that as a result of the collision, the M/V Maria
Efigenia XV sustained a hole at its left side that caused
it to sink with its cargo of 1,050 bañeras valued at
P170,000.00;
(c) Exhibit C — a quotation for the construction of a 95-
footer trawler issued by Isidoro A. Magalong of I. A.
Magalong Engineering and Construction on January
26, 1987 to Del Rosario showing that construction of
such trawler would cost P2,250,000.00;
(d) Exhibit D — pro forma invoice No. PSPI-05/87-NAV
issued by E.D. Daclan of Power Systems, Incorporated
on January 20, 1987 to Del Rosario showing that two
(2) units of CUMMINS Marine Engine model N855-M,
195 bhp. at 1800 rpm. would cost P1,160,000.00;
(e) Exhibit E — quotation of prices issued by Scan
Marine Inc. on January 20, 1987 to Del Rosario showing
that a unit of Furuno Compact Daylight Radar, Model
FR-604D, would cost P100,000.00 while a unit of
Furuno Color Video Sounder, Model FCV-501 would
cost P45,000.00 so that the two units would cost
P145,000.00;
(f) Exhibit F — quotation of prices issued by Seafgear
Sales, Inc. on January 21, 1987 to Del Rosario showing
that two (2) rolls of nylon rope (5" cir. X 300fl.) would
cost P140,000.00; two (2) rolls of nylon rope (3" cir. X
240fl.), P42,750.00; one (1) binocular (7 x 50), P1,400.00,
one (1) compass (6"), P4,000.00 and 50 pcs. of floats,
P9,000.00 or a total of P197,150.00;
(g) Exhibit G — retainer agreement between Del
Rosario and F. Sumulong Associates Law Offices
stipulating an acceptance fee of P5,000.00, per
appearance fee of P400.00, monthly retainer of
P500.00, contingent fee of 20% of the total amount
recovered and that attorney's fee to be awarded by the
court should be given to Del Rosario; and
(h) Exhibit H — price quotation issued by Seafgear
Sales, Inc. dated April 10, 1987 to Del Rosario showing
the cost of poly nettings as: 50 rolls of 400/18 3kts.
100md x 100mtrs., P70,000.00; 50 rolls of 400/18 5kts.
100md x 100mtrs., P81,500.00; 50 rolls of 400/18 8kts.
100md x 100mtrs., P116,000.00, and 50 rolls of 400/18
10kts. 100md x 100mtrs., P146,500 and bañera (tub) at
P65.00 per piece or a total of P414,065.00.
The lower court held that the prevailing replacement value of P6,438,048.00 of the
fishing boat and all its equipment would regularly increase at 30% every year from
the date the quotations were given.
On the other hand, the lower court noted that petitioner only presented Lorenzo
Lazaro, senior estimator at PNOC Dockyard & Engineering Corporation, as sole
witness and it did not bother at all to offer any documentary evidence to support its
position. Lazaro testified that the price quotations submitted by private respondent
were "excessive" and that as an expert witness, he used the quotations of his
suppliers in making his estimates. However, he failed to present such quotations of
prices from his suppliers, saying that he could not produce a breakdown of the costs
of his estimates as it was "a sort of secret scheme." For this reason, the lower court
concluded:
 Evidently, the quotation of prices submitted by the plaintiff relative to
the replacement value of the fishing boat and its equipments in the
tune of P6,438,048.00 which were lost due to the recklessness and
imprudence of the herein defendants were not rebutted by the latter
with sufficient evidence. The defendants through their sole witness
Lorenzo Lazaro relied heavily on said witness' bare claim that the
amount afore-said is excessive or bloated, but they did not bother at
all to present any documentary evidence to substantiate such claim.
Evidence to be believed must not only proceed from the mouth of the
credible witness, but it must be credible in itself. (Vda. de Bonifacio
vs. B. L. T. Bus Co., Inc. L-26810, August 31, 1970).
Aggrieved, petitioner filed a motion for the reconsideration of the lower court's
decision contending that: (1) the lower court erred in holding it liable for damages;
that the lower court did not acquire jurisdiction over the case by paying only
P1,252.00 as docket fee; (2) assuming that plaintiff was entitled to damages, the
lower court erred in awarding an amount greater than that prayed for in the second
amended complaint; and (3) the lower court erred when it failed to resolve the issues
it had raised in its memorandum. 16Petitioner likewise filed a supplemental motion
for reconsideration expounding on whether the lower court acquired jurisdiction
over the subject matter of the case despite therein plaintiff's failure to pay the
prescribed docket fee. 17
On January 25, 1990, the lower court declined reconsideration for lack of
merit. 18 Apparently not having received the order denying its motion for
reconsideration, petitioner still filed a motion for leave to file a reply to private
respondent's opposition to said motion. 19 Hence, on February 12, 1990, the lower
court denied said motion for leave to file a reply on the ground that by the issuance
of the order of January 25, 1990, said motion had become moot and academic. 20
Unsatisfied with the lower court's decision, petitioner elevated the matter to the
Court of Appeals which, however, affirmed the same in toto on October 14,
1992. 21 On petitioner's assertion that the award of P6,438,048.00 was not
convincingly proved by competent and admissible evidence, the Court of Appeals
ruled that it was not necessary to qualify Del Rosario as an expert witness because
as the owner of the lost vessel, "it was well within his knowledge and competency
to identify and determine the equipment installed and the cargoes loaded" on the
vessel. Considering the documentary evidence presented as in the nature of market
reports or quotations, trade journals, trade circulars and price lists, the Court of
Appeals held, thus:
Consequently, until such time as the Supreme Court categorically
rules on the admissibility or inadmissibility of this class of evidence,
the reception of these documentary exhibits (price quotations) as
evidence rests on the sound discretion of the trial court. In fact, where
the lower court is confronted with evidence which appears to be of
doubtful admissibility, the judge should declare in favor of
admissibility rather than of non-admissibility (The Collector of
Palakadhari, 124 [1899], p. 13, cited in Francisco, Revised Rules of
Court, Evidence, Volume VII, Part I, 1990 Edition, p. 18). Trial courts
are enjoined to observe the strict enforcement of the rules of
evidence which crystallized through constant use and practice and
are very useful and effective aids in the search for truth and for the
effective administration of justice. But in connection with evidence
which may appear to be of doubtful relevancy or incompetency or
admissibility, it is the safest policy to be liberal, not rejecting them on
doubtful or technical grounds, but admitting them unless plainly
irrelevant, immaterial or incompetent, for the reason that their
rejection places them beyond the consideration of the court. If they
are thereafter found relevant or competent, can easily be remedied by
completely discarding or ignoring them. (Banaria vs. Banaria, et al.,
C.A. No. 4142, May 31, 1950; cited in Francisco, Supra). [Emphasis
supplied].
Stressing that the alleged inadmissible documentary exhibits were never
satisfactorily rebutted by appellant's own sole witness in the person of Lorenzo
Lazaro, the appellate court found that petitioner ironically situated itself in an
"inconsistent posture by the fact that its own witness, admittedly an expert one,
heavily relies on the very same pieces of evidence (price quotations) appellant has
so vigorously objected to as inadmissible evidence." Hence, it concluded:
. . . The amount of P6,438,048.00 was duly established at the trial on
the basis of appellee's documentary exhibits (price quotations) which
stood uncontroverted, and which already included the amount by way
of adjustment as prayed for in the amended complaint. There was
therefore no need for appellee to amend the second amended
 complaint in so far as to the claim for damages is concerned to
conform with the evidence presented at the trial. The amount of
P6,438,048.00 awarded is clearly within the relief prayed for in
appellee's second amended complaint.
On the issue of lack of jurisdiction, the respondent court held that following the
ruling in Sun Insurance Ltd. v. Asuncion, 22 the additional docket fee that may later
on be declared as still owing the court may be enforced as a lien on the judgment.
Hence, the instant recourse.
In assailing the Court of Appeals' decision, petitioner posits the view that the award
of P6,438,048 as actual damages should have been in light of these considerations,
namely: (1) the trial court did not base such award on the actual value of the vessel
and its equipment at the time of loss in 1977; (2) there was no evidence on
extraordinary inflation that would warrant an adjustment of the replacement cost of
the lost vessel, equipment and cargo; (3) the value of the lost cargo and the prices
quoted in respondent's documentary evidence only amount to P4,336,215.00; (4)
private respondent's failure to adduce evidence to support its claim for unrealized
profit and business opportunities; and (5) private respondent's failure to prove the
extent and actual value of damages sustained as a result of the 1977 collision of the
vessels. 23
Under Article 2199 of the Civil Code, actual or compensatory damages are those
awarded in satisfaction of, or in recompense for, loss or injury sustained. They
proceed from a sense of natural justice and are designed to repair the wrong that
has been done, to compensate for the injury inflicted and not to impose a
penalty. 24 In actions based on torts or quasi-delicts, actual damages include all the
natural and probable consequences of the act or omission complained of. 25 There
are two kinds of actual or compensatory damages: one is the loss of what a person
already possesses (daño emergente), and the other is the failure to receive as a
benefit that which would have pertained to him (lucro cesante). 26 Thus:
Where goods are destroyed by the wrongful act of the defendant the
plaintiff is entitled to their value at the time of destruction, that is,
normally, the sum of money which he would have to pay in the market
for identical or essentially similar goods, plus in a proper case
damages for the loss of use during the period before replacement. In
other words, in the case of profit-earning chattels, what has to be
assessed is the value of the chattel to its owner as a going concern at
the time and place of the loss, and this means, at least in the case of
ships, that regard must be had to existing and pending engagements,
...
. . . . If the market value of the ship reflects the fact that it is in any
case virtually certain of profitable employment, then nothing can be
added to that value in respect of charters actually lost, for to do so
would be pro tanto to compensate the plaintiff twice over. On the
other hand, if the ship is valued without reference to its actual future
engagements and only in the light of its profit-earning potentiality,
then it may be necessary to add to the value thus assessed the
anticipated profit on a charter or other engagement which it was
unable to fulfill. What the court has to ascertain in each case is the
"capitalised value of the vessel as a profit-earning machine not in the
abstract but in view of the actual circumstances," without, of course,
taking into account considerations which were too remote at the time
of the loss. 27 [Emphasis supplied].
As stated at the outset, to enable an injured party to recover actual or compensatory
damages, he is required to prove the actual amount of loss with reasonable degree
of certainty premised upon competent proof and on the best evidence
available. 28 The burden of proof is on the party who would be defeated if no evidence
would be presented on either side. He must establish his case by a preponderance
of evidence which means that the evidence, as a whole, adduced by one side is
superior to that of the other. 29 In other words, damages cannot be presumed and
courts, in making an award must point out specific facts that could afford a basis
for measuring whatever compensatory or actual damages are borne. 30
In this case, actual damages were proven through the sole testimony of private
respondent's general manager and certain pieces of documentary evidence. Except
for Exhibit B where the value of the 1,050 bañeras of fish were pegged at their
September 1977 value when the collision happened, the pieces of documentary
evidence proffered by private respondent with respect to items and equipment lost
show similar items and equipment with corresponding prices in early 1987 or
approximately ten (10) years after the collision. Noticeably, petitioner did not object
to the exhibits in terms of the time index for valuation of the lost goods and
equipment. In objecting to the same pieces of evidence, petitioner commented that
these were not duly authenticated and that the witness (Del Rosario) did not have
personal knowledge on the contents of the writings and neither was he an expert on
the subjects thereof. 31 Clearly ignoring petitioner's objections to the exhibits, the
lower court admitted these pieces of evidence and gave them due weight to arrive
at the award of P6,438,048.00 as actual damages.
The exhibits were presented ostensibly in the course of Del Rosario's testimony.
Private respondent did not present any other witnesses especially those whose
signatures appear in the price quotations that became the bases of the award. We
hold, however, that the price quotations are ordinary private writings which under
the Revised Rules of Court should have been proffered along with the testimony of
the authors thereof. Del Rosario could not have testified on the veracity of the
contents of the writings even though he was the seasoned owner of a fishing fleet
because he was not the one who issued the price quotations. Section 36, Rule 130
of the Revised Rules of Court provides that a witness can testify only to those facts
that he knows of his personal knowledge.
For this reason, Del Rosario's claim that private respondent incurred losses in the
total amount of P6,438,048.00 should be admitted with extreme caution considering
that, because it was a bare assertion, it should be supported by independent
evidence. Moreover, because he was the owner of private respondent
corporation 32 whatever testimony he would give with regard to the value of the lost
vessel, its equipment and cargoes should be viewed in the light of his self-interest
therein. We agree with the Court of Appeals that his testimony as to the equipment
installed and the cargoes loaded on the vessel should be given
credence 33 considering his familiarity thereto. However, we do not subscribe to the
conclusion that his valuation of such equipment, cargo and the vessel itself should
be accepted as gospel truth. 34 We must, therefore, examine the documentary
evidence presented to support Del Rosario's claim as regards the amount of losses.
The price quotations presented as exhibits partake of the nature of hearsay
evidence considering that the persons who issued them were not presented as
witnesses. 35 Any evidence, whether oral or documentary, is hearsay if its probative
value is not based on the personal knowledge of the witness but on the knowledge
of another person who is not on the witness stand. Hearsay evidence, whether
objected to or not, has no probative value unless the proponent can show that the
evidence falls within the exceptions to the hearsay evidence rule. 36 On this point,
we believe that the exhibits do not fall under any of the exceptions provided under
Sections 37 to 47 of Rule 130. 37
It is true that one of the exceptions to the hearsay rule pertains to "commercial lists
and the like" under Section 45, Rule 130 of the Revised Rules on Evidence. In this
respect, the Court of Appeals considered private respondent's exhibits as
"commercial lists." It added, however, that these exhibits should be admitted in
evidence "until such time as the Supreme Court categorically rules on the
admissibility or inadmissibility of this class of evidence" because "the reception of
these documentary exhibits (price quotations) as evidence rests on the sound
discretion of the trial court." 38 Reference to Section 45, Rule 130, however, would
show that the conclusion of the Court of Appeals on the matter was arbitrarily
arrived at. This rule states:
Commercial lists and the like. — Evidence of statements of matters
of interest to persons engaged in an occupation contained in a list,
register, periodical, or other published compilation is admissible as
tending to prove the truth of any relevant matter so stated if that
compilation is published for use by persons engaged in that
occupation and is generally used and relied upon by them there.
Under Section 45 of the aforesaid Rule, a document is a commercial list if: (1) it is a
statement of matters of interest to persons engaged in an occupation; (2) such
statement is contained in a list, register, periodical or other published compilation;
(3) said compilation is published for the use of persons engaged in that occupation,
and (4) it is generally used and relied upon by persons in the same occupation.
Based on the above requisites, it is our considered view that Exhibits B, C, D, E, F
and H 39 are not "commercial lists" for these do not belong to the category of "other
published compilations" under Section 45 aforequoted. Under the principle
of ejusdem generis, "(w)here general words follow an enumeration of persons or
things, by words of a particular and specific meaning, such general words are not
to be construed in their widest extent, but are to be held as applying only to persons
or things of the same kind or class as those specifically mentioned." 40 The exhibits
mentioned are mere price quotations issued personally to Del Rosario who
requested for them from dealers of equipment similar to the ones lost at the collision
of the two vessels. These are not published in any list, register, periodical or other
compilation on the relevant subject matter. Neither are these "market reports or TERMS : CASH
quotations" within the purview of "commercial lists" as these are not "standard
handbooks or periodicals, containing data of everyday professional need and relied DELIVERY : 60-90 days from date of order.
upon in the work of the occupation." 41 These are simply letters responding to the
queries of Del Rosario. Thus, take for example Exhibit D which reads: VALIDITY : Subject to our final confirmation.

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

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

e
MARIA EFIGINIA FISHING CORPORATION r
y
Navotas, Metro Manila t
r
Attention: MR. EDDIE DEL ROSARIO u
l
Gentlemen: y
y
o
In accordance to your request, we are pleated to quote our Cummins
u
Marine Engine, to wit.
r
s
Two (2) units CUMMINS Marine Engine ,
model N855-M, 195 bhp. at 1800 rpm., 6-
cylinder in-line, 4-stroke cycle, natural
P
aspirated, 5 1/2 in. x 6 in. bore and
O
stroke, 855 cu. In. displacement, keel-
W
cooled, electric starting coupled with
E
Twin-Disc Marine gearbox model MG-
R
509, 4.5:1 reduction ratio, includes oil
S
cooler, companion flange, manual and
Y
standard accessories as per attached
S
sheet.
T
E
Price FOB Manila P580,000.00/unit M
S
Total FOB Manila P1,160,000.00 ,
 Admissibility
I of evidence refers to the question of whether or not the circumstance
(or evidence)
N is to considered at all. 45 On the other hand, the probative value of
evidenceCrefers to the question of whether or not it proves an issue. 46 Thus, a letter
may be offered
. in evidence and admitted as such but its evidentiary weight depends
upon the observance of the rules on evidence. Accordingly, the author of the letter
should be( presented as witness to provide the other party to the litigation the
opportunity
S to question him on the contents of the letter. Being mere hearsay
evidence,g failure to present the author of the letter renders its contents suspect. As
earlier stated,
d hearsay evidence, whether objected to or not, has no probative value.
Thus: .
)
The courts differ as to the weight to be given to hearsay evidence
E admitted without objection. Some hold that when hearsay has been
. admitted without objection, the same may be considered as any other
D properly admitted testimony. Others maintain that it is entitled to no
. more consideration than if it had been excluded.
D
a The rule prevailing in this jurisdiction is the latter one. Our Supreme
c Court held that although the question of admissibility of evidence can
l not be raised for the first time on appeal, yet if the evidence is hearsay
a it has no probative value and should be disregarded whether objected
n to or not. "If no objection is made" — quoting Jones on Evidence —
"it (hearsay) becomes evidence by reason of the want of such
To be sure, letters and telegrams are admissible in evidence but these are, however, objection even though its admission does not confer upon it any new
subject to the general principles of evidence and to various rules relating to attribute in point of weight. Its nature and quality remain the same, so
documentary evidence. 42 Hence, in one case, it was held that a letter from an far as its intrinsic weakness and incompetency to satisfy the mind are
automobile dealer offering an allowance for an automobile upon purchase of a new concerned, and as opposed to direct primary evidence, the latter
automobile after repairs had been completed, was not a "price current" or always prevails.
"commercial list" within the statute which made such items presumptive evidence
of the value of the article specified therein. The letter was not admissible in evidence The failure of the defense counsel to object to the presentation of
as a "commercial list" even though the clerk of the dealer testified that he had incompetent evidence, like hearsay evidence or evidence that
written the letter in due course of business upon instructions of the dealer. 43 violates the rules of res inter alios acta, or his failure to ask for the
striking out of the same does not give such evidence any probative
But even on the theory that the Court of Appeals correctly ruled on the admissibility value. But admissibility of evidence should not be equated with
of those letters or communications when it held that unless "plainly irrelevant, weight of evidence. Hearsay evidence whether objected to or not has
immaterial or incompetent," evidence should better be admitted rather than rejected no probative value. 47
on "doubtful or technical grounds," 44 the same pieces of evidence, however, should
not have been given probative weight. This is a distinction we wish to point out.
Accordingly, as stated at the outset, damages may not be awarded on the basis of
hearsay evidence. 48
Nonetheless, the non-admissibility of said exhibits does not mean that it totally
deprives private respondent of any redress for the loss of its vessel. This is because
in Lufthansa German Airlines v. Court of Appeals, 49 the Court said:
In the absence of competent proof on the actual damage suffered,
private respondent is "entitled to nominal damages which, as the law
says, is adjudicated in order that a right of the plaintiff, which has
been violated or invaded by defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff for
any loss suffered." [Emphasis supplied].
Nominal damages are awarded in every obligation arising from law, contracts,
quasi-contracts, acts or omissions punished by law, and quasi-delicts, or in every
case where property right has been invaded. 50Under Article 2223 of the Civil Code,
"(t)he adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their
respective heirs and assigns."
Actually, nominal damages are damages in name only and not in fact. Where these
are allowed, they are not treated as an equivalent of a wrong inflicted but simply in
recognition of the existence of a technical injury. 51 However, the amount to be
awarded as nominal damages shall be equal or at least commensurate to the injury
sustained by private respondent considering the concept and purpose of such
damages. 52 The amount of nominal damages to be awarded may also depend on
certain special reasons extant in the case. 53
Applying now such principles to the instant case, we have on record the fact that
petitioner's vesselPetroparcel was at fault as well as private respondent's complaint
claiming the amount of P692,680.00 representing the fishing nets, boat equipment
and cargoes that sunk with the M/V Maria Efigenia XV. In its amended complaint,
private respondent alleged that the vessel had an actual value of P800,000.00 but it
had been paid insurance in the amount of P200,000.00 and, therefore, it claimed only
the amount of P600,000.00. Ordinarily, the receipt of insurance payments should
diminish the total value of the vessel quoted by private respondent in his complaint
considering that such payment is causally related to the loss for which it claimed
compensation. This Court believes that such allegations in the original and
amended complaints can be the basis for determination of a fair amount of nominal
damages inasmuch as a complaint alleges the ultimate facts constituting the
plaintiffs cause of
action. 54 Private respondent should be bound by its allegations on the amount of its
claims.
With respect to petitioner's contention that the lower court did not acquire
jurisdiction over the amended complaint increasing the amount of damages claimed
to P600,000.00, we agree with the Court of Appeals that the lower court acquired
jurisdiction over the case when private respondent paid the docket fee
corresponding to its claim in its original complaint. Its failure to pay the docket fee
corresponding to its increased claim for damages under the amended complaint
should not be considered as having curtailed the lower court's jurisdiction.
Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 55 the unpaid
docket fee should be considered as a lien on the judgment even though private
respondent specified the amount of P600,000.00 as its claim for damages in its
amended complaint.
Moreover, we note that petitioner did not question at all the jurisdiction of the lower
court on the ground of insufficient docket fees in its answers to both the amended
complaint and the second amended complaint. It did so only in its motion for
reconsideration of the decision of the lower court after it had received an adverse
decision. As this Court held in Pantranco North Express, Inc. v. Court of
Appeals, 56 participation in all stages of the case before the trial court, that included
invoking its authority in asking for affirmative relief, effectively barred petitioner by
estoppel from challenging the court's jurisdiction. Notably, from the time it filed its
answer to the second amended complaint on April 16, 1985, 57 petitioner did not
question the lower court's jurisdiction. It was only on December 29, 1989 58 when it
filed its motion for reconsideration of the lower court's decision that petitioner
raised the question of the lower court's lack of jurisdiction. Petitioner thus
foreclosed its right to raise the issue of jurisdiction by its own inaction.
WHEREFORE, the challenged decision of the Court of Appeals dated October 14,
1992 in CA-G.R. CV No. 26680 affirming that of the Regional Trial Court of Caloocan
City, Branch 121, is hereby MODIFIED insofar as it awarded actual damages to
private respondent Maria Efigenia Fishing Corporation in the amount of
P6,438,048.00 for lack of evidentiary bases therefor. Considering the fact, however,
that: (1) technically petitioner sustained injury but which, unfortunately, was not
adequately and properly proved, and (2) this case has dragged on for almost two
decades, we believe that an award of Two Million (P2,000,000.00) 59 in favor of private
respondent as and for nominal damages is in order.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 163212 March 13, 2007
CANDANO SHIPPING LINES, INC., Petitioner,
vs.
FLORENTINA J. SUGATA-ON, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,
seeking to reverse and set aside the Court of Appeals Decision1 dated 23 May 2003 and
its Resolution dated 1 April 2004, affirming with modification the Decision of the Regional
Trial Court (RTC) of Manila, Branch 20, finding Candano Shipping Lines, Inc. (Candano
Shipping) liable for the death of Melquiades Sugata-on. The dispositive portion of the
assailed decision of the appellate court reads:
IN VIEW OF ALL THE FOREGOING, the appealed decision is AFFIRMED, with
the MODIFICATION that: (1) the awarded compensation for the death of Melquiades
Sugata-on is reduced to ₱608,400.00; and, (2) the award of moral and exemplary damages
as well as attorney’s fees is deleted. No pronouncement as to costs.2
The factual and procedural antecedents of this instant petition are as follows:
Candano Shipping is a domestic corporation engaged in the business of coastwise trading
within the Philippines.3On 7 March 1994, Melquiades Sugata-on was employed by
Candano Shipping as Third Marine Engineer on board its cargo vessel, M/V David, Jr.,
with the monthly salary of ₱7,800.00.4
On 25 March 1996, M/V David, Jr. left the port of Davao City with its cargo and 20 crew
members. The voyage was initially uneventful until around seven o’clock in the evening of
27 March 1996 when the vessel encountered rough seas and strong winds while traversing
the waters of Lianga Bay, Surigao del Sur, causing her to tilt at three degrees on its
starboard side. Due to the violent waves which continuously hammered the tilting vessel,
the seawaters slowly swallowed up the main deck causing the tilting to worsen up to 30
degrees. In an effort to salvage the vessel, the ship captain changed its course from the
north to the south but the tilting continued to grow to a dangerously high level, rendering
the vessel beyond control. It was at this point when the ship captain ordered the crew
members to abandon the vessel. Despite the efforts exerted by the crew members to save
the vessel, M/V David, Jr. sank together with her cargo at around eleven o’clock in the
evening at Bakulin Point, Lianga Bay, Surigao del Sur. Among the 20 crew members,
twelve survived, one died and seven were missing. One of those who were missing was
Melquiades Sugata-on (Melquiades), the husband of herein respondent, Florentina
Sugata-on, (Florentina) as shown in the List of Surviving Crew of the Ill-Fated David, Jr.,
prepared by Candano Shipping.5
Upon learning of Melquiades’ fate, Florentina immediately went to the office of Candano
Shipping in Manila to claim the death benefits of her husband but it refused to pay.6
Such refusal prompted Florentina to institute on 31 January 1997, an action seeking
indemnity for the death of her husband against Candano Shipping before the RTC of
Manila, Branch 20. She grounded her case on the provision of Article 17117 of the New
Civil Code, which imposes upon the employer liability for the death of his employee in the
course of employment, even if the death is caused by a fortuitous event. Accordingly,
Florentina prayed that actual, moral and exemplary damages including attorney’s fees, be
awarded in her favor.8
In its Answer,9 Candano Shipping countered that Florentina had no cause of action against
it because the death of Melquiades was not yet an established fact since he was merely
reported missing upon the sinking of M/V David, Jr. The filing of the case before the RTC
therefore was premature for she should have waited until the body of Melquiades could be
recovered or until the lapse of time which would render the provision of Article 391 of the
New Civil Code10 on presumptive death operative.
The RTC resolved the controversy in favor of Florentina and ratiocinated that the provision
of Article 391 of the New Civil Code on presumptive death had become operative since the
period of four years had already elapsed since Melquiades was reported missing upon the
sinking incident which occurred on 27 March 1996. In a Decision11promulgated on 15
February 2001, the RTC ordered Candano Shipping to indemnify Florentina for the death
of her husband, in the following amounts:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant
Candano Shipping Lines, Inc. to indemnify plaintiff Forentina J. Sugata-on the amount of
₱988,400.00 as actual damages, ₱100,000.00 as moral damages ₱50,000.00 as
exemplary damages and 10% of the amount due as and for attorney’s fees plus the cost
of suit.
The award for actual damages amounting to ₱988,400.00 was computed by the lower
court by adopting the formula in the computation of loss of earning capacity enunciated in
the case of Villa Rey Transit, Inc. v. Court of Appeals,12wherein the annual expenses of
the deceased are deducted from his gross annual income and multiplied by life expectancy
(gross annual income – annual expense x life expectancy).13
The Motion for Reconsideration interposed by Candano Shipping was denied by the RTC
for lack of cogent reason to disturb or reconsider its decision.14
Aggrieved, Candano Shipping elevated the adverse RTC decision to the Court of Appeals,
which in turn, affirmed with modification the judgment of the lower court. The award for
actual damages was reduced from ₱998,400.00 to ₱608,400.00, while the awards for
moral and exemplary damages including attorney’s fees were deleted for lack of sufficient
basis for their allowance.15
In arriving at the sum of ₱608,400.00, the appellate court applied the standard prescribed
by Article 194 of the Labor Code of the Philippines, as amended, to wit:
ART. 194. DEATH. – (a) Under such regulations as the Commission may approve, the
System shall pay to the primary beneficiaries upon the death of the covered employee
under this Title an amount equivalent to his monthly income benefit, plus ten percent
thereof for each dependent child, but not exceeding five, beginning with the youngest and
without substitution, except as provided for in paragraph (j) of Article 167 hereof; Provided,
however, That the monthly income benefit shall be guaranteed for five years: Provided,
further, That if he has no primary beneficiary, the System shall pay to his secondary
beneficiaries the monthly income benefit not to exceed sixty months; Provided, finally, That
the minimum monthly death benefit shall not be less that fifteen thousand pesos.
In a Resolution16 issued on 1 April 2004, the Court of Appeals denied the Motion for
Reconsideration filed by Candano Shipping for failure to offer any justifiable ground to
modify, reverse or reconsider the questioned decision.
Hence, this instant Petition for Review on Certiorari filed by Candano Shipping raising the
following issues:
WHETHER OR NOT THE FORMULA FOR FIXING THE AMOUNT OF DEATH
COMPENSATION IN ARTICLE 194 OF THE LABOR CODE APPLIES IN
DETERMINING THE COMPENSATION CLAIMED BY THE HEIR OF THE
DECEASED EMPLOYEE AGAINST THE EMPLOYER UNDER ARTICLE 1711?
WHETHER OR NOT IT IS PERMITTED FOR THE COURT OF APPEALS, ON
ORDINARY APPEAL, TO APPLY ART. 194 OF THE LABOR CODE ON A CLAIM
FOR DEATH COMPENSATION OF AN EMPLOYEE AGAINST THE EMPLOYER
FILED AND TRIED BEFORE THE REGULAR COURTS ON THE BASIS OF
ARTICLE 1711 OF THE CIVIL CODE AND THE DOCTRINE ENUNCIATED IN
THE VILLA REY TRANSIT CASE?
WHETHER OR NOT APPLICATION OF ARTICLE 194 OF THE LABOR CODE
ON THE CLAIM FOR DEATH COMPENSATION OF RESPONDENT OUSTS THE
REGULAR COURTS, INCLUDING THE COURT OF APPEALS OF
JURISDICTION OVER THE CASE?
IN THE EVENT THAT THE SUPREME COURT RULES THAT THE COURT OF
APPEALS APPLICATION OF ARTICLE 194 OF THE LABOR CODE IN THIS
CASE SHOULD BE SET ASIDE, IS RESPONDENT ENTITLED TO RECOVER
DEATH COMPENSATION FROM PETITIONER IN ACCORDANCE WITH HER
THEORY OF THE CASE AS ALLEGED, ARGUED AND TRIED BEFORE THE
TRIAL COURT.17
Since the factual findings of the RTC and the Court of Appeals that the non-recovery of
Melquiades’ body for the period of four (4) years from 27 March 1996 creates a
presumption that he is already dead and that his death was caused by a fortuitous event,
were already settled, and considering that these findings were not controverted by the
parties in this instant petition, we find no compelling reason to disturb the same.
Henceforth, we will limit our discussion to the computation of the amount of indemnification.
In its Petition, Candano Shipping argues that the application of the measure stipulated
under Article 194 of the Labor Code is erroneous since it applies only to death
compensation to be paid by the Social Security System to the beneficiaries of a deceased
member, to which proposition Florentina concedes. We agree. The remedy availed by
Sugata-on in filing the claim under the New Civil Code has been validly recognized by the
prevailing jurisprudence on the matter.
In the case of Floresca v. Philex Mining Company,18 we declared that the employees may
invoke either the Workmen’s Compensation Act or the provisions of the Civil Code, subject
to the consequence that the choice of one remedy will exclude the other and that the
acceptance of the compensation under the remedy chosen will exclude the other remedy.
The exception is where the claimant who had already been paid under the Workmen’s
Compensation Act may still sue for damages under the Civil Code on the basis of
supervening facts or developments occurring after he opted for the first remedy.19
Stated differently, save for the recognized exception, an employee cannot pursue both
remedies simultaneously but has the option to proceed by interposing one remedy and
waiving his right over the other. As we have explained in Floresca, this doctrinal rule is
rooted on the theory that the basis of the compensation under the Workmen’s
Compensation Act is separate and distinct from the award of damages under the Civil
Code, thus:
The rationale in awarding compensation under the Workmen’s Compensation Act differs
from that in giving damages under the Civil Code. The compensation acts are based on a
theory of compensation distinct from the existing theories of damages, payments under
the acts being made as compensation and not as damages (99 C.J.S. 53). Compensation
is given to mitigate harshness and insecurity of industrial life for the workman and his
family. Hence, an employer is liable whether negligence exists or not since liability is
created by law. Recovery under the Act is not based on any theory of actionable wrong on
the part of the employer (99 D.J.S. 36).
In other words, under compensation acts, the employer is liable to pay compensation
benefits for loss of income, as long as the death, sickness or injury is work-connected or
work-aggravated, even if the death or injury is not due to the fault of the employer (Murillo
v. Mendoza, 66 Phil. 689). On the other hand, damages are awarded to one as a
vindication of the wrongful invasion of his rights. It is the indemnity recoverable by a person
who has sustained injury either in his person, property or relative rights, through the act or
default of another (25 C.J.S. 452).
The principle underscored in the case of Floresca was further affirmed in the later case
of Ysmael Maritime Corporation v. Avelino,20 wherein we emphasized that once the
claimant had already exercised his choice to pursue his right under one remedy, he is
barred from proceeding with an alternative remedy. As eloquently laid down by Chief
Justice Marcelo Fernan:
It is therefore clear that respondents had not only opted to recover under the Act but they
had also been duly paid. At the very least, a sense of fair play would demand that if a
person entitled to a choice of remedies made a first election and accepted the benefits
thereof, he should no longer be allowed to exercise the second option. "Having staked
his fortunes on a particular remedy, (he) is precluded from pursuing the alternate
course, at least until the prior claim is rejected by the Compensation Commission."
In the case at bar, Florentina was forced to institute a civil suit for indemnity under the New
Civil Code, after Candano Shipping refused to compensate her husband’s death.
The pertinent provision of the New Civil Code reads:
Article 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 employment. The employer
is also liable for compensation if the employee contracts any illness or diseases caused by
such employment or as the result of the nature of 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.
In the case of Philippine Air Lines, Inc. v. Court of Appeals,21 this Court validated the
strength of the aforementioned provision and made the employer liable for the injury
suffered by its employee in the course of employment. We thus ruled:
Having affirmed the gross negligence of PAL in allowing Capt. Delfin Bustamante to fly the
plane to Daet on January 8, 1951 whose slow reaction and poor judgment was the cause
of the crash-landing of the plane which resulted in private respondent Samson hitting his
head against the windshield and causing him injuries for which reason PAL terminated his
services and employment as pilot after refusing to provide him with the necessary medical
treatment of respondent’s periodic spells, headache and general debility produced from
said injuries, We must necessarily affirm likewise the award of damages or
compensation under the provisions of Art. 1711 and Art. 1712 of the New Civil Code.
x x x.
As early as the case of Valencia v. Manila Yacht Club, Inc.,22 this Court, speaking
through the renowned civilist, Mr. Justice J.B.L. Reyes, made a pronouncement that
Article 1711 of the Civil Code imposes upon the employer the obligation to
compensate the employee for injury or sickness occasioned by his employment,
and thus articulated:
>Appellant’s demand for compensation is predicated on employer’s liability for the sickness
of, or injury to, his employee imposed by Article 1711 of the Civil Code, which reads:
Article 1711. Owners of enterprises and other employers are obliged to pay compensation
for the death x x x.
We find the abovequoted provision to be applicable and controlling in this case. The matter
of the amount of compensation and allowable medical expenses should be properly
determined by the Municipal Court after the parties are heard accordingly.
Given that the right of the claimant arose from the contract of employment and the
corresponding obligation imposed by the New Civil Code upon the employer to indemnify
the former for death and injury of the employee circumstanced by his employment,
necessarily, the provisions of the same code on damages shall govern the extent of the
employer’s liability.
The pertinent provision on damages under the New Civil Code provides:
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.
Article 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.
In order to give breath to the aforestated provisions on damages of the New Civil Code,
they must be transformed into a more tangible and practical mathematical form, so that the
purpose of the law to indemnify the employee or his heirs for his death or injury occasioned
by his employment, as envisioned by the Article 1711 of the same code may be realized.
We deem it best to adopt the formula for loss of earning capacity enunciated in the case
of Villa Rey v. Court of Appeals,23 in computing the amount of actual damages to be
awarded to the claimant under Article 1711 of the New Civil Code.
In Villa Rey, the common carrier was made liable for the death of its passenger on board
a passenger bus owned and operated by Villa Rey Transit, Inc. going to Manila from
Lingayen, Pangasinan. While the bus was nearing Sadsaran Bridge in Barrio Sto.
Domingo, Minalin, Pampanga, it frontally hit the rear side of bull cart filled with hay and
bamboo poles. The protruding end of one bamboo pole, about eight feet long, penetrated
through the glass windshield of the bus and hit the face of Policarpio Quintos, Jr., who was
then sitting at the front row, causing his death.24
The obligation of the common carrier to indemnify its passenger or his heirs for injury or
death arose from the contract of carriage entered into by the common carrier and the
passenger.25 By the very nature of the obligation which is imbued with public interest,26 in
contract of carriage the carrier assumes the express obligation to transport its passenger
to his destination safely and to observe extraordinary diligence with due regard to all the
circumstances, and any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier and thus gives rise to the right of the
passenger or his heirs for indemnity.27
In the same breadth, the employer shall be liable for the death or personal injury of its
employees in the course of employment as sanctioned by Article 1711 of the New Civil
Code. The liability of the employer for death or personal injury of his employees arose from
the contract of employment entered into between the employer and his employee which is
likewise imbued with public interest.28 Accordingly, when the employee died or was injured
in the occasion of employment, the obligation of the employer for indemnity, automatically
attaches. The indemnity may partake of the form of actual, moral, nominal, temperate,
liquidated or exemplary damages, as the case may be depending on the factual milieu of
the case and considering the criterion for the award of these damages as outlined by our
jurisprudence.29 In the case at bar, only the award of actual damages, specifically the
award for unearned income is warranted by the circumstances since it has been duly
proven that the cause of death of Melquiades is a fortuitous event for which Candano
Shipping cannot be faulted.
The formula for the computation of unearned income is:
Net Earning Capacity = life expectancy x (gross annual income - reasonable and
necessary living expenses).
Life expectancy is determined in accordance with the formula:
2 / 3 x [80 – age of deceased at the time of death]
Jurisprudence provides that the first factor, i.e., life expectancy, shall be computed by
applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table
of Mortality or the Actuarial of Combined Experience Table of Mortality.30
In the computation of the second factor, it is computed by multiplying the life expectancy
by the net earnings of the deceased, i.e., the total earnings less expenses necessary in
the creation of such earnings or income and less living and other incidental
expenses.31 The loss is not equivalent to the entire earnings of the deceased, but only such
portion that he would have used to support his dependents or heirs. Hence, we deduct
from his gross earnings the necessary expenses supposed to be used by the deceased
for his own needs.32 The Court explained in Villa Rey: 1avv phi1
[(The award of damages for loss of earning capacity is)] concerned with the determination
of losses or damages sustained by the private respondents, as dependents and intestate
heirs of the deceased, and that said damages consist, not of the full amount of his earnings,
but of the support they received or would have received from him had he not died in
consequence of negligence of petitioner’s agent. In fixing the amount of that support, we
must reckon with the ‘necessary expenses of his own living’, which should be deducted
from his earnings. Thus, it has been consistently held that earning capacity, as an element
of damages to one’s estate for his death by wrongful act is necessarily his net earning
capacity or his capacity to acquire money, ‘less necessary expense for his own living.’
Stated otherwise, the amount recoverable is not the loss of entire earning, but rather the
loss of that portion of the earnings which the beneficiary would have received. In other
words, only net earnings, and not gross earnings are to be considered that is, the total of
the earnings less expenses necessary in the creation of such earnings or income and less
living and other incidental expenses.33
In computing the third factor, the necessary living expense, a survey of more recent
jurisprudence shows that this Court consistently pegged the amount at 50% of the gross
annual income.34 We held in Smith Bell Dodwell Shipping Agency Corp. v. Borja,35 that
when there is no showing that the living expenses constituted the smaller percentage of
the gross income, we fix the living expenses at half of the gross income.
Applying the aforestated jurisprudential guidelines in the computation of the amount of
award for damages set out in Villa Rey, we now proceed to determining Melquiades’ life
expectancy, thus:
Life expectancy = 2 / 3 x [80 – age of deceased at the time of death]
2 /3 x [80 – 56]
2 / 3 x [24]
Life expectancy = 16
With 16 more years of life expectancy and a monthly income of ₱7,800.00, as evidenced
by the pay slips duly presented before the RTC, Melquiades’ earning capacity is computed
as follows:
Net Earning Capacity = life expectancy x (gross annual income - reasonable and
necessary living expenses).
= 16 x ( ₱93,600.00 – ₱ 46,800.00)
= 16 x ( ₱ 46,800.00 )
Net Earning Capacity = ₱ 748,800.00
The argument raised by Candano Shipping that the formula for determining the life
expectancy under Villa Reycannot be automatically applied without proof of the basis for
the expected length of life of a Filipino does not merit our consideration. The formula for
life expectancy has been repeatedly adopted in our jurisprudence in fixing the amount of
indemnity for the death of a party. This was adopted from the American Expectancy Table
of Mortality or the Actuarial of Combined Experience Table of Mortality which was used by
insurers in determining the capital sum to be charged for annuity.36
Admittedly, in several cases, this Court reduced the life expectancy multiplier considering
the medical history such as when the deceased previously underwent a major surgery37 or
when it was shown that he was treated for chest pains, backache or occasional feeling of
tiredness38 and the fact that the deceased has been consistently engaged in a dangerous
and risky activity tending to shorten his life.39 Failing to prove, however, that any of these
circumstances is attendant in the case at bar, Candano Shipping cannot validly assert that
the standard life expectancy factor laid down in Villa Rey cannot be applied in this case.
Accordingly, Florentina is entitled to recover the amount of ₱748,800.00 as actual
damages for the death of her husband. The awards of moral and exemplary damages are
deleted. However, the award of costs of litigation and attorney’s fees are proper.40
WHEREFORE, in view of the foregoing, the instant petition is DENIED and the Decision
dated 23 May 2003 as well as the Resolution dated 1 April 2004, rendered by the Court of
Appeals in CA-G.R. CV No. 70410, are hereby PARTIALLY AFFIRMED in so far as it finds
petitioner liable to respondent for damages.
Pursuant to the appropriate provisions of the New Civil Code and the prevailing
jurisprudence on the matter, petitioner Candano Shipping Lines, Inc., is ORDERED to pay
the amount of ₱748,800.00, as actual damages, plus 10% of the amount awarded as
attorney’s fee plus cost of the suit.
SO ORDERED.
G.R. No. 104235 November 18, 1993
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES,
INC., respondents.
Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for private-respondent.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in TWA Flight
007 departing from New York to Los Angeles on June 6, 1984 despite possession of
confirmed tickets, petitioners filed an action for damages before the Regional Trial Court
of Makati, Metro Manila, Branch 145. Advocating petitioner's position, the trial court
categorically ruled that respondent TransWorld Airlines (TWA) breached its contract of
carriage with petitioners and that said breach was "characterized by bad faith." On appeal,
however, the appellate court found that while there was a breach of contract on respondent
TWA's part, there was neither fraud nor bad faith because under the Code of Federal
Regulations by the Civil Aeronautics Board of the United States of America it is allowed to
overbook flights.
The factual backdrop of the case is as follows:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana
Zalamea, purchased three (3) airline tickets from the Manila agent of respondent
TransWorld Airlines, Inc. for a flight to New York to Los Angeles on June 6, 1984. The
tickets of petitioners-spouses were purchased at a discount of 75% while that of their
daughter was a full fare ticket. All three tickets represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of the reconfirmation of
their reservations for said flight. On the appointed date, however, petitioners checked in at
10:00 a.m., an hour earlier than the scheduled flight at 11:00 a.m. but were placed on the
wait-list because the number of passengers who had checked in before them had already
taken all the seats available on the flight. Liana Zalamea appeared as the No. 13 on the
wait-list while the two other Zalameas were listed as "No. 34, showing a party of two." Out
of the 42 names on the wait list, the first 22 names were eventually allowed to board the
flight to Los Angeles, including petitioner Cesar Zalamea. The two others, on the other
hand, at No. 34, being ranked lower than 22, were not able to fly. As it were, those holding
full-fare tickets were given first priority among the wait-listed passengers. Mr. Zalamea,
who was holding the full-fare ticket of his daughter, was allowed to board the plane; while
his wife and daughter, who presented the discounted tickets were denied boarding.
According to Mr. Zalamea, it was only later when he discovered the he was holding his
daughter's full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be
accommodated because it was also fully booked. Thus, they were constrained to book in
another flight and purchased two tickets from American Airlines at a cost of Nine Hundred
Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for damages based on
breach of contract of air carriage before the Regional Trial Court of Makati, Metro Manila,
Branch 145. As aforesaid, the lower court ruled in favor of petitioners in its decision 1 dated
January 9, 1989 the dispositive portion of which states as follows:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay
plaintiffs the following amounts:
(1) US $918.00, or its peso equivalent at the time of payment representing
the price of the tickets bought by Suthira and Liana Zalamea from American
Airlines, to enable them to fly to Los Angeles from New York City;
(2) US $159.49, or its peso equivalent at the time of payment, representing
the price of Suthira Zalamea's ticket for TWA Flight 007;
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty Centavos
(P8,934.50, Philippine Currency, representing the price of Liana Zalamea's
ticket for TWA Flight 007,
(4) Two Hundred Fifty Thousand Pesos (P250,000.00), Philippine
Currency, as moral damages for all the plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00), Philippine Currency, as
and for attorney's fees; and
(6) The costs of suit.
SO ORDERED. 2
On appeal, the respondent Court of Appeals held that moral damages are recoverable in
a damage suit predicated upon a breach of contract of carriage only where there is fraud
or bad faith. Since it is a matter of record that overbooking of flights is a common and
accepted practice of airlines in the United States and is specifically allowed under the Code
of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be
imputed on respondent TransWorld Airlines.
Moreover, while respondent TWA was remiss in not informing petitioners that the flight was
overbooked and that even a person with a confirmed reservation may be denied
accommodation on an overbooked flight, nevertheless it ruled that such omission or
negligence cannot under the circumstances be considered to be so gross as to amount to
bad faith.
Finally, it also held that there was no bad faith in placing petitioners in the wait-list along
with forty-eight (48) other passengers where full-fare first class tickets were given priority
over discounted tickets.
The dispositive portion of the decision of respondent Court of Appeals3 dated October 25,
1991 states as follows:
WHEREFORE, in view of all the foregoing, the decision under review is
hereby MODIFIED in that the award of moral and exemplary damages to
the plaintiffs is eliminated, and the defendant-appellant is hereby ordered
to pay the plaintiff the following amounts:
(1) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Suthira Zalamea's ticket for TWA Flight 007;
(2) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Cesar Zalamea's ticket for TWA Flight 007;
 (3) P50,000.00 as and for attorney's fees.
(4) The costs of suit.
SO ORDERED.4
Not satisfied with the decision, petitioners raised the case on petition for review
on certiorari and alleged the following errors committed by the respondent Court of
Appeals, to wit:
I.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR BAD FAITH ON THE
PART OF RESPONDENT TWA BECAUSE IT HAS A RIGHT TO
OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF EXEMPLARY DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF LIANA ZALAMEA'S TWA
TICKET AND PAYMENT FOR THE AMERICAN AIRLINES
TICKETS.5
That there was fraud or bad faith on the part of respondent airline when it did not allow
petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be
disputed. The U.S. law or regulation allegedly authorizing overbooking has never been
proved. Foreign laws do not prove themselves nor can the courts take judicial notice of
them. Like any other fact, they must be alleged and proved.6 Written law may be evidenced
by an official publication thereof or by a copy attested by the officer having the legal custody
of the record, or by his deputy, and accompanied with a certificate that such officer has
custody. The certificate may be made by a secretary of an embassy or legation, consul
general, consul, vice-consul, or consular agent or by any officer in the foreign service of
the Philippines stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office.7
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
service agent, in her deposition dated January 27, 1986 that the Code of Federal
Regulations of the Civil Aeronautics Board allows overbooking. Aside from said statement,
no official publication of said code was presented as evidence. Thus, respondent court's
finding that overbooking is specifically allowed by the US Code of Federal Regulations has
no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci contractus which
require that the law of the place where the airline ticket was issued should be applied by
the court where the passengers are residents and nationals of the forum and the ticket is
issued in such State by the defendant airline.8 Since the tickets were sold and issued in
the Philippines, the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals,9 where passengers with confirmed bookings were refused carriage on the last
minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises, and the passenger has
every right to expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage. Where an airline had
deliberately overbooked, it took the risk of having to deprive some passengers of their
seats in case all of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is
entitled to an award of moral damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private respondent was
not allowed to board the plane because her seat had already been given to another
passenger even before the allowable period for passengers to check in had lapsed despite
the fact that she had a confirmed ticket and she had arrived on time, this Court held that
petitioner airline acted in bad faith in violating private respondent's rights under their
contract of carriage and is therefore liable for the injuries she has sustained as a result.
In fact, existing jurisprudence abounds with rulings where the breach of contract of carriage
amounts to bad faith. In Pan American World Airways, Inc. v. Intermediate Appellate
Court, 11 where a would-be passenger had the necessary ticket, baggage claim and
clearance from immigration all clearly and unmistakably showing that she was, in fact,
included in the passenger manifest of said flight, and yet was denied accommodation in
said flight, this Court did not hesitate to affirm the lower court's finding awarding her
damages.
A contract to transport passengers is quite different in kind and degree from any other
contractual relation. So ruled this Court in Zulueta v. Pan American World Airways,
Inc. 12 This is so, for a contract of carriage generates a relation attended with public duty —
a duty to provide public service and convenience to its passengers which must be
paramount to self-interest or enrichment. Thus, it was also held that the switch of planes
from Lockheed 1011 to a smaller Boeing 707 because there were only 138 confirmed
economy class passengers who could very well be accommodated in the smaller planes,
thereby sacrificing the comfort of its first class passengers for the sake of economy,
amounts to bad faith. Such inattention and lack of care for the interest of its passengers
who are entitled to its utmost consideration entitles the passenger to an award of moral
damages. 13
Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad
faith in not informing its passengers beforehand that it could breach the contract of carriage
even if they have confirmed tickets if there was overbooking. Respondent TWA should
have incorporated stipulations on overbooking on the tickets issued or to properly inform
its passengers about these policies so that the latter would be prepared for such eventuality
or would have the choice to ride with another airline.
Respondent TWA contends that Exhibit I, the detached flight coupon upon which were
written the name of the passenger and the points of origin and destination, contained such
a notice. An examination of Exhibit I does not bear this out. At any rate, said exhibit was
not offered for the purpose of showing the existence of a notice of overbooking but to show
that Exhibit I was used for flight 007 in first class of June 11, 1984 from New York to Los
Angeles.
Moreover, respondent TWA was also guilty of not informing its passengers of its alleged
policy of giving less priority to discounted tickets. While the petitioners had checked in at
the same time, and held confirmed tickets, yet, only one of them was allowed to board the
plane ten minutes before departure time because the full-fare ticket he was holding was
given priority over discounted tickets. The other two petitioners were left behind.
It is respondent TWA's position that the practice of overbooking and the airline system of
boarding priorities are reasonable policies, which when implemented do not amount to bad
faith. But the issue raised in this case is not the reasonableness of said policies but whether
or not said policies were incorporated or deemed written on petitioners' contracts of
carriage. Respondent TWA failed to show that there are provisions to that effect. Neither
did it present any argument of substance to show that petitioners were duly apprised of the
overbooked condition of the flight or that there is a hierarchy of boarding priorities in
booking passengers. It is evident that petitioners had the right to rely upon the assurance
of respondent TWA, thru its agent in Manila, then in New York, that their tickets
represented confirmed seats without any qualification. The failure of respondent TWA to
so inform them when it could easily have done so thereby enabling respondent to hold on
to them as passengers up to the last minute amounts to bad faith. Evidently, respondent
TWA placed its self-interest over the rights of petitioners under their contracts of carriage.
Such conscious disregard of petitioners' rights makes respondent TWA liable for moral
damages. To deter breach of contracts by respondent TWA in similar fashion in the future,
we adjudge respondent TWA liable for exemplary damages, as well.
Petitioners also assail the respondent court's decision not to require the refund of Liana
Zalamea's ticket because the ticket was used by her father. On this score, we uphold the
respondent court. Petitioners had not shown with certainty that the act of respondent TWA
in allowing Mr. Zalamea to use the ticket of her daughter was due to inadvertence or
deliberate act. Petitioners had also failed to establish that they did not accede to said
agreement. The logical conclusion, therefore, is that both petitioners and respondent TWA
agreed, albeit impliedly, to the course of action taken.
The respondent court erred, however, in not ordering the refund of the American Airlines
tickets purchased and used by petitioners Suthira and Liana. The evidence shows that
petitioners Suthira and Liana were constrained to take the American Airlines flight to Los
Angeles not because they "opted not to use their TWA tickets on another TWA flight" but
because respondent TWA could not accommodate them either on the next TWA flight
which was also fully booked. 14 The purchase of the American Airlines tickets by petitioners
Suthira and Liana was the consequence of respondent TWA's unjustifiable breach of its
contracts of carriage with petitioners. In accordance with Article 2201, New Civil Code,
respondent TWA should, therefore, be responsible for all damages which may be
reasonably attributed to the non-performance of its obligation. In the previously cited case
of Alitalia Airways v. Court of Appeals, 15 this Court explicitly held that a passenger is
entitled to be reimbursed for the cost of the tickets he had to buy for a flight to another
airline. Thus, instead of simply being refunded for the cost of the unused TWA tickets,
petitioners should be awarded the actual cost of their flight from New York to Los Angeles.
On this score, we differ from the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the refund of the unused TWA LEONARDO-DE CASTRO, J.:
tickets. To require both prestations would have enabled petitioners to fly from New York to
Los Angeles without any fare being paid. On automatic review is the decision1 dated July 14, 2005 of the Court of Appeals (CA) in
CA-G.R. CR-HC No. 00717 which affirmed, with modifications, an earlier decision2 of the
The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil Regional Trial Court (RTC) of Ligao City, Branch 13, in Criminal Case No. 4134, finding
Code which allows recovery when the defendant's act or omission has compelled plaintiff herein accused-appellant Richard O. Sarcia alias "Nogi" guilty beyond reasonable doubt
to litigate or to incur expenses to protect his interest. However, the award for moral of the crime of rape3 committed against AAA,4 and sentenced him to suffer the penalty of
damages and exemplary damages by the trial court is excessive in the light of the fact that Reclusion Perpetua and to pay the amount of ₱50,000.00 as civil indemnity, ₱50,000.00
only Suthira and Liana Zalamea were actually "bumped off." An award of P50,000.00 moral as moral damages, and the cost of the suit. However, the CA modified the penalties
damages and another P50,000.00 exemplary damages would suffice under the imposed by the RTC by imposing the death penalty, increasing the award of civil indemnity
circumstances obtaining in the instant case. to ₱75,000.00, and awarding ₱25,000.00 as exemplary damages, aside from the
₱50,000.00 for moral damages.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court
of Appeals is hereby MODIFIED to the extent of adjudging respondent TransWorld Airlines The crime of rape was allegedly committed sometime in 1996 against AAA, a five (5) year
to pay damages to petitioners in the following amounts, to wit: old girl. After almost four (4) years, AAA’s father filed a complaint5 for acts of lasciviousness
against herein accused-appellant on July 7, 2000. Upon review of the evidence, the Office
(1) US$918.00 or its peso equivalent at the time of payment representing the price of the of the Provincial Prosecutor at Ligao, Albay upgraded the charge to rape.6 The
tickets bought by Suthira and Liana Zalamea from American Airlines, to enable them to fly Information7 dated September 5, 2000 reads:
to Los Angeles from New York City;
That sometime in 1996 at Barangay Doña Tomasa, Municipality of Guinobatan, Province
(2) P50,000.00 as moral damages; of Albay, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, with lewd and unchaste design, and by means of force, threats and intimidation,
(3) P50,000.00 as exemplary damages; did then and there willfully, unlawfully and feloniously have sexual intercourse with [AAA],
who was then 6 years of age, against her will and consent, to her damage and prejudice.
(4) P50,000.00 as attorney's fees; and
ACTS CONTRARY TO LAW.
(5) Costs of suit.
At his arraignment on October 25, 2000, accused-appellant, with the assistance of his
counsel, entered a plea of not guilty.8 Thereafter, trial on the merits ensued.
SO ORDERED.
The prosecution presented the oral testimonies of the victim AAA; her minor cousin; her
G.R. No. 169641 September 10, 2009
father; and Dr. Joana Manatlao, the Municipal Health Officer of Guinobatan, Albay. The
defense presented the accused-appellant himself, who vehemently denied committing the
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, crimes imputed to him and Manuel Casimiro, Clerk of Court II of the Municipal Trial Court
vs. at Guinobatan, Albay.
RICHARD O. SARCIA, Accused-Appellant.

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

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

In our Resolution15 of November 15, 2005, we required the parties to simultaneously submit [AAA’s cousin], who positioned herself around five (5) meters away from them, witnessed
their respective supplemental briefs. Accused-appellant filed his Supplemental Brief16 on appellant’s dastardly act. Horrified, [AAA’s cousin] instinctively rushed to the house of
April 7, 2006. Having failed to submit one, the Office of the Solicitor General (OSG) was [AAA’s] mother, her aunt Emily, and told the latter what she had seen. [AAA’s] mother
deemed to have waived the filing of its supplemental brief.
answered that they (referring to {AAA and her cousin} were still very young to be talking
about such matters.
Meanwhile, after satisfying his lust, appellant stood up and ordered [AAA] to put on her
clothes. Appellant then left.
Perplexed, [AAA’s cousin] immediately returned to the backyard of Saling Crisologo where
she found [AAA] crying. Appellant, however, was gone. [AAA’s cousin] approached [AAA]
and asked her what appellant had done to her. When [AAA] did not answer, [her cousin]
did not ask her any further question and just accompanied her home.
At home, [AAA] did not tell her mother what appellant had done to her because she feared
that her mother might slap her. Later, when her mother washed her body, she felt a grating
sensation in her private part. Thereafter, [AAA] called for [her cousin]. [AAA’s cousin] came
to their house and told [AAA’s] mother again that appellant had earlier made an up-and-
down movement on top of [AAA]. [AAA’s mother], however did not say anything. At that
time, [AAA’s] father was working in Manila.
Dr. Joana Manatloa is the Municipal Health Officer of Guinobatan, Albay. She testified that:
(1) it was the rural health officer, Dr. Reantaso, who conducted a physical examination on
[AAA]; (2) Dr. Reantaso prepared and signed a medico-legal certificate containing the
result of [AAA]’s examination; (3) Dr. Reantaso, however, had already resigned as rural
health officer of Guinobatan, Albay; (4) as a medical doctor, she can interpret, the findings
in said medico-legal certificate issued to [AAA]; (5) [AAA]’s medical findings are as follows:
"negative for introital vulvar laceration nor scars, perforated hymen, complete, pinkish
vaginal mucosa, vaginal admits little finger with resistance; (6) the finding "negative for
introital bulvar laceration nor scars" means, in layman’s language, that there was no
showing of any scar or wound, and (7) there is a complete perforation of the hymen which
means that it could have been subjected to a certain trauma or pressure such as strenuous
exercise or the entry of an object like a medical instrument or penis.17
On the other hand, the trial court summarized the version of the defense as follows:
Richard Sarcia, 24 years old, single, student and a resident of Doña Tomasa, Guinobatan,
Albay denied he raped [AAA]. While he knows [AAA’s] parents, because sometimes they
go to their house looking for his father to borrow money, he does not know [AAA] herself.
His father retired as a fireman from Crispa in 1991 while his mother worked as an
agriculturist in the Municipality of Teresa, Antipolo, Rizal. As an agriculturist of the
Department of Agriculture, his mother would bring seedlings and attend seminars in
Batangas and Baguio. They were residing in Cainta, Rizal when sometime in 1992 they
transferred residence to Guinobatan, Albay. His father is from barangay Masarawag while
his mother is from barangay Doña Tomasa both of Guinobatan, Albay. After their transfer
in Guinobatan, his mother continued to be an agriculturist while his father tended to his 1-
hectare coconut land. Richard testified he was between fourteen (14) and fifteen (15) years
old in 1992 when they transferred to Guinobatan. Between 1992 and 1994 he was out of
school. But from 1994 to 1998 he took his high school at Masarawag High School. His
daily routine was at about 4:00 o’clock in the afternoon after school before proceeding
home he would usually play basketball at the basketball court near the church in Doña
Tomasa about 1 kilometer away from their house. When her mother suffered a stroke in
1999 he and his father took turns taking care of his mother. Richard denied molesting other
girls ... and was most surprised when he was accused of raping [AAA]. He knows Saling
Crisologo and the latter’s place which is more than half kilometer to their house. Richard
claimed Salvacion Bobier, grandmother of Mae Christine Camu, whose death on May 7,
2000 was imputed to him and for which a case for Murder under Criminal Case No. 4087
was filed against him with the docile cooperation of [AAA’s] parents who are related to
Salvacion, concocted and instigated [AAA’s] rape charge against him to make the case for
Murder against him stronger and life for him miserable. He was incarcerated on May 10,
2000 for the Murder charge and two (2) months later while he already in detention, the
rape case supposedly committed in 1996 was filed against him in the Municipal Trial Court
(MTC) of Guinobatan, Albay. He was to learn about it from his sister, Marivic, on a Sunday
afternoon sometime on July 20, 2000 when his sister visited him in jail. He naturally got
angry when he heard of this rape charge because he did not do such thing and recalled
telling his sister they can go to a doctor and have the child examine to prove he did not
rape her. Subsequently, from his sister again he was to learn that the rape case was
ordered dismissed.
On cross-examination, Richard admitted [AAA’s] mother, is also related to his father, [AAA
mother’s] father, being a second cousin of his father. Richard is convinced it is not the
lending of money by his father to the AAA’s family as the motive for the latter to file the
rape case against him but the instigation of Salvacion Bobier.
Manuel A. Casimiro, Clerk of Court II of the Municipal Trial Court (MTC), Guinobatan,
Albay, testified on the records of Criminal Case No. 7078 filed in MTC Guinobatan, Albay
against Richard Sarcia for Rape in relation to RA 7610 relative to the alleged withdrawal
of said rape case but the accused through counsel failed to formally offer the marked
exhibits relative to said case.18
Accused-appellant alleges that the trial court erred in convicting him, as the prosecution
was not able to prove his guilt beyond reasonable doubt. He assailed the credibility of the
prosecution witnesses, AAA, her cousin and her father on the following grounds: (1) the
testimonies of AAA and her cousin were inconsistent with each other; (2) the victim was
confused as to the date and time of the commission of the offense; (3) there was a four-
year delay in filing the criminal case, and the only reason why they filed the said case was
"to help Salvacion Bobier get a conviction of this same accused in a murder case filed by
said Salvacion Bobier for the death of her granddaughter Mae Christine Camu on May 7,
2000." Accused-appellant stressed that the same Salvacion Bobier helped AAA’s father in
filing the said case for rape. Accused-appellant also claimed that the prosecution failed to
prove that he employed force, threats or intimidation to achieve his end. Finally, accused-
appellant harped on the finding in the medical certificate issued by Dr. Reantaso and
interpreted by Dr. Joana Manatlao, stating "negative for introital bulvar laceration nor scar
which means that there was no showing of any scar or wound."
In his Appellee's Brief accused-appellant pointed out the inconsistencies between AAA’s
and her cousin’s testimonies as follows: (1) the cousin testified that she played with AAA
at the time of the incident, while AAA testified that she was doing nothing before accused-
appellant invited her to the back of the house of a certain Saling; (2) the cousin testified
that when she saw accused-appellant doing the push-and-pull motion while on top of AAA,
the latter shouted in a loud voice contrary to AAA’s testimony that when accused-appellant
was inside her and started the up-and-down motion, she said "aray"; (3) when the cousin
returned to AAA after telling the latter’s mother what accused-appellant had done to AAA,
she found AAA crying. AAA however testified that, after putting on her clothes, she invited
the cousin to their house; and (4) the cousin testified that other children were playing at
the time of the incident, but AAA testified that there were only four of them who were playing
at that time.
As it is oft-repeated, inconsistencies in the testimonies of witnesses, which refer only to
minor details and collateral matters, do not affect the veracity and weight of their
testimonies where there is consistency in relating the principal occurrence and the positive
identification of the accused. Slight contradictions in fact even serve to strengthen the
credibility of the witnesses and prove that their testimonies are not rehearsed. Nor are such
inconsistencies, and even improbabilities, unusual, for there is no person with perfect
faculties or senses.19 The alleged inconsistencies in this case are too inconsequential to
overturn the findings of the court a quo. It is important that the two prosecution witnesses
were one in saying that it was accused-appellant who sexually abused AAA. Their positive,
candid and straightforward narrations of how AAA was sexually abused by accused-
appellant evidently deserve full faith and credence. When the rape incident happened, AAA
was only five (5) years old; and when she and her cousin testified, they were barely 9 and
11 years old, respectively. This Court has had occasion to rule that the alleged
inconsistencies in the testimonies of the witnesses can be explained by their age and their
inexperience with court proceedings, and that even the most candid of witnesses commit
mistakes and make confused and inconsistent statements. This is especially true of young
witnesses, who could be overwhelmed by the atmosphere of the courtroom. Hence, there
is more reason to accord them ample space for inaccuracy.20
Accused-appellant capitalizes on AAA’s inability to recall the exact date when the incident
in 1996 was committed. Failure to recall the exact date of the crime, however, is not an
indication of false testimony, for even discrepancies regarding exact dates of rapes are
inconsequential and immaterial and cannot discredit the credibility of the victim as a
witness.21 In People v. Purazo,22 We ruled:
We have ruled, time and again that the date is not an essential element of the crime of
rape, for the gravamen of the offense is carnal knowledge of a woman. As such, the time
or place of commission in rape cases need not be accurately stated. As early as 1908, we
already held that where the time or place or any other fact alleged is not an essential
element of the crime charged, conviction may be had on proof of the commission of the
crime, even if it appears that the crime was not committed at the precise time or place
alleged, or if the proof fails to sustain the existence of some immaterial fact set out in the
complaint, provided it appears that the specific crime charged was in fact committed prior
to the date of the filing of the complaint or information within the period of the statute of
limitations and at a place within the jurisdiction of the court.
Also in People v. Salalima,23 the Court held:
Failure to specify the exact dates or time when the rapes occurred does not ipso facto
make the information defective on its face. The reason is obvious. The precise date or time
when the victim was raped is not an element of the offense. The gravamen of the crime is
the fact of carnal knowledge under any of the circumstances enumerated under Article 335
of the Revised Penal Code. As long as it is alleged that the offense was committed at any
time as near to the actual date when the offense was committed an information is sufficient.
In previous cases, we ruled that allegations that rapes were committed "before and until
October 15, 1994," "sometime in the year 1991 and the days thereafter," "sometime in
November 1995 and some occasions prior and/or subsequent thereto" and "on or about
and sometime in the year 1988" constitute sufficient compliance with Section 11, Rule 110
of the Revised Rules on Criminal Procedure.
In this case, AAA’s declaration that the rape incident took place on December 15, 1996
was explained by the trial court, and we quote:
The rape took place in 1996. As earlier noted by the Court the date December 15, 1996
mentioned by [AAA] may have been arbitrarily chosen by the latter due to the intense
cross-examination she was subjected but the Court believes it could have been in any
month and date in the year 1996 as in fact neither the information nor [AAA’s] sworn
statement mention the month and date but only the year.24
Likewise, witnesses’ credibility is not affected by the delay in the filing of the case against
accused-appellant. Neither does the delay bolster accused-appellant’s claim that the only
reason why this case was filed against him was "to help Salvacion Bobier get a conviction
of this same accused-appellant in the case of murder filed by Salvacion Bobier for the
death of her granddaughter Mae Christine Camu on May 7, 2000."
The rape victim’s delay or hesitation in reporting the crime does not destroy the truth of the
charge nor is it an indication of deceit. It is common for a rape victim to prefer silence for
fear of her aggressor and the lack of courage to face the public stigma of having been
sexually abused. In People v. Coloma25 we even considered an 8-year delay in reporting
the long history of rape by the victim’s father as understandable and not enough to render
incredible the complaint of a 13-year-old daughter. Thus, in the absence of other
circumstances that show that the charge was a mere concoction and impelled by some ill
motive, delay in the filing of the complainant is not sufficient to defeat the charge. Here,
the failure of AAA’s parents to immediately file this case was sufficiently justified by the
complainant’s father in the latter’s testimony, thus:
Q But, did you not say, please correct me if I am wrong, you got angry when your
wife told you that something happened to Hazel way back in 1996?
A Yes, sir.
Q Yet, despite your anger you were telling us that you waited until June to file this
case?
A After I heard about the incident, I and my wife had a talk for which reason that
during that time we had no money yet to use in filing the case, so we waited. When
we were able to save enough amounts, we filed the case.26
Accused-appellant also contends that he could not be liable for rape because there is no
proof that he employed force, threats or intimidation in having carnal knowledge of AAA.
Where the girl is below 12 years old, as in this case, the only subject of inquiry is whether
"carnal knowledge" took place. Proof of force, intimidation or consent is unnecessary, since
none of these is an element of statutory rape. There is a conclusive presumption of
absence of free consent when the rape victim is below the age of twelve.27
Accused-appellant harps on the medical report, particularly the conclusion quoted as
follows: "negative for introital bulvar laceration nor scars, which means, in layman
language, that there was no showing of any scar or wound." The Court has consistently
ruled that the presence of lacerations in the victim’s sexual organ is not necessary to prove
the crime of rape and its absence does not negate the fact of rape. A medical report is not
indispensable in a prosecution for rape.28 What is important is that AAA’s testimony meets
the test of credibility, and that is sufficient to convict the accused.
Accused-appellant’s defense of denial was properly rejected. Time and time again, we
have ruled that denial like alibi is the weakest of all defenses, because it is easy to concoct
and difficult to disprove. Furthermore, it cannot prevail over the positive and unequivocal
identification of appellant by the offended party and other witnesses. Categorical and
consistent positive identification, absent any showing of ill motive on the part of the
eyewitness testifying on the matter, prevails over the appellants’ defense of denial and
alibi.29 The shallow hypothesis put forward by accused-appellant that he was accused of
raping AAA due to the instigation of Salvacion Bobier hardly convinces this Court. On this
score, the trial court aptly reached the following conclusion:
…True, Salvacion Bobier actively assisted AAA’s family file the instant case against the
accused, but the Court believes [AAA’s] parents finally decided to file the rape case
because after they have come to realize after what happened to Mae Christine Camu that
what previously [AAA and her cousin] told her mother and which the latter had continually
ignored is after all true.
AAA was barely 9 years of age when she testified. It has been stressed often enough that
the testimony of rape victims who are young and immature deserve full credence. It is
improbable for a girl of complainant’s age to fabricate a charge so humiliating to herself
and her family had she not been truly subjected to the painful experience of sexual abuse.
At any rate, a girl of tender years, innocent and guileless, cannot be expected to brazenly
impute a crime so serious as rape to any man if it were not true.30 Parents would not
sacrifice their own daughter, a child of tender years at that, and subject her to the rigors
and humiliation of public trial for rape, if they were not motivated by an honest desire to
have their daughter’s transgressor punished accordingly.31 Hence, the logical conclusion
is that no such improper motive exists and that her testimony is worthy of full faith and
credence.
The guilt of accused-appellant having been established beyond reasonable doubt, we
discuss now the proper penalty to be imposed on him.
Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659, 32 was the
governing law at the time the accused-appellant committed the rape in question. Under the
said law, the penalty of death shall be imposed when the victim of rape is a child below
seven years of age. In this case, as the age of AAA, who was five (5) years old at the time
the rape was committed, was alleged in the information and proven during trial by the
presentation of her birth certificate, which showed her date of birth as January 16, 1991,
the death penalty should be imposed.
However, this Court finds ground for modifying the penalty imposed by the CA. We cannot
agree with the CA’s conclusion that the accused-appellant cannot be deemed a minor at
the time of the commission of the offense to entitle him to the privileged mitigating
circumstance of minority pursuant to Article 68(2)33 of the Revised Penal Code. When
accused appellant testified on March 14, 2002, he admitted that he was 24 years old, which
means that in 1996, he was 18 years of age. As found by the trial court, the rape incident
could have taken place "in any month and date in the year 1996." Since the prosecution
was not able to prove the exact date and time when the rape was committed, it is not
certain that the crime of rape was committed on or after he reached 18 years of age in
1996. In assessing the attendance of the mitigating circumstance of minority, all doubts
should be resolved in favor of the accused, it being more beneficial to the latter. In fact, in
several cases, this Court has appreciated this circumstance on the basis of a lone
declaration of the accused regarding his age.34
Under Article 68 of the Revised Penal Code, when the offender is a minor under 18 years,
the penalty next lower than that prescribed by law shall be imposed, but always in the
proper period. However, for purposes of determining the proper penalty because of the
privileged mitigating circumstance of minority, the penalty of death is still the penalty to be
reckoned with.35 Thus, the proper imposable penalty for the accused-appellant is reclusion
perpetua.
It is noted that the Court is granted discretion in awarding damages provided in the Civil
Code, in case a crime is committed. Specifically, Article 2204 of the Civil Code provides
that "in crimes, the damages to be adjudicated may be respectively increased or lessened
according to the aggravating or mitigating circumstances." The issue now is whether the
award of damages should be reduced in view of the presence here of the privileged
mitigating circumstance of minority of the accused at the time of the commission of the
offense.
A review of the nature and purpose of the damages imposed on the convicted offender is
in order. Article 107 of the Revised Penal Code defines the term "indemnification," which
is included in the civil liability prescribed by Article 104 of the same Code, as follows:
Art. 107. Indemnification-What is included. – Indemnification for consequential damages
shall include not only those caused the injured party, but also those suffered by his family
or by a third person by reason of the crime.
Relative to civil indemnity, People v. Victor36 ratiocinated as follows:
The lower court, however, erred in categorizing the award of ₱50,000.00 to the offended
party as being in the nature of moral damages. We have heretofore explained in People v.
Gementiza that the indemnity authorized by our criminal law as civil liability 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. It is not to be considered as moral damages thereunder, the latter being based
on different jural foundations and assessed by the court in the exercise of sound discretion.
One other point of concern has to be addressed. Indictments for rape continue unabated
and the legislative response has been in the form of higher penalties. The Court believes
that, on like considerations, the jurisprudential path on the civil aspect should follow the
same direction. Hence, starting with the case at bar, if the crime of rape is committed or
effectively qualified by any of the circumstances under which the death penalty is
authorized by the present amended law, the indemnity for the victim shall be in the
increased amount of not less than ₱75,000.00. This is not only a reaction to the apathetic
societal perception of the penal law, and the financial fluctuations over time, but also an
expression of the displeasure of the Court over the incidence of heinous crimes against
chastity. (Emphasis Supplied)
The Court has had the occasion to rule that moral damages are likewise compensatory in
nature. In San Andres v. Court of Appeals,37 we held:
x x x Moral damages, though incapable of pecuniary estimation, are in the category of an
award designed to compensate the claimant for actual injury suffered and not to impose a
penalty on the wrongdoer. (Emphasis Supplied)
In another case, this Court also explained:
What we call moral damages are treated in American jurisprudence as compensatory
damages awarded for mental pain and suffering or mental anguish resulting from a wrong
(25 C.J.S. 815).38 (Emphasis Supplied)
Thus, according to law and jurisprudence, civil indemnity is in the nature of actual and
compensatory damages for the injury caused to the offended party and that suffered by
her family, and moral damages are likewise compensatory in nature. The fact of minority
of the offender at the time of the commission of the offense has no bearing on the gravity
and extent of injury caused to the victim and her family, particularly considering the
circumstances attending this case. Here, the accused-appelant could have been eighteen
at the time of the commission of the rape. He was accorded the benefit of the privileged
mitigating circumstance of minority because of a lack of proof regarding his actual age and
the date of the rape rather than a moral or evidentiary certainty of his minority.
In any event, notwithstanding the presence of the privileged mitigating circumstance of
minority, which warrants the lowering of the public penalty by one degree, there is no
justifiable ground to depart from the jurisprudential trend in the award of damages in the
case of qualified rape, considering the compensatory nature of the award of civil indemnity
and moral damages. This was the same stance this Court took in People v. Candelario,39 a
case decided on July 28, 1999, which did not reduce the award of damages. At that time,
the damages amounted to ₱75,000.00 for civil indemnity and ₱50,000.00 for moral
damages, even if the public penalty imposed on the accused was lowered by one degree,
because of the presence of the privileged mitigating circumstance of minority.
The principal consideration for the award of damages, under the ruling in People v.
Salome40 and People v. Quiachon41 is the penalty provided by law or imposable for the
offense because of its heinousness, not the public penalty actually imposed on the
offender.
Regarding the civil indemnity and moral damages, People v. Salome explained the basis
for increasing the amount of said civil damages as follows:
The Court, likewise, affirms the civil indemnity awarded by the Court of Appeals to Sally in
accordance with the ruling in People v. Sambrano which states:
"As to damages, we have held that if the rape is perpetrated with any of the attending
qualifying circumstances that require the imposition of the death penalty, the civil indemnity
for the victim shall ₱75,000.00 … Also, in rape cases, moral damages are awarded without
the need proof other than the fact of rape because it is assumed that the victim has suffered
moral injuries entitling her to such an award. However, the trial court’s award of ₱50,000.00
as moral damages should also be increased to ₱75,000 pursuant to current jurisprudence
on qualified rape."
It should be noted that while the new law prohibits the imposition of the death penalty, the
penalty provided for by law for a heinous offense is still death and the offense is still
heinous. Consequently, the civil indemnity for the victim is still ₱75,000.00.
People v. Quiachon also ratiocinates as follows:
With respect to the award of damages, the appellate court, following prevailing
jurisprudence, correctly awarded the following amounts; ₱75,000.00 as civil indemnity
which is awarded if the crime is qualified by circumstances warranting the imposition of the
death penalty; ₱75,000.00.00 as moral damages because the victim is assumed to have
suffered moral injuries, hence, entitling her to an award of moral damages even without
proof thereof, x x x
Even if the penalty of death is not to be imposed on the appellant because of the prohibition
in R.A. No. 9346, the civil indemnity of ₱75,000.00 is still proper because, following the
ratiocination in People v. Victor, the said award is not dependent on the actual imposition
of the death penalty but on the fact that qualifying circumstances warranting the imposition
of the death penalty attended the commission of the offense. The Court declared that the
award of ₱75,000.00 shows "not only a reaction to the apathetic societal perception of the
penal law and the financial fluctuations over time but also the expression of the displeasure
of the court of the incidence of heinous crimes against chastity."
The litmus test therefore, in the determination of the civil indemnity is the heinous character
of the crime committed, which would have warranted the imposition of the death penalty,
regardless of whether the penalty actually imposed is reduced to reclusion perpetua.
As to the award of exemplary damages, Article 2229 of the Civil Code provides that
exemplary or corrective damages are imposed in addition to the moral, temperate,
liquidated or compensatory damages. Exemplary damages are not recoverable as a matter
of right. The requirements of an award of exemplary damagees are: (1) they may be
imposed by way of example in addition to compensatory damages, and only after the
claimant’s right to them has been established; (2) they cannot be recovered as a matter of
right, their determination depending upon the amount of compensatory damages that may
be awarded to the claimant; (3) the act must be accompanied by bad faith or done in a
wanton, fraudulent, oppressive or malevolent manner.42 Since the compensatory
damages, such as the civil indemnity and moral damages, are increased when qualified
rape is committed, the exemplary damages should likewise be increased in accordance
with prevailing jurisprudence.43
In sum, the increased amount of ₱75,000.00 each as civil indemnity and moral damages
should be maintained. It is also proper and appropriate that the award of exemplary
damages be likewise increased to the amount of ₱30,000.00 based on the latest
jurisprudence on the award of damages on qualified rape. Thus, the CA correctly awarded
₱75,000.00 as civil indemnity. However the award of ₱50,000.00 as moral damages is
increased to ₱75,000.0044 and that of ₱25,000.00 as exemplary damages is likewise
increased to ₱30,000.00.45
Meanwhile, when accused-appellant was detained at the New Bilibid Prison pending the
outcome of his appeal before this Court, Republic Act (R.A.) No. 9344, the Juvenile Justice
and Welfare Act of 2006 took effect on May 20, 2006. The RTC decision and CA decision
were promulgated on January 17, 2003 and July 14, 2005, respectively. The promulgation
of the sentence of conviction of accused-appellant handed down by the RTC was not
suspended as he was about 25 years of age at that time, in accordance with Article 192 of
Presidential Decree (P.D.) No. 603, The Child and Youth Welfare Code 46 and Section 32
of A.M. No. 02-1-18-SC, the Rule on Juveniles in Conflict with the Law.47 Accused-
appellant is now approximately 31 years of age. He was previously detained at the Albay
Provincial Jail at Legaspi City and transferred to the New Bilibid Prison, Muntinlupa City
on October 13, 2003.
R.A. No. 9344 provides for its retroactive application as follows:
Sec. 68. Children Who Have Been Convicted and are Serving Sentence. – Persons who
have been convicted and are serving sentence at the time of the effectivity of this Act, and
who were below the age of eighteen (18) years at the time of the commission of the offense
for which they were convicted and are serving sentence, shall likewise benefit from the
retroactive application of this Act. x x x
The aforequoted provision allows the retroactive application of the Act to those who have
been convicted and are serving sentence at the time of the effectivity of this said Act, and
who were below the age of 18 years at the time of the commission of the offense. With
more reason, the Act should apply to this case wherein the conviction by the lower court is
still under review. Hence, it is necessary to examine which provisions of R.A. No. 9344
shall apply to accused-appellant, who was below 18 years old at the time of the
commission of the offense.
Sec. 38 of R.A. No. 9344 provides for the automatic suspension of sentence of a child in
conflict with the law, even if he/she is already 18 years of age or more at the time he/she
is found guilty of the offense charged. It reads:
Sec. 38. Automatic Suspension of Sentence. – Once the child who is under eighteen (18)
years of age at the time of the commission of the offense is found guilty of the offense
charged, the court shall determine and ascertain any civil liability which may have resulted
from the offense committed. However, instead of pronouncing the judgment of conviction,
the court shall place the child in conflict with the law under suspended sentence, without
need of application: Provided, however, That suspension of sentence shall still be applied
even if the juvenile is already eighteen (18) of age or more at the time of the
pronouncement of his/her guilt.
Upon suspension of sentence and after considering the various circumstances of the child,
the court shall impose the appropriate disposition measures as provided in the Supreme
Court on Juvenile in Conflict with the Law.
The above-quoted provision makes no distinction as to the nature of the offense committed
by the child in conflict with the law, unlike P.D. No. 603 and A.M. No. 02-1-18-SC.48 The
said P.D. and Supreme Court (SC) Rule provide that the benefit of suspended sentence
would not apply to a child in conflict with the law if, among others, he/she has been
convicted of an offense punishable by death, reclusion perpetua or life imprisonment. In
construing Sec. 38 of R.A. No. 9344, the Court is guided by the basic principle of statutory
construction that when the law does not distinguish, we should not distinguish.49 Since R.A.
No. 9344 does not distinguish between a minor who has been convicted of a capital offense
and another who has been convicted of a lesser offense, the Court should also not
distinguish and should apply the automatic suspension of sentence to a child in conflict
with the law who has been found guilty of a heinous crime.
Moreover, the legislative intent, to apply to heinous crimes the automatic suspension of
sentence of a child in conflict with the law can be gleaned from the Senate
deliberations50 on Senate Bill No. 1402 (Juvenile Justice and Delinquency Prevention Act
of 2005), the pertinent portion of which is quoted below:
If a mature minor, maybe 16 years old to below 18 years old is charged, accused with, or
may have committed a serious offense, and may have acted with discernment, then the
child could be recommended by the Department of Social Welfare and Development
(DSWD), by the Local Council for the Protection of Children (LCPC), or by my proposed
Office of Juvenile Welfare and Restoration to go through a judicial proceeding; but the
welfare, best interests, and restoration of the child should still be a primordial or primary
consideration. Even in heinous crimes, the intention should still be the child’s restoration,
rehabilitation and reintegration. xxx (Italics supplied)1avvphi 1
Nonetheless, while Sec. 38 of R.A. No. 9344 provides that suspension of sentence can
still be applied even if the child in conflict with the law is already eighteen (18) years of age
or more at the time of the pronouncement of his/her guilt, Sec. 40 of the same law limits
the said suspension of sentence until the said child reaches the maximum age of 21, thus:
Sec. 40. Return of the Child in Conflict with the Law to Court. – If the court finds that the
objective of the disposition measures imposed upon the child in conflict with the law have
not been fulfilled, or if the child in conflict with the law has willfully failed to comply with the
condition of his/her disposition or rehabilitation program, the child in conflict with the law
shall be brought before the court for execution of judgment.
If said child in conflict with the law has reached eighteen (18) years of age while under
suspended sentence, the court shall determine whether to discharge the child in
accordance with this Act, to order execution of sentence, or to extend the suspended
sentence for a certain specified period or until the child reaches the maximum age of
twenty-one (21) years. (emphasis ours)
To date, accused-appellant is about 31 years of age, and the judgment of the RTC had
been promulgated, even before the effectivity of R.A. No. 9344. Thus, the application of
Secs. 38 and 40 to the suspension of sentence is now moot and academic.51 However,
accused-appellant shall be entitled to appropriate disposition under Sec. 51 of R.A. No.
9344, which provides for the confinement of convicted children as follows:
Sec. 51. Confinement of Convicted Children in Agricultural Camps and Other Training
Facilities. – A child in conflict with the law may, after conviction and upon order of the court,
be made to serve his/her sentence, in lieu of confinement in a regular penal institution, in
an agricultural camp and other training facilities that may be established, maintained,
supervised and controlled by the BUCOR, in coordination with the DSWD.
The civil liability resulting from the commission of the offense is not affected by the
appropriate disposition measures and shall be enforced in accordance with law.52
WHEREFORE, the decision of the CA dated July 14, 2005 in CA-G.R. CR-H.C. No. 00717
is hereby AFFIRMED with the following MODIFICATIONS: (1) the penalty of death
imposed on accused-appellant is reduced to reclusion perpetua;53 and (2) accused-
appellant is ordered to pay the victim the amount of ₱75,000.00 and ₱30,000.00 as moral
damages and exemplary damages, respectively. The award of civil indemnity in the
amount of ₱75,000.00 is maintained. However, the case shall be REMANDED to the court
a quo for appropriate disposition in accordance with Sec. 51 of R.A. 9344.
SO ORDERED.
G.R. No. 85464 October 3, 1991
DAVID P. LLORENTE, petitioner,
vs.
THE SANDIGANBAYAN (THIRD DIVISION), and PEOPLE OF THE
PHILIPPINES, respondents.
Padilla Law Office for petitioner.
SAMIENTO, J.:
The petitioner questions the Decision of the Sandiganbayan * holding him civilly liable in
spite of an acquittal. The facts are not disputed:
Atty. Llorente was employed in the PCA, a public corporation (Sec. 1, PD 1468)
from 1975 to August 31, 1986, when he resigned. He occupied the positions of
Assistant Corporate Secretary for a year, then Corporate Legal Counsel until
November 2, 1981, and, finally, Deputy Administrator for Administrative Services,
Finance Services, Legal Affairs Departments. ...
As a result of a massive reorganization in 1981, hundreds of PCA employees
resigned effective October 31, 1981. Among them were Mr. Curio, Mrs. Perez, Mr.
Azucena, and Mrs. Javier (TSN, Oct. 22/87, p. 2; Exhs. M-2, N-1, and O-1). They
were all required to apply for PCA clearances in support of their gratuity benefits
(Exhs. C, M-2, N-1, and 0-1). Condition (a) of the clearance provided:
The clearance shall be signed by the PCA officers concemed only when
there is no item appearing under "PENDING ACCOUNTABILITY" or after
every item previously entered thereunder is fully settled. Settlement thereof
shall be written in RED ink. (Exhs. D or D-1 and 1-B)
After the clearance was signed by the PCA officers concerned, it was to be
approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col.
Duefias, the acting administrator, in the case of an officer, and then by Atty.
Rodriguez, the corporate auditor ...
Notwithstanding Condition (a) just quoted, the clearances of Mrs Perez and Mr.
Azucena both dated October 30, 1981, were favorably acted upon by the CPA
officers concerned, including Mrs. Sotto, acting for the accounting division, even if
the clearances showed they had pending accountabilities to the GSIS and the
UCPB, and subsequently approved by Attys. Llorente and Rodriguez (Exhs. M and
N). Thereafter, the vouchers for their gratuity benefits, also indicating their
outstanding obligations were approved, among others, by Atty Llorente, and their
gratuity benefits released to them after deducting those accountabilities. ...
The clearanceof Mrs. Javier of the same date of October 30, 1991 was also signed
by all PCA officers concerned, including Mrs. Sotto even though the former had
unsettled obligations noted thereon, viz 'SIS loan — P5,387.00 and UCPB car loan
P19,705.00, or a total of P25,092.00, and later on approveed by Col. Dueñas, Mrs
Javier being an officer, and Atty. Rodriguez "Exh. (O)". Similariv the, voucher of
Mrs Javier for her gratuity benefits likewise recited her accountabilities of
P25,092.00 plus P92.000.00, which was handwritten. Both accounts were
deducted from her gratuity benefits, and the balance released to her on November
16, 1981. The voucher passed post-audit by Atty. Rodriguez on December 1, 1981
(Exhs. L,
L-1, L-2, and L-3).
The said P92,000.00 was the disallowed portion of the cash advances received by
Mr. Curio in connection with his duties as "super cargo" in the distribution of seed
nuts throughout the country. He received them through and in the name of Mrs.
Javier from the UCPB. When the amount was disallowed, the UCPB withheld from
the PCA certain receivables; the latter, in turn, deducted the same amount from
the gratuity benefits of Mrs. Javier, she being primarily liable therefor (Exhs, L, L-
1, L-2, and L-3), At the time of the deduction, the additional liquidation papers had
already been submitted and were in process. Just in case she would not be
successful in having the entire amount wiped out, she requested Mr. Curio, who
admittedly received it, to execute, as he did, an affidavit dated November 26, 1981,
in which he assumed whatever portion thereof might not be allowed ...
The clearance of Mr. Curio dated November 4,1981, (Exh. D or D-1) likewise
favorably passed all officers concerned, including Mrs. Sotto, the latter signing
despite the notation handwritten on December 8, 1981, that Mr. Curio had pending
accountabilities, namely: GSIS loan — 2,193.74, 201 accounts receivable —
P3,897.75, and UCPB loan — P3,623.49, or a total of P10,714.78. However, when
the clearance was submitted to Atty. Llorente for approval, he refused to approve mentioned anymore about the disallowed cash advances of P92,000.00, which had
it. For this reason, the clearance was held up in his office and did not reach Atty. been reduced to P55,000.00 ...
Rodriguez, ...
Between December 1981 and December 1986, Mr. Curio failed to get gainful
The reason given by Atty. Llorente was that when the clearance was presented to employment; as a result, his family literally went hungry, In 1981, he applied for
him on December 8, 1981, he was already aware of the affidavit dated November work with the Philippine Cotton Authority, but was refused, because he could not
26, 1981, in which Mr. Curio assumed to pay any residual liability for the disallowed present his PCA clearance. The same thing happened when he sought
cash advances, which at the time, December 8, 1981, stood at P92,000.00 (Exhs. employment with the Philippine Fish Marketing Administration in January 1982. In
2 and 2-A). Moreover, Mr. Curio had other pending obligations noted on his both prospective employers, the item applied for was P2,500.00 a month. At that
clearance totalling Pl0,714.98 (Exh. 1-a). To justify his stand, Atty. Llorente invoked time, he was only about 45 years old and still competitive in the job market. But in
Condition (a) of the clearance (Exhs. D and I-B), which, he said, was "very 1986, being already past 50 years, he could no longer be hired permanently, there
stringent" and could not be interpreted in any other way ... being a regulation to that effect. His present employment with the Philippine Ports
Authority, which started on March 16, 1987, was casual for that reason. Had his
On December 1, 1982, Mr. Curio brought the matter of his unapproved clearance gratuity benefits been paid in 1981, he would have received a bigger amount,
to Col. Dueñas (Exh. G), who referred it to the Legal Department, which was under considering that since then interest had accrued and the foreign exchange rate of
Atty. Llorente as Deputy Administrator for legal affairs. After follow-up in that the peso to the dollar had gone up ... 1
department, Mr. Curio received the answer of Col. Dueñas dated February 11,
1983, saying that the clearance was being withheld until the former settled his
alleged accountability for P92,000.00 reduced already to P56,000.00 (Exh. I). Mr.
On December 10, 1986, an Information for violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act was filed against the
Curio elevated the matter to the Chairman of the PCA Board, who indorsed it to
petitioner:
Col. Dueñas, who, in turn, sent it to the Legal Department. This time the latter,
through its Manager, Manuel F. Pastor, Jr., first cousin of Atty. Llorente, submitted
a formal report under date of August 14, 1986, to the PCA Chairman, justifying the
action taken by Atty. Llorente and Col. Dueñas (Exh. 12). The PCA Chairman did
not respond in writing, but advised Mr. Curio to wait for the resolution of the
That on or about December 8, 1981 and/or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of
Tanodbayan with which he (Mr. Curio) had filed this case initially against Atty.
this Honorable Court, accused David Pastor Llorente, Deputy Administrator for the Philippine Coconut Authority (PCA), and
Llorente and, later on, against Col. Duerias also. On August 31, 1986, Atty.
as such was empowered among others to approve clearances of employees thereat, taking advantage of his position,
Llorente resigned from the PCA; the clearance, however, could not be issued
through evident bad faith, did then and there, wilfully and unlawfully refuse to issue a certificate of clearance to Herminigildo
because, according to the PCA Corporate Legal Counsel, Arthur J. Liquate, the
M. Curio, an employee thereat, who was forced to resign as a result of the abolition of his item pursuant to the 1981
PCA did not want to preempt the Tanodbayan. On November 12, 1986, the latter
reorganization of the PCA, resulting in his deprivation to receive his gratuity benefits amounting to P29,854.90, and to secure
decided to institlite this case in court ...
employment with other offices to his damage and prejudice, and that of the public service.

Nine days thereafter, or on November 21, 1986, Mr. Curio accomplished another
CONTRARY TO LAW.
clearance, which no longer imposed Condition (a) of his earlier clearance (Exh. E).
The new clearance was approved, even if he still had pending accountabilities,
totalling P10,714.78 that had remained unsettled since December 1981. His
voucher was also approved, and his gratuity benefits paid to him in the middle of
December 1986, after deducting those obligations (Exh. F). Nothing was Manila, Philippines, December 10, 1986. 2
As indicated at the outset, the Sandiganbayan acquitted the petitioner in the absence of any evidence that he acted in bad faith. 3
The Sandiganbayan cited three
considerations that precluded bad faith:
First, when Atty. Llorente withheld favorable action on the clearance on and after
December 8, 1981, there was still the possibility, remote though it was when
viewed after the fact, that the accountability, which Mrs. Javier was primarily liable
therefor and which was fully settled by deduction from her gratuity benefits on
November 16, 1981 (Exhs. L, L-1, L-2, and
L-3), would be reinstated and charged directly to Mr. Curio, for the latter executed
on November 26, 1981, an affidavit assuming responsibility for the obligation to the
extent of the amount finally disallowed, and the affidavit was on December 8, 1981,
already pending consideration by the PCA management (Exhs. 2 and 2-A).
Second, Atty. Llorente was appointed Deputy Administrator for administrative
services, finance services, and legal affairs departments only on November 2,1981
(TSN, March 9/87, p. 3). Being new in his job, it was but natural that he was zealous
in the performance of his functions — in fact, overzealous in the protection of the
PCA interests, even if that protection was not necessary, as the P92,000.00
accountability had already been paid (See Exh. 12, 4th paragraph).
Finally, Atty. Llorente was officiously, though incidentally, taking care also of the
interest of Mrs. Javier who, justice and equity demanded, should not be made to
shoulder the P92,000.00 unliquidated cash advances, for the reason that it was
Mr. Curio who admittedly spent them or who, at the very least, should be able to
get reimbursement of what she paid, totally or partially, from his gratuity benefits
(See Exh. 5, pp. 2-3 ). 4
The Sandiganbayan, as we also indicated earlier, took the petitioner to task civilly,
and ordered him to pay "compensatory damages" in the sum of P90,000.00.
According to the Sandiganbayan, the petitioner was guilty nonetheless of abuse of
right under Article 19 of the Civil Code and as a public officer, he was liable for
damages suffered by the aggrieved party (under Article 27).
The petitioner claims that the Sandiganbayan's Decision is erroneous even if the
Sandiganbayan acquitted him therein, because he was never in bad faith as indeed
found by the Sandiganbayan.
Under the 1985 Rules of Criminal Procedure, amending Rules 110 through 127 of the
Rules of Court, the judgment of the court shall include, in case of acquittal, and
unless there is a clear showing that the act from which the civil liability might arise
did not exist, "a finding on the civil liability of the accused in favor of the offended
party." 5 The rule is based on the provisions of substantive law, 6 that if acquittal proceeds from reasonable doubt, a civil
action, lies nonetheless.
The challenged judgment found that the petitioner, in refusing to issue a certificate of
clearance in favor of the private offended party, Herminigildo Curio, did not act with
"evident bad faith," one of the elements of Section 3(e) of Republic Act No. 3819. 7 We
agree with tile judgment, insofar as it found lack of evident bad faith by the petitioner, for
the reasons cited therein basicallv, because the petitioner was acting within the bounds of
law in refusing to clear Curio although "[t]he practice was that the clearance was
nevertheless approved, and then the amount of the unsettled obligation was deducted from
the gratuity benefits of the employee." 8
We also agree with the Sandiganbaya (although the Sandiganbayan did not say it) that although the petitioner did not act with evident
bad faith, he acted with bad faith nevertheless, for which he should respond for damages.
The records show that the office practice indeed in the Philippine Coconut Authority was to clear the employee (retiree) and deduct his accountabilities from his gratuity benefits. There seems to be no debate
about the existence of this practice (the petitioner admitted it later on) and in fact, he cleared three employees on the condition that their obligations should be deducted from their benefits. 9
We
quote:
Confronted with these evidence (sic), Atty. Llorente conceded, albeit grudgingly,
the existence of the practice by the accounting division of not complying with
Condition (a). He, however, claimed that he learned of the practice only during the
trial of the case and that he must have inadvertently approved the clearances of
Mrs. Perez, Mr. Azucena, and possibly others who were similarly situated (TSN,
March 9/88,pp. 4-5). This the evidence belies. First, he himself testified that when
the clearance of Mr. Curio was presented to him in December 1981, it already bore
the signature of Mrs. Sotto of the accounting division and the notation set opposite
her name about the outstanding accountabilities of Mr. Curio; but he (Atty. Llorente)
significantly did not ask her why she signed the clearance (TSN, Nov. 24/87, pp.
24-25). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr.
 Azucena's vouchers showing that hey has pending obligations to the GSIS and the terminating the agency — again, a legal act — when terminating the agency would deprive
UCPB, which were being deducted from their gratuity benefits. Attached to those the agent of his legitimate business.
vouchers were the clearances as supporting documents (Exhs. M-2 and N-1; TSN,
Dec. 7/87, pp. 13,23). And third, in the same month, Atty. Llorente was already We believe that the petitioner is liable under Article 19.
aware of the cae of Mrs. Javier whose clearance and voucher were, according to
him, preciselywithheld because of her unsettled accountability for the cash The Court finds the award of P90,000.00 to be justified bv Article 2202 of the Civil Code,
advances of P92,000.00, but here later on given due course; and her gratuity which holds the defendant liable for all "natural and probable" damages. Hennenegildo
benefits released on November 16, 1981, minus that amount (TSN, Nov. 24/87, Cunct presented evidence that as a consequence of the petitioner's refusal to clear him,
pp. 31-32; Exhs. L, L-1, L-2 and L-3). he failed to land a job at the Philippine Cotton Authority and Philippine First Marketing
Authority. He also testified that a job in either office would have earned him salary of
The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of
they were secured through her and in her name from the UCPB. That was why reasonably about P1,000.00 a month or P60,000.00 in five years, the petitioner owes him
they were charged to and deducted from, her gratuity benefits. Consequently, as a total actual damages of P90,000.00
early as that date and in so far as the PCA and the UCPB were concerned, the
accountability was already fully paid. The assumption of residual liability by Mr. WHEREFORE, premises considered, the Petition is DENIED. No pronouncement as to
Curio for the cash advances on November 26, 1981, was a matter between him costs.
and Mrs. Javier (Exhs. 2 and 2-A). 10
The general rule is that this Court is bound by the findings of fact of the Sandiganbayan. 11
IT IS SO ORDERED.

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

REYNALDA GATCHALIAN, petitioner,

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

Pedro G. Peralta for petitioner.

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

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

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

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

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

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

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

Without special pronouncement as to costs.

xxx xxx xxx 2

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

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

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

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

xxx xxx xxx

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

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

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

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

Lasam, a witness presented as an expert by petitioner, testified that the cost would
probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact
that a considerable amount of time has lapsed since the mishap in 1973 which may be
expected to increase not only the cost but also very probably the difficulty of removing the
scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery
is not unreasonable.
Turning to petitioner's claim for moral damages, the long-established rule is that moral
damages may be awarded where gross negligence on the part of the common carrier is
shown. 18 Since we have earlier concluded that respondent common carrier and his driver
had been grossly negligent in connection with the bus mishap which had injured petitioner
and other passengers, and recalling the aggressive manuevers of respondent, through his
wife, to get the victims to waive their right to recover damages even as they were still
DECISION
PUNO, C.J.:
On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No.
83981, dated February 16, 2006 and March 30, 2006, respectively which affirmed with
modification the Decision3 of the Regional Trial Court (RTC) of Makati City, dated
September 29, 2004. The trial court found petitioners jointly and severally liable to pay
respondents damages for the injuries sustained by respondent Stephen Huang, son of
respondent spouses Richard and Carmen Huang.
First, the facts:
Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six-
wheeler 1990 Mitsubishi Truck with plate number PRE 641 (truck). It has in its employ
petitioner Rolando J. del Rosario as driver. Respondent spouses Richard and Carmen
Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla
GLI Sedan with plate number PTT 775 (car).
These two vehicles figured in a road accident on December 20, 1996 at around 10:30 p.m.
within the municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving
the car, weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing
14,058 kg. Both were traversing the C-5 Highway, north bound, coming from the general
direction of Alabang going to Pasig City. The car was on the left innermost lane while the
truck was on the next lane to its right, when the truck suddenly swerved to its left and
slammed into the front right side of the car. The collision hurled the car over the island
where it hit a lamppost, spun around and landed on the opposite lane. The truck also hit a
lamppost, ran over the car and zigzagged towards, and finally stopped in front of Buellah
Land Church.
At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt
(TVR). His driver’s license had been confiscated because he had been previously
apprehended for reckless driving.
The car, valued at ₱300,000.00, was a total wreck. Respondent Stephen Huang sustained
massive injuries to his spinal cord, head, face, and lung. Despite a series of operations,
respondent Stephen Huang is paralyzed for life from his chest down and requires
continuous medical and rehabilitation treatment.
Respondents fault petitioner Del Rosario for committing gross negligence and reckless
imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence
of a good father of a family in the selection and supervision of its driver.
In contrast, petitioners allege that the immediate and proximate cause of the accident was
respondent Stephen Huang’s recklessness. According to petitioner Del Rosario, he was
driving on the left innermost lane when the car bumped the truck’s front right tire. The truck
then swerved to the left, smashed into an electric post, crossed the center island, and
stopped on the other side of the highway. The car likewise crossed over the center island
and landed on the same portion of C-5. Further, petitioner Mercury Drug claims that it
exercised due diligence of a good father of a family in the selection and supervision of all
its employees.
The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug
and Del Rosario jointly and severally liable to pay respondents actual, compensatory,
moral and exemplary damages, attorney’s fees, and litigation expenses. The dispositive
portion reads:
WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc.
and Rolando del Rosario, jointly and severally liable to pay plaintiffs Spouses Richard Y.
Huang and Carmen G. Huang, and Stephen Huang the following amounts:
1. Two Million Nine Hundred Seventy Three Thousand Pesos (₱2,973,000.00) actual
damages;
2. As compensatory damages:
a. Twenty Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(₱23,461,062.00) for life care cost of Stephen;
b. Ten Million Pesos (₱10,000,000.00) as and for lost or impaired earning capacity of
Stephen;
3. Four Million Pesos (₱4,000,000.00) as moral damages;
4. Two Million Pesos (₱2,000,000.00) as exemplary damages; and
5. One Million Pesos (₱1,000,000.00) as attorneys fees and litigation expense.4
On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but
reduced the award of moral damages to ₱1,000,000.00. The appellate court also denied
the motion for reconsideration filed by petitioners.
Hence, this appeal.
Petitioners cite the following grounds for their appeal:
1. That the subject Decision which dismissed the appeal of petitioners herein but
AFFIRMED WITH MODIFICATION the decision of the Regional Trial Court, Branch 64,
Makati City, in that the award of moral damages was reduced to ₱1,000,000.00 and its
Resolution dated March 30, 2006, which dismissed outright the Motion for Reconsideration
must be set aside because the Honorable Court of Appeals committed reversible error:
A. IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON
ALLEGEDLY BEING FILED OUT OF TIME FOR ONE DAY;
B. IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE
INTERPOSED BY THE PETITIONERS HEREIN;
C. IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE
PETITIONERS HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON
PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO ARE NOT
WITNESSES TO THE ACCIDENT;
D. IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN;
E. IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE THE
DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE
OVERWHELMING EVIDENCE PRESENTED BY PETITIONER COMPANY;
F. IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS NEGLIGENT IN
DRIVING THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY DISREGARDING
THE EVIDENCES PRESENTED DURING THE TRIAL OF THE CASE.
G. IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO THE
RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE EVIDENCES
PRESENTED BY THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH
TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS WELL AS
DOCUMENTARY EVIDENCES.5
We affirm the findings of the trial court and the appellate court that petitioner Del Rosario
was negligent. The evidence does not support petitioners’ claim that at the time of the
accident, the truck was at the left inner lane and that it was respondent Stephen Huang’s
car, at its right, which bumped the right front side of the truck. Firstly, petitioner Del Rosario
could not precisely tell which part of the truck was hit by the car,6 despite the fact that the
truck was snub-nosed and a lot higher than the car. Petitioner Del Rosario could not also
explain why the car landed on the opposite lane of C-5 which was on its left side. He said
that "the car did not pass in front of him after it hit him or under him or over him or behind
him."7 If the truck were really at the left lane and the car were at its right, and the car hit the
truck at its front right side, the car would not have landed on the opposite side, but would
have been thrown to the right side of the C-5 Highway. Noteworthy on this issue is the
testimony of Dr. Marlon Rosendo H. Daza, an expert in the field of physics. He conducted
a study based on the following assumptions provided by respondents:
1. Two vehicles collided;
2. One vehicle is ten times heavier, more massive than the other;
3. Both vehicles were moving in the same direction and at the same speed of about 85 to
90 kilometers per hour;
4. The heavier vehicle was driving at the innermost left lane, while the lighter vehicle was
at its right.
Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right
front portion of the heavier vehicle, the general direction of the light vehicle after the impact
would be to the right side of the heavy vehicle, not the other way around. The truck, he
opined, is more difficult to move as it is heavier. It is the car, the lighter vehicle, which
would move to the right of, and away from the truck. Thus, there is very little chance that
the car will move towards the opposite side, i.e., to the left of the truck.
Dr. Daza also gave a further study on the basis of the same assumptions except that the
car is on the left side of the truck, in accordance with the testimony of respondent Stephen
Huang. Dr. Daza concluded that the general direction of the car after impact would be to
the left of the truck. In this situation, the middle island against which the car was pinned
would slow down the car, and enable the truck to catch up and hit the car again, before
running over it.8
To support their thesis, petitioners tried to show the damages that the truck sustained at
its front right side. The attempt does not impress. The photographs presented were taken
a month after the accident, and Rogelio Pantua, the automechanic who repaired the truck And this was despite the fact that you were only traveling at the speed of seventy five
and authenticated the photographs, admitted that there were damages also on the left side kilometers per hour, jumped over the island, hit the lamppost, and traveled the three lanes
of the truck.9 of the opposite lane of C-5 highway, is that what you want to impress upon this court?

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

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

WITNESS: Art. 2180. The obligation imposed by article 2176 is demandable not only for one’s own
acts or omissions, but also for those of persons for whom one is responsible.
Yes, sir.
xxx
ATTY. DIAZ:
The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
In other words, sir from the time your truck was hit according to you up to the time you
employed or on the occasion of their functions.
rested on the shoulder, you traveled fifty meters?
xxx
WITNESS:
The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is
Yes, sir, about that distance.
not conditioned on a prior recourse against the negligent employee, or a prior showing of
insolvency of such employee. It is also joint and solidary with the employee.11
ATTY. DIAZ:
To be relieved of liability, petitioner Mercury Drug should show that it exercised the
diligence of a good father of a family, both in the selection of the employee and in the
supervision of the performance of his duties. Thus, in the selection of its prospective
employees, the employer is required to examine them as to their qualifications, experience,
and service records.12 With respect to the supervision of its employees, the employer
should formulate standard operating procedures, monitor their implementation, and
impose disciplinary measures for their breach. To establish compliance with these
requirements, employers must submit concrete proof, including documentary evidence.13
In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring
procedure. According to Mrs. Merlie Caamic, the Recruitment and Training Manager of
petitioner Mercury Drug, applicants are required to take theoretical and actual driving tests,
and psychological examination. In the case of petitioner Del Rosario, however, Mrs.
Caamic admitted that he took the driving tests and psychological examination when he
applied for the position of Delivery Man, but not when he applied for the position of Truck
Man. Mrs. Caamic also admitted that petitioner Del Rosario used a Galant which is a light
vehicle, instead of a truck during the driving tests. Further, no tests were conducted on the
motor skills development, perceptual speed, visual attention, depth visualization, eye and
hand coordination and steadiness of petitioner Del Rosario. No NBI and police clearances
were also presented. Lastly, petitioner Del Rosario attended only three driving seminars –
on June 30, 2001, February 5, 2000 and July 7, 1984. In effect, the only seminar he
attended before the accident which occurred in 1996 was held twelve years ago in 1984.
It also appears that petitioner Mercury Drug does not provide for a back-up driver for long
trips. At the time of the accident, petitioner Del Rosario has been out on the road for more
than thirteen hours, without any alternate. Mrs. Caamic testified that she does not know of
any company policy requiring back-up drivers for long trips.14
Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the
supervision and discipline over its employees. In fact, on the day of the accident, petitioner
Del Rosario was driving without a license. He was holding a TVR for reckless driving. He
testified that he reported the incident to his superior, but nothing was done about it. He
was not suspended or reprimanded.15 No disciplinary action whatsoever was taken against
petitioner Del Rosario. We therefore affirm the finding that petitioner Mercury Drug has
failed to discharge its burden of proving that it exercised due diligence in the selection and
supervision of its employee, petitioner Del Rosario.
We now consider the damages which respondents should recover from the petitioners.
The trial court awarded the following amounts:
1. Two Million Nine Hundred Seventy-Three Thousand Pesos (₱2,973,000.00) actual
damages;
2. As compensatory damages:
a. Twenty-Three Million Four Hundred Sixty One Thousand, and Sixty-Two Pesos
(₱23,461,062.00) for life care cost of Stephen;
b. Ten Million Pesos (₱10,000,000.00) as and for lost or impaired earning capacity of
Stephen;
3. Four Million Pesos (₱4,000,000.00) as moral damages;
4. Two Million Pesos (₱2,000,000.00) as exemplary damages; and
5. One Million Pesos (₱1,000,000.00) as attorney’s fees and litigation expense.
The Court of Appeals affirmed the decision of the trial court but reduced the award of moral
damages to ₱1,000,000.00.
With regard to actual damages, Art. 2199 of the Civil Code provides that "[E]xcept 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 x x x." In the instant case, we uphold
the finding that the actual damages claimed by respondents were supported by receipts.
The amount of ₱2,973,000.00 represented cost of hospital expenses, medicines, medical
services and supplies, and nursing care services provided respondent Stephen from
December 20, 1996, the day of the accident, until December 1998.
Petitioners are also liable for all damages which are the natural and probable
consequences of the act or omission complained of.16 The doctors who attended to
respondent Stephen are one in their prognosis that his chances of walking again and
performing basic body functions are nil. For the rest of his life, he will need continuous
rehabilitation and therapy to prevent further complications such as pneumonia, bladder
and rectum
infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other
spinal cord injury-related conditions. He will be completely dependent on the care and
support of his family. We thus affirm the award of ₱23,461,062.00 for the life care cost of
respondent Stephen Huang, based on his average monthly expense and the actuarial
computation of the remaining years that he is expected to live; and the conservative
amount of ₱10,000,000.00, as reduced by the trial court, for the loss or impairment of his
earning capacity,17 considering his age, probable life expectancy, the state of his health,
and his mental and physical condition before the accident. He was only seventeen years
old, nearly six feet tall and weighed 175 pounds. He was in fourth year high school, and a
member of the school varsity basketball team. He was also class president and editor-in-
chief of the school annual. He had shown very good leadership qualities. He was looking
forward to his college life, having just passed the entrance examinations of the University
of the Philippines, De La Salle University, and the University of Asia and the Pacific. The
University of Sto. Tomas even offered him a chance to obtain an athletic scholarship, but
the accident prevented him from attending the basketball try-outs. Without doubt, he was
an exceptional student. He excelled both in his academics and extracurricular
undertakings. He is intelligent and motivated, a go-getter, as testified by Francisco Lopez,
respondent Stephen Huang’s godfather and a bank executive.18 Had the accident not
happened, he had a rosy future ahead of him. He wanted to embark on a banking career,
get married and raise children. Taking into account his outstanding abilities, he would have
enjoyed a successful professional career in banking. But, as Mr. Lopez stated, it is highly
unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no
bank has ever hired a person suffering with
the kind of disability as Stephen Huang’s.19
We likewise uphold the award of moral and exemplary damages and attorney’s fees.
"The award of moral damages is aimed at a restoration, within the limits of the possible, of
the spiritual status quo ante."20 Moral damages are designed to compensate and alleviate
in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly
caused a person. Although incapable of pecuniary computation, they must be
proportionate to the suffering inflicted.21 The amount of the award bears no relation
whatsoever with the wealth or means of the offender.
In the instant case, respondent Stephen Huang and respondent spouses Richard and
Carmen Huang testified to the intense suffering they continue to experience as a result of
the accident. Stephen recounted the nightmares and traumas he suffers almost every night
when he relives the accident. He also gets depression when he thinks of his bleak future.
He feels frustration and embarrassment in needing to be helped with almost everything
and in his inability to do simple things he used to do. Similarly, respondent spouses and
the rest of the family undergo their own private suffering. They live with the day-to-day
uncertainty of respondent Stephen Huang’s condition. They know that the chance of full
recovery is nil. Moreover, respondent Stephen Huang’s paralysis has made him prone to
many other illnesses. His family, especially respondent spouses, have to make themselves
available for Stephen twenty-four hours a day. They have patterned their daily life around
taking care of him, ministering to his daily needs, altering the lifestyle to which they had
been accustomed.
Respondent Carmen Huang’s brother testified on the insensitivity of petitioner Mercury
Drug towards the plight of respondent. Stephen, viz.:
Maybe words cannot describe the anger that we feel towards the defendants. All the time
that we were going through the crisis, there was none (sic) a single sign of nor offer of help,
any consolation or anything whatsoever. It is funny because, you know, I have many
colleagues, business associates, people even as far as United States, Japan, that I
probably met only once, when they found out, they make a call, they sent card, they write
small notes, but from the defendant, absolute silence. They didn’t care, and worst, you
know, this is a company that have (sic) all the resources to help us. They were (sic) on our
part, it was doubly painful because we have no choice but to go back to them and buy the
medicines that we need for Stephen. So, I don’t know how someone will really have no
sense of decency at all to at least find out what happened to my son, what is his condition,
or if there is anything that they can do to help us.22
On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of
quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence. The records show that at the time of the accident, petitioner Del Rosario was
driving without a license because he was previously ticketed for reckless driving. The
evidence also shows that he failed to step on his brakes immediately after the impact. Had
petitioner Del Rosario done so, the injuries which respondent Stephen sustained could
have been greatly reduced. Wanton acts such as that committed by petitioner Del Rosario
need be suppressed; and employers like petitioner Mercury Drug should be more
circumspect in the observance of due diligence in the selection and supervision of their
employees. The award of exemplary damages in favor of the respondents is therefore
justified.
With the award of exemplary damages, we also affirm the grant of attorney’s fees to
respondents.23 In addition, attorney’s fees may be granted when a party is compelled to
litigate or incur expenses to protect his interest by reason of an unjustified act of the other
party.24
Cost against petitioners.
During the trial, prosecution witness Leo Acibar (Acibar) testified that on 31 July 2006 at
about 8:30 a.m., he saw Melendres buying cigarettes from a store when Lopez suddenly
appeared and shot Melendres from behind with a caliber .38 revolver, hitting him on the
right side of the head. Acibar added that Lopez again shot Melendres on the chest and on
the lower abdomen. Lopez then fled from the scene. Acibar immediately reported the
incident to the barangay authorities.

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

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

Hence, this petition.

= 26 x ₱37,470
We find the petition without merit. When the trial court’s factual findings are affirmed by the
Net Earning
Court of Appeals, such findings are generally conclusive and binding upon the
Capacity = ₱974,220
Court.7 Moreover, where the credibility of the witness is in question, the findings of the trial
court are generally accorded great respect, if not finality, and generally will not be disturbed
on appeal, unless there is a clear showing that the trial court overlooked, misappreciated, WHEREFORE, we AFFIRM the 12 May 2009 Decision of the Court of Appeals finding
or misapplied some facts or circumstances of weight and substance that would have accused-appellant Roberto Lopez y Cabal guilty beyond reasonable doubt of murder with
affected the outcome of the case.8 The rationale for this rule is that the trial court has the the MODIFICATION that accused-appellant Roberto Lopez y Cabal is ordered to pay the
advantage of observing first-hand the demeanor, behavior, and manner of the witness on heirs of Prudencio Melendres the amount of ₱974,220 for loss of earning capacity.
the stand and, thus, is in a better position to determine the witness’ credibility.9
SO ORDERED.
However, we modify the award for loss of earning capacity. The rule is that documentary
evidence should be presented to substantiate a claim for loss of earning capacity.10 In this G.R. No. 166869 February 16, 2010
case, Liberty presented a certification from Tanod Publishing which showed that
Melendres was a photo correspondent for Tanod Newspaper and that "his monthly salary PHILIPPINE HAWK CORPORATION, Petitioner,
ranges from ₱1,780 to ₱3,570 on per story basis."11 Liberty presented another certification vs.
from Tanod Publishing which showed that Melendres received the total amount of ₱24,990 VIVIAN TAN LEE, Respondent.
representing payment of honoraria and transportation allowance from 1 January to 31 July
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari1 of the Decision of the Court of Appeals in CA-
G.R. CV No. 70860, promulgated on August 17, 2004, affirming with modification the
Decision of the Regional Trial Court (RTC) of Quezon City, Branch 102, dated March 16,
2001, in Civil Case No. Q-91-9191, ordering petitioner Philippine Hawk Corporation and
Margarito Avila to jointly and severally pay respondent Vivian Tan Lee damages as a result
of a vehicular accident.
The facts are as follows:
On March 15, 2005, respondent Vivian Tan Lee filed before the RTC of Quezon City a
Complaint2 against petitioner Philippine Hawk Corporation and defendant Margarito Avila
for damages based on quasi-delict, arising from a vehicular accident that occurred on
March 17, 1991 in Barangay Buensoceso, Gumaca, Quezon. The accident resulted in the
death of respondent’s husband, Silvino Tan, and caused respondent physical injuries.
On June 18, 1992, respondent filed an Amended Complaint,3 in her own behalf and in
behalf of her children, in the civil case for damages against petitioner. Respondent sought
the payment of indemnity for the death of Silvino Tan, moral and exemplary damages,
funeral and interment expenses, medical and hospitalization expenses, the cost of the
motorcycle’s repair, attorney’s fees, and other just and equitable reliefs.
The accident involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The
bus was owned by petitioner Philippine Hawk Corporation, and was then being driven by
Margarito Avila.
In its Answer,4 petitioner denied liability for the vehicular accident, alleging that the
immediate and proximate cause of the accident was the recklessness or lack of caution of
Silvino Tan. Petitioner asserted that it exercised the diligence of a good father of the family
in the selection and supervision of its employees, including Margarito Avila.
On March 25, 1993, the trial court issued a Pre-trial Order5 stating that the parties
manifested that there was no possibility of amicable settlement between them. However,
they agreed to stipulate on the following facts:
1. On March 17, 1991, in Bgy. Buensoceso, Gumaca, Quezon, plaintiff Vivian Lee
Tan and her husband Silvino Tan, while on board a motorcycle with [P]late No. DA-
5480 driven by the latter, and a Metro Bus with [P]late No. NXR-262 driven by
Margarito Avila, were involved in an accident;
2. As a result of the accident, Silvino Tan died on the spot while plaintiff Vivian Lee
Tan suffered physical injuries which necessitated medical attention and
hospitalization;
3. The deceased Silvino Tan is survived by his wife, plaintiff Vivian Lee Tan and
four children, three of whom are now residents of the United States; and
4. Defendant Margarito Avila is an employee of defendant Philippine Hawk.6
The parties also agreed on the following issues:
1. Whether or not the proximate cause of the accident causing physical injuries
upon the plaintiff Vivian Lee Tan and resulting in the death of the latter’s husband
was the recklessness and negligence of Margarito Avila or the deceased Silvino
Tan; and
2. Whether or not defendant Philippine Hawk Transport Corporation exercised the
diligence of a good father of the family in the selection and supervision of its driver
Margarito Avila.7
Respondent testified that on March 17, 1991, she was riding on their motorcycle in tandem
with her husband, who was on the wheel, at a place after a Caltex gasoline station in
Barangay Buensoceso, Gumaca, Quezon on the way to Lopez, Quezon. They came from
the Pasumbal Machine Shop, where they inquired about the repair of their tanker. They
were on a stop position at the side of the highway; and when they were about to make a
turn, she saw a bus running at fast speed coming toward them, and then the bus hit a jeep
parked on the roadside, and their motorcycle as well. She lost consciousness and was
brought to the hospital in Gumaca, Quezon, where she was confined for a week. She was
later transferred to St. Luke’s Hospital in Quezon City, Manila. She suffered a fracture on
her left chest, her left arm became swollen, she felt pain in her bones, and had high blood
pressure.8
Respondent’s husband died due to the vehicular accident. The immediate cause of his
death was massive cerebral hemorrhage.9
Respondent further testified that her husband was leasing and operating a Caltex
10
gasoline station in Gumaca, Quezon that yielded one million pesos a year in revenue. They
also had a copra business, which gave them an income of ₱3,000.00 a month or
₱36,000.00 a year.11
Ernest Ovial, the driver of the passenger jeep involved in the accident, testified that in the
afternoon of March 17, 1991, his jeep was parked on the left side of the highway near the
Pasumbal Machine Shop. He did not notice the motorcycle before the accident. But he
saw the bus dragging the motorcycle along the highway, and then the bus bumped his jeep
and sped away.12
For the defense, Margarito Avila, the driver of petitioner’s bus, testified that on March 17,
1999, at about 4:30 p.m., he was driving his bus at 60 kilometers per hour on the Maharlika
Highway. When they were at Barangay Buensoceso, Gumaca, Quezon, a motorcycle ran
from his left side of the highway, and as the bus came near, the motorcycle crossed the
path of the bus, and so he turned the bus to the right. He heard a loud banging sound.
From his side mirror, he saw that the motorcycle turned turtle ("bumaliktad"). He did not
stop to help out of fear for his life, but drove on and surrendered to the police. He denied
that he bumped the motorcycle.13
Avila further testified that he had previously been involved in sideswiping incidents, but he
forgot how many times.14
Rodolfo Ilagan, the bus conductor, testified that the motorcycle bumped the left side of the
bus that was running at 40 kilometers per hour.15
Domingo S. Sisperes, operations officer of petitioner, testified that, like their other drivers,
Avila was subjected to and passed the following requirements:
(1) Submission of NBI clearance;
(2) Certification from his previous employer that he had no bad record;
(3) Physical examination to determine his fitness to drive;
(4) Test of his driving ability, particularly his defensive skill; and
(5) Review of his driving skill every six months.16
Efren Delantar, a Barangay Kagawad in Buensoceso, Gumaca, Quezon, testified that the
bus was running on the highway on a straight path when a motorcycle, with a woman
behind its driver, suddenly emerged from the left side of the road from a machine shop.
The motorcycle crossed the highway in a zigzag manner and bumped the side of the bus.17
In its Decision dated March 16, 2001, the trial court rendered judgment against petitioner
and defendant Margarito Avila, the dispositive portion of which reads:
ACCORDINGLY, MARGARITO AVILA is adjudged guilty of simple negligence, and
judgment is hereby rendered in favor of the plaintiff Vivian Lee Tan and h[er] husband’s
heirs ordering the defendants Philippine Hawk Corporation and Margarito Avila to pay them
jointly and solidarily the sum of ₱745,575.00 representing loss of earnings and actual
damages plus ₱50,000.00 as moral damages.18
The trial court found that before the collision, the motorcycle was on the left side of the
road, just as the passenger jeep was. Prior to the accident, the motorcycle was in a running
position moving toward the right side of the highway. The trial court agreed with the bus
driver that the motorcycle was moving ahead of the bus from the left side of the road toward
the right side of the road, but disagreed that the motorcycle crossed the path of the bus
while the bus was running on the right side of the road.19
The trial court held that if the bus were on the right side of the highway, and Margarito Avila
turned his bus to the right in an attempt to avoid hitting the motorcyle, then the bus would
not have hit the passenger jeep, which was then parked on the left side of the road. The
fact that the bus also hit the passenger jeep showed that the bus must have been running
from the right lane to the left lane of the highway, which caused the collision with the
motorcycle and the passenger jeep parked on the left side of the road. The trial court stated
that since Avila saw the motorcycle before the collision, he should have stepped on the
brakes and slowed down, but he just maintained his speed and veered to the left.20 The
trial court found Margarito Avila guilty of simple negligence.
The trial court held petitioner bus company liable for failing to exercise the diligence of a
good father of the family in the selection and supervision of Avila, having failed to
sufficiently inculcate in him discipline and correct behavior on the road.21
On appeal, the Court of Appeals affirmed the decision of the trial court with modification in
the award of damages. The dispositive portion of the decision reads:
WHEREFORE, foregoing premises considered, the appeal is DENIED. The assailed
decision dated March 16, 2001 is hereby AFFIRMED with MODIFICATION. Appellants
Philippine Hawk and Avila are hereby ordered to pay jointly and severally appellee the
following amount: (a) ₱168,019.55 as actual damages; (b) ₱10,000.00 as temperate
damages; (c) ₱100,000.00 as moral damages; (d) ₱590,000.00 as unearned income; and
(e) ₱50,000.00 as civil indemnity.22
Petitioner filed this petition, raising the following issues:
1) The Court of Appeals committed grave abuse of discretion amounting to lack of
jurisdiction in passing upon an issue, which had not been raised on appeal, and
which had, therefore, attained finality, in total disregard of the doctrine laid down
by this Court in Abubakar v. Abubakar, G.R. No. 134622, October 22, 1999.
2) The Court of Appeals committed reversible error in its finding that the petitioner’s
bus driver saw the motorcycle of private respondent executing a U-turn on the
highway "about fifteen (15) meters away" and thereafter held that the Doctrine of
Last Clear was applicable to the instant case. This was a palpable error for the
simple reason that the aforesaid distance was the distance of the witness to the
bus and not the distance of the bus to the respondent’s motorcycle, as clearly
borne out by the records.
3) The Court of Appeals committed reversible error in awarding damages in total
disregard of the established doctrine laid down in Danao v. Court of Appeals, 154
SCRA 447 and Viron Transportation Co., Inc. v. Delos Santos, G.R. No. 138296,
November 22, 2000.23
In short, the issues raised by petitioner are: (1) whether or not negligence may be attributed
to petitioner’s driver, and whether negligence on his part was the proximate cause of the
accident, resulting in the death of Silvino Tan and causing physical injuries to respondent;
(2) whether or not petitioner is liable to respondent for damages; and (3) whether or not
the damages awarded by respondent Court of Appeals are proper.
Petitioner seeks a review of the factual findings of the trial court, which were sustained by
the Court of Appeals, that petitioner’s driver was negligent in driving the bus, which caused
physical injuries to respondent and the death of respondent’s husband.
The rule is settled that the findings of the trial court, especially when affirmed by the Court
of Appeals, are conclusive on this Court when supported by the evidence on record.24 The
Court has carefully reviewed the records of this case, and found no cogent reason to
disturb the findings of the trial court, thus:
The Court agree[s] with the bus driver Margarito that the motorcycle was moving ahead of
the bus towards the right side from the left side of the road, but disagrees with him that it
crossed the path of the bus while the bus was running on the right side of the highway.
If the bus were on the right side of the highway and Margarito turned his bus to the right in
an attempt to avoid hitting it, then the bus would not have hit the passenger jeep vehicle
which was then parked on the left side of the road. The fact that the bus hit the jeep too,
shows that the bus must have been running to the left lane of the highway from right to the
left, that the collision between it and the parked jeep and the moving rightways cycle
became inevitable. Besides, Margarito said he saw the motorcycle before the collision
ahead of the bus; that being so, an extra-cautious public utility driver should have stepped
on his brakes and slowed down. Here, the bus never slowed down, it simply maintained
its highway speed and veered to the left. This is negligence indeed.25
Petitioner contends that the Court of Appeals was mistaken in stating that the bus driver
saw respondent’s motorcycle "about 15 meters away" before the collision, because the
said distance, as testified to by its witness Efren Delantar Ong, was Ong’s distance from
the bus, and not the distance of the bus from the motorcycle. Petitioner asserts that this
mistaken assumption of the Court of Appeals made it conclude that the bus driver,
Margarito Avila, had the last clear chance to avoid the accident, which was the basis for
the conclusion that Avila was guilty of simple negligence.
A review of the records showed that it was petitioner’s witness, Efren Delantar Ong, who
was about 15 meters away from the bus when he saw the vehicular
accident.26 Nevertheless, this fact does not affect the finding of the trial court that
petitioner’s bus driver, Margarito Avila, was guilty of simple negligence as affirmed by the
appellate court. Foreseeability is the fundamental test of negligence.27 To be negligent, a
defendant must have acted or failed to act in such a way that an ordinary reasonable man
would have realized that certain interests of certain persons were unreasonably subjected
to a general but definite class of risks.28
In this case, the bus driver, who was driving on the right side of the road, already saw the
motorcycle on the left side of the road before the collision. However, he did not take the
necessary precaution to slow down, but drove on and bumped the motorcycle, and also
the passenger jeep parked on the left side of the road, showing that the bus was negligent
in veering to the left lane, causing it to hit the motorcycle and the passenger jeep.
Whenever an employee’s negligence causes damage or injury to another, there instantly
arises a presumption that the employer failed to exercise the due diligence of a good father
of the family in the selection or supervision of its employees.29 To avoid liability for a quasi-
delict committed by his employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a
family in the selection and supervision of his employee.30
The Court upholds the finding of the trial court and the Court of Appeals that petitioner is
liable to respondent, since it failed to exercise the diligence of a good father of the family
in the selection and supervision of its bus driver, Margarito Avila, for having failed to
sufficiently inculcate in him discipline and correct behavior on the road. Indeed, petitioner’s
tests were concentrated on the ability to drive and physical fitness to do so. It also did not
know that Avila had been previously involved in sideswiping incidents.
As regards the issue on the damages awarded, petitioner contends that it was the only
one that appealed the decision of the trial court with respect to the award of actual and
moral damages; hence, the Court of Appeals erred in awarding other kinds of damages in
favor of respondent, who did not appeal from the trial court’s decision.
Petitioner’s contention is unmeritorious.
Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides:
SEC. 8. Questions that may be decided. -- No error which does not affect the jurisdiction
over the subject matter or the validity of the judgment appealed from or the proceedings
therein will be considered unless stated in the assignment of errors, or closely related to
or dependent on an assigned error and properly argued in the brief, save as the court pass
upon plain errors and clerical errors.
Philippine National Bank v. Rabat31 cited the book32 of Justice Florenz D. Regalado to
explain the section above, thus:
In his book, Mr. Justice Florenz D. Regalado commented on this section, thus:
1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes
some substantial changes in the rules on assignment of errors. The basic
procedural rule is that only errors claimed and assigned by a party will be
considered by the court, except errors affecting its jurisdiction over the subject
matter. To this exception has now been added errors affecting the validity of the
judgment appealed from or the proceedings therein.
Also, even if the error complained of by a party is not expressly stated in his
assignment of errors but the same is closely related to or dependent on an
assigned error and properly argued in his brief, such error may now be considered
by the court. These changes are of jurisprudential origin.
2. The procedure in the Supreme Court being generally the same as that in the
Court of Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has
been held that the latter is clothed with ample authority to review matters, even if
they are not assigned as errors on appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case. Also, an unassigned error
closely related to an error properly assigned (PCIB vs. CA, et al., L-34931, Mar.
18, 1988), or upon which the determination of the question raised by error properly
assigned is dependent, will be considered by the appellate court notwithstanding
the failure to assign it as error (Ortigas, Jr. vs. Lufthansa German Airlines, L-28773,
June 30, 1975; Soco vs. Militante, et al., G.R. No. 58961, June 28, 1983).
It may also be observed that under Sec. 8 of this Rule, the appellate court is
authorized to consider a plain error, although it was not specifically assigned by
the appellant (Dilag vs. Heirs of Resurreccion, 76 Phil. 649), otherwise it would be
sacrificing substance for technicalities.33
In this case for damages based on quasi-delict, the trial court awarded respondent the sum
of ₱745,575.00, representing loss of earning capacity (₱590,000.00) and actual damages
(₱155,575.00 for funeral expenses), plus ₱50,000.00 as moral damages. On appeal to the
Court of Appeals, petitioner assigned as error the award of damages by the trial court on
the ground that it was based merely on suppositions and surmises, not the admissions
made by respondent during the trial.
documentary evidence, it is reasonable to peg necessary expenses for the lease and
operation of the gasoline station at 80 percent of the gross income, and peg living
expenses at 50 percent of the net income (gross income less necessary expenses).
In this case, the computation for loss of earning capacity is as follows:

In its Decision, the Court of Appeals sustained the award by the trial court for loss of Life Expectancy Reasonable and
Net
[2/3 (80-age at Gross Annual Necessary
earning capacity of the deceased Silvino Tan, moral damages for his death, and actual Earning = x –
damages, although the amount of the latter award was modified. the time of Income (GAI) Expenses
Capacity
death)] (80% of GAI)
The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 X = [2/3 (80-65)] x ₱1,000,000.00 - ₱800,000.00
of the Civil Code.34Compensation of this nature is awarded not for loss of earnings, but for
loss of capacity to earn money.35 X = 2/3 (15) x ₱200,000.00 - ₱100,000.00(Living
Expenses)
As a rule, documentary evidence should be presented to substantiate the claim for
X = 30/3 x ₱100,000.00
damages for loss of earning capacity.36 By way of exception, damages for loss of earning
capacity may be awarded despite the absence of documentary evidence when: (1) the X = 10 x ₱100,000.00
deceased is self-employed and earning less than the minimum wage under current labor
laws, in which case, judicial notice may be taken of the fact that in the deceased's line of X = ₱1,000,000.00
work no documentary evidence is available; or (2) the deceased is employed as a daily
wage worker earning less than the minimum wage under current labor laws.37
The Court of Appeals also awarded actual damages for the expenses incurred in
connection with the death, wake, and interment of respondent’s husband in the amount of
In this case, the records show that respondent’s husband was leasing and operating a ₱154,575.30, and the medical expenses of respondent in the amount of ₱168,019.55.
Caltex gasoline station in Gumaca, Quezon. Respondent testified that her husband earned
an annual income of one million pesos. Respondent presented in evidence a Certificate of
Creditable Income Tax Withheld at Source for the Year 1990,38which showed that Actual damages must be substantiated by documentary evidence, such as receipts, in
respondent’s husband earned a gross income of P950,988.43 in 1990. It is reasonable to order to prove expenses incurred as a result of the death of the victim40 or the physical
use the Certificate and respondent’s testimony as bases for fixing the gross annual income injuries sustained by the victim. A review of the valid receipts submitted in evidence
of the deceased at one million pesos before respondent’s husband died on March 17, showed that the funeral and related expenses amounted only to ₱114,948.60, while the
1999. However, no documentary evidence was presented regarding the income derived medical expenses of respondent amounted only to ₱12,244.25, yielding a total of
from their copra business; hence, the testimony of respondent as regards such income ₱127,192.85 in actual damages.
cannot be considered.
Moreover, the Court of Appeals correctly sustained the award of moral damages in the
In the computation of loss of earning capacity, only net earnings, not gross earnings, are amount of ₱50,000.00 for the death of respondent’s husband. Moral damages are not
to be considered; that is, the total of the earnings less expenses necessary for the creation intended to enrich a plaintiff at the expense of the defendant.41 They are awarded to allow
of such earnings or income, less living and other incidental expenses.39 In the absence of the plaintiff to obtain means, diversions or amusements that will serve to alleviate the moral
suffering he/she has undergone due to the defendant’s culpable action and must, perforce,
be proportional to the suffering inflicted.42
In addition, the Court of Appeals correctly awarded temperate damages in the amount of
₱10,000.00 for the damage caused on respondent’s motorcycle. Under Art. 2224 of the
Civil Code, temperate damages "may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty." The cost of the repair of the motorcycle was prayed for by
respondent in her Complaint. However, the evidence presented was merely a job
estimate43 of the cost of the motorcycle’s repair amounting to ₱17, 829.00. The Court of
Appeals aptly held that there was no doubt that the damage caused on the motorcycle was
due to the negligence of petitioner’s driver. In the absence of competent proof of the actual
damage caused on the motorcycle or the actual cost of its repair, the award of temperate
damages by the appellate court in the amount of ₱10,000.00 was reasonable under the
circumstances.44
The Court of Appeals also correctly awarded respondent moral damages for the physical
injuries she sustained due to the vehicular accident. Under Art. 2219 of the Civil
Code,45 moral damages may be recovered in quasi-delicts causing physical injuries.
However, the award of ₱50,000.00 should be reduced to ₱30,000.00 in accordance with
prevailing jurisprudence.46
Further, the Court of Appeals correctly awarded respondent civil indemnity for the death of
her husband, which has been fixed by current jurisprudence at ₱50,000.00.47 The award
is proper under Art. 2206 of the Civil Code.48
In fine, the Court of Appeals correctly awarded civil indemnity for the death of respondent’s
husband, temperate damages, and moral damages for the physical injuries sustained by
respondent in addition to the damages granted by the trial court to respondent. The trial
court overlooked awarding the additional damages, which were prayed for by respondent
in her Amended Complaint. The appellate court is clothed with ample authority to review
matters, even if they are not assigned as errors in the appeal, if it finds that their
consideration is necessary in arriving at a just decision of the case.49
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated August
17, 2004 in CA-G.R. CV No. 70860 is hereby AFFIRMED with MODIFICATION. Petitioner
Philippine Hawk Corporation and Margarito Avila are hereby ordered to pay jointly and
severally respondent Vivian Lee Tan: (a) civil indemnity in the amount of Fifty Thousand
Pesos (₱50,000.00); (b) actual damages in the amount of One Hundred Twenty-Seven
Thousand One Hundred Ninety-Two Pesos and Eighty-Five Centavos ( ₱127,192.85); (c)
moral damages in the amount of Eighty Thousand Pesos (₱80,000.00); (d) indemnity for
loss of earning capacity in the amount of One Million Pesos (₱1,000,000.00); and (e)
temperate damages in the amount of Ten Thousand Pesos (₱10,000.00).
Costs against petitioner.
SO ORDERED.
G.R. No. 148737 June 16, 2004
ERNESTO PLEYTO and PHILIPPINE RABBIT BUS LINES, INC., petitioners,
vs.
MARIA D. LOMBOY and CARMELA LOMBOY, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated October 31, 2000 of the Court of Appeals in
CA-G.R. CV No. 61300, which affirmed with modification the Decision2 dated June 26,
1998 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. 95-
00724-D. The RTC ordered herein petitioners to solidarily pay damages to respondents.
Petitioners likewise assail the Resolution3 dated June 21, 2001 of the appellate court,
which denied their Motion for Reconsideration.
Petitioner Philippine Rabbit Bus Lines, Inc. (PRBL), with principal office at Tarlac City,
Tarlac, is a public carrier, engaged in carrying passengers and goods for a fare. It serviced
various routes in Central and Northern Luzon. Petitioner Ernesto Pleyto was a bus driver
employed by PRBL at the time of the incident in question.
Respondent Maria D. Lomboy of Calasiao, Pangasinan, is the surviving spouse of the late
Ricardo Lomboy, who died in Pasolingan, Gerona, Tarlac, in a vehicular accident at around
11:30 a.m. of May 16, 1995. The accident was a head-on collision between the PRBL bus
driven by petitioner Pleyto and the car where Ricardo was a passenger. Respondent
Carmela Lomboy is the eldest daughter of Ricardo and Maria Lomboy. Carmela suffered
injuries requiring hospitalization in the same accident which resulted in her father’s death.
On November 29, 1995, herein respondents, as pauper-litigants, filed an action for
damages against PRBL and its driver, Pleyto, with the RTC of Dagupan City. In their
complaint, which was docketed as Civil Case No. 95-00724-D, the Lomboys prayed that
they be indemnified for the untimely death of Ricardo Lomboy, his lost earnings, the
medical and hospitalization expenses of Carmela, and moral damages.
The facts, established during trial and affirmed by the appellate court, are as follows:
At approximately 11:30 a.m. of May 16, 1995, PRBL Bus No. 1539, with Plate No.
CVD 556, driven by petitioner Pleyto, was traveling along MacArthur Highway in
Gerona, Tarlac bound for Vigan, Ilocos Sur. It was drizzling that morning and the
macadam road was wet. Right in front of the bus, headed north, was the tricycle
with Plate No. CX 7844, owned and driven by one Rodolfo Esguerra.
According to Rolly Orpilla, a witness and one of the bus passengers, Pleyto tried to
overtake Esguerra’s tricycle but hit it instead. Pleyto then swerved into the left opposite
lane. Coming down the lane, some fifty meters away, was a southbound Mitsubishi Lancer
car, with Plate No. PRS 941, driven by Arnulfo Asuncion. The car was headed for Manila
with some passengers. Seated beside Arnulfo was his brother-in-law, Ricardo Lomboy,
while in the back seat were Ricardo’s 18-year old daughter Carmela and her friend, one
Rhino Daba. PRBL Bus No. 1539 smashed head-on the car, killing Arnulfo and Ricardo
instantly. Carmela and Rhino suffered injuries, but only Carmela required hospitalization.
In their Answer, petitioners PRBL and Ernesto Pleyto both claimed that the bus was
running slowly at the time of the accident. They pointed out that Bus No. 1539 had been
inspected by driver Pleyto and examined by a mechanic prior to the trip, in accordance
with the company’s standard operating procedure. It was found in good working condition.
Pleyto claimed that while cruising along the highway at Gerona, Tarlac, he noticed
Esguerra’s tricycle and followed it at a safe distance after he was unable to overtake it.
Suddenly and without warning, the tricycle stopped in the middle of the road. Pleyto
stepped on the brakes and the bus lost speed. But, since it skidded towards the direction
of the tricycle, he swerved the bus to the other lane to avoid hitting it, only to collide with
the Manila-bound Mitsubishi car.
On June 26, 1998, the trial court decided Civil Case No. 95-00724-D as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs and against the defendants ordering the defendants to pay solidarily the
plaintiffs the following amounts:
1) ₱50,000.00 as indemnification for the death of Ricardo Lomboy;
2) ₱1,642,521.00 for lost earnings of Ricardo Lomboy;
3) ₱59,550.00 as actual damages for the funeral, wake, religious services
and prayer for the soul of the departed;
4) ₱52,000.00 for the medical treatment and medicine of Carmela Lomboy;
5) ₱500,000.00 as moral damages for the wife and children excluding
Carmela Lomboy;
6) ₱50,000.00 as moral damages for Carmela Lomboy; and
7) To pay costs.
The filing fee the plaintiffs should have paid is hereby ordered to be paid by the
plaintiffs to the Clerk of Court of this Court upon satisfaction of the foregoing
amounts to the plaintiffs by the defendants.
SO ORDERED.4
In ruling for respondents, the RTC found Pleyto negligent and lacking in precaution when
he overtook the tricycle with complete disregard of the approaching car in the other lane.
It found the testimony of Rolly Orpilla credible and persuasive as against Pleyto’s self-
serving and unbelievable testimony. The court found that Pleyto should have been more
prudent in overtaking a tricycle, considering that it was drizzling, the road was slippery, and
another vehicle was approaching from the opposite direction. The RTC found that Pleyto
had clearly violated traffic rules and regulations, and thus was negligent under Article
21855 of the Civil Code of the Philippines because petitioner Pleyto failed to present any
proof to rebut the presumption. The lower court likewise held co-petitioner PRBL equally
liable under Article 21806 of the Civil Code for its failure to show that it had maintained
proper supervision of its employees notwithstanding strict standards in employee selection.
Petitioners appealed the judgment of the trial court to the Court of Appeals in CA-G.R. CV
No. 61300. The appellate court, however, affirmed the decision of the trial court, with
modification in the award of damages, thus:
Wherefore, with the MODIFICATION that the award for actual damages is reduced
to ₱39,550.00 for funeral and religious services and ₱27,000.00 for medical
expenses of Carmela Lomboy; and the award for loss of earning capacity is
accordingly corrected to ₱1,152,000.00, the appealed decision is AFFIRMED.
SO ORDERED.7
The Court of Appeals affirmed the findings of the RTC with respect to Pleyto’s fault and
negligence. The appellate court noted that this was evident in his overtaking Esguerra’s
tricycle despite the drizzle, the slippery road, and an oncoming car a mere fifty meters
away. The court reasoned that the bus must have been speeding since despite braking,
the bus still hit the tricycle, and then rammed the car in the opposite lane with such force
as to throw the car off the road. The appellate court also found petitioner PRBL liable as
owner of the bus and as employer of Pleyto pursuant to Article 2180 of the Civil Code, for
its failure to observe the required diligence in its supervision of its employees and the safe
maintenance of its buses. In modifying the award of damages, the appellate court took
note of the amounts that were duly supported by receipts only.
Petitioners then moved for reconsideration, but the appellate court denied it.
Hence, the instant petition, premised on the following grounds:
A. THE SUPREME COURT MAY REVIEW THE CONCLUSION DRAWN BY THE
COURT OF APPEALS, NAMELY, THAT THE PRBL BUS OVERTOOK A
TRICYCLE THUS CAUSING THE ACCIDENT, SINCE IT WAS MADE IN
DISREGARD OF FACTS UNDISPUTED BY THE PARTIES.
B. THE COURT OF APPEALS DISREGARDED THE DOCTRINE LAID DOWN IN
VILLA REY TRANSIT, INC. v. COURT OF APPEALS, G.R. NO. L-25499,
FEBRUARY 18, 1970, 31 SCRA 511, WHEN IT ARBITRARILY PEGGED THE
MONTHLY LIVING EXPENSES AT 50% OF GROSS EARNINGS.8
At the outset, it appears that petitioners call for this Court to review the factual findings and
conclusions of the Court of Appeals. Petitioners assail the appellate court’s affirmance of
the finding by the trial court that Pleyto was negligent. The issue of negligence is factual
and, in quasi-delicts, crucial in the award of damages.9 But it is well established that under
Rule 45 of the 1997 Rules of Civil Procedure, only questions of law, not of fact, may be
raised before the Supreme Court. It must be stressed that this Court is not a trier of facts,
and it is not its function to re-examine and weigh anew the respective evidence of the
parties.10 Factual findings of the trial court, especially those affirmed by the Court of
Appeals, are conclusive on this Court when supported by the evidence on record.11 In the
present petition, no compelling reason is shown by petitioners whatsoever for this Court to
reverse those findings. Our examination of the records shows that the evidence clearly
supports the following findings of the appellate court:
The negligence and fault of appellant driver is manifest. He overtook the tricycle despite
the oncoming car only fifty (50) meters away from him. Defendant-appellant’s claim that
he was driving at a mere 30 to 35 kilometers per hour does not deserve credence as it
would have been easy to stop or properly maneuver the bus at this speed. The speed of
the bus, the drizzle that made the road slippery, and the proximity of the car coming from
the opposite direction were duly established by the evidence. The speed at which the bus
traveled, inappropriate in the light of the aforementioned circumstances, is evident from
the fact despite the application of the brakes, the bus still bumped the tricycle, and then
proceeded to collide with the incoming car with such force that the car was pushed beyond
the edge of the road to the ricefield (Paragraph 8, Affidavit of Rolly Orpilla marked Exh. "D"
and Traffic Report marked Exh. "E", Folder of Exhibits)....12
Indeed, petitioner Pleyto violated traffic rules and regulations when he overtook the tricycle
despite the presence of an oncoming car in the other lane. Article 2185 of the Civil Code
lays down the presumption that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was violating any traffic regulation. As found by both the Court
of Appeals and the trial court, petitioners failed to present any convincing proof rebutting
such presumption.
A driver abandoning his proper lane for the purpose of overtaking another vehicle in an
ordinary situation has the duty to see to it that the road is clear and not to proceed if he
cannot do so in safety. When a motor vehicle is approaching or rounding a curve, there is
special necessity for keeping to the right side of the road and the driver does not have the
right to drive on the left hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view.13
The Court of Appeals found PRBL liable for Pleyto’s negligence pursuant to Article 2180
in relation to Article 217614of the Civil Code. Under Article 2180, when an injury is caused
by the negligence of a servant or an employee, the master or employer is presumed to be
negligent either in the selection or in the supervision of that employee. This presumption
may be overcome only by satisfactorily showing that the employer exercised the care and
the diligence of a good father of a family in the selection and the supervision of its
employee.15
In fine, when the employee causes damage due to his own negligence while performing
his own duties, there arises the juris tantum presumption that the employer is negligent,
rebuttable only by proof of observance of the diligence of a good father of a family.16 Thus,
in the selection of prospective employees, employers are required to examine them as to
their qualifications, experience and service records. With respect to the supervision of
employees, employers must formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for breaches thereof. These facts must
be shown by concrete proof, including documentary evidence.17
In the present case, petitioners presented several documents in evidence to show the
18
various tests and pre-qualification requirements imposed upon petitioner Pleyto before his
hiring as a driver by PRBL. However, no documentary evidence was presented to prove
that petitioner PRBL exercised due diligence in the supervision of its employees, including
Pleyto. Citing precedents, the Court of Appeals opined,
"in order that the defense of due diligence in the selection and supervision of
employees may be deemed sufficient and plausible, it is not enough for the
employer to emptily invoke the existence of company guidelines and policies on
hiring and supervision. As the negligence of the employee gives rise to the
presumption of negligence on the part of the employer, the latter has the burden of
proving that it has been diligent not only in the selection of employees but also in
the actual supervision of their work. The mere allegation of the existence of hiring
procedures and supervisory policies without anything more is decidedly not
sufficient to overcome such presumption. (Metro Manila Transit Corp. vs. CA (223
SCRA 521). The trial court ratiocinated:
...
Indeed, the testimony of the said two witnesses of the PRBL would impress
one to believe that the PRBL has always exercised the strictest standard
of selecting its employees and of maintaining its vehicles to avoid injury or
damage to the life and limb of people on the road whether of its own
passengers or pedestrians or occupants or other vehicles. It has not
however, shown to the satisfaction of the Court that it has maintained
proper supervision of its employees, especially drivers while in the actual
operation of its buses. While it has a list of procedures and testing when it
comes to recruitment and another list of what should be done with its buses
before they are allowed to run on the road, it has no list of procedures and
duties to be followed by a driver while he is operating a vehicle to prevent
injury to persons and damage to property. Neither has it proved to the Court
that there are people employed by it to supervise its drivers so that it can
be seen to it that all the safety procedures to prevent accident or damage
to property or injury to people on the road have been in place. It is in this
aspect of supervising its employees where this Court has found the
defendant PRBL deficient." (Decision p. 29, Rollo)19
In our view, no reversible error was committed by the Court of Appeals when it sustained
what the trial court found after trial that PRBL had failed to rebut the presumption of
negligence on its part. Said finding binds us now in this review on certiorari.
Hence, the only remaining issue relevant for our resolution concerns the award to herein
respondents for damages as well as the loss of earning capacity of the victim, Ricardo
Lomboy.
Petitioners argue that the award of loss of earning capacity to respondents is devoid of
legal basis. They fault the appellate court for pegging the monthly living expenses at 50%
of gross earnings since, they claim, this runs contrary to Villa Rey Transit, Inc. v. Court of
Appeals,20 which held that "the amount recoverable is not loss of the entire earning, but
rather the loss of that portion of the earnings which the beneficiary would have received."
Petitioners also point out that respondents failed to prove the gross income of the
deceased Ricardo Lomboy, thus, making the computations of the appellate court doubtful,
to say the least.
Respondents counter that the deduction of 50% of the gross income as reasonable and Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As
necessary living expenses by the appellate court is in accord with established to the second factor, it is computed by multiplying the life expectancy by the net earnings
jurisprudence, pointing to our decision in Negros Navigation Co., Inc. v. Court of Appeals.21 of the deceased, i.e., the total earnings less expenses necessary in the creation of such
earnings or income and less living and other incidental expenses. The net earning is
Petitioners, in our view, misread the Villa Rey Transit case, where we emphasized that: ordinarily computed at fifty percent (50%) of the gross earnings.24 Thus, the formula used
by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80
"Thus, it has been consistently held that earning capacity, as an element of – age at time of death) x (gross annual income – reasonable and necessary living
damages to one’s estate for his death by wrongful act is necessarily his net earning expenses)].25
capacity or his capacity to acquire money, "less the necessary expense for his own
living". Stated otherwise, the amount recoverable is not loss of the entireearning, It was established that Ricardo Lomboy was 44 years old at the time of his death and is
but rather the loss of that portion of the earnings which the beneficiary would have earning a monthly income of ₱8,000 or a gross annual income (GAI) of ₱96,000.26 Using
received. In other words, only net earnings, not gross earning, are to be considered the cited formula, the Court of Appeals correctly computed the Loss of Net Earning
that is, the total of the earnings lessexpenses necessary in the creation of such Capacity as ₱1,152,000, net of and after considering a reasonable and necessary living
earnings or income and less living and other incidental expenses."22 expenses of 50% of the gross annual income or ₱48,000. A detailed computation is as
follows:
In considering the earning capacity of the victim as an element of damages, the net
earnings, which is computed by deducting necessary expenses from the gross earnings, NET GROSS
and not the gross earnings, is to be utilized in the computation. Note that in the present LIFE EXPECTANCY LIVING
EARNING ANNUAL
case, both the Court of Appeals and the trial court used net earnings, not gross earnings = [2/3 (80-age at the x – EXPENSES
CAPACITY INCOME
in computing loss of earning capacity. The amount of net earnings was arrived at after time of death)] (50% of GAI)
(X) (GAI)
deducting the necessary expenses (pegged at 50% of gross income) from the gross annual
income. This computation is in accord with settled jurisprudence, including the Villa (50% x
X = [2/3 (80-44)] x [₱96,000 –
Rey case. ₱96,000)

Petitioners’ claim that no substantial proof was presented to prove Ricardo Lomboy’s gross X = [2/3 (36)] x [₱96,000 – 48,000]
income lacks merit. Failure to present documentary evidence to support a claim for loss of X = 24 x 48,000
earning capacity of the deceased need not be fatal to its cause. Testimonial evidence
suffices to establish a basis for which the court can make a fair and reasonable estimate X = ₱ 1,152,000.00
of the loss of earning capacity.23 Hence, the testimony of respondent Maria Lomboy,
Ricardo’s widow, that her husband was earning a monthly income of ₱8,000 is sufficient
to establish a basis for an estimate of damages for loss of earning capacity. Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning
capacity at said amount.
It is well-settled in jurisprudence that the factors that should be taken into account in
determining the compensable amount of lost earnings are: (1) the number of years for We likewise sustain the reduction of the award of actual damages from ₱59,550 for funeral
which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs and burial expenses of Ricardo and ₱52,000 for medical expenses of Carmela Lomboy to
of the deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is ₱39,55027 and ₱27,000, respectively, as only these latter amounts were duly supported by
computed by applying the formula (2/3 x [80 - age at death]) adopted in the American receipts.28 To justify an award of actual damages, there must be competent proof of the
actual amount of loss, credence can be given only to claims which are duly supported by
receipts.29
However, while the award of ₱50,000 as moral damages to Carmela Lomboy is sustained,
the award for moral damages of ₱500,000 to the heirs of Ricardo Lomboy should be
reduced for being excessive.
Under Article 2206 of the Civil Code, the spouse, legitimate children and illegitimate
descendants and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.30 However, we must stress that moral
damages, though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury and are not meant to enrich
complainant at the expense of defendant.31 Moral damages are awarded to enable the
injured party to obtain means, diversions or amusements that will serve to alleviate the
moral suffering he/she has undergone, by reason of the defendant’s culpable action. Its
award is aimed at restoration, as much as possible, of the spiritual status quo ante; thus it
must be proportionate to the suffering inflicted.32 Under the circumstances of this case, an
award of ₱100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with
the purpose of the law and jurisprudence in allowing moral damages.33
The indemnification award of ₱50,000 is also sustained.
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 61300
is AFFIRMED, with the sole MODIFICATION that the award of moral damages to the
heirs of Ricardo Lomboy is reduced from ₱500,000.00 to ₱100,000.00. No pronouncement
as to costs.
SO ORDERED.
G.R. No. 197813 September 25, 2013
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
EDWIN IBANEZ y ALBANTE and ALFREDO (FREDDIE) NULLA y IBANEZ, Accused-
appellants.
DECISION
PEREZ, J.:
Before us is an appeal via a Notice of Appeal from the Decision of the Court of Appeals in
CA-G.R. CR-H.C. No. 04051.1 The appellate court affirmed in toto the Decision2 of the
Regional Trial Court (RTC), Branch18, Malolos, Bulacan which convicted accused-
appellants Edwin Ibañez y Albante (Edwin) and Alfredo Nulla y Ibañez (Alfredo) of Murder
in Criminal Case No. 3517-M-2004.
Appellants Edwin and Alfredo, with Jesus Monsillo y Taniares (Jesus), were all charged in
an Information for Murder under Article 248 of the Revised Penal Code, which reads:
The undersigned Asst. Provincial Prosecutor accuses Jesus Montisillo y Taniares @
Dodong, Edwin Ibañez y Albante and Alfredo(Freddie) Nulla y Ibañez of the crime of
murder, penalized under the provisions of Article 248 of the Revised Penal Code,
committed as follows:
That on or about the 29th day of August, 2004, in the municipality of Bocaue, province of
Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, armed with a soil digger (bareta) and with intent to kill one Wilfredo Atendido y
Dohenog, conspiring, confederating and helping one another did then and there willfully,
unlawfully and feloniously, with evident premeditation, abuse of superior strength and
treachery, attack, assault and hit with the said soildigger (bareta) the said Wilfredo
Atendido y Dohenog, hitting the latter on his head, thereby inflicting upon him serious
physical injuries which directly caused his death.3
During arraignment, Edwin and Alfredo pleaded not guilty. Jesus, on the other hand,
remained at large; the case against him was archived. Thereafter, trial ensued.
The prosecution’s version was testified to by the victim’s wife and daughter, in succession.
On that fateful day, Wilfredo Atendido y Dohenog (Wilfredo) was invited by Alfredo to a
drinking session with Jesus and Edwin making them a party of four. Rachel, Wilfredo’s
daughter, an adolescent at the time, was underneath the house (silong in the vernacular)
of a neighbor, three (3)meters away from the place where Wilfredo and his companions
were ostensibly in merrymaking.
Rachel saw her father step away from the group to urinate. While Wilfredo relieved himself,
Edwin snatched a t-shirt from a nearby clothesline, and hooded the t-shirt over the head
and face of Wilfredo. Robbed of vision as his head was fully covered, Wilfredo was wrestled
and pinned down by Edwin, while Alfredo boxed the left side of Wilfredo’s chest. Jesus,
armed with a long iron bar, swung at and hit Wilfredo in the head. Terrified, Rachel stood
immobilized as she watched the attack on father. Thereafter, she saw her mother running
out of their house and crying for help.
On that same auspicious date, 29 August 2004, Rowena, Wilfredo’s wife and Rachel’s
mother, was inside their house taking care of their youngest daughter. She heard a
commotion coming from the neighboring house, about eight (8) steps away, so she rushed
in that direction. Once outside their house, she saw Wilfredo prostrate on the ground
covered with blood on his face and forehead. Upon reaching Wilfredo, Rowena saw
accused Jesus, standing one meter away from Wilfredo, holding an iron bar. Edwin and
Alfredo stood beside Jesus; Edwin held a white shirt. Forthwith, Jesus and Alfredo ran
away while Edwin went home. Rowena asked for help to bring Wilfredo to the hospital.
However, Wilfredo did not reach the hospital alive and was pronounced dead on arrival.
Expectedly, the defense mainly of Edwin and Alfredo, proffered an altogether different
version of the events.
The two accused-appellants pointed to Jesus as the sole culprit, proclaimed their
innocence and professed to being at the scene of the crime only because of their curiosity
for what had occurred.
Allegedly, on that day, the two buddies were having their regular drinking session at
Edwin’s house when they heard a commotion outside. Curious about the ruckus, they
approached and saw Wilfredo prostrate on the ground; Jesus, held an iron bar and was
being held back by his sister who was shouting, "Tama na! Tama na!." Edwin then called
for a tricycle so Wilfredo could be brought to a hospital and given medical attention. Alfredo
stood by and merely watched as events transpired.
To corroborate their claim of innocence, the defense called Aniceta Dosil (Aniceta) to the
witness stand who testified as follows:
(1) She sold doormats for a living which she peddled on the road;
(2) On 29 August 2004, Rachel helped her in selling the doormats;
(3) On that day, they finished at around 6:00 p.m. and headed to their respective
residences along the railroad track;
(4) Upon arriving at their vicinity, Aniceta witnessed the immediate aftermath of the
purported fight between Jesus and Wilfredo;
(5) At that juncture, Jesus was being embraced by his sister, Marilou, and the two
were two meters away from the body of Wilfredo;
(6) Marilou recounted to Aniceta that Jesus had hit Wilfredo with an iron bar, a
preemptive move because Wilfredo was about to stab Jesus;
(7) While Aniceta and Marilou discussed the incident, Rachel stood and listened to
them;
(8) At that time, only the four of them, Jesus, Marilou, Aniceta and Rachel, were at
the place of the incident;
(9) After learning the entirety of what had transpired, Aniceta, who was afraid to
get involved, and Rachel, ran to their respective houses;
(10) For the duration of the day, Aniceta did not step out of her house, neither did
she volunteer information to the police when the case was investigated in the
following days; and
(11) Aniceta only came forward to testify at the request of Adela Ibañez, wife of
Edwin.
As previously adverted to, the trial court convicted Edwin and Alfredo of Murder. It disposed
of the case, to wit:
WHEREFORE, accused Edwin Ibañez y Albante and Alfredo (Freddie) Nulla y Ibañez are
hereby found GUILTY beyond reasonable doubt of the crime of murder and are hereby
sentenced to suffer imprisonment of reclusion perpetua and to indemnify the heirs of
Wilfredo D. Atendido in the amount of:
 a) Fifty Thousand Pesos (₱50,000.00) as civil indemnity;
b) Twenty-Five Thousand Pesos (₱25,000.00) as temperate damages;
c) Fifty Thousand Pesos (₱50,000.00) as moral damages;
d) Twenty-Five Thousand Pesos (₱25,000.00) as exemplary damages; and
e) One Million Nine Hundred Forty-Six Thousand and One Hundred Eighty Pesos
(₱1,946,180.00) for the unearned income of Wilfredo Atendido.4
On appeal, Edwin and Alfredo found no reprieve. The Court of Appeals did not deviate
from the RTC’s ruling and affirmed in toto its finding of guilt.
In this appeal, Edwin and Alfredo assign the following as errors:
I was delivered in a firm, candid, and straightforward manner. There is no showing that
THE LOWER COURTS GRAVELY ERRED IN GIVING FULLWEIGHT AND
CREDENCE TO THE TESTIMONY OF THEALLEGED PROSECUTION
EYEWITNESS.
II
THE LOWER COURTS GRAVELY ERRED IN NOT GIVINGWEIGHT AND
CREDENCE TO THE DEFENSE‘S EVIDENCE.
III
THE LOWER COURTS GRAVELY ERRED IN CONVICTING THEACCUSED-
APPELLANTS WHEN THEIR GUILT WAS NOT PROVENBEYOND
REASONABLE DOUBT.5
In sum, the issue is whether the accused are guilty of murder.
Edwin and Alfredo maintain their innocence and point to Jesus as the sole perpetrator of
the crime. They insist that they were at the scene of the crime only because they wanted
to know what the commotion was all about. They claim that, in fact, Edwin called for a
tricycle so Wilfredo could be brought to a hospital. To discredit the eyewitness testimony
of Rachel, they presented Aniceta who testified that she and Rachel were out on that day
selling doormats and only returned at 6:00 p.m. Thus, Rachel could not have witnessed
the murder of Wilfredo.
Both lower courts, however, found the testimony of Rachel credible:
This Court finds the testimony of Rachel clear and convincing. The testimony flows from a
person who was present in the place where the killing occurred. They are replete with
details sufficient to shift the burden of evidence to appellants. We have no reason to doubt
Rachel’s credibility. Her candid account of the incident, standing alone, clearly established
the components of the crime of murder. Appellants’ defense of denial, not sufficiently
proven, cannot overcome the conclusions drawn from said evidence. We find no cogent
reason to deviate from the findings and conclusions of the trial court. Rachel’s testimony
Rachel wavered from the basic facts of her testimony, even when she was subjected to a
rigorous examination.
Rachel was only ten (10) years old when she witnessed the murder of the victim. She
testified in open court two (2) years later. Thus, she cannot be expected to give an error-
free narration of the events that happened two years earlier. The alleged inconsistencies
between her sworn statement and testimony referred to by appellants do not affect her
credibility. What is important is that in all her narrations she consistently and clearly
identified appellants as the perpetrators of the crime. Inconsistencies between the sworn
statement and the testimony in court do not militate against witness’ credibility since sworn
statements are generally considered inferior to the testimony in open court.6
We find no error in the lower courts’ disposal of the issue.
Well-entrenched in jurisprudence is that the trial court's evaluation of the testimony of a
witness is accorded the highest respect because of its direct opportunity to observe the
witnesses on the stand and to determine if they are telling the truth or not.7 This opportunity
enables the trial judge to detect better that thin line between fact and prevarication that will
determine the guilt or innocence of the accused. That line may not be discernible from a
mere reading of the impersonal record by the reviewing court. Thus, the trial judge's Q: Was it already dark?
evaluation of the competence and credibility of a witness will not be disturbed on review,
unless it is clear from the records that his judgment is erroneous.8 A: Not yet, your Honor.

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

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

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

PROS. LAGROSA: Q: Also inside the house?

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

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

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

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

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

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

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

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

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

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

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

Q: You said that Kuya Edwin put around a piece of cloth on your papa, in what part of your Q: And what was he doing, if he was doing anything at that time?
father’s body (sic) that cloth being put around by Kuya Edwin?
A: "Binareta na po ‘yong papa ko sa ulo."
A: He put it around all over the face and the head, ma’am.
COURT:
PROS. LAGROSA:
Q: What did he use noong" binareta"?
The witness was demonstrating by making a circling movement or motion of her hand all
over the head and the face.
A: It is a long iron bar used in digging soil?
PROS. LAGROSA:
Q: Now, what happened after Kuya Dodong " binareta" (sic) your father on the head?
A: "Nandoon pa po ako sa silong nila Kuya Unyo nakita ko nalang ponandoon na po ang
nanay ko pati po mga kapatid ko tsaka na poako lumabas."10
As the lower courts have done, we accord full faith and credence to Rachel’s testimony.
She was young and unschooled, but her narration of the incident was categorical, without
wavering. It has no markings of a concocted story, impressed upon her by other people.
The defense, accused-appellants herein, tried to further discredit Rachel’s testimony by
arguing that Rachel was a mere child who had studied only until the first grade of
elementary school and could barely read, and did not know how to tell time.
We cannot take Rachel’s testimony lightly simply because she was a mere child when she
witnessed the incident and when she gave her testimony in court. There is no showing that
her mental maturity rendered her incapable of testifying and of relating the incident
truthfully.
With exceptions provided in the Rules of Court,11 all persons who can perceive, and
perceiving, can make known their perception to others, may be witnesses. That is even
buttressed by the Rule on Examination of a Child Witness which specifies that every child
is presumed qualified to be a witness. To rebut this presumption, the burden of proof lies
on the party challenging the child's competence. Only when substantial doubt exists
regarding the ability of the child to perceive, remember, communicate, distinguish truth
from falsehood, or appreciate the duty to tell the truth in court will the court, motu proprio
or on motion of a party, conduct a competency examination of a child.12 Thus, petitioners’
flimsy objections on Rachel’s lack of education and inability to read and tell time carry no
weight and cannot overcome the clear and convincing testimony of Rachel as to who killed
her father.
We likewise note that the line of questioning of the defense during cross-examination on
the competency of Rachel to read and tell time did not distract her in recollecting how her
father was attacked by accused-appellants. From her position underneath the house of her
"Kuya Unyo," she saw her father, Wilfredo, attacked by accused-appellants. Although she
was astonished as the happening unfolded, her ability to perceive, remember, and make
known her perception was not diminished.
As regards Aniceta’s version of the events that Jesus was the sole perpetrator of the crime
who attacked Wilfredo only in self-defense, we easily see the fatal flaw: Aniceta arrived
after the supposed fight between Wilfredo and Jesus, and what transpired was merely
relayed to her by Jesus’ sister, Marilou.
Quite apparent from Aniceta’s narration of events is that she has no personal knowledge
of Wilfredo’s killing. Aniceta’s testimony is mainly hearsay, specially on the purported fight
between Wilfredo and Jesus that ended in Wilfredo’s death. Aniceta’s testimony as such
carries no probative weight. At best, Aniceta’s testimony is an independent relevant
statement: offered only as to the fact of its declaration and the substance of what had been
relayed to Aniceta by Marilou, not as to the truth thereof.13
Section 36 of Rule 130 of the Rules of Court explicitly provides:
SEC. 36. Testimony generally confined to personal knowledge; hearsay excluded. – A
witness can testify only to those facts which he knows of his personal knowledge; that is,
which are derived from his own perception, except as otherwise provided in these rules.
We detect a clever, albeit transparent ploy, to pin Jesus who had already fled and is
temporarily out of reach of the law. Thus, with Jesus temporarily shielded from punishment,
accused-appellants freely accuse and point to him as the sole perpetrator of the crime.
This cannot trump the solid testimony of Rachel on accused-appellants’ direct participation
in killing Wilfredo.
We likewise affirm the lower courts’ appreciation of the aggravating circumstance of
treachery:
The essence of treachery is the sudden and unexpected attack by an aggressor without
the slightest provocation on the part of the victim, depriving the latter of any real chance to
defend himself, thereby ensuring its commission without risk to the aggressor. Treachery
attended the killing of the victim because he was unarmed and the attack on him was swift
and sudden. He had not means and there was no time for him to defend himself. Indeed,
nothing can be more sudden and unexpected than when petitioners Edwin and Alfredo
attacked the victim. The latter did not have the slightest idea that he was going to be
attacked because he was urinating and his back was turned from his assailants. The
prosecution was able to establish that petitioners’ attack on the victim was without any
slightest provocation on the latter’s part and that it was sudden and unexpected. This is a
clear case of treachery.14
Finally, we affirm the lower court’s award of damages consistent with jurisprudence:15 (1)
₱50,000.00 as civil indemnity; (2) ₱25,000.00 as temperate damages; and (3) ₱50,000.00
as moral damages. Consistent with current jurisprudence, we increase the award of
exemplary damages from ₱25,000.00 to ₱30,000.00.16 However, we delete the award of
₱1,946,180.00 representing the unearned income of Wilfredo.
To obviate confusion on the award of loss of earning capacity, we reiterate herein that
compensation for lost income is in the nature of damages and as such requires due proof
of the damages suffered; there must be unbiased proof of the deceased’s average
income.17 In this case, we only had he testimony of Wilfredo’s spouse, Rowena, who
claimed that Wilfredo earned ₱400.00 to ₱500.00 daily as a doormat vendor.
On more than one occasion, we have held that the bare testimony of a deceased’s mother
or spouse as to the income or earning capacity of the deceased must be supported by
competent evidence like income tax returns or receipts.18
In People v. Caraig,19 we have drawn two exceptions to the rule that "documentary
evidence should be presented to substantiate the claim for damages for loss of earning
capacity," and have thus awarded damages where there is testimony that the victim was
either (1) self-employed earning less than the minimum wage under current labor laws,
and judicial notice may be taken of the fact that in the victim's line of work no documentary
evidence is available; or (2) employed as a daily-wage worker earning less than the
minimum wage under current labor laws."
Although Wilfredo’s occupation as a doormat vendor may fall under the first exception, the
minimum wage for Region III, which includes the province of Bulacan, is below ₱400.00
as per the National Wages and Productivity Commission Regional Daily Minimum Wage
Rates as of August 2013.20 Regrettably, except for the bare assertion of Rowena,
Wilfredo's spouse, we have nothing to anchor the award for loss of earning capacity. Thus,
we delete the award for loss of earning capacity in the amount of ₱1,946,180.00.
WHEREFORE, the appeal is DISMISSED. The Decisions of the Court of Appeals in CA-
G.R. H.C. No. 04051 and the Regional Trial Court, Branch 18, Malolos, Bulacan in Criminal
Case No. 3517-M-2004 are AFFIRMED with MODIFICATION. The award of exemplary
damages is increased from ₱25,000.00 to ₱30,000.00 and we delete the award for loss of
earning capacity in the amount of ₱1,946, 180.00.
SO ORDERED.
G.R. No. 169873 June 8, 2007
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
NORBERTO ASTROLOGO y DE DIOS, Accused-Appellant.
DECISION
CHICO-NAZARIO, J.:
For review is the Decision1 dated 29 April 2005 of the Court of Appeals in CA-G.R. CR No.
0013, which affirmed the Decision2 dated 10 March 2003 of the Regional Trial Court (RTC)
of Quezon City, Branch 102, in Criminal Case No. Q-00-89343 finding herein appellant
Norberto Astrologo y De Dios guilty beyond reasonable doubt of the crime of rape as
defined and penalized under Article 266 of the Revised Penal Code committed against his
own daughter and sentencing him to suffer the penalty of reclusion perpetua, with the
modification which reduced the amount of civil indemnity to ₱50,000.00; moral damages
to ₱50,000.00; and ordering the appellant to pay the victim exemplary damages in the
amount of ₱25,000.00.
An Information3 dated 3 January 2000 was filed against appellant Astrologo charging him
with the crime of rape committed against his own daughter, AAA.4 The Information reads
as follows:
The undersigned upon prior sworn complaint filed by AAA, assisted by Aida
Zipagan5 accuses [NORBERTO] ASTROLOGO Y DE DIOS of the crime of Rape,
committed as follows:
That on or about the 28th day of December, 1999, in xxx City, Philippines, the said
accused, by means of force and intimidation, did then and there wilfully (sic), unlawfully
and feloniously and at knife point have sexual intercourse with said AAA, his own daughter
inside their residence located at Phase xxx, Purok xxx, xxx, Bgy. xxx,6 this City, against
her will and without her consent.7
On 1 March 1999, the appellant was arraigned, in which he entered a plea of NOT GUILTY
to the crime charged against him. Thereafter, trial ensued.
The prosecution presented the following witnesses: AAA, the victim, Aida Zepadan (Aida),
Mauricio Cabrera (Mauricio), and Dr. Francisco Supe, Jr. (Dr. Supe, Jr.).
AAA testified that she is the daughter of the appellant. She stated that before the incident,
she used to live with her grandmother in Montalban. But, on 23 December 1999, she was
fetched by the appellant at her grandmother’s house to live with him and his family. On 28
December 1999, at around 10:00 p.m., she went home after watching television from their
neighbor’s house. Shortly thereafter, she slept beside her two siblings, namely: BBB, nine
years old; and CCC, seven years old. At around 11:00 p.m., while she was sleeping inside
a room in their house located in Phase XXX, Purok XXX, XXX, Barangay XXX, XXX City,
she woke up when she felt someone kissing her lips. She opened her eyes and recognized
that it was her father, herein appellant. She struggled in refusal. She noticed then that her
polo shirt was already open. The appellant started mashing her breasts, and when she
resisted, he pointed a knife at her. Then, the appellant touched her vagina, lifted her skirt
and succeeded in inserting his penis into her vagina despite her continuing refusal, thereby
causing her so much pain. After satisfying his lust, the appellant fell asleep. AAA
immediately dressed up and proceeded to their neighbor’s (Aida) house. Aida brought AAA
to her stepmother, who was at another neighbor’s house that time. AAA narrated to her
stepmother how the appellant sexually abused her. Subsequently, Aida brought AAA to
the Barangay authorities, particularly to Mauricio who is a Barangay Security and
Development Officer (BSDO) of Barangay XXX, to report the incident.
Mauricio affirmed that between 11:00 p.m. and 12:00 midnight of 28 December 1999 or
almost 29 December 1999, while he was at a Christmas Party, AAA, together with a
neighbor, approached him to seek his assistance as she was raped by her father earlier
that night. Thereafter, he and the rest of the BSDO went to appellant’s house but the latter
had already left the premises. The group spread out to search for the appellant and when
they saw him, they chased him for some distance until he was overran and caught by
SPO3 David Laciste. They brought the appellant to the police station at around 1:00 a.m.
on 29 December 1999. Also on 29 December 1999, AAA, assisted by some barangay
officials, reported the incident to the police authorities where she executed an Affidavit8 on
what had happened. AAA was also subjected to a physical examination at Camp Crame
conducted by Dr. Supe, Jr. on the basis of the complaint filed by her against her own father.
During Dr. Supe, Jr.’s testimony in court, he declared that AAA suffered a deep fresh
hymenal laceration at six and seven o’clock positions. Such declaration affirmed his
findings as stated in Medico-Legal Report No. M-3479-A-999that AAA suffered a
"compatible loss of virginity," which loss could have occurred within 24 hours before the
examination.
On the other hand, the defense merely presented the lone testimony of the appellant. The
appellant denied having committed the crime of rape against his own daughter, AAA. This
Court will quote the defense’s own version of the facts of the case according to the
testimony of the appellant as summarized by the RTC and the appellate court. Thus-
On [23 December 1999], [herein appellant’s] mother instructed him to fetch [AAA] because
his daughter was frequently meeting her boyfriend late in the evening at the back of her
grandmother’s house and that this would happen about twice or thrice in one evening. [The
appellant] then fetched his daughter and brought her to his house in [Barangay] XXX, XXX
City.
On [26 December 1999], herein [appellant] celebrated his birthday. The next day, a friend
came to his house to continue the birthday celebration. The [appellant] and his friends
started the party at about 10:30 [a.m.], about four (4) blocks from his house. At around
10:30 [p.m.], the [appellant] went home from the party. On his way home, he passed by
his daughter who was still out in the street. He ordered her to go home as it was getting
late. At around 12:30 o’ clock past midnight, or early morning of [28 December 1999], he
went out of his house for some fresh air. Shortly thereafter, he was arrested [for allegedly
raping his daughter (AAA) and brought to Police Station 6 where he was detained.10
After trial, the RTC rendered a Decision on 10 March 2003, finding the appellant guilty
beyond reasonable doubt of the crime of simple rape.11 The RTC did not give credence to
the defense offered by the appellant which consisted merely of his bare denial. The
decretal portion of the aforesaid Decision reads, thus:
WHEREFORE, in view of the foregoing, the Court finds the [appellant] Norberto Astrologo
y De Dios GUILTY beyond reasonable doubt of the crime of Rape, as defined and
penalized under Article 266 of the Revised Penal Code, and is hereby sentenced to suffer
the penalty of imprisonment of reclusion perpetua.
The [appellant] is likewise ordered to pay [AAA] the following amounts:
(1) ₱75,000.00 as civil indemnity; and
(2) ₱75,000.00 as moral damages.12
The records of this case were originally transmitted to this Court on appeal.
In his brief, the appellant’s lone assignment of error was, the trial court gravely erred in
convicting the appellant for the crime of rape.13
Pursuant to People v. Mateo, the records of the present case were transferred to the
14
Court of Appeals for appropriate action and disposition.
Accordingly, the Court of Appeals, taking into consideration the assignment of error stated
by the appellant in his Appellant’s Brief and after a thorough study of the records of the
case, rendered a Decision on 29 April 2005 affirming the conviction of the appellant with
the modification which reduced the amount of civil indemnity and moral damages awarded
and ordering the payment of exemplary damages to the victim, AAA. The dispositive
portion of the said Decision reads as follows:
IN LIGHT OF ALL THE FOREGOING, the Decision of the Regional Trial Court of Quezon
City, Branch 102 in Criminal Case No. Q-00-89343 is hereby AFFIRMED WITH
MODIFICATIONS, to wit:
1. Reducing the civil indemnity from ₱75,000.00 to ₱50,000.00;
2. Reducing the award of moral damages from ₱75,000.00 to ₱50,000.00; and
3. Appellant Norberto Astrologo y De Dios is ordered to pay [the victim, AAA] ₱25,000.00
as exemplary damages.
Let the records of this case be forwarded to the Supreme Court for automatic review.15
Aggrieved by the aforesaid Decision of the appellate court, the appellant filed a Notice of
Appeal.16 In view of the said Notice of Appeal, the Court of Appeals forwarded to this Court
the records of this case.
On 4 September 2006, this Court resolved to accept the present case and to require the
parties to simultaneously submit their respective supplemental briefs. The Office of the
Solicitor General filed a Manifestation in lieu of Supplemental Brief wherein it re-pleads
and re-submits all the arguments in the Appellee’s Brief dated 20 May 2004. The appellant
also filed a Manifestation in lieu of Supplemental Brief which merely adopts the defenses
and arguments raised in the Appellant’s Brief.
After a careful review of the records of this case, this Court affirms appellant’s conviction.
A rape charge is a serious matter with pernicious consequences both for the appellant and
the complainant; hence, utmost care must be taken in the review of a decision involving
conviction of rape.17 Thus, in reviewing rape cases, the Court is guided by these principles:
First, the prosecution has to show the guilt of the accused by proof beyond reasonable
doubt or that degree of proof that, to an unprejudiced mind, produces conviction. Second,
unless there are special reasons, the findings of trial courts, especially regarding the
credibility of witnesses, are entitled to great respect and will not be disturbed on appeal.
Third, the disposition of rape cases is governed by the following guidelines: (1) an
accusation of rape can be made with facility; it is difficult to prove but more difficult for the
person accused, though innocent, to disprove; (2) in view of the intrinsic nature of the crime
of rape where only two persons are usually involved, the testimony of the complainant must
be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand
or fall on its own merits and cannot draw strength from the weakness of the evidence of
the defense.18
In the present case, appellant contends that the court a quo erred in disregarding the
appellant’s defense of denial. According to appellant, he could not have raped the victim
as he was arrested during the early hours of 28 December 1999, while the rape incident
allegedly committed by him happened in the evening of the same day at around 10:00 p.m.
Therefore, he was arrested even before the commission of the crime. This Court finds this
contention indefensible.
This Court has consistently held that when the victim says that she has been raped, she
says in effect all that is necessary to show that rape has been committed, and if her
testimony meets the test of credibility, the accused may be convicted on the basis thereof.
This is all the more true where the complainant is the daughter of the accused19because a
daughter would not concoct a story of defloration against her father, accused him of so
grave a crime as rape, allow an examination of her private parts, submit herself to public
humiliation and scrutiny via an open trial, if she were not truly aggrieved or her sordid tale
was not true and her sole motivation was not to have the culprit apprehended and
punished.20 It is likewise against human nature for a girl to fabricate a story that would
expose herself as well as her family to a lifetime of dishonor, especially when her charge
could mean the death or a lifetime in prison of her own father.21
In this case, when AAA testified before the trial court, she described in detail the horrible
experience she suffered at the hands of her own father on that fateful night of 28 December
1999. Her testimony can be characterized as categorical and unqualified. She gave a vivid
and clear account on how the appellant raped her. She also made a positive identification
of the person who raped her and she declared in an unequivocal manner that it was her
father, herein appellant, who raped her. It is worthy to note that after she was raped, she
took effort to report that incident to their neighbor, but since she could not utter a word, her
neighbor brought her to her stepmother to whom she narrated how the appellant raped her
and subsequently, sought the help of the barangay officials to report what had happened
as affirmed by Mauricio, one of the prosecution’s witnesses. Mauricio averred that indeed,
between 11:00 p.m. and 12:00 midnight of 28 December 1999, or almost 29 December
1999, AAA, together with a neighbor, approached him asking for assistance as she was
raped by her father. He then informed the Barangay Chairman of XXX, Barangay XXX,
and the latter ordered the barangay tanods to apprehend the appellant. Mauricio testified
that it was already 1:00 a.m. of 29 December 1999 and not 28 December 1999, as alleged
by the appellant, when the latter was arrested and brought to Police Station 6.
The testimony of AAA as to the fact of rape was corroborated by the medical findings
conducted on 29 December 1999 by Dr. Supe, Jr. of the Philippine National Police (PNP)
Crime Laboratory at Camp Crame. In his testimony, he declared to have found a deep
fresh hymenal laceration at six and seven o’clock positions, which means AAA suffered a
"compatible loss of virginity." He avowed that such loss of virginity could have occurred
within 24 hours before the examination, which coincides with the date the rape incident
happened, which was 28 December 1999. It has been said that when the testimony of a
rape victim is consistent with the medical findings, sufficient basis exists to warrant a
conclusion that the essential requisite of carnal knowledge has thereby been
established.22 Thus, such testimony of Dr. Supe, Jr. strengthens the charge of rape against
appellant.
As compared to the aforesaid evidence of the prosecution, the defense of bare denial
offered by the appellant cannot hold water.
The defense of denial is an intrinsically weak defense, which must be buttressed by strong
evidence of non-culpability to merit credibility.23 It is merely a negative and self-serving
allegation that cannot be given any weight on the scale of justice.24 And although denial is
a legitimate defense in rape cases, mere bare assertions to this effect cannot overcome
the positive, straightforward, unequivocal and categorical testimony of the victim. It is an
established rule that an affirmative testimony is far stronger than a negative testimony,
especially so when it comes from a credible witness.25 Likewise, it is hornbook doctrine
that such positive and categorical testimony of a rape victim-daughter, identifying her own
father as the one who sexually attacked her, prevails over his bare denial because no
daughter will charge a father, especially a good father, with rape. The charge is not only
embarrassing to the victim and the family. It means death to the head of the family. A father
so charged cannot exculpate himself by a bare-bone denial.26
In the case at bar, the appellant repeatedly denied having committed the crime of rape as
charged against him because he was arrested even before its commission. Such defense
of denial offered by the appellant must be rejected. It is a well-settled doctrine that denial
being a weak defense must be substantiated by a clear and convincing evidence to merit
credibility.27 In this case, the defense merely relied on the lone testimony of the appellant.
The appellant did not bother to present other evidence to prove his contention that on the
early hours of 28 December 1999, he was already arrested and brought to Police Station
6 where he was detained thereby making it impossible for him to have committed the
offense charged. The appellant could have presented the records or the logbook of the
Police Station where he was detained to establish the truthfulness of his assertion that he
was already confined in prison when the alleged rape incident happened. In stark contrast,
Mauricio, the BSDO of the Barangay, categorically stated that it was 1:00 a.m. of 29
December 1999 when appellant was arrested.
Q: Where were you on [28 December 1999] at around 11:00 p.m., Mr. Witness?
A: I was attending a Christmas party, sir.
Q: Where was it held, Mr. Witness? failed to move for the quashing of the Information against him before the arraignment,
appellant is estopped from questioning the legality of his arrest.29
A: At the compound of our Barangay Captain.
Finally, this Court agrees in the amount of civil indemnity, moral damages and exemplary
Q: Where is that compound? damages which the appellate court awarded to the victim. Civil indemnity, which is actually
in the nature of actual or compensatory damages, is mandatory upon the finding of the fact
A: XXX. of rape.30 The case law also requires automatic award of moral damages to a rape victim
without need of proof because from the nature of the crime, it can be assumed that she
has suffered moral injuries entitling her to such award. Such award is separate and distinct
xxxx
from civil indemnity.31The reduction of civil indemnity to ₱50,000.00 and moral damages to
₱50,000.00 is proper because the crime committed by the appellant is only simple rape.
Q: What time when you arrived at the residence of the [appellant] in this case? The award of ₱25,000.00 as exemplary damages to AAA is likewise proper in order to
deter other fathers with perverse tendencies or aberrant sexual behaviors from sexually
A: It was nighttime but we could not determine the time when arrested the [appellant] (sic) abusing their own daughters.32
because when [the complainant] arrived to complain our Christmas party (sic) was already
between 11:00 and 12:00. WHEREFORE, premises considered, the Decision of the Court of Appeals in CA-G.R. CR
No. 0013 dated 29 April 2005 finding appellant Norberto Astrologo y De Dios guilty beyond
Q: What time was the [appellant] apprehended? reasonable doubt of the crime of rape, as defined and penalized under Article 266 of the
Revised Penal Code, committed against his own daughter, AAA, and sentencing him to
A: When we brought him to the police station, more or less it was 1:00 o’clock in the suffer the penalty of reclusion perpetua, is hereby AFFIRMED. Costs against appellant.
morning.28
SO ORDERED.
Therefore, the appellant’s bare denial, which was unsubstantiated by convincing evidence,
was not sufficient to create a reasonable doubt as to his commission of the crime. G.R. No. 193188 August 10, 2011

The contention of the appellant that the trial court failed to consider that his arrest was PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
legally objectionable because the barangay tanods and the arresting officer who arrested vs.
him had no personal knowledge of the facts indicating that he had committed the crime is JUANITO APATTAD,Accused-Appellant.
grossly weak. We quote here the findings of the appellate court, viz:
DECISION
Appellant cannot possibly claim that the arresting officers did not have personal knowledge
of the facts indicating that he committed the alleged rape. The victim herself reported to VELASCO, JR., J.:
the barangay authorities that it was appellant who raped her. The arresting officers
therefore, had probable cause to believe that appellant raped the victim.
The Case
Nevertheless, it is a well-entrenched rule that any objection, defect or irregularity attending
This is an appeal from the August 28, 2009 Decision1 of the Court of Appeals (CA) in CA-
an arrest must be made before the accused enters his plea on arraignment. And, having
G.R. CR-H.C. No. 03173, which affirmed, with modification, an earlier Decision2 in Criminal
Case Nos. 10172-10175 of the Regional Trial Court (RTC), Branch 4 in Tuguegarao City,
Cagayan. The RTC found accused Juanito Apattad guilty beyond reasonable doubt of
three (3) counts of rape.
The Facts
Accused was charged in four (4) separate informations, the accusatory portions of which
read:
CRIMINAL CASE NO. 10172
That sometime in the year 2001, in the evening[,] in the Municipality of Peñablanca,
Province of Cagayan, and within the jurisdiction of this Honorable Court, the said accused,
JUANITO APATTAD[,] father of the offended party, [AAA],3 a minor below 12 years of age,
thus have moral ascendancy over the complainant, with lewd design and by the use of
force, did, then and there, willfully, unlawfully and feloniously have sexual intercourse with
his own daughter, the herein offended party, [AAA], a minor woman below 12 years of age
against her will.
CONTRARY TO LAW.4 (Emphasis in the original.)
CRIMINAL CASE NO. 10173
That sometime in the year 2002, in the evening[,] in the Municipality of Peñablanca,
Province of Cagayan, and within the jurisdiction of this Honorable Court, the said accused,
JUANITO APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age,
thus have moral ascendancy over the complainant, with lewd design and by the use of
force, did, then and there, willfully, unlawfully and feloniously have sexual intercourse with
his own daughter, the herein offended party, [AAA], a minor woman below 12 years of age
against her will.
CONTRARY TO LAW.5 (Emphasis in the original.)
CRIMINAL CASE NO. 10174
That on or about June 10, 2003, in the Municipality of Peñablanca, Province of Cagayan,
and within the jurisdiction of this Honorable Court, the said accused, JUANITO
APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age, thus have
moral ascendancy over the complainant, with lewd design and by the use of force, did,
then and there, willfully, unlawfully and feloniously have sexual intercourse with his own
daughter, the herein offended party, [AAA], a minor woman below 12 years of age against
her will.
CONTRARY TO LAW.6 (Emphasis in the original.)
CRIMINAL CASE NO. 10175
That on or about June 11, 2003, in the Municipality of Peñablanca, Province of Cagayan,
and within the jurisdiction of this Honorable Court, the said accused, JUANITO
APATTAD[,] father of the offended party, [AAA], a minor below 12 years of age, thus have
moral ascendancy over the complainant, with lewd design and by the use of force, did,
then and there, willfully, unlawfully and feloniously have sexual intercourse with his own
daughter, the herein offended party, [AAA], a minor woman below 12 years of age against
her will
CONTRARY TO LAW.7 (Emphasis in the original.)
On June 1, 2004, the accused, with the assistance of his counsel, pleaded not guilty to all
the charges against him.8Subsequently, on June 8, 2004, pre-trial conference was held
and was terminated on the same day, with the parties stipulating on the following:
(a) The identities of the accused and AAA;
(b) AAA is the daughter of the accused;
(c) AAA was a minor, being born on October 14, 1994, and was only ten (10) years
old during the commission of the crime;
(d) The existence of the Certificate of Live Birth of AAA; and
(e) The existence of the Medico Legal Report of AAA issued by Dr. Mila Lingan-
Simangan, Health Officer of Peñablanca, Cagayan.9
Thereafter, trial on the merits ensued. During trial, the prosecution offered the oral
testimonies of AAA and Dr. Mila Lingan-Simangan. On the other hand, the defense
presented as its witnesses the accused himself and Louie Calimag.10
Version of the Prosecution
AAA testified that sometime in 2001, while she was sleeping with her sisters, the accused
pulled and positioned her just below the feet of her siblings, and right then and there,
succeeded in molesting her.11 AAA was just seven (7) years old then.12
On June 10, 2003, the accused sexually abused AAA again. While she was sleeping
beside her younger sister in their room, accused carried her from the bed through the
window and placed her on the floor.13 Afterwards, accused removed his own shirt and used
it to cover the mouth of AAA.14 Accused then removed his underwear and AAA’s
underwear, and inserted his penis inside AAA’s vagina, while telling her not to report the
incident to her mother.15When the accused was finished in satisfying his lust, he put AAA’s
clothes back on, carried her back to bed, and untied the shirt covering AAA’s mouth.16
The same incident happened on June 11, 2003, when accused carried AAA once again
through the window, placed her on the floor, covered her mouth, undressed her, and
inserted his penis into her vagina.17 The accused also threatened to kill her if she reports
the incident to her mother.18
When AAA finally told her mother on June 13, 2003 that she was being abused by her own
father, her mother whipped her for not telling her about it immediately.19 Thereafter, they
went to the Department of Social Welfare and Development (DSWD) office in Peñablanca,
Cagayan, where AAA was interviewed by a certain Ms. Abrena, a DSWD
personnel.20 Afterwards, they proceeded to the police station where AAA executed a sworn
statement narrating what happened. Dr. Mila Lingan-Simangan (Dr. Simangan) also
subsequently conducted a physical examination on AAA.21
On cross-examination, AAA explained that the reason why it was only on June 13, 2003
that she reported the incidents to her mother was because she was afraid that her father
would kill them.22 AAA also confirmed that her parents often quarrel and shout at each
other.23 She even admitted that she had seen her father slap her mother and that because
of this, she sympathized and took pity on her.24 When asked whether she would do
anything that her mother would tell her to do, AAA answered in the affirmative.25 However,
on re-direct examination, AAA clarified that her mother did not teach her to claim that she
was raped and that she was only telling the truth.26
Dr. Simangan, the prosecution’s other witness, testified that on June 16, 2003, she
conducted a physical examination on AAA and discovered that the latter had a healed
hymen laceration at 4 and 7 o’clock positions, and that her vagina admitted the tip of the
fifth finger easily.27 She stated that the laceration could have been caused by a blunt
object.28 She also testified that after conducting the physical examination, she interviewed
AAA and the latter gave her the name of the person who raped her.29 However, Dr.
Simangan admitted that she can no longer remember the name that was mentioned by
AAA.30 Dr. Simangan also identified the Medico-Legal Report that she prepared.31
Version of the Defense
The accused denied the accusation of rape hurled against him and claimed that his wife
was the one who initiated the criminal complaint against him because she thinks that he
has a mistress.32
The other defense witness, Louie Calimag (Calimag), testified that from June 3, 2003 until
July 8, 2003, he employed the services of the accused to help him in the operation of the
chainsaw.33 As part of their routine, he and the accused would saw logs in the forest from
7:00 a.m. to 5:00 p.m., go back to his house, and sleep there at night.34 Calimag further
testified that when the accused was arrested by the police in the forest on July 8, 2003, he
was also with him.35 Thus, when he found out that the accused was arrested for rape
allegedly committed on June 10 and 11, 2003, Calimag claimed that he did not believe this
because the accused stayed in his house on those days.36
Calimag likewise added that after the accused was arrested, he saw AAA, who admitted
to him that she was not raped by the accused and that it was her mother who instructed
her to give false information. AAA allegedly told him that her parents had a fight due to her
father’s illicit relationship with another woman.37
On cross-examination, Calimag admitted that the house of the accused was only three (3)
kilometers away from his house and that the accused’s house may be reached by jeepney
in an hour and by foot in four (4) hours.38
Ruling of the Trial Court
Between the two versions of the incident, the trial court gave credence to the version of
the prosecution and rendered its Decision dated October 24, 2007, finding the accused
guilty of three (3) counts of rape. The decretal portion reads:
ACCORDINGLY, this Court finds accused JUANITO APATTAD GUILTY beyond
reasonable doubt of the crime of rape for three (3) counts in Criminal Cases Nos. 10172,
10174 and 10175 and hereby imposes upon him the penalty of RECLUSION PERPETUA
for each case. He is further ordered to pay [AAA] the amount of One Hundred Fifty
Thousand (P150,000.00) Pesos as civil indemnity.
Accused is acquitted in Criminal Case No. 10173 for lack of sufficient evidence.
No pronouncement as to costs.39
On December 19, 2007, accused-appellant filed his Notice of Appeal40 of the Decision
dated October 24, 2007 rendered by the trial court. On April 15, 2008, the CA, where the
case was docketed as CA-G.R. C.R.-H.C. No. 03173, issued a notice to file brief to the
parties.41
On September 5, 2008, accused-appellant filed his Brief for the Accused-Appellant,42 while
the People of the Philippines, through the Office of the Solicitor General, filed its Brief for
the Plaintiff-Appellee43 on March 27, 2009.
Ruling of the Appellate Court
As stated above, the CA, in its Decision44 dated August 28, 2009, affirmed with modification
the judgment of conviction by the trial court, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the instant appeal is DISMISSED. The assailed
Decision of Branch 4 of the Regional Trial Court of Tuguegarao City in Criminal Case Nos.
10172, 10174 and 10175 is hereby AFFIRMED with the MODIFICATION that the civil
indemnity awarded should be P75,000.00 for each count of rape. In addition, moral
damages and exemplary damages in the amounts of P75,000.00 and Php25,000.00
respectively, for each count of rape are hereby awarded.
SO ORDERED.45
On September 22, 2009, accused-appellant filed his Notice of Appeal46 from the CA
Decision dated August 28, 2009.
In Our Resolution dated October 4, 2010, We notified the parties that they may file their
respective supplemental briefs. Both parties manifested that they are no longer filing
supplemental briefs and they are adopting their respective main briefs before the CA.
The Issues
Accused-appellant contends in his Brief47 that:
THE COURT A QUO GRAVELY ERRED IN FINDING ACCUSED-APPELLANT GUILTY
DESPITE THE PROSECUTION’S FAILURE TO PROVE HIS GUILT BEYOND
REASONABLE DOUBT.
The Court’s Ruling
We sustain accused-appellant’s conviction.
Denial and alibi are inherently weak defenses
In his Brief, accused-appellant contends that while, generally, the defense of alibi is
frowned upon by the court, it assumes significance when it is corroborated by credible and
disinterested witnesses.48 Accused-appellant claims that Calimag’s testimony was
categorical, concise and persistent in affirming that he was innocent of the crimes
charged.49 Accused-appellant also maintains that although he was not able to adduce any
evidence to corroborate his stand that it was his wife, motivated by revenge and anger,
who ultimately caused the filing of the criminal charges against him, this should not be
entirely taken against him.50
In People v. Estoya,51 this Court laid down the jurisprudential guidelines in assessing the
proffered defense of alibi. Particularly:
Jurisprudential rules and precepts guide this Court in assessing the proffered defense.
One, alibis and denials are generally disfavored by the courts for being weak. Two, they
cannot prevail over the positive identification of the accused as the perpetrators of the
crime. Three, for alibi to prosper, the accused must prove not only that they were
somewhere else when the crime was committed, but also that it was physically impossible Q: Why do you have light in the room?
for them to be at the scene of the crime at the time of its commission. Fourth, alibi assumes
significance or strength only when it is amply corroborated by credible and disinterested A: Yes, ma’am.
witnesses. Fifth, alibi is an issue of fact that hinges on the credibility of witnesses, and the
assessment made by the trial court — unless patently and clearly inconsistent — must be Q: What is that light?
accepted.52 (Emphasis supplied.)
A: Electric light, ma’am.
Measured against the foregoing yardstick, accused-appellant’s defenses of alibi and denial
cannot prosper. As mentioned above, alibis and denials are inherently weak defenses.
Q: After carrying you and brought [sic] you to the floor, what did he do to you?
This is understandably so because said defenses can be easily fabricated by an accused
in order to escape criminal liability.53
A: He removed his t-shirt and tied my mouth.
Likewise, it was stated in Estoya that alibi and denial cannot prevail over the positive
identification of the accused as the perpetrator of the crime. Notably, these defenses Q: You mean to say he used his t-shirt in tying your mouth?
crumble in light of positive identification by truthful witnesses.54 An alibi is evidence
negative in nature and self-serving, and, thus, cannot attain more credibility than the A: He tied his t-shirt covering my mouth.
testimonies of prosecution witnesses who testify on clear and positive evidence.55 In the
present case, AAA positively identified accused-appellant in her testimony as the very Q: After removing his t-shirt and tying your mouth, what did he do next?
perpetrator of the crime of rape committed against her, to wit:
A: He removed my t-shirt and short[s], ma’am.
Q: While you were sleeping, do you remember any untoward incident that
happened to you? Q: When he undressed you, what happened next?

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

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

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

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

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

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

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

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

Q: Did he also kiss you? Indeed, "it is a hornbook doctrine that the findings of fact of the trial court are entitled to
great weight on appeal and should not be disturbed except for strong and valid reasons,
A: He kissed my cheek, ma’am. because the trial court is in a better position to examine the demeanor of the witnesses
while testifying."61 In People v. Lusabio, Jr., this Court held:
Q: Did he kiss your lips?
All in all, we find the evidence of the prosecution to be more credible than that adduced by
A: No ma’am. accused-appellant. When it comes to credibility, the trial court's assessment deserves
great weight, and is even conclusive and binding, if not tainted with arbitrariness or
oversight of some fact or circumstance of weight and influence. The reason is obvious.
Q: How about your neck?
Having the full opportunity to observe directly the witnesses’ deportment and manner of
testifying, the trial court is in a better position than the appellate court to evaluate
testimonial evidence properly.62 (Emphasis supplied; citations omitted.)
Since accused-appellant failed to show any palpable error, arbitrariness, or capriciousness
on the findings of fact of the trial and appellate courts, these findings deserve great weight
and are deemed conclusive and binding.
The guilt of accused-appellant has been
established beyond reasonable doubt
After a careful examination of the records of this case, this Court is satisfied that the
prosecution’s evidence established the guilt of accused-appellant beyond reasonable
doubt.
In reviewing the evidence in rape cases, the following considerations should be made: (1)
an accusation for rape can be made with facility, it is difficult to prove but more difficult for
the person, though innocent, to disprove; (2) in view of the intrinsic nature of the crime of
rape where only two persons are usually involved, the testimony of the complainant must
be scrutinized with extreme caution; and (3) the evidence for the prosecution must stand
or fall on its own merits and cannot be allowed to draw strength from the weakness of the
evidence for the defense.63Nonetheless, it also bears stressing that rape is essentially
committed in relative isolation or secrecy; thus, it is most often only the victim who can
testify with regard to the fact of forced coitus.64
Under Article 266-A of the Revised Penal Code, as amended, the crime of rape is
committed by a man having carnal knowledge of a woman under any of the following
circumstances: (1) through force, threat or intimidation; (2) when the offended party is
deprived of reason or otherwise unconscious; (3) by means of fraudulent machination or
grave abuse of authority; and (4) when the offended party is under twelve (12) years of
age or is demented, even though none of the circumstances mentioned above be
present.65
In People v. Orillosa,66 this Court held that in incestuous rape of a minor, actual force or
intimidation need not be employed where the overpowering moral influence of the father
would suffice.67 Thus, in order for the accused to be found guilty of the crime of statutory
rape in this jurisdiction, only two (2) elements must concur: (1) that the offender had carnal
knowledge of the victim; and (2) that the victim is below twelve (12) years old.68
In the present case, it is undisputed that the victim, AAA, was below twelve (12) years old
when the crime was committed. A copy of AAA’s birth certificate to prove her age was duly
presented in evidence by the prosecution, indicating that she was indeed born on October
14, 1994.69 Concomitantly, AAA was only seven (7) years old when the crime of rape was
first committed against her in 2001, and was only nine (9) years old when the accused
once again succeeded in committing the same crime in 2003.70 Also, it is undisputed that
accused-appellant is the father of AAA, as stipulated by the parties during the pre-trial
conference and as also indicated in AAA’s birth certificate.71Thus, what only remains to be
proved is the fact of carnal knowledge by the accused of the victim.
Verily, the prosecution has sufficiently established the foregoing element, thus proving that
accused-appellant is guilty beyond reasonable doubt of three (3) counts of rape. 1avv phi1
When AAA was called to the witness stand, she gave a detailed narration of how she was
sexually molested by her father, which narration is difficult, if not improbable, for a 10-year-
old girl to concoct. As aptly observed by the CA, "[AAA] was able to describe in detail how
her father carried her through the window, laid her down the floor, tied her mouth, removed
her clothes and inserted his penis inside her vagina. She even described that she felt pain
while her father was performing the carnal act against her."72
Pertinently, "it is settled jurisprudence that the testimony of a child-victim is given full weight
and credence, considering that when a woman, specially a minor, says that she has been
raped, she says in effect all that is necessary to show that rape was committed. Youth and
immaturity are generally badges of truth and sincerity."73
Moreover, the fact that AAA’s testimony was able to withstand scrutiny during cross-
examination bolsters her credibility and makes her statements more credible.74
Further, it should be noted that the findings in the medical examination of Dr. Simangan
corroborate the testimony of AAA. In this regard, while a medical examination of the victim
is not indispensable in the prosecution of a rape case, and no law requires a medical
examination for its successful prosecution, the medical examination conducted and the
medical certificate issued are veritable corroborative evidence, which strongly bolster
AAA’s testimony.75
In addition, this Court is not convinced that a child of a tender age would concoct a story
as sordid as in the instant case due to her mother’s alleged ill motive. In People v. Padilla,
We held that accused-appellant’s imputation of ill motive on the victim’s mother for being
jealous of another woman is clearly unmeritorious, for no mother in her right mind would
possibly wish to stamp her child with the stigma that follows the crime of rape only because
she is consumed with hatred and revenge. Specifically:
Appellant, nonetheless, imputes ill-motive on Laiza and her mother Elisa in charging him
with rape contending that the latter was jealous when she found that he was courting a
woman in their place.
Again, appellant’s excuse is simply too frail to cause resentment and ill will on the part of
Laiza and her mother against him. Though one may be consumed with much hatred and
revenge, it takes nothing less than psychological depravity for a mother to concoct a story
too damaging to the welfare and well-being of her own daughter. Certainly, no mother in
her right mind would possibly wish to stamp her child with the stigma that follows a
despicable crime of rape. We are convinced that the victim and her mother boldly initiated
the present case to seek justice for the abominable act committed by appellant. (Emphasis
supplied; citations omitted.)
All told, We accordingly sustain accused-appellant’s conviction.
Award of Damages
The Decision of the CA as to the damages awarded must be modified.
In rape cases, when the victim is under 18 years of age and the offender is a parent,
ascendant, step-parent, guardian, relative by consanguinity or affinity within the third civil
degree, or the common-law-spouse of the parent of the victim, the imposable penalty is
death.76 However, with the enactment of Republic Act No. (RA) 9346 or An Act Prohibiting
the Imposition of Death Penalty in the Philippines, the imposition of death penalty is now
prohibited.77 In lieu of the penalty of death, the penalty of reclusion perpetua shall be
imposed when the law violated makes use of the nomenclature of the penalties of the
RPC.78
Consequently, courts can no longer impose the penalty of death. Instead, they have to
impose reclusion perpetua. Nonetheless, the principal consideration for the award of
damages is "the penalty provided by law or imposable for the offense because of its
heinousness, not the public penalty actually imposed on the offender."
Pertinently, as early as July 9, 1998, this Court has held that when the circumstances
surrounding the crime would justify the imposition of the penalty of death were it not for RA
9346, the award of civil indemnity for the crime of rape should be PhP 75,000,79 racionating
that "[t]his is not only a reaction to the apathetic societal perception of the penal law and
the financial fluctuations over time, but also an expression of the displeasure of the Court
over the incidence of heinous crimes against chastity."80 1av vphi1
Likewise, the award of moral damages in the amount of PhP 75,000 is warranted,81 without
need of pleading or proving them.82 In rape cases, it is recognized that the victim’s injury
is concomitant with and necessarily results from the odious crime of rape to warrant per se
the award of moral damages.83
Further, the Court also awards exemplary damages in the amount of PhP 30,000, despite
the lack of any aggravating circumstances,84 to deter others from committing similar acts
or for correction for the public good.85
WHEREFORE, the appeal is DENIED. The CA Decision dated August 28, 2009 in CA-
G.R. CR-H.C. No. 03173 finding accused-appellant Juanito Apattad guilty of rape
is AFFIRMED with MODIFICATIONS. As thus modified, accused-appellant is ordered to
pay AAA for each count of rape, PhP 75,000 as civil indemnity, PhP 75,000 as moral
damages, and PhP 30,000 as exemplary damages.
SO ORDERED.
G.R. No. 128384 June 29, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
REYNALDO SAHOR BAÑAGO, accused-appellant.
PUNO, J.:
Accused-appellant Reynaldo Sahor Bañago was charged before the Regional Trial Court
of Malolos, Bulacan with the crime of rape committed as follows:
 That on or about the 15th day of October, 1993, in the municipality of
Marilao, province of Bulacan, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, armed with a gun, did then
and there wilfully, unlawfully and feloniously, by means of force and
intimidation and with lewd designs, have carnal knowledge to (sic) said
Dolores C. Jaurigue, against her will and without her consent. 1
Accused-appellant pleaded "not guilty" to the charge. 2 Hence, trial proceeded in due
course.
The prosecution presented the testimony of the thirteen-year-old victim, Dolores Jaurigue.
She testified that on October 15, 1993, she visited her sister, Dorotea Jaurigue-Mejico,
who was staying with her husband at the bodega of Bauer Company in Marilao, Bulacan.
That evening, she was left alone in the bodega as her sister attended a party. She went to
bed at around seven o'clock. She was later roused from her sleep when she felt someone
embracing her. It turned out to be accused-appellant. Accused-appellant poked a gun at
her and started to remove her short pants and underwear. She tried to shout but accused-
appellant slapped her twice. Then, he took off his pants and underwear and succeeded in
having carnal knowledge of Dolores. He admonished her not to tell anybody about the
incident. Thereafter, accused-appellant put on his pants and left the room. 3
When Dorotea arrived from the party, she saw accused-appellant coming out of the bodega
zipping his pants. Dorotea asked Dolores what happened but she did not answer. 4
The following day, Dorotea again asked Dolores what happened the previous night.
Dolores told her sister that accused-appellant raped her. Afraid of what accused-appellant
might do to them, Dolores and Dorotea kept the incident to themselves. 5
It was only on March 18, 1994 that Dolores had the courage to tell her aunt, Lourdes
Corcuera, about the assault on her womanhood. Lourdes tried to talk to accused-appellant
but nothing happened. 6
During an altercation with Dolores' mother, Antonina Jaurigue, Lourdes divulged that
Dolores was no longer a virgin. Shocked about the revelation, Antonina sought for an
explanation. Dolores was compelled to tell her mother about the rape incident. 7
Antonina brought Dolores to the Philippine National Police Crime Laboratory for physical
examination on March 29, 1994. The medico-legal report executed by Dr. Jesusa N.
Vergara of the Philippine National Police Crime Laboratory revealed that Dolores was "in
non-virgin state physically" and that "there (were) no signs of recent application of any form
of violence." 8
On July 14, 1994, Dolores, assisted by her mother, filed a criminal complaint for rape
against accused-appellant.
For their part, the defense presented the testimonies of accused-appellant and Delfin
Castillo.
Accused-appellant testified that he was a welder at Bauer Company. In the afternoon of
October 15, 1993, he, together with Delfin Castillo and Rolando Pambico, went to the office
of their employer, Mr. Mariano Takbas, in Quezon City to get their salary. They left the
office at about six o'clock in the evening and then they went home to Marilao, Bulacan.
They reached Marilao at about eight o'clock in the evening. Accused-appellant proceeded
to his residence in Constantino Street, Poblacion, Marilao, Bulacan. Accused-appellant
denied having raped Dolores Jaurigue on the evening of October 15, 1993. 9
Defense witness Delfin Castillo corroborated accused-appellant's testimony. Castillo
testified that he was with accused-appellant in the afternoon of October 15, 1993 when
they went to Quezon City to get their salary. From Quezon City, they proceeded to Marilao,
Bulacan. He spent the night at the bodega of Bauer Company but he did not see private
complainant there. He also stated that accused-appellant did not go to the bodega that
evening. 10
The trial court found accused-appellant guilty beyond reasonable doubt of the crime
charged. It sentenced him to reclusion perpetua and ordered him to indemnify the victim
the sum of P50,000.00 as moral damages. 11
Accused-appellant appealed the decision of the trial court. He raised the following errors:
1. The court a quo erred in finding accused-appellant guilty
beyond reasonable doubt of the crime of rape; and
 2. The court a quo erred in ordering accused-appellant to
indemnify (the) victim in the amount of P50,000.00 as moral
damages. 12
Accused-appellant assailed the credibility of private complainant who alone testified for the
prosecution. In his brief, accused-appellant harped on the alleged flaws in the testimony
of private complainant. He contended that it was unlikely for Dorotea Jaurigue-Mejico and
her husband to use the bodega as their living quarters since the bodega had no division
and was open to anyone who wished to enter; that although private complainant testified
that her sister saw accused-appellant coming out of the bodega, the prosecution did not
present her sister to testify on such fact; and that private complainant admitted that she
never saw accused-appellant again after the rape although she earlier testified that she
told her aunt about the incident only on March 18, 1994 because she was afraid of what
accused-appellant might do to her. Accused-appellant also cited the nine-month delay in
the filing of the criminal complaint.
Accused-appellant's contentions deserve scant consideration as they pertain merely to
minor details and do not negate private complainant's positive testimony that accused-
appellant violated her on the evening of October 15, 1993. Even the delay in the filing of
the complaint does not favor accused-appellant's cause. The records show that private
complainant did not report the incident to the authorities because accused-appellant
threatened to harm her if she tells anybody about it. It is understandable for any woman,
especially a young girl, to hide such a traumatic and horrible experience even from the
persons closest to her because of shame and fear.
The parameters for scrutinizing the credibility of witnesses have been set forth as follows:
First, the appellate court will not disturb the factual findings of the lower
court unless there is a showing that it had overlooked, misunderstood, or
misapplied some fact or circumstances of weight and substance that would
have affected the result of the case;
Second, the findings of the trial court pertaining to the credibility of
witnesses are entitled to great respect since it had the opportunity to
examine their demeanor as they testified on the witness stand; and
Third, a witness who testified in a categorical straightforward, spontaneous
and frank manner and remained consistent on cross-examination is a
credible witness. 13
We find no reason in the case at bar to disturb the findings of the trial court regarding
private complainant's credibility. A reading of the transcript of the trial shows that private
complainant, young and innocent as she was, was able to recount clearly and candidly
before the court how accused-appellant ravished her on the evening of October 15, 1993.
Her testimony must be given full weight, especially since it is supported by the medical
report submitted by the Philippine National Police Crime Laboratory. As a rule, testimonies
of rape victims who are young and immature deserve full credence, considering that no
young woman, especially of tender age, would concoct a story of defloration, allow an
examination of her private parts, and thereafter pervert herself by being subject to a public
trial, if she was not motivated solely by the desire to obtain justice for the wrong committed
against her. 14Hence, we affirm accused-appellant's conviction.
We likewise affirm the award of moral damages to private complainant. In rape cases, the
court may, in its discretion, award moral damages to the victim without need for pleading
or proof of the basis thereof. We held in People vs. Prades 15 that "the conventional
requirement of allegata et probata in civil procedure and for essentially civil cases should
be dispensed with in criminal prosecutions for rape with the civil aspect included therein,
since no appropriate pleadings are filed wherein such allegations can be made." As the
fact of rape has been sufficiently proved in this case, we find the award of moral damages
proper and correct.
We note, however, that the trial court failed to award civil indemnity to private complainant.
Time and again, we have held that moral damages is separate and distinct from the civil
indemnity awarded to rape victims. The moral damages cannot take the place of the civil
indemnity. While the award of moral damages is discretionary on the part of the court, the
civil indemnity, which is actually in the nature of actual or compensatory damages, is
mandatory upon the finding of the fact of rape. 16 Hence, in addition to the P50,000.00 moral
damages, accused appellant is ordered to pay private complainant the amount of
P75,000.00 by way of civil indemnity.
IN VIEW WHEREOF, the judgment appealed from is AFFIRMED with the MODIIFICATION
that in addition to the P50,000.00 moral damages, accused-appellant is also ordered to
pay private complainant P75,000.00 as civil indemnity. 1âwphi1.nêt
SO ORDERED. Criminal Case No. 99-1-2084-H:

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

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

Criminal Case No. 99-1-2083-H:
That on or about 7:00 o’clock in the morning sometime in the month of March 1995, at Sitio
[ABC], Barangay [123], Municipality of Hinatuan, Province of Surigao del Sur, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused with lewd
and unchaste designs, did then and there wilfully, unlawfully and feloniously rape [his]
daughter, [AAA], by means of force and intimidation, and against his daughter’s will, to the
damage and prejudice of the said [AAA], who was then 14 years old.
CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code as amended
by Section 11 of Republic Act No. 7659.
Bislig, Surigao del Sur, November 23, 1998.4
CONTRARY TO LAW: In violation of Article 335 of the Revised Penal Code as amended
by Section 11 of Republic Act No. 7659.
Bislig, Surigao del Sur, November 27, 1998.6
Upon arraignment on May 4, 1999, Bartolini pleaded not guilty to all the three (3) charges
filed against him.7 The three (3) criminal cases were thereafter tried jointly.
In the course of the trial, the prosecution presented four (4) witnesses: AAA; BBB; CCC,
appellant’s wife and mother of both victims; and Dr. Emelie S. Viola, the Municipal Health
Officer of Hinatuan District Hospital who conducted the physical examination of both
victims.
Below are the facts established by their testimonies.
Bartolini is married to CCC.8 They begot six (6) children, the eldest being BBB who was
born on January 14, 1978,9followed by AAA who was born on June 16, 1980.10
Sometime in March 1994, at around 3:00 in the afternoon, while BBB was weeding the
grass on their vegetable garden with her father, the latter suddenly pulled her to the ground
and forced her to lie down. Bartolini then lifted BBB’s skirt, removed her panty and
proceeded to have sexual intercourse with her. As BBB struggled, appellant punched her
and hit her at her back. Afterwards, appellant put back his clothes and left. When BBB
went inside their house, appellant, who was waiting for her, warned her not to tell CCC
about the incident. Despite the warning, BBB reported the incident to her mother, but the
latter told her to just keep quiet.11
After the said incident, appellant repeatedly had sexual intercourse with BBB, the last of
which happened on March 2, 1998 at about 8:00 in the morning inside their house while
her mother was away selling fish and while all her siblings were attending school. That
morning, appellant ordered BBB to get his clothes for him. Appellant then followed BBB to
the room, took off her clothes and raped her.12
It also appears that sometime in March 1995, at about 6:30 in the morning, while having
breakfast, appellant instructed his second eldest daughter, AAA, to burn the dried leaves
in their garden. Dutifully, AAA went to the garden at around 7:00 that morning and met her
father there. To her surprise, appellant immediately pulled her and brought her near a big
fallen tree while threatening to kill her and all the members of their family if she would not
acquiesce to his demands. Appellant told her to remove her panties, but since AAA was
crying and pushing her father away, appellant himself took off AAA’s panties, laid her on
the ground and placed one (1) of her feet on top of the fallen tree. Afterwards, appellant
removed his pants and raped her. After having sexual intercourse with AAA, appellant put
back his pants and went to the barangay hall to report for duty as appellant was a
barangay kagawadat that time. Like her sister, AAA also told the incident to their mother,
but the latter told her to keep silent for fear that appellant would fulfill his threats.
Consequently, AAA was repeatedly raped by appellant until sometime in October 1998, a
month before she gave birth to appellant’s child.13
When CCC discovered that AAA was pregnant, she confided the matter to her sister-in-
law, DDD, who, in turn, reported the incident to the barangay captain and to a
representative of the Department of Social Welfare and Development (DSWD) in Butuan
City. On November 19, 1998, while under the custody of the DSWD, AAA gave birth to her
child.14
During the trial, CCC testified that sometime in March 1994, her daughter BBB confided to
her that she was raped by appellant. She just kept silent about the incident for fear that her
husband will maul her when confronted. AAA also reported to her that she was raped by
her father sometime in 1995. In one (1) instance, CCC even saw appellant touching AAA’s
vagina while the two (2) were inside their kitchen. She got angry and told her parents-in-
law about the incident, but the latter replied that she has no other evidence to prove her
accusation. CCC also testified that appellant, despite being an elected barangay kagawad,
was a drunkard, violent and an irresponsible individual. She added that she had received
a letter from appellant threatening to kill them.
Dr. Emelie S. Viola, Municipal Health Officer of Hinatuan District Hospital, testified that
sometime in October 1998, BBB and AAA were brought to her clinic for physical
examination. Although there were no visible signs of physical trauma, Dr. Viola found that
BBB had deep healed hymenal lacerations at the 6 and 7 o’clock positions, as well as
superficial healed hymenal laceration at the 10 o’clock position, which indicate that there
was a penetration of an object or a male reproductive organ at BBB’s female genitalia.15
Dr. Viola also examined AAA and found that the latter had deep healed lacerations at the
12 o’clock position and superficial healed hymenal lacerations at the 3, 9 and 10 o’clock
positions, also indicating penetration of an object or a male reproductive organ at AAA’s
vagina. AAA was also pregnant.16
The defense, on the other hand, presented its lone witness, appellant Bartolini, who
interposed the defense of denial and alibi. According to him, he could not have raped BBB
in the morning of March 2, 1998 because he has been out of their house from 4:00 a.m.
that day to deliver shrimps, prawns, and crabs to a certain Benjamin Castañas who resides
in Hinatuan, Surigao del Sur. Appellant claims that he arrived at Castañas’s house at
around 4:20 a.m. and stayed there for breakfast upon the latter’s invitation. After getting
paid, he left for home at around 10:00 a.m. and reached his house fifteen (15) minutes
later.17
On September 4, 2000, a subpoena was issued for Benjamin Castañas to appear as
witness for the defense.18Castañas, however, failed to appear before the trial court. A
warrant of arrest was thereafter issued against him,19but to no avail. Thus, on July 24,
2002, the trial court issued another subpoena to Castañas.20 When Castañas still failed to
appear, the trial court issued an order declaring the case submitted for decision.21
On September 18, 2002, the RTC promulgated its decision finding appellant guilty beyond
reasonable doubt of three (3) counts of rape committed against AAA and BBB. The fallo
reads:
WHEREFORE, finding the accused RUSTICO BARTOLINI Y AMPIS, forty-four (44) years
of age, a fisherman and a resident of [ABC, 123,] Hinatuan, Surigao del Sur, guilty beyond
reasonable doubt of the crime of RAPE pursuant to Article 335 of the Revised Penal Code,
as amended by Section 11, Republic Act No. 7659, paragraph (1), this Court hereby
sentences him:
1. In Criminal Case No. [99-1-]2083-H, to suffer the penalty of Death by Lethal
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs;
2. In Criminal Case No. [99-1-]2084-H, to suffer the penalty of Death by Lethal
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs;
[and]
3. In Criminal Case No. [99-1-]2085-H, to suffer the penalty of Death by Lethal
Injection. To pay Seventy-Five Thousand (P75,000.00) pesos as civil indemnity
and Fifty Thousand (P50,000.00) pesos as moral damages and to pay the costs.
Let the entire records of this case be forwarded to the Supreme Court for automatic review
pursuant to Section 22 of Republic Act No. 7659.
SO ORDERED.22
At the CA, Bartolini argued that he should not have been convicted of the crime of qualified
rape since the information in Criminal Case No. 99-1-2085-H was defective because it
failed to allege that the act was committed by force or intimidation as required by law, while
there was no allegation of minority of the victim in the information for Criminal Case No.
99-1-2084-H. Bartolini also argued that the prosecution failed to prove his guilt beyond
reasonable doubt.23
After an extensive discussion on the issues raised by Bartolini, the appellate court found
no compelling reason to deviate from the findings of the trial court. Nevertheless, the CA
modified the penalties by reducing the penalty of death to reclusion perpetua following the
abolition of the death penalty and by modifying the monetary award in favor of the victims.
The dispositive portion of the appellate court’s decision reads,
WHEREFORE, the Decision dated September 18, 2002 of the Regional Trial Court, 11th
Judicial Region, Branch 29, Bislig City, in Criminal Case Nos. [99-1-]2083-H, [99-1-]2084-
H and [99-1-]2085-H finding appellant Rustico Bartolini y Ampis guilty beyond reasonable
doubt for three counts of rape is AFFIRMED with the following MODIFICATIONS:
(a) in Criminal Case Nos. [99-1-]2083-H and [99-1-]2085-H, the penalty of death is
reduced to reclusion perpetua; and to pay the amount of seventy-five thousand
pesos (P75,000.00) as civil indemnity, seventy-five thousand pesos (P75,000.00)
as moral damages and twenty-five thousand pesos (P25,000.00) as exemplary
damages for each count; and
(b) in Criminal Case No. [99-1-]2084-H, the accused is sentenced to suffer the
penalty of reclusion perpetua; and to pay the amount of fifty thousand pesos
(P50,000.00) as civil indemnity, the amount of fifty thousand pesos (P50,000.00)
as moral damages, and twenty-five thousand pesos (P25,000.00) as exemplary
damages;
(c) with costs.
SO ORDERED.24
On August 30, 2007, the records of the case were forwarded to this Court for automatic
review.25 The Court accepted the appeal and directed the parties to file their respective
supplemental briefs if they so desire. However, both the Office of the Solicitor General, for
the appellee, and the appellant submitted manifestations26 stating that they replead and
adopt the arguments raised in their respective briefs27 before the CA.
Appellant raises the following issues:
I. Whether the trial court erred in convicting the appellant;
II. Whether the trial court erred in convicting the appellant in Criminal Case No. 99-
1-2085-H despite the fact that the information therein was allegedly defective; and
 III. Whether the trial court erred in imposing the death penalty upon the appellant Q: Do you recall of any unusual incident that happened on March 1994, while you
after finding him guilty in Criminal Case No. 99-1-2084-H considering the failure of were still residing at [Sitio ABC], [123], Lingig, Surigao del Sur, together with your
the information to allege minority.28 parents?

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

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

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

A: He made me lie down, sir.

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

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

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

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

Q: What did your father do next? xxxx

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

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

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

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

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

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

xxxx However, we disagree with the trial court’s ruling convicting appellant Bartolini for qualified
rape under Criminal Case No. 99-1-2084-H. The appellate court was correct in sustaining
Q: While his penis was inside your vagina, what happened? appellant’s argument that the special qualifying circumstance cannot be appreciated in
Criminal Case No. 99-1-2084-H since the age of the victim was not specifically alleged in
A: He boxed me, sir. the information.32
Our disquisition in People v. Tagud, Sr.33 succinctly explains the matter. There, we said:
To justify the imposition of the death penalty in this case, the single special qualifying
circumstance of the minority of the victim and her relationship to the offender must be
specifically alleged in the Information and proven during the trial. x x x
xxxx
Even under the old Rules of Criminal Procedure, jurisprudence already required that
qualifying circumstances must be specifically alleged in the Information to be appreciated
as such.
xxxx
Notably, the amended Information merely stated that appellant had carnal knowledge of
his minor daughter without stating Arwin’s actual age. In a rape case where the very life of
the accused is at stake, such an inexact allegation of the age of the victim is insufficient to
qualify the rape and raise the penalty to death. The sufficiency of the Information is held to
a higher standard when the only imposable penalty is death. The constitutional right of the
accused to be properly informed of the nature and cause of the accusation against him
assumes the greatest importance when the only imposable penalty in case of conviction is
death.34
Similar to Tagud, the qualifying circumstance of relationship of BBB to appellant was
specifically alleged and proven during the trial. Notably absent in the information, however,
is a specific averment of the victim’s age at the time the offense against her was committed.
Such an omission committed by the prosecutor is fatal in the imposition of the supreme
penalty of death against the offender. It must be borne in mind that the requirement for
complete allegations on the particulars of the indictment is based on the right of the
accused to be fully informed of the nature of the charges against him so that he may
adequately prepare for his defense pursuant to the constitutional requirement on due
process,35 specially so if the case involves the imposition of the death penalty in case the
accused is convicted. Thus, even if the victim is below eighteen (18) years of age and the
offender is her parent, but these facts are not alleged in the information, or if only one (1)
is so alleged such as what happened in the instant case, their proof as such by evidence
offered during trial cannot sanction the imposition of the death penalty.36
Appellant also argues that both the trial court and the CA committed reversible errors when
he was found guilty for the three (3) counts of rape even if his guilt was not proven beyond
reasonable doubt. In particular, appellant attacks AAA’s credibility by arguing that it would
have been physically impossible for him to rape said victim on top of a log as claimed by
AAA in her testimony. Appellant also questions the motive of both victims saying that it is
unnatural for both to report the abuses made on them only after the lapse of several years.
We cannot subscribe to appellant’s desperate attempt to save himself from the
consequences of his dastardly acts.
Settled is the rule that when the issue is one (1) of credibility of witnesses, appellate courts
will generally not disturb the findings of the trial courts considering that the latter are in a
better position to decide the question as they have heard the witnesses and observed their
deportment and manner of testifying during the trial. It is for this reason that the findings of
the trial court are given the highest degree of respect. These findings will not ordinarily be
disturbed by an appellate court absent any clear showing that the trial court has
overlooked, misunderstood, or misapplied some facts or circumstances of weight or
substance which could very well affect the outcome of the case.37
1avvphi1
Moreover, AAA’s testimony was vivid and precise. She said:
Q: What was your position at that time when you said your father spread your legs
apart?
A: When I spread my legs, I was laying (sic), and he put my one leg on top of the
fallen tree.38
We note with approval the CA’s observation that such revelation is plausible and consistent
with human experience. Indeed, if there is any incongruity in the manner of intercourse as
portrayed by the appellant, the same would be trivial and will not smother AAA’s revelation
of sexual abuse.39
How the victims managed to endure the bestial treatment of their father to them for four (4)
long years, with one (1) even having to live with the shame of siring an offspring from her
very own father, should not be taken against them. Children of tender age have natural
respect and reverence for their loved ones. More often than not, they would try to keep to
themselves if anything unnatural was committed against them, especially if the offender is
one (1) of their relatives. A father is known to have a strong natural, cultural and ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages, and ₱30,000.00 as
psychological hold upon his child. Hence, it would be too assuming for us to ask the victims exemplary damages.
why they have kept these facts of abuse to themselves, when their very own mother
decided to be mum on the matter as well. In Criminal Case No. 99-1-2084-H, appellant is found GUILTY beyond reasonable doubt
of the crime of RAPE and is hereby sentenced to suffer the penalty of reclusion perpetua.
Anent the award of damages, we find modifications to be in order. We increase the award He is ORDERED to pay the victim, BBB, ₱75,000.00 as civil indemnity, ₱75,000.00 as
of civil indemnity and moral damages in Criminal Case No. 99-1-2084-H from ₱50,000.00 moral damages, and ₱30,000.00 as exemplary damages.
to ₱75,000.00 each. In People v. Catubig,40 we explained that the commission of an
offense has a two (2)-pronged effect, one (1) on the public as it breaches the social order Costs against the appellant.
and the other upon the private victim as it causes personal sufferings. Each effect is
respectively addressed by the prescription of heavier punishment for the accused and by SO ORDERED.
an award of additional damages to the victim. The increase of the penalty or a shift to a
graver felony underscores the exacerbation of the offense by the attendance of
G.R. No. 158911 March 4, 2008
aggravating circumstances, whether ordinary or qualifying, in its commission. But unlike
the criminal liability which is basically the State’s concern, the award of damages is in
general intended for the offended party who suffers thereby. Hence, although it is essential MANILA ELECTRIC COMPANY, Petitioner,
to observe the requirements imposed by Sections 841 and 942 of Rule 110 of the Revised vs.
Rules of Criminal Procedure, as amended, the requirements should affect only the criminal MATILDE MACABAGDAL RAMOY, BIENVENIDO RAMOY, ROMANA RAMOY-
liability of the accused, which is the State’s concern, and should not affect the civil liability RAMOS, ROSEMARIE RAMOY, OFELIA DURIAN and CYRENE
of the accused, which is for the benefit of the injured party. Where the special qualifying PANADO, Respondents.
circumstances of age and relationship, although not alleged in the information, are
nonetheless established during the trial, the award of civil indemnity and moral damages DECISION
in a conviction for simple rape should equal the award of civil indemnity and moral
damages in convictions for qualified rape. Truly, BBB’s moral suffering is just as great as AUSTRIA-MARTINEZ, J.:
when her father who raped her is convicted for qualified rape as when he is convicted only
for simple rape due to a technicality. 1avvphi 1
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court,
praying that the Decision1 of the Court of Appeals (CA) dated December 16, 2002, ordering
Likewise, we modify the award for exemplary damages. Pursuant to prevailing petitioner Manila Electric Company (MERALCO) to pay Leoncio Ramoy2 moral and
jurisprudence, the award of exemplary damages for the two (2) counts of qualified rape exemplary damages and attorney's fees, and the CA Resolution3 dated July 1, 2003,
under Criminal Case Nos. 99-1-2083-H and 99-1-2085-H and for the crime of simple rape denying petitioner's motion for reconsideration, be reversed and set aside.
in Criminal Case No. 99-1-2084-H is increased to ₱30,000.00 for each count of rape.43
The Regional Trial Court (RTC) of Quezon City, Branch 81, accurately summarized the
WHEREFORE, the judgment on review is AFFIRMED with MODIFICATIONS. facts as culled from the records, thus:

In Criminal Case Nos. 99-1-2083-H and 99-1-2085-H, appellant Rustico Bartolini y Ampis The evidence on record has established that in the year 1987 the National Power
is found GUILTY beyond reasonable doubt of two (2) counts of QUALIFIED RAPE and is Corporation (NPC) filed with the MTC Quezon City a case for ejectment against several
hereby sentenced to suffer the penalty of reclusion perpetua, in lieu of death, without the persons allegedly illegally occupying its properties in Baesa, Quezon City. Among the
possibility of parole. He is ORDERED to pay each of his two (2) victims, AAA and BBB, defendants in the ejectment case was Leoncio Ramoy, one of the plaintiffs in the case at
bar. On April 28, 1989 after the defendants failed to file an answer in spite of summons
duly served, the MTC Branch 36, Quezon City rendered judgment for the plaintiff
[MERALCO] and "ordering the defendants to demolish or remove the building and
structures they built on the land of the plaintiff and to vacate the premises." In the case of
Leoncio Ramoy, the Court found that he was occupying a portion of Lot No. 72-B-2-B with
the exact location of his apartments indicated and encircled in the location map as No. 7.
A copy of the decision was furnished Leoncio Ramoy (Exhibits 2, 2-A, 2-B, 2-C, pp. 128-
131, Record; TSN, July 2, 1993, p. 5).
On June 20, 1990 NPC wrote Meralco requesting for the "immediate disconnection of
electric power supply to all residential and commercial establishments beneath the NPC
transmission lines along Baesa, Quezon City (Exh. 7, p. 143, Record). Attached to the
letter was a list of establishments affected which included plaintiffs Leoncio and Matilde
Ramoy (Exh. 9), as well as a copy of the court decision (Exh. 2). After deliberating on
NPC's letter, Meralco decided to comply with NPC's request (Exhibits 6, 6-A, 6-A-1, 6-B)
and thereupon issued notices of disconnection to all establishments affected including
plaintiffs Leoncio Ramoy (Exhs. 3, 3-A to 3-C), Matilde Ramoy/Matilde Macabagdal
(Exhibits 3-D to 3-E), Rosemarie Ramoy (Exh. 3-F), Ofelia Durian (Exh. 3-G), Jose Valiza
(Exh. 3-H) and Cyrene S. Panado (Exh. 3-I).
In a letter dated August 17, 1990 Meralco requested NPC for a joint survey to determine
all the establishments which are considered under NPC property in view of the fact that
"the houses in the area are very close to each other" (Exh. 12). Shortly thereafter, a joint
survey was conducted and the NPC personnel pointed out the electric meters to be
disconnected (Exh. 13; TSN, October 8, 1993, p. 7; TSN, July 1994, p. 8).
In due time, the electric service connection of the plaintiffs [herein respondents] was
disconnected (Exhibits D to G, with submarkings, pp. 86-87, Record).
Plaintiff Leoncio Ramoy testified that he and his wife are the registered owners of a parcel
of land covered by TCT No. 326346, a portion of which was occupied by plaintiffs
Rosemarie Ramoy, Ofelia Durian, Jose Valiza and Cyrene S. Panado as lessees. When
the Meralco employees were disconnecting plaintiffs' power connection, plaintiff Leoncio
Ramoy objected by informing the Meralco foreman that his property was outside the NPC
property and pointing out the monuments showing the boundaries of his property.
However, he was threatened and told not to interfere by the armed men who accompanied
the Meralco employees. After the electric power in Ramoy's apartment was cut off, the
plaintiffs-lessees left the premises.
During the ocular inspection ordered by the Court and attended by the parties, it was found
out that the residence of plaintiffs-spouses Leoncio and Matilde Ramoy was indeed outside
the NPC property. This was confirmed by defendant's witness R.P. Monsale III on cross-
examination (TSN, October 13, 1993, pp. 10 and 11). Monsale also admitted that he did
not inform his supervisor about this fact nor did he recommend re-connection of plaintiffs'
power supply (Ibid., p. 14).
The record also shows that at the request of NPC, defendant Meralco re-connected the
electric service of four customers previously disconnected none of whom was any of the
plaintiffs (Exh. 14).4
The RTC decided in favor of MERALCO by dismissing herein respondents' claim for moral
damages, exemplary damages and attorney's fees. However, the RTC ordered MERALCO
to restore the electric power supply of respondents.
Respondents then appealed to the CA. In its Decision dated December 16, 2002, the CA
faulted MERALCO for not requiring from National Power Corporation (NPC) a writ of
execution or demolition and in not coordinating with the court sheriff or other proper officer
before complying with the NPC's request. Thus, the CA held MERALCO liable for moral
and exemplary damages and attorney's fees. MERALCO's motion for reconsideration of
the Decision was denied per Resolution dated July 1, 2003.
Hence, herein petition for review on certiorari on the following grounds:
I
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND MERALCO
NEGLIGENT WHEN IT DISCONNECTED THE SUBJECT ELECTRIC SERVICE OF
RESPONDENTS.
II
THE COURT OF APPEALS GRAVELY ERRED WHEN IT AWARDED MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES AGAINST MERALCO UNDER THE
CIRCUMSTANCES THAT THE LATTER ACTED IN GOOD FAITH IN THE
DISCONNECTION OF THE ELECTRIC SERVICES OF THE RESPONDENTS. 5
The petition is partly meritorious.
MERALCO admits6 that respondents are its customers under a Service Contract whereby
it is obliged to supply respondents with electricity. Nevertheless, upon request of the NPC,
MERALCO disconnected its power supply to respondents on the ground that they were
illegally occupying the NPC's right of way. Under the Service Contract, "[a] customer of
electric service must show his right or proper interest over the property in order that he will
be provided with and assured a continuous electric service."7 MERALCO argues that since
there is a Decision of the Metropolitan Trial Court (MTC) of Quezon City ruling that herein
respondents were among the illegal occupants of the NPC's right of way, MERALCO was
justified in cutting off service to respondents.
Clearly, respondents' cause of action against MERALCO is anchored on culpa
contractual or breach of contract for the latter's discontinuance of its service to respondents
under Article 1170 of the Civil Code which provides:
Article 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable
for damages.
In Radio Communications of the Philippines, Inc. v. Verchez,8 the Court expounded on the
nature of culpa contractual, thus:
"In culpa contractual x x x the mere proof of the existence of the contract and the
failure of its compliance justify, prima facie, a corresponding right of relief. The law,
recognizing the obligatory force of contracts, will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or a contravention of
the tenor thereof. A breach upon the contract confers upon the injured party a valid cause
for recovering that which may have been lost or suffered. The remedy serves to preserve
the interests of the promissee that may include his "expectation interest," which is his
interest in having the benefit of his bargain by being put in as good a position as he would
have been in had the contract been performed, or his "reliance interest," which is his
interest in being reimbursed for loss caused by reliance on the contract by being put in as
good a position as he would have been in had the contract not been made; or his
"restitution interest," which is his interest in having restored to him any benefit that he has
conferred on the other party. Indeed, agreements can accomplish little, either for their
makers or for society, unless they are made the basis for action. The effect of every
infraction is to create a new duty, that is, to make recompense to the one who has been
injured by the failure of another to observe his contractual obligation unless he can show
extenuating circumstances, like proof of his exercise of due diligence x x x or of
the attendance of fortuitous event, to excuse him from his ensuing liability.9 (Emphasis
supplied)
Article 1173 also provides that the fault or negligence of the obligor consists in the omission
of that diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. The Court emphasized in Ridjo
Tape & Chemical Corporation v. Court of Appeals10 that "as a public utility, MERALCO has
the obligation to discharge its functions with utmost care and diligence."11
The Court agrees with the CA that under the factual milieu of the present case, MERALCO
failed to exercise the utmost degree of care and diligence required of it. To repeat, it was
not enough for MERALCO to merely rely on the Decision of the MTC without ascertaining
whether it had become final and executory. Verily, only upon finality of said Decision can
it be said with conclusiveness that respondents have no right or proper interest over the
subject property, thus, are not entitled to the services of MERALCO.
Although MERALCO insists that the MTC Decision is final and executory, it never showed
any documentary evidence to support this allegation. Moreover, if it were true that the
decision was final and executory, the most prudent thing for MERALCO to have done was
to coordinate with the proper court officials in determining which structures are covered by
said court order. Likewise, there is no evidence on record to show that this was done by
MERALCO.
The utmost care and diligence required of MERALCO necessitates such great degree of
prudence on its part, and failure to exercise the diligence required means that MERALCO
was at fault and negligent in the performance of its obligation. In Ridjo Tape,12 the Court
explained:
[B]eing a public utility vested with vital public interest, MERALCO is impressed with certain
obligations towards its customers and any omission on its part to perform such duties
would be prejudicial to its interest. For in the final analysis, the bottom line is that those
who do not exercise such prudence in the discharge of their duties shall be made to bear
the consequences of such oversight.13
This being so, MERALCO is liable for damages under Article 1170 of the Civil Code.
The next question is: Are respondents entitled to moral and exemplary damages and
attorney's fees?
Article 2220 of the Civil Code provides:
Article 2220. Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the defendant acted fraudulently or in bad
faith.
In the present case, MERALCO wilfully caused injury to Leoncio Ramoy by withholding
from him and his tenants the supply of electricity to which they were entitled under the
Service Contract. This is contrary to public policy because, as discussed above,
MERALCO, being a vital public utility, is expected to exercise utmost care and diligence in
the performance of its obligation. It was incumbent upon MERALCO to do everything within
its power to ensure that the improvements built by respondents are within the NPC’s right
of way before disconnecting their power supply. The Court emphasized in Samar II Electric
Cooperative, Inc. v. Quijano14 that:
Electricity is a basic necessity the generation and distribution of which is imbued with public
interest, and its provider is a public utility subject to strict regulation by the State in
the exercise of police power. Failure to comply with these regulations will give rise to
the presumption of bad faith or abuse of right.15 (Emphasis supplied)
Thus, by analogy, MERALCO's failure to exercise utmost care and diligence in the
performance of its obligation to Leoncio Ramoy, its customer, is tantamount to bad faith.
Leoncio Ramoy testified that he suffered wounded feelings because of MERALCO's
actions.16 Furthermore, due to the lack of power supply, the lessees of his four apartments
on subject lot left the premises.17 Clearly, therefore, Leoncio Ramoy is entitled to moral
damages in the amount awarded by the CA.
Leoncio Ramoy, the lone witness for respondents, was the only one who testified regarding
the effects on him of MERALCO's electric service disconnection. His co-respondents
Matilde Ramoy, Rosemarie Ramoy, Ofelia Durian and Cyrene Panado did not present any
evidence of damages they suffered.
It is a hornbook principle that damages may be awarded only if proven. In Mahinay v.
Velasquez, Jr.,18 the Court held thus:
In order that moral damages may be awarded, there must be pleading and proof of
moral suffering, mental anguish, fright and the like. While respondent alleged in his
complaint that he suffered mental anguish, serious anxiety, wounded feelings and moral
shock, he failed to prove them during the trial. Indeed, respondent should have taken
the witness stand and should have testified on the mental anguish, serious anxiety,
wounded feelings and other emotional and mental suffering he purportedly suffered to
sustain his claim for moral damages. Mere allegations do not suffice; they must be
substantiated by clear and convincing proof. No other person could have proven such
damages except the respondent himself as they were extremely personal to him.
In Keirulf vs. Court of Appeals, we held:
"While no proof of pecuniary loss is necessary in order that moral damages may be
awarded, the amount of indemnity being left to the discretion of the court, it is nevertheless
essential that the claimant should satisfactorily show the existence of the factual basis of
damages and its causal connection to defendant’s acts. This is so because moral
damages, though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury suffered and not to impose a penalty
on the wrongdoer. In Francisco vs. GSIS, the Court held that there must be clear
testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff
fails to take the witness stand and testify as to his/her social humiliation, wounded feelings
and anxiety, moral damages cannot be awarded. In Cocoland Development Corporation
vs. National Labor Relations Commission, the Court held that "additional facts must be
pleaded and proven to warrant the grant of moral damages under the Civil Code, these
being, x x x social humiliation, wounded feelings, grave anxiety, etc. that resulted
therefrom."
x x x The award of moral damages must be anchored to a clear showing that respondent
actually experienced mental anguish, besmirched reputation, sleepless nights, wounded
feelings or similar injury. There was no better witness to this experience than respondent
himself. Since respondent failed to testify on the witness stand, the trial court did
not have any factual basis to award moral damages to him.19 (Emphasis supplied)
Thus, only respondent Leoncio Ramoy, who testified as to his wounded feelings, may be (6) In actions for legal support;
awarded moral damages.20
(7) In actions for the recovery of wages of household helpers, laborers and skilled
With regard to exemplary damages, Article 2232 of the Civil Code provides that in contracts workers;
and quasi-contracts, the court may award exemplary damages if the defendant, in this
case MERALCO, acted in a wanton, fraudulent, reckless, oppressive, or malevolent (8) In actions for indemnity under workmen’s compensation and employer’s liability
manner, while Article 2233 of the same Code provides that such damages cannot be laws;
recovered as a matter of right and the adjudication of the same is within the discretion
of the court.
1avvphi1

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

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

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

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

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

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy DECISION
the plaintiff’s plainly valid, just and demandable claim;
VILLARAMA, JR., J.:
On appeal under Rule 45 of the 1997 Rules of Civil Procedure, as amended, is the
Decision1 dated December 11, 2000 of the Court of Appeals (CA) in CA-G.R. CV No.
48109 which affirmed the September 29, 1993 Decision2 of the Regional Trial Court (RTC)
of Makati City, Branch 135, ordering petitioners Luciano and Nelly Briones to remove the
improvements they have made on the disputed property or to pay respondent-spouses
Jose and Fe Macabagdal the prevailing price of the land as compensation.
The undisputed factual antecedents of the case are as follows:
Respondent-spouses purchased from Vergon Realty Investments Corporation (Vergon)
Lot No. 2-R, a 325-square-meter land located in Vergonville Subdivision No. 10 at Las
Piñas City, Metro Manila and covered by Transfer Certificate of Title No. 62181 of the
Registry of Deeds of Pasay City. On the other hand, petitioners are the owners of Lot No.
2-S, which is adjacent to Lot No. 2-R.
Sometime in 1984, after obtaining the necessary building permit and the approval of
Vergon, petitioners constructed a house on Lot No. 2-R which they thought was Lot No. 2-
S. After being informed of the mix up by Vergon’s manager, respondent-spouses
immediately demanded petitioners to demolish the house and vacate the property.
Petitioners, however, refused to heed their demand. Thus, respondent-spouses filed an
action to recover ownership and possession of the said parcel of land with the RTC of
Makati City.3
Petitioners insisted that the lot on which they constructed their house was the lot which
was consistently pointed to them as theirs by Vergon’s agents over the seven (7)-year
period they were paying for the lot. They interposed the defense of being buyers in good
faith and impleaded Vergon as third-party defendant claiming that because of the warranty
against eviction, they were entitled to indemnity from Vergon in case the suit is decided
against them.4
The RTC ruled in favor of respondent-spouses and found that petitioners’ house was
undoubtedly built on Lot No. 2-R. The dispositive portion of the trial court’s decision reads
as follows:
PREMISES CONSIDERED, let judgment be rendered declaring, to wit:
1. That plaintiffs are the owners of Lot No. 2-R of subdivision plan (LRC) Psd-
147392 at Vergonville Subdivision, No. 10, Las Piñas, Metro Manila covered by
TCT No. 62181 of the Registry of Deeds of Pasay City on which defendants have
constructed their house;
2. Defendants, jointly and severally, are ordered to demolish their house and
vacate the premises and return the possession of the portion of Lot No. 2-R as
above-described to plaintiffs within thirty (30) days from receipt of this decision, or
in the alternative, plaintiffs should be compensated by defendants, jointly and
severally, by the payment of the prevailing price of the lot involved as Lot No. 2-R
with an area of 325 square meters which should not be less than ₱1,500.00 per
square meter, in consideration of the fact that prices of real estate properties in the
area concerned have increased rapidly;
3. Defendants, jointly and severally, pay to plaintiffs for moral damages with
plaintiffs’ plans and dreams of building their own house on their own lot being
severely shattered and frustrated due to defendants’ incursion as interlopers of Lot
No. 2-R in the sum of ₱50,000.00;
4. Defendants, jointly and severally, to pay plaintiffs in the amount of ₱30,000.00
as attorney’s fees; and,
5. to pay the costs of the proceedings.
Defendants’ counterclaim against plaintiffs is dismissed for lack of merit and with no cause
of action.
Defendants’ third-party complaint against third-party defendant Vergonville Realty and
Investments Corporation is likewise ordered dismissed for lack of cause of action and
evidently without merit.
On the other hand, defendants, jointly and severally, are liable for the litigation expenses
incurred by Vergonville Realty by way of counterclaim, which is also proven by the latter
with a mere preponderance of evidence, and are hereby ordered to pay the sum of
₱20,000.00 as compensatory damage; and attorney’s fees in the sum of ₱10,000.00
SO ORDERED.5
On appeal, the CA affirmed the RTC’s finding that the lot upon which petitioners built their
house was not the one (1) which Vergon sold to them. Based on the documentary
evidence, such as the titles of the two (2) lots, the contracts to sell, and the survey report
made by the geodetic engineer, petitioners’ house was built on the lot of the respondent-
spouses.6 There was no basis to presume that the error was Vergon’s fault. Also the
warranty against eviction under Article 1548 of the Civil Code was not applicable as there
was no deprivation of property: the lot on which petitioners built their house was not the lot
sold to them by Vergon, which remained vacant and ready for occupation.7 The CA further
ruled that petitioners cannot use the defense of allegedly being a purchaser in good faith
for wrongful occupation of land.8
Aggrieved, petitioners filed a motion for reconsideration, but it was denied by the appellate
court.9 Hence, this petition for review on certiorari.
Petitioners raise the following assignment of errors:
I.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE CONTRARY TO
LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT IN AFFIRMING THE
DECISION OF THE TRIAL COURT ORDERING PETITIONERS TO DEMOLISH THEIR
ONLY HOUSE AND VACATE THE LOT AND TO PAY MORAL AND COMPENSATORY
DAMAGES AS WELL AS ATTORNEY’S FEE IN THE TOTAL AMOUNT OF PS[₱]
110,000; AND
II.
THE COURT OF APPEALS SANCTIONED THE DEPARTURE OF THE LOWER COURT
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO
CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.10
In the main, it is petitioners’ position that they must not bear the damage alone. Petitioners
insist that they relied with full faith and confidence in the reputation of Vergon’s agents
when they pointed the wrong property to them. Even the President of Vergon, Felix
Gonzales, consented to the construction of the house when he signed the building
permit.11 Also, petitioners are builders in good faith.12
The petition is partly meritorious.
At the outset, we note that petitioners raise factual issues, which are beyond the scope of
a petition for review on certiorari under Rule 45 of the Rules. Well settled is the rule that
the jurisdiction of this Court in cases brought to it from the CA via a petition for review on
certiorari under Rule 45 is limited to the review of errors of law. The Court is not bound to
weigh all over again the evidence adduced by the parties, particularly where the findings
of both the trial court and the appellate court coincide. The resolution of factual issues is a
function of the trial court whose findings on these matters are, as a general rule, binding
on this Court, more so where these have been affirmed by the CA.13 We note that the CA
and RTC did not overlook or fail to appreciate any material circumstance which, when
properly considered, would have altered the result of the case. Indeed, it is beyond cavil
that petitioners mistakenly constructed their house on Lot No. 2-R which they thought was
Lot No. 2-S.
However, the conclusiveness of the factual findings notwithstanding, we find that the trial
court nonetheless erred in outrightly ordering petitioners to vacate the subject property or
to pay respondent spouses the prevailing price of the land as compensation. Article
52714 of the Civil Code presumes good faith, and since no proof exists to show that the
mistake was done by petitioners in bad faith, the latter should be presumed to have built
the house in good faith.
When a person builds in good faith on the land of another, Article 448 of the Civil
Code governs. Said article provides,
ART. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is considerably
more than that of the building or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of disagreement,
the court shall fix the terms thereof. (Emphasis ours.)
The above-cited article covers cases in which the builders, sowers or planters believe
themselves to be owners of the land or, at least, to have a claim of title thereto.15 The
builder in good faith can compel the landowner to make a choice between appropriating
the building by paying the proper indemnity or obliging the builder to pay the price of the
land. The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way around.
However, even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one.16 He cannot, for instance, compel the owner of the
building to remove the building from the land without first exercising either option. It is only
if the owner chooses to sell his land, and the builder or planter fails to purchase it where
its value is not more than the value of the improvements, that the owner may remove the
improvements from the land. The owner is entitled to such remotion only when, after having
chosen to sell his land, the other party fails to pay for the same.17
Moreover, petitioners have the right to be indemnified for the necessary and useful
expenses they may have made on the subject property. Articles 546 and 548 of the Civil
Code provide,
ART. 546. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the
possessor in good faith; but he may remove the ornaments with which he has embellished
the principal thing if it suffers no injury thereby, and if his successor in the possession does
not prefer to refund the amount expended.
Consequently, the respondent-spouses have the option to appropriate the house on the
subject land after payment to petitioners of the appropriate indemnity or to oblige
petitioners to pay the price of the land, unless its value is considerably more than the value
of the structures, in which case petitioners shall pay reasonable rent.
In accordance with Depra v. Dumlao,18 this case must be remanded to the RTC which shall
conduct the appropriate proceedings to assess the respective values of the improvement
and of the land, as well as the amounts of reasonable rentals and indemnity, fix the terms
of the lease if the parties so agree, and to determine other matters necessary for the proper
application of Article 448, in relation to Articles 546 and 548, of the Civil Code.
As to the liability of Vergon, petitioners failed to present sufficient evidence to show
negligence on Vergon’s part. Petitioners’ claim is obviously one (1) for tort, governed by
Article 2176 of the Civil Code, which provides:
ART. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
preexisting contractual relation between the parties, is called a quasi-delict and is governed
by the provisions of this Chapter. (Emphasis ours.)
Under this provision, it is the plaintiff who has to prove by a preponderance of evidence:
(1) the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or
some other person for whose act he must respond; and (3) the connection of cause and
effect between the fault or negligence and the damages incurred.19 This the petitioners
failed to do. The President of Vergon signed the building permit as a precondition for its
approval by the local government, but it did not guarantee that petitioners were
constructing the structure within the metes and bounds of petitioners’ lot. The signature of
the President of Vergon on the building permit merely proved that petitioners were
authorized to make constructions within the subdivision project of Vergon. And while
petitioners acted in good faith in building their house on Lot No. 2-R, petitioners did not
show by what authority the agents or employees of Vergon were acting when they pointed
to the lot where the construction was made nor was petitioners’ claim on this matter
corroborated by sufficient evidence.
One (1) last note on the award of damages. Considering that petitioners acted in good faith
in building their house on the subject property of the respondent-spouses, there is no basis
for the award of moral damages to respondent-spouses. Likewise, the Court deletes the
award to Vergon of compensatory damages and attorney’s fees for the litigation expenses
Vergon had incurred as such amounts were not specifically prayed for in its Answer to
petitioners’ third-party complaint. Under Article 220820 of the Civil Code, attorney’s fees
and expenses of litigation are recoverable only in the concept of actual damages, not as
moral damages nor judicial costs. Hence, such must be specifically prayed for—as was
not done in this case—and may not be deemed incorporated within a general prayer for
"such other relief and remedy as this court may deem just and equitable."21 It must also be
noted that aside from the following, the body of the trial court’s decision was devoid of any
statement regarding attorney’s fees. In Scott Consultants & Resource Development
Corporation, Inc. v. Court of Appeals,22 we reiterated that attorney’s fees are not to be
awarded every time a party wins a suit. The power of the court to award attorney’s fees
under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its
basis cannot be left to speculation or conjecture. Where granted, the court must explicitly
state in the body of the decision, and not only in the dispositive portion thereof, the legal
reason for the award of attorney’s fees. 1avvphi1
WHEREFORE, the Decision dated December 11, 2000 of the Court of Appeals in CA-G.R.
CV No. 48109 is AFFIRMED WITH MODIFICATION. The award of moral damages in favor
of respondent-spouses Jose and Fe Macabagdal and the award of compensatory
damages and attorney’s fees to respondent Vergon Realty Investments Corporation
are DELETED. The case is REMANDED to the Regional Trial Court of Makati City, Branch
135, for further proceedings consistent with the proper application of Articles 448, 546 and
548 of the Civil Code, as follows:
1. The trial court shall determine:
a. the present fair price of the respondent-spouses’ lot;
b. the amount of the expenses spent by petitioners for the building of their
house;
c. the increase in value ("plus value") which the said lot may have acquired
by reason thereof; and
d. whether the value of said land is considerably more than that of the
house built thereon.
2. After said amounts shall have been determined by competent evidence, the
Regional Trial Court shall render judgment, as follows:
a. The trial court shall grant the respondent-spouses a period of fifteen (15)
days within which to exercise their option under Article 448 of the Civil
Code, whether to appropriate the house as their own by paying to
petitioners either the amount of the expenses spent by petitioners for the
building of the house, or the increase in value ("plus value") which the said
lot may have acquired by reason thereof, or to oblige petitioners to pay the
price of said land. The amounts to be respectively paid by the respondent-
spouses and petitioners, in accordance with the option thus exercised by
written notice of the other party and to the Court, shall be paid by the obligor
within fifteen (15) days from such notice of the option by tendering the
amount to the Court in favor of the party entitled to receive it;
b. The trial court shall further order that if the respondent-spouses
exercises the option to oblige petitioners to pay the price of the land but
the latter rejects such purchase because, as found by the trial court, the
value of the land is considerably more than that of the house, petitioners
shall give written notice of such rejection to the respondent-spouses and
to the Court within fifteen (15) days from notice of the respondent-spouses’
option to sell the land. In that event, the parties shall be given a period of
fifteen (15) days from such notice of rejection within which to agree upon
the terms of the lease, and give the Court formal written notice of such
agreement and its provisos. If no agreement is reached by the parties, the
trial court, within fifteen (15) days from and after the termination of the said
period fixed for negotiation, shall then fix the terms of the lease, payable
within the first five (5) days of each calendar month. The period for the
forced lease shall not be more than two (2) years, counted from the finality
of the judgment, considering the long period of time since petitioners have
occupied the subject area. The rental thus fixed shall be increased by ten
percent (10%) for the second year of the forced lease. Petitioners shall not
make any further constructions or improvements on the house. Upon
expiration of the two (2)-year period, or upon default by petitioners in the
payment of rentals for two (2) consecutive months, the respondent-
spouses shall be entitled to terminate the forced lease, to recover their
land, and to have the house removed by petitioners or at the latter’s
expense. The rentals herein provided shall be tendered by petitioners to
the Court for payment to the respondent-spouses, and such tender shall
constitute evidence of whether or not compliance was made within the
period fixed by the Court.
c. In any event, petitioners shall pay the respondent-spouses reasonable
compensation for the occupancy of the respondent-spouses’ land for the
period counted from the year petitioners occupied the subject area, up to
the commencement date of the forced lease referred to in the preceding
paragraph;
 d. The periods to be fixed by the trial court in its Decision shall be
inextendible, and upon failure of the party obliged to tender to the trial court
the amount due to the obligee, the party entitled to such payment shall be
entitled to an order of execution for the enforcement of payment of the
amount due and for compliance with such other acts as may be required
by the prestation due the obligee.
No costs.
SO ORDERED.
G.R. No. 150228 July 30, 2009
BANK OF AMERICA NT & SA, Petitioner,
vs.
PHILIPPINE RACING CLUB, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the
Decision1 promulgated on July 16, 2001 by the former Second Division of the Court of
Appeals (CA), in CA-G.R. CV No. 45371 entitled "Philippine Racing Club, Inc. v. Bank of
America NT & SA," affirming the Decision2 dated March 17, 1994 of the Regional Trial
Court (RTC) of Makati, Branch 135 in Civil Case No. 89-5650, in favor of the respondent.
Likewise, the present petition assails the Resolution3 promulgated on September 28, 2001,
denying the Motion for Reconsideration of the CA Decision.
The facts of this case as narrated in the assailed CA Decision are as follows:
Plaintiff-appellee PRCI is a domestic corporation which maintains several accounts with
different banks in the Metro Manila area. Among the accounts maintained was Current
Account No. 58891-012 with defendant-appellant BA (Paseo de Roxas Branch). The
authorized joint signatories with respect to said Current Account were plaintiff-appellee’s
President (Antonia Reyes) and Vice President for Finance (Gregorio Reyes).
On or about the 2nd week of December 1988, the President and Vice President of plaintiff-
appellee corporation were scheduled to go out of the country in connection with the
corporation’s business. In order not to disrupt operations in their absence, they pre-signed
several checks relating to Current Account No. 58891-012. The intention was to insure
continuity of plaintiff-appellee’s operations by making available cash/money especially to
settle obligations that might become due. These checks were entrusted to the accountant
with instruction to make use of the same as the need arose. The internal arrangement was,
in the event there was need to make use of the checks, the accountant would prepare the
corresponding voucher and thereafter complete the entries on the pre-signed checks.
It turned out that on December 16, 1988, a John Doe presented to defendant-appellant
bank for encashment a couple of plaintiff-appellee corporation’s checks (Nos. 401116 and
401117) with the indicated value of P110,000.00 each. It is admitted that these 2 checks
were among those presigned by plaintiff-appellee corporation’s authorized signatories.
The two (2) checks had similar entries with similar infirmities and irregularities. On the
space where the name of the payee should be indicated (Pay To The Order Of) the
following 2-line entries were instead typewritten: on the upper line was the word "CASH"
while the lower line had the following typewritten words, viz: "ONE HUNDRED TEN
THOUSAND PESOS ONLY." Despite the highly irregular entries on the face of the checks,
defendant-appellant bank, without as much as verifying and/or confirming the legitimacy
of the checks considering the substantial amount involved and the obvious infirmity/defect
of the checks on their faces, encashed said checks. A verification process, even by was of
a telephone call to PRCI office, would have taken less than ten (10) minutes. But this was
not done by BA. Investigation conducted by plaintiff-appellee corporation yielded the fact
that there was no transaction involving PRCI that call for the payment of P220,000.00 to
anyone. The checks appeared to have come into the hands of an employee of PRCI (one
Clarita Mesina who was subsequently criminally charged for qualified theft) who eventually
completed without authority the entries on the pre-signed checks. PRCI’s demand for
defendant-appellant to pay fell on deaf ears. Hence, the complaint.4
After due proceedings, the trial court rendered a Decision in favor of respondent, the
dispositive portion of which reads:
PREMISES CONSIDERED, judgment is hereby rendered in favor of plaintiff and against
the defendant, and the latter is ordered to pay plaintiff:
 (1) The sum of Two Hundred Twenty Thousand (₱220,000.00) Pesos, with legal
interest to be computed from date of the filing of the herein complaint;
(2) The sum of Twenty Thousand (₱20,000.00) Pesos by way of attorney’s fees;
(3) The sum of Ten Thousand (₱10,000.00) Pesos for litigation expenses, and
(4) To pay the costs of suit.
SO ORDERED.5
Petitioner appealed the aforesaid trial court Decision to the CA which, however, affirmed
said decision in toto in its July 16, 2001 Decision. Petitioner’s Motion for Reconsideration
of the CA Decision was subsequently denied on September 28, 2001.
Petitioner now comes before this Court arguing that:
I. The Court of Appeals gravely erred in holding that the proximate cause of respondent’s
loss was petitioner’s encashment of the checks.
A. The Court of Appeals gravely erred in holding that petitioner was liable for the
amount of the checks despite the fact that petitioner was merely fulfilling its
obligation under law and contract.
B. The Court of Appeals gravely erred in holding that petitioner had a duty to verify
the encashment, despite the absence of any obligation to do so.
C. The Court of Appeals gravely erred in not applying Section 14 of the Negotiable
Instruments Law, despite its clear applicability to this case;
II. The Court of Appeals gravely erred in not holding that the proximate cause of
respondent’s loss was its own grossly negligent practice of pre-signing checks without
payees and amounts and delivering these pre-signed checks to its employees (other than
their signatories).
III. The Court of Appeals gravely erred in affirming the trial court’s award of attorney’s fees
despite the absence of any applicable ground under Article 2208 of the Civil Code.
IV. The Court of Appeals gravely erred in not awarding attorney’s fees, moral and
exemplary damages, and costs of suit in favor of petitioner, who clearly deserves them.6
From the discussions of both parties in their pleadings, the key issue to be resolved in the
present case is whether the proximate cause of the wrongful encashment of the checks in
question was due to (a) petitioner’s failure to make a verification regarding the said checks
with the respondent in view of the misplacement of entries on the face of the checks or (b)
the practice of the respondent of pre-signing blank checks and leaving the same with its
employees.
Petitioner insists that it merely fulfilled its obligation under law and contract when it
encashed the aforesaid checks. Invoking Sections 1267 and 1858 of the Negotiable
Instruments Law (NIL), petitioner claims that its duty as a drawee bank to a drawer-client
maintaining a checking account with it is to pay orders for checks bearing the drawer-
client’s genuine signatures. The genuine signatures of the client’s duly authorized
signatories affixed on the checks signify the order for payment. Thus, pursuant to the said
obligation, the drawee bank has the duty to determine whether the signatures appearing
on the check are the drawer-client’s or its duly authorized signatories. If the signatures are
genuine, the bank has the unavoidable legal and contractual duty to pay. If the signatures
are forged and falsified, the drawee bank has the corollary, but equally unavoidable legal
and contractual, duty not to pay.9
Furthermore, petitioner maintains that there exists a duty on the drawee bank to inquire
from the drawer before encashing a check only when the check bears a material alteration.
A material alteration is defined in Section 125 of the NIL to be one which changes the date,
the sum payable, the time or place of payment, the number or relations of the parties, the
currency in which payment is to be made or one which adds a place of payment where no
place of payment is specified, or any other change or addition which alters the effect of the
instrument in any respect. With respect to the checks at issue, petitioner points out that
they do not contain any material alteration.10 This is a fact which was affirmed by the trial
court itself.11
There is no dispute that the signatures appearing on the subject checks were genuine
signatures of the respondent’s authorized joint signatories; namely, Antonia Reyes and
Gregorio Reyes who were respondent’s President and Vice-President for Finance,
respectively. Both pre-signed the said checks since they were both scheduled to go abroad
and it was apparently their practice to leave with the company accountant checks signed
in black to answer for company obligations that might fall due during the signatories’
absence. It is likewise admitted that neither of the subject checks contains any material
alteration or erasure.
However, on the blank space of each check reserved for the payee, the following
typewritten words appear: "ONE HUNDRED TEN THOUSAND PESOS ONLY." Above the
same is the typewritten word, "CASH." On the blank reserved for the amount, the same
amount of One Hundred Ten Thousand Pesos was indicated with the use of a check writer.
The presence of these irregularities in each check should have alerted the petitioner to be
cautious before proceeding to encash them which it did not do.
It is well-settled that banks are engaged in a business impressed with public interest, and
it is their duty to protect in return their many clients and depositors who transact business
with them. They have the obligation to treat their client’s account meticulously and with the
highest degree of care, considering the fiduciary nature of their relationship. The diligence
required of banks, therefore, is more than that of a good father of a family.12
Petitioner asserts that it was not duty-bound to verify with the respondent since the amount
below the typewritten word "CASH," expressed in words, is the very same amount
indicated in figures by means of a check writer on the amount portion of the check. The
amount stated in words is, therefore, a mere reiteration of the amount stated in figures.
Petitioner emphasizes that a reiteration of the amount in words is merely a repetition and
that a repetition is not an alteration which if present and material would have enjoined it to
commence verification with respondent.13
We do not agree with petitioner’s myopic view and carefully crafted defense. Although not
in the strict sense "material alterations," the misplacement of the typewritten entries for the
payee and the amount on the same blank and the repetition of the amount using a check
writer were glaringly obvious irregularities on the face of the check. Clearly, someone made
a mistake in filling up the checks and the repetition of the entries was possibly an attempt
to rectify the mistake. Also, if the check had been filled up by the person who customarily
accomplishes the checks of respondent, it should have occurred to petitioner’s employees
that it would be unlikely such mistakes would be made. All these circumstances should
have alerted the bank to the possibility that the holder or the person who is attempting to
encash the checks did not have proper title to the checks or did not have authority to fill up
and encash the same. As noted by the CA, petitioner could have made a simple phone
call to its client to clarify the irregularities and the loss to respondent due to the encashment
of the stolen checks would have been prevented.
In the case at bar, extraordinary diligence demands that petitioner should have ascertained
from respondent the authenticity of the subject checks or the accuracy of the entries therein
not only because of the presence of highly irregular entries on the face of the checks but
also of the decidedly unusual circumstances surrounding their encashment. Respondent’s
witness testified that for checks in amounts greater than Twenty Thousand Pesos
(₱20,000.00) it is the company’s practice to ensure that the payee is indicated by name in
the check.14 This was not rebutted by petitioner. Indeed, it is highly uncommon for a
corporation to make out checks payable to "CASH" for substantial amounts such as in this
case. If each irregular circumstance in this case were taken singly or isolated, the bank’s
employees might have been justified in ignoring them. However, the confluence of the
irregularities on the face of the checks and circumstances that depart from the usual
banking practice of respondent should have put petitioner’s employees on guard that the
checks were possibly not issued by the respondent in due course of its business.
Petitioner’s subtle sophistry cannot exculpate it from behavior that fell extremely short of
the highest degree of care and diligence required of it as a banking institution.
Indeed, taking this with the testimony of petitioner’s operations manager that in case of an
irregularity on the face of the check (such as when blanks were not properly filled out) the
bank may or may not call the client depending on how busy the bank is on a particular
day,15 we are even more convinced that petitioner’s safeguards to protect clients from
check fraud are arbitrary and subjective. Every client should be treated equally by a
banking institution regardless of the amount of his deposits and each client has the right
to expect that every centavo he entrusts to a bank would be handled with the same degree
of care as the accounts of other clients. Perforce, we find that petitioner plainly failed to
adhere to the high standard of diligence expected of it as a banking institution.
In defense of its cashier/teller’s questionable action, petitioner insists that pursuant to
Sections 1416 and 1617 of the NIL, it could validly presume, upon presentation of the checks,
that the party who filled up the blanks had authority and that a valid and intentional delivery
to the party presenting the checks had taken place. Thus, in petitioner’s view, the sole
blame for this debacle should be shifted to respondent for having its signatories pre-sign
and deliver the subject checks.18 Petitioner argues that there was indeed delivery in this
case because, following American jurisprudence, the gross negligence of respondent’s
accountant in safekeeping the subject checks which resulted in their theft should be treated
as a voluntary delivery by the maker who is estopped from claiming non-delivery of the
instrument.19
Petitioner’s contention would have been correct if the subject checks were correctly and
properly filled out by the thief and presented to the bank in good order. In that instance,
there would be nothing to give notice to the bank of any infirmity in the title of the holder of
the checks and it could validly presume that there was proper delivery to the holder. The
bank could not be faulted if it encashed the checks under those circumstances. However,
the undisputed facts plainly show that there were circumstances that should have alerted
the bank to the likelihood that the checks were not properly delivered to the person who
encashed the same. In all, we see no reason to depart from the finding in the assailed CA
Decision that the subject checks are properly characterized as incomplete and undelivered
instruments thus making Section 1520 of the NIL applicable in this case.
However, we do agree with petitioner that respondent’s officers’ practice of pre-signing of
blank checks should be deemed seriously negligent behavior and a highly risky means of
purportedly ensuring the efficient operation of businesses. It should have occurred to
respondent’s officers and managers that the pre-signed blank checks could fall into the
wrong hands as they did in this case where the said checks were stolen from the company
accountant to whom the checks were entrusted.
Nevertheless, even if we assume that both parties were guilty of negligent acts that led to
the loss, petitioner will still emerge as the party foremost liable in this case. In instances
where both parties are at fault, this Court has consistently applied the doctrine of last clear
chance in order to assign liability.
In Westmont Bank v. Ong,21 we ruled:
…[I]t is petitioner [bank] which had the last clear chance to stop the fraudulent encashment
of the subject checks had it exercised due diligence and followed the proper and regular
banking procedures in clearing checks. As we had earlier ruled, the one who had a last
clear opportunity to avoid the impending harm but failed to do so is chargeable with the
consequences thereof.22 (emphasis ours)
In the case at bar, petitioner cannot evade responsibility for the loss by attributing
negligence on the part of respondent because, even if we concur that the latter was indeed
negligent in pre-signing blank checks, the former had the last clear chance to avoid the
loss. To reiterate, petitioner’s own operations manager admitted that they could have
called up the client for verification or confirmation before honoring the dubious checks.
Verily, petitioner had the final opportunity to avert the injury that befell the respondent.
Failing to make the necessary verification due to the volume of banking transactions on
that particular day is a flimsy and unacceptable excuse, considering that the "banking
business is so impressed with public interest where the trust and confidence of the public
in general is of paramount importance such that the appropriate standard of diligence must
be a high degree of diligence, if not the utmost diligence."23 Petitioner’s negligence has
been undoubtedly established and, thus, pursuant to Art. 1170 of the NCC,24 it must suffer
the consequence of said negligence.
In the interest of fairness, however, we believe it is proper to consider respondent’s own
negligence to mitigate petitioner’s liability. Article 2179 of the Civil Code provides:
Art. 2179. When the plaintiff’s own negligence was the immediate and proximate cause of
his injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant’s lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. 1avvph!1
Explaining this provision in Lambert v. Heirs of Ray Castillon,25 the Court held:
The underlying precept on contributory negligence is that a plaintiff who is partly
responsible for his own injury should not be entitled to recover damages in full but must
bear the consequences of his own negligence. The defendant must thus be held liable only
for the damages actually caused by his negligence. xxx xxx xxx
As we previously stated, respondent’s practice of signing checks in blank whenever its
authorized bank signatories would travel abroad was a dangerous policy, especially
considering the lack of evidence on record that respondent had appropriate safeguards or
internal controls to prevent the pre-signed blank checks from falling into the hands of
unscrupulous individuals and being used to commit a fraud against the company. We
cannot believe that there was no other secure and reasonable way to guarantee the non-
disruption of respondent’s business. As testified to by petitioner’s expert witness, other
corporations would ordinarily have another set of authorized bank signatories who would
be able to sign checks in the absence of the preferred signatories.26 Indeed, if not for the
fortunate happenstance that the thief failed to properly fill up the subject checks,
respondent would expectedly take the blame for the entire loss since the defense of forgery
of a drawer’s signature(s) would be unavailable to it. Considering that respondent
knowingly took the risk that the pre-signed blank checks might fall into the hands of
wrongdoers, it is but just that respondent shares in the responsibility for the loss.
We also cannot ignore the fact that the person who stole the pre-signed checks subject of
this case from respondent’s accountant turned out to be another employee, purportedly a
clerk in respondent’s accounting department. As the employer of the "thief," respondent
supposedly had control and supervision over its own employee. This gives the Court more
reason to allocate part of the loss to respondent.
Following established jurisprudential precedents,27 we believe the allocation of sixty
percent (60%) of the actual damages involved in this case (represented by the amount of
the checks with legal interest) to petitioner is proper under the premises. Respondent
should, in light of its contributory negligence, bear forty percent (40%) of its own loss.
Finally, we find that the awards of attorney’s fees and litigation expenses in favor of
respondent are not justified under the circumstances and, thus, must be deleted. The
power of the court to award attorney’s fees and litigation expenses under Article 2208 of
the NCC28 demands factual, legal, and equitable justification.
An adverse decision does not ipso facto justify an award of attorney’s fees to the winning
party.29 Even when a claimant is compelled to litigate with third persons or to incur
expenses to protect his rights, still attorney’s fees may not be awarded where no sufficient
showing of bad faith could be reflected in a party’s persistence in a case other than an
erroneous conviction of the righteousness of his cause.30
WHEREFORE, the Decision of the Court of Appeals dated July 16, 2001 and its Resolution
dated September 28, 2001 are AFFIRMED with the following MODIFICATIONS: (a)
petitioner Bank of America NT & SA shall pay to respondent Philippine Racing Club sixty
percent (60%) of the sum of Two Hundred Twenty Thousand Pesos (₱220,000.00) with
legal interest as awarded by the trial court and (b) the awards of attorney’s fees and
litigation expenses in favor of respondent are deleted.
Proportionate costs.
SO ORDERED.
G.R. No. 156448 February 23, 2011
SPS. MOISES and CLEMENCIA ANDRADA, Petitioners,
vs.
PILHINO SALES CORPORATION, represented by its Branch Manager, JOJO S.
SAET, Respondent.
DECISION
BERSAMIN, J.:
An appeal by petition for review on certiorari under Rule 45 shall raise only questions of
law. Thus, the herein petition for review must fail for raising a question essentially of fact.
Antecedents
On December 28, 1990, respondent Pilhino Sales Corporation (Pilhino) sued Jose
Andrada, Jr. and his wife, Maxima, in the Regional Trial Court in Davao City (RTC) to
recover the principal sum of ₱240,863.00, plus interest and incidental charges (Civil Case
No. 20,489-90). Upon Pilhino’s application, the RTC issued a writ of preliminary
attachment, which came to be implemented against a Hino truck and a Fuso truck both
owned by Jose Andrada, Jr. However, the levies on attachment were lifted after Jose filed
a counter-attachment bond.
In due course, the RTC rendered a decision against Jose Andrada, Jr. and his wife. Pilhino
opted to enforce the writ of execution against the properties of the Andradas instead of
claiming against the counter-attachment bond considering that the premium on the bond
had not been paid. As a result, the sheriff seized the Hino truck and sold it at the ensuing
public auction, with Pilhino as the highest bidder. However, the Hino truck could not be
transferred to Pilhino’s name due to its having been already registered in the name of
petitioner Moises Andrada. It appears that the Hino truck had been meanwhile sold by
Jose Andrada, Jr. to Moises Andrada, which sale was unknown to Pilhino, and that Moises
had mortgaged the truck to BA Finance Corporation (BA Finance) to secure his own
obligation.
BA Finance sued Moises Andrada for his failure to pay the loan (Civil Case No. 5117).
After a decision was rendered in the action in favor of BA Finance, a writ of execution
issued, by which the sheriff levied upon and seized the Hino truck while it was in the
possession of Pilhino and sold it at public auction, with BA Finance as the highest bidder.
Consequently, Pilhino instituted this action in the RTC in Davao City against Spouses Jose
Andrada, Jr. and Maxima Andrada, Spouses Moises Andrada and Clemencia Andrada,
Jose Andrada, Sr., BA Finance, Land Transportation Office (in Surallah, South Cotabato),
and the Registrar of Deeds of General Santos City to annul the following: (a) the deed of
sale between Jose Andrada, Jr. and Moises Andrada; (b) the chattel mortgage involving
the Hino truck between Moises Andrada and BA Finance; (c) the deed of conveyance
executed by Jose Andrada, Jr. in favor of his father, Jose Andrada, Sr., involving a hard-
top jeep; and (d) the certificate of registration of the Hino truck in the name of Moises
Andrada as well as the registration of the chattel mortgage with the Registry of Deeds of
General Santos City. The action was docketed as Civil Case No. 21,898-93.
Of the Andradas who were defendants in Civil Case No. 21,898-93, only Moises Andrada
and his wife filed their responsive pleading. Later on, Jose Andrada, Jr. and his wife and
Pilhino submitted a compromise agreement dated August 20, 1993. They submitted a
second compromise agreement dated March 4, 1994 because the first was found to be
defective and incomplete. The RTC thereafter rendered a partial judgment on March 21,
1994 based on the second compromise agreement. After that, further proceedings were
taken in Civil Case No. 21,898-93 only with respect to Moises Andrada and his wife, and
BA Finance.
Moises Andrada and his wife averred as defenses that they had already acquired the Hino
truck from Jose Andrada, Jr. free from any lien or encumbrance prior to its seizure by the
sheriff pursuant to the writ of execution issued in Civil Case No. 20,489-90; that their
acquisition had been made in good faith, considering that at the time of the sale the
preliminary attachment had already been lifted; and that Pilhino’s recourse was to proceed
against the counter-attachment bond.
For its part, BA Finance claimed lack of knowledge of the truth of the material allegations
of the complaint of Pilhino; and insisted that the Hino truck had been validly mortgaged to
it by Moises Andrada, the lawful owner, to secure his own valid obligation.
On March 25, 1998, the RTC, citing the compromise agreement between Pilhino and Jose
Andrada, Jr. that had settled all the claims of Pilhino against Jose Andrada, Jr., and the
good faith of Pilhino and BA Finance in filing their respective actions, rendered its decision
in Civil Case No. 21,898-93,1 disposing:
WHEREFORE, judgment is rendered dismissing this case insofar as the spouses Moises
Andrada and Clemencia Andrada, Jose Andrada, Sr. and BA Finance Corporation, now
accordingly BA Savings Bank, including the counterclaims.
SO ORDERED.
Spouses Moises and Clemencia Andrada appealed the decision rendered on March 25,
1998 to the extent that the RTC thereby: (a) dismissed their counterclaim; (b) declared that
the deed of sale of the Hino truck between Jose Andrada, Jr. and Moises Andrada had
been simulated; and (c) approved the compromise agreement between Pilhino and
Spouses Jose Andrada, Jr. and Maxima Andrada.
On December 13, 2001, the Court of Appeals (CA) promulgated its decision, as follows:2
WHEREFORE, the judgment appealed from is AFFIRMED with the modification that the
sale of the Hino truck by defendant Jose Andrada, Jr. in favor of defendant-appellant
Moises Andrada is declared valid, subject to the rights of BA Finance as mortgagee and
highest bidder.
SO ORDERED.
Spouses Moises and Clemencia Andrada are now before the Court via petition for review
on certiorari to pose the following issues: 3
1. Whether or not Pilhino should be held liable for the damages the petitioners
sustained from Pilhino’s levy on execution upon the Hino truck under Civil Case
No. 20,489-90; and
2. Whether or not Pilhino was guilty of bad faith when it proceeded with the levy on
execution upon the Hino truck owned by Moises Andrada.
Ruling
We find no merit in the petition for review.
The petitioners assail the decision promulgated by the CA to the extent that it denied their
claim for the damages they had sought by way of counterclaim. They anchored their claim
on Article 21 of the Civil Code, which provides that "any person who willfully causes loss
or injury to another in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for damage."
Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the
cause of action known in this jurisdiction as "abuse of rights." The elements of abuse of
rights are: (a) there is a legal right or duty; (b) exercised in bad faith; and (c) for the sole
intent of prejudicing or injuring another.4
In its assailed decision, the CA found that Pilhino had acted in good faith in bringing Civil
Case No. 21,898-93 to annul the deed of sale involving the Hino truck executed by Jose
Andrada, Jr. in favor of Moises Andrada, considering that Pilhino had "believed that the
sale in favor of defendants-appellants [had been] resorted to so that Jose Andrada [might]
evade his obligations."5 The CA concluded that no remedy was available for any damages
that the petitioners sustained from the filing of Civil Case No. 21,898-93 against them
because "the law affords no remedy for such damages resulting from an act which does
not amount to a legal injury or wrong."6
Worthy to note is that the CA’s finding and conclusion rested on the RTC’s own persuasion
that the sale of the Hino truck to Moises Andrada had been simulated.7
Yet, the petitioners still insist in this appeal that both lower courts erred in their conclusion
on the absence of bad faith on the part of Pilhino.
We cannot side with the petitioners. Their insistence, which represents their disagreement
with the CA’s declaration that the second and third elements of abuse of rights, supra, were
not established, requires the consideration and review of factual issues. Hence, this appeal
cannot succeed, for an appeal by petition for review on certiorari cannot determine factual
issues. In the exercise of its power of review, the Court is not a trier of facts and does not
normally undertake the re-examination of the evidence presented by the contending
parties during the trial. Perforce, the findings of fact by the CA are conclusive and binding
on the Court. This restriction of the review to questions of law has been institutionalized in
Section 1, Rule 45 of the Rules of Court, viz:
Section 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari
from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan,
the Regional Trial Court or other courts whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari. The petition shall raise only
questions of law which must be distinctly set forth. (1a, 2a)8
It is true that the Court has, at times, allowed exceptions from the restriction. Among the
recognized exceptions are the following, to wit:9
(a) When the findings are grounded entirely on speculation, surmises, or
conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(g) When the CA’s findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which
they are based;
(i) When the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.
However, the circumstances of this case do not warrant reversing or modifying the findings
of the CA, which are consistent with the established facts. Verily, the petitioners did not
prove the concurrence of the elements of abuse of rights.
The petitioners further seek attorney’s fees based on Article 2208 (4) of the Civil Code,
which provides that "in the absence of stipulation, attorney’s fees and expenses of
litigation, other than judicial costs, cannot be recovered, except xxx (4) in cases of clearly
unfounded civil action or proceeding against the plaintiff xxx."
The petitioners are not entitled to attorney’s fees.
It is well accepted in this jurisdiction that no premium should be placed on the right to
litigate and that not every winning party is entitled to an automatic grant of attorney’s
fees.10 Indeed, before the effectivity of the new Civil Code, such fees could not be
recovered in the absence of a stipulation.11 It was only with the advent of the new Civil
Code that the right to collect attorney’s fees in the instances mentioned in Article 2208 was
recognized,12 and such fees are now included in the concept of actual damages.13 One
such instance is where the defendant is guilty of gross and evident bad faith in refusing to
satisfy the plaintiff’s plainly valid, just and demandable claim.14 This is a corollary of the
general principle expressed in Article 19 of the Civil Code that everyone must, in the
performance of his duties, observe honesty and good faith and the rule embodied in Article
1170 that anyone guilty of fraud (bad faith) in the performance of his obligation shall be
liable for damages.
But, as noted by the Court in Morales v. Court of Appeals,15 the award of attorney’s fees is
the exception rather than the rule. The power of a court to award attorney’s fees under
Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis
cannot be left to speculation and conjecture.16 The general rule is that attorney’s fees
cannot be recovered as part of damages because of the policy that no premium should be
placed on the right to litigate.17
1av vphi1
Herein, the element of bad faith on the part of Pilhino in commencing and prosecuting Civil
Case No. 21,898-93, which was necessary to predicate the lawful grant of attorney’s fees
based on Article 2208 (4) of the Civil Code, was not established. Accordingly, the
petitioners’ demand for attorney’s fees must fail.
WHEREFORE, we deny the petition for review on certiorari for its lack of merit, and affirm
the decision of the Court of Appeals.
SO ORDERED.
G.R. No. 183804 September 11, 2013
S.C. MEGAWORLD CONSTRUCTION and DEVELOPMENT
CORPORATION, Petitioner,
vs.
ENGR. LUIS U. PARADA, represented by ENGR. LEONARDO A. PARADA of
GENLITE INDUSTRIES,Respondent.
DECISION
REYES, J.:
Before us on appeal by certiorari1 is the Decision2 dated April 30, 2008 of the Court of
Appeals (CA) in CA-G.R. CV No. 83811 which upheld the Decision3 dated May 8, 2004 of
the Regional Trial Court (RTC) of Quezon City, Branch 100, in Civil Case No. Q-01-45212.
Factual Antecedents
S.C. Megaworld Construction and Development Corporation (petitioner) bought electrical
lighting materials from Gentile Industries, a sole proprietorship owned by Engineer Luis U.
Parada (respondent), for its Read-Rite project in Canlubang, Laguna. The petitioner was
unable to pay for the above purchase on due date, but blamed it on its failure to collect
under its sub-contract with the Enviro KleenTechnologies, Inc. (Enviro Kleen). It was
however able to persuade Enviro Kleen to agree to settle its above purchase, but after
paying the respondent ₱250,000.00 on June 2, 1999,4 Enviro Kleen stopped making
further payments, leaving an outstanding balance of ₱816,627.00. It also ignored the
various demands of the respondent, who then filed a suit in the RTC, docketed as Civil
Case No.Q-01-45212, to collect from the petitioner the said balance, plus damages, costs
and expenses, as summarized in the RTC’s decision, as follows:
The petitioner in its answer denied liability, claiming that it was released from its
indebtedness to the respondent by reason of the novation of their contract, which, it
reasoned, took place when the latter accepted the partial payment of Enviro Kleen in its
behalf, and thereby acquiesced to the substitution of Enviro Kleen as the new debtor in the
petitioner’s place. After trial, the RTC rendered judgment6 on May 28, 2004 in favor of the
respondent, the fallo of which reads, as follows:
WHEREFORE, judgment is hereby rendered for the respondent. The petitioner is hereby
ordered to pay the respondent the following:
A. the sum of ₱816,627.00 representing the principal obligation due;
B. the sum equivalent to twenty percent (20%)per month of the principal obligation
due from date of judicial demand until fully paid as and for interest; and
C. the sum equivalent to twenty-five percent (25%) of the principal sum due as and
for attorney’s fees and other costs of suits. The compulsory counterclaim
interposed by the petitioner is hereby ordered dismissed for lack of merit.
SO ORDERED.7 (Emphasis supplied)
On appeal to the CA, the petitioner maintained that the trial court erred in ruling that no
novation of the contract took place through the substitution of Enviro Kleen as the new
debtor. But for the first time, it further argued that the trial court should have dismissed the
complaint for failure of the respondent to implead Genlite Industries as "a proper party in
interest", as provided in Section 2 of Rule 3 of the 1997 Rules of Civil Procedure. The said
section provides:
SEC. 2. Parties in interest. — A real party in interest is the party who stands to be benefited
or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every action must be prosecuted or defended
in the name of the real party in interest.
In Section 1(g) of Rule 16 of the Rules of Court, it is also provided that the defendant may
move to dismiss the suit on the ground that it was not brought in the name of or against
the real party in interest, with the effect that the complaint is then deemed to state no cause
of action.
In dismissing the appeal, the CA noted that the petitioner in its answer below raised only
the defense of novation, and that at no stage in the proceedings did it raise the question
of whether the suit was brought in the name of the real party in interest. Moreover, the
appellate court found from the sales invoices and receipts that the respondent is the sole
proprietor of Genlite Industries, and therefore the real party-plaintiff. Said the CA:
Settled is the rule that litigants cannot raise an issue for the first time on appeal as this
would contravene the basic rules of fair play and justice.
In any event, there is no question that respondent Engr.Luis U. Parada is the proprietor of
Genlite Industries, as shown on the sales invoice and delivery receipts. There is also no
question that a special power of attorney was executed by respondent Engr.Luis U. Parada
in favor of Engr. Leonardo A. Parada authorizingthe latter to file a complaint against the
petitioner.8 (Citations omitted)
The petitioner also contended that a binding novation of the purchase contract between
the parties took place when the respondent accepted the partial payment of Enviro Kleen
of ₱250,000.00 in its behalf, and thus acquiesced to the substitution by Enviro Kleen of the
petitioner as the new debtor. But the CA noted that there is nothing in the two (2) letters of
the respondent to Enviro Kleen, dated April 14, 1999 and June 16, 1999, which would imply
that he consented to the alleged novation, and, particularly, that he intended to release the
petitioner from its primary obligation to pay him for its purchase of lighting materials. The
appellate court cited the RTC’s finding9 that the respondent informed Enviro Kleen in his
first letter that he had served notice to the petitioner that he would take legal action against
it for its overdue account, and that he retained his option to pull out the lighting materials
and charge the petitioner for any damage they might sustain during the pull-out:
Respondent x x x has served notice to the petitioner that unless the overdue account is
paid, the matter will be referred to its lawyers and there may be a pull-out of the delivered
lighting fixtures. It was likewise stated therein that incidental damages that may result to
the structure in the course of the pull-out will be to the account of the petitioner.10
The CA concurred with the RTC that by retaining his option to seek satisfaction from the
petitioner, any acquiescence which the respondent had made was limited to merely
accepting Enviro Kleen as an additional debtor from whom he could demand payment, but
without releasing the petitioner as the principal debtor from its debt to him.
On motion for reconsideration,11 the petitioner raised for the first time the issue of the
validity of the verification and certification of non-forum shopping attached to the complaint.
On July 18, 2008, the CA denied the said motion for lack of merit.12
Petition for Review in the Supreme Court
died of cardio-pulmonary arrest on January 21,2009,16 survived by his legitimate children,
namely, Leonardo, Luis, Jr., and Lalaine, all surnamed Parada. They have since
substituted him in this petition, per the Resolution of the Supreme Court dated September
2, 2009.17 Also, on July 23, 2009, Luis, Jr. and Lalaine Parada executed an SPA
authorizing their brother Leonardo to represent them in the instant petition.18

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

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

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

The trial court found that the respondent never agreed to release the petitioner from its It is settled that other than in the case of judgments which are void ab initio for lack of
obligation, and this conclusion was upheld by the CA. We generally accord utmost respect jurisdiction, or which are null and void per se, and thus may be questioned at any time,
and great weight to factual findings of the trial court and the CA, unless there appears in when a decision is final, even the court which issued it can no longer alter or modify it,
the record some fact or circumstance of weight and influence which has been overlooked, except to correct clerical errors or mistakes.46
or the significance of which has been misinterpreted, that if considered would have affected
the result of the case.41 We find no such oversight in the appreciation of the facts below, The foregoing notwithstanding, of more important consideration in the case before us is
nor such a misinterpretation thereof, as would otherwise provide a clear and unequivocal the fact that it is nowhere stated in the trial court’s decision that the parties had in fact
showing that a novation has occurred in the contract between the parties resulting in the stipulated an interest on the amount due to the respondent. Even granting that there was
release of the petitioner. such an agreement, there is no finding by the trial court that the parties stipulated that the
outstanding debt of the petitioner would be subject to two percent (2%) monthly interest.
Pursuant to Article 2209 of the The most that the decision discloses is that the respondent demanded a monthly interest
Civil Code, except as provided of 2% on the amount outstanding.
under Central Bank Circular
No. 905, and now under Bangko
Article 2209 of the Civil Code provides that "if the obligation consists in the payment of a
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 per annum." Pursuant to the
said provision, then, since there is no finding of a stipulation by the parties as to the
imposition of interest, only the amount of 12% per annum47 may be awarded by the court
by way of damages in its discretion, not two percent(2%) per month, following the
guidelines laid down in the landmark case of Eastern Shipping Lines v. Court of
Appeals,48 to wit:
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
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.49 (Citations omitted)
As further clarified in the case of Sunga-Chan v. CA,50 a loan or forbearance of money,
goods or credit describes a contractual obligation whereby a lender or creditor has
refrained during a given period from requiring the borrower or debtor to repay the loan or
debt then due and payable.51 Thus:
In Reformina v. Tomol, Jr., the Court held that the legal interest at 12% per annum under
Central Bank (CB) Circular No. 416 shall be adjudged only in cases involving the loan or
forbearance of money. And for transactions involving payment of indemnities in the
concept of damages arising from default in the performance of obligations in general and/or
for money judgment not involving a loan or forbearance of money, goods, or credit, the
governing provision is Art. 2209 of the Civil Code prescribing a yearly 6% interest. Art.
2209 pertinently provides:
"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."
The term "forbearance," within the context of usury law, has been described as a
contractual obligation of a lender or creditor to refrain, during a given period of time, from
requiring the borrower or debtor to repay the loan or debt then due and payable.
Eastern Shipping Lines, Inc. synthesized the rules on the imposition of interest, if proper,
and the applicable rate, as follows: The12% per annum rate under CB Circular No. 416
shall apply only to loans or forbearance of money, goods, or credits, as well as to
judgments involving such loan or forbearance of money, goods, or credit, while the 6% per
annum under Art. 2209 of the Civil Code applies "when the transaction involves the
payment of indemnities in the concept of damage arising from the breach or a delay in the
performance of obligations in general," with the application of both rates reckoned "from
the time the complaint was filed until the adjudged amount is fully paid." In either instance,
the reckoning period for the commencement of the running of the legal interest shall be
subject to the condition "that the courts are vested with discretion, depending on the
equities of each case, on the award of interest."52 (Citations omitted and emphasis ours)
Pursuant, then, to Central Bank Circular No. 416, issued on July 29,1974,53 in the absence
of a written stipulation, the interest rate to be imposed in judgments involving a forbearance
of credit shall be 12% per annum, up from 6% under Article 2209 of the Civil Code. This
was reiterated in Central Bank Circular No. 905, which suspended the effectivity of the
Usury Law from January 1, 1983.54 But if the judgment refers to payment of interest as
damages arising from a breach or delay in general, the applicable interest rate is 6% per
annum, following Article 2209 of the Civil Code.55 Both interest rates apply from judicial or
extrajudicial demand until finality of the judgment. But from the finality of the judgment
awarding a sum of money until it is satisfied, the award shall be considered a forbearance
of credit, regardless of whether the award in fact pertained to one, and therefore during
this period, the interest rate of 12% per annum for forbearance of money shall apply.56
But notice must be taken that in Resolution No. 796 dated May 16,2013, the Monetary
Board of the Bangko Sentral ng Pilipinas approved the revision of the interest rate to be
imposed for the loan or forbearance of any money, goods or credits and the rate allowed
in judgments, in the absence of an express contract as to such rate of interest. Thus, under
BSP Circular No.799, issued on June 21, 2013 and effective on July 1, 2013, the said rate
of interest is now back at six percent (6%), viz:
BANGKO SENTRAL NG PILIPINAS
OFFICE OF THE GOVERNOR
CIRCULAR NO. 799
Series of 2013
Subject: Rate of interest in the absence of stipulation
The monetary Board, in its Resolution No. 796 dated 16 May 2013,approved the following
revisions governing the rate of interest in the absence of stipulation in loan contracts,
thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. 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 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 1 July 2013.
FOR THE MONETARY BOARD:
DIWA C. GUINIGUNDO
Officer-In-Charge
The award of attorney’s fees is not proper.
Other than to say that the petitioner "unjustifiably failed and refused to pay the respondent,"
the trial court did not state in the body of its decision the factual or legal basis for its award
of attorney’s fees to the respondent, as required under Article 2208 of the New Civil Code,
for which reason we have resolved to delete the same. The rule is settled that the trial court
must state the factual, legal or equitable justification for its award of attorney’s
fees.57Indeed, the matter of attorney’s fees cannot be stated only in the dispositive portion,
but the reasons must be stated in the body of the court’s decision.58 This failure or oversight
of the trial court cannot even be supplied by the CA. As concisely explained in Frias v. San
Diego-Sison59:
Article 2208 of the New Civil Code enumerates the instances where such may be awarded
and, in all cases, it must be reasonable, just and equitable if the same were to be granted.
Attorney’s fees as part of damages are not meant to enrich the winning party at the
expense of the losing litigant. They are not awarded every time a party prevails in a suit
because of the policy that no premium should be placed on the right to litigate. The award
of attorney’s fees is the exception rather than the general rule. As such, it is necessary for
the trial court to make findings of facts and law that would bring the case within the
exception and justify the grant of such award. The matter of attorney’s fees cannot be
mentioned only in the dispositive portion of the decision. They must be clearly explained
and justified by the trial court in the body of its decision. On appeal, the CA is precluded
from supplementing the bases for awarding attorney’s fees when the trial court failed to
discuss in its Decision the reasons for awarding the same. Consequently, the award of
1âwphi1
attorney’s fees should be deleted.60 (Citations omitted)
WHEREFORE, premises considered, the Decision dated April 30, 2008 of the Court of
Appeals in CA-G.R. CV No. 83811 is AFFIRMED with MODIFICATION. Petitioner S.C.
Megaworld Construction and Development Corporation is ordered to pay respondent Engr.
Luis A. Parada, represented by Engr. Leonardo A. Parada, the principal amount due of
₱816,627.00, plus interest at twelve percent (12%) per annum, reckoned from judicial
demand until June 30, 2013, and six percent (6%) per an own from July 1, 2013 until finality
hereof, by way of actual and compensatory damages. Thereafter, the principal amount due
as adjusted by interest shall likewise earn interest at six percent (6%) per annum until fully
paid. The award of attorney's fees is DELETED.
SO ORDERED.
G.R. No. 191470 January 26, 2015
AUGUSTO M. AQUINO, Petitioner,
vs.
HON. ISMAEL P. CASABAR, as Presiding Judge Regional Trial Court-Guimba,
Nueva Ecija, Branch 33 and MA. ALA F. DOMINGO and MARGARITA IRENE F.
DOMINGO, substituting Heirs of the deceased ANGEL T. DOMINGO, Respondents.
DECISION
PERALTA, J.:
Before us is a special civil action for certiorari1 under Rule 65 of the Rules of Court, dated
March 17, 2010, filed by Atty. Augusto M. Aquino (petitioner) assailing the Order dated
January 11, 2010 issued by respondent Presiding Judge Ismael P. Casabar (public
respondent), in relation to Agrarian Case No. 1217-G,2 for allegedly having been issued
with grave abuse of discretion amounting to lack or excess of jurisdiction.
The facts of the case, as culled from the records, are as follows:
On June 27, 2002, Atty. Angel T. Domingo (now deceased) verbally contracted petitioner
to represent him in Agrarian Case No. 1217-G on a contingency fee basis. The case was
for the determination of the just compensation for the expropriation and taking of Atty.
Domingo's ricelands consisting of 60.5348 hectares, situated in Guimba, Nueva Ecija, by
the Department of Agrarian Reform (DAR), pursuant to Presidential Decree (P.D.)27. The
DAR and the Land Bank of the Philippines (Land Bank) initially valued Atty. Domingo's
property at ₱484,236.27 or ₱7,999.30 per hectare, which the latter, through petitioner-
counsel, opposed in courts. Eventually, the RTC, acting as Special Agrarian Court
(RTC/SAC) issued a Decision dated April 12, 2004 fixing the just compensation for Atty.
Domingo's property at ₱2,459,319.70 or ₱40,626.54 per hectare, or an increase of
₱1,975,083.43 over the initial DAR and the Land Bank valuation. Land Bank moved for
reconsideration, but was denied, thus, it filed a petition for review docketed as CA-G.R.
SPNo. 85394. However, in a Decision dated June 12, 2007, the appellate court affirmed in
totothe SAC Decision dated April 12, 2004. Land Bank moved for reconsideration anew,
but was denied.
Meanwhile, on September 30, 2007, Atty. Domingo died. Petitioner filed a Manifestation
dated December 11, 2007 of the fact of Atty. Domingo's death and the substitution of the
latter by his legal heirs, Ma. Ala F. Domingo and Margarita Irene F. Domingo (private
respondents).
Land Bank assailed the appellate court's decision and resolution before the Supreme Court
via a petition for review on certiorari dated December 4, 2007 docketed as G.R. No. 180108
entitled "Land Bank of the Philippines vs. Angel T. Domingo". However, in a Resolution
dated September 17, 2008, the Court denied the same for failure to sufficiently show any
reversible error in the appellate court's decision. On December 15, 2008, the Court denied
with finality Land Bank's motion for reconsideration.
On February 11, 2009,3 petitioner wrote private respondent Ma. Ala Domingo and informed
her of the finality of the RTC/SAC decision as affirmed by the Court of Appeals and the
Supreme Court. He then requested her to inform the Land Bank of the segregation of
petitioner's thirty percent (30%) contingent attorney's fees out of the increase of the just
compensation for the subject property, or thirty percent (30%) of the total increase
amounting to Php1,975,983.43. Petitioner claimed never to have received a reply from
private respondent.
On March 30, 2009, petitioner received a copy of the entry of judgment from this Court
certifying that its Resolution dated September 17, 2008 in G.R. No. 180108 has already
become final and executory on March 3, 2009.
On July 28, 2009, petitioner received a Notice of Appearance dated July 16, 2009 filed by
Atty. Antonio G. Conde, entering his appearance as counsel of herein private respondents
and replacing him as counsel in Agrarian Case No. 1217-G.
On August 14, 2009, private respondents, through their new counsel, Atty. Conde, filed a
Motion for Execution dated August 6, 2009 of the RTC/SAC Decision dated April 12, 2004.
On August 12, 2009, petitioner filed a Motion for Approval of Charging Attorney's Lien and
for the Order of Payment.4 Petitioner further executed an Affidavit5 dated August 10, 2009,
attesting to the circumstances surrounding the legal services he has rendered for the
deceased Atty. Domingo and the successful prosecution of the Agrarian case from the
RTC/SAC through the appellate court and the Supreme Court.
On August 18, 2009, private respondents filed a Motion to Dismiss/Expunge Petitioner's
Motion.6 Public respondent Presiding Judge Casabar denied the same.7 Private
respondents moved for reconsideration.
On January 11, 2010, public respondent Judge Casabar issued the disputed Order
denying petitioner's motion for approval of attorney's lien, the dispositive portion of which
reads:
xxxx
Examining the basis of the instant motion for reconsideration, this court agrees with
respondents – movants that this court has no jurisdiction over Atty. Aquino's motion for
approval of charging (Attorney's) lien having been filed after the judgment has become
final and executory. Accordingly, the motion for reconsideration is granted and the motion
for approval of (Attorney's) lien is denied and or expunged from the records of the case.
SO ORDERED.
On the same day, January 11, 2010, public respondent issued an Order directing the
issuance of a Writ of Execution of the RTC/SAC Decision dated April 12, 2004.
On January 12, 2010, the Clerk of Court of Branch 33, RTC of Guimba, Nueva Ecija, issued
a Writ of Execution of the April 12, 2004. On January 15, 2010, the Sheriff of the RTC of
Guimba, Nueva Ecija issued a Notice of Garnishment.
Thus, the instant petition for certiorari via Rule 65, raising the following issues:
I
WHETHER OR NOT A CHARGING (ATTORNEY'S) LIEN CAN EFFECTIVELY BE FILED
ONLY BEFORE JUDGMENT IS RENDERED.
II
WHETHER OR NOT RESPONDENT PRESIDING JUDGE HAS THE JURISDICTION TO
TAKE COGNIZANCE OVER PETITIONER'S MOTION FOR APPROVAL OF CHARGING
(ATTORNEY'S) LIEN FILED AFTER THE JUDGMENT HAS BECOME FINAL AND
EXECUTORY.
III
WHETHER OR NOT THE RESPONDENT PRESIDING JUDGE ACTED WITH GRAVE
ABUSE OF DISCRETION IN ISSUING THE CHALLENGED ORDER.8
Petitioner maintains that he filed the motion for charging attorney's lien and order of
payment in the very same case, Agrarian Case No. 1217-G, as an incident thereof, wherein
he was the counsel during the proceedings of the latter, and that he is allowed to wait until
the finality of the case to file the said motion.
Private respondents, on the other hand, counter that the motion was belatedly filed and
that it was filed without the payment of docket fees, thus, the court a quodid not acquire
jurisdiction over the case.
RULING
In a nutshell, the issue is whether the trial court committed a reversible error in denying the
motion toapprove attorney's lien and order of payment on the ground that it lost jurisdiction
over the case since judgment in the case has already become final and executory.
We rule in favor of the petitioner.
In the case of Rosario, Jr. v. De Guzman,9 the Court clarified a similar issue and discussed
the two concepts of attorney’s fees – that is, ordinary and extraordinary. In its ordinary
sense, it is the reasonable compensation paid to a lawyer by his client for legal services
rendered. In its extraordinary concept, it is awarded by the court to the successful litigant
to be paid by the losing party as indemnity for damages.10 Although both concepts are
similar in some respects, they differ from eachother, as further explained below:
The attorney’s fees which a court may, in proper cases, award to a winning litigant is,
strictly speaking, anitem of damages. It differs from that which a client pays his counsel for
the latter’s professional services. However, the two concepts have many things in common
that a treatment of the subject is necessary. The award that the court may grant to a
successful party by way of attorney’sfee is an indemnity for damages sustained by him in
prosecuting or defending, through counsel, his cause in court. It may be decreed in favor
of the party, not his lawyer, in any of the instances authorized by law. Onthe other hand,
the attorney’s fee which a client pays his counsel refersto the compensation for the latter’s
services. The losing party against whom damages by way of attorney’s fees may be
assessed is not bound by, nor is his liability dependent upon, the fee arrangement of the
prevailing party with his lawyer. The amount stipulated in such fee arrangement may,
however, be taken into account by the court in fixing the amount of counsel fees as an
element of damages.
The fee as an item of damages belongs to the party litigant and not to his lawyer. It forms
part of his judgment recoveries against the losing party. The client and his lawyer may,
however, agree that whatever attorney’s fee as an element of damages the court may
award shall pertain to the lawyer as his compensation or as part thereof. In such a case,
the court upon proper motion may require the losing party to pay such fee directly to the
lawyer of the prevailing party.
The two concepts of attorney’s fees are similar in other respects. They both require, as a
prerequisite totheir grant, the intervention of or the rendition of professional services by a
lawyer. As a client may not be held liable for counsel fees in favor of his lawyer who never
rendered services, so too may a party be not held liable for attorney’s fees as damages in
favor of the winning party who enforced his rights without the assistance of counsel.
Moreover, both fees are subject to judicial control and modification. And the rules
governing the determination of their reasonable amount are applicablein one as in the
other.11
Similarly, in the instant case, the attorney’s fees being claimed by the petitioner is the
compensation for professional services rendered, and not an indemnity for damages.
Petitioner is claiming payment from private respondents for the successful outcome of the
agrarian case which he represented. We see no valid reason why public respondent
cannot pass upon a proper petition to determine attorney's fees considering that it is
already familiar with the nature and the extent of petitioner's legal services. If we are to
follow the rule against multiplicity of suits, then with more reason that petitioner's motion
should not be dismissed as the same is in effect incidental to the main case.
We are, likewise, unconvinced that the courta quodid not acquire jurisdiction over the
motion solely due to non-payment of docket fees. Petitioner's failure to pay the docket fees
pertinent to his motion should not be considered as having divested the court a quo's
jurisdiction. We note that, in this case, there was no showing that petitioner intended to
evade the payment of docket fees as in fact he manifested willingness to pay the same
should it be necessary.12
Likewise, pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, should
there be unpaid docket fees, the same should be considered as a lien on the judgment.
Thus, even on the assumption that additional docket fees are required as a consequence
of petitioner's motion, its non-payment will not result in the court’s loss of jurisdiction over
the case.13
With regards tohow attorney’s fees for professional services can be recovered, and when
an action for attorney’s fees for professional services can be filed, the case of Traders
Royal Bank Employees Union-Independent v. NLRC14 is instructive:
x x x It is well settled that a claim for attorney’s fees may be asserted either in the very
action in which the services of a lawyer had been rendered or in a separate action.
With respect to the first situation, the remedy for recovering attorney’s fees as an incident
of the main action may be availed of only when something is due to the client. Attorney’s
fees cannot be determined until after the main litigation has been decided and the subject
of the recovery is at the disposition of the court. The issue over attorney’s fees only arises
when something has been recovered from which the fee is to be paid.
While a claim for attorney’s fees may be filed before the judgment is rendered, the
determination as to the propriety of the fees or as to the amount thereof will have to be
held in abeyance until the main case from which the lawyer’s claim for attorney’s fees may
arise has become final. Otherwise, the determination to be made by the courts will be
premature. Of course, a petition for attorney’s fees may be filed before the judgment in
favor of the client issatisfied or the proceeds thereof delivered to the client.
It is apparent from the foregoing discussion that a lawyer has two options as to when to
file his claim for professional fees. Hence, private respondent was well within his rights
when he made his claim and waited for the finality of the judgment for holiday pay
differential, instead of filing it ahead of the award’s complete resolution. To declare that a
lawyer may file a claim for feesin the same action only before the judgment is reviewed by
a higher tribunal would deprive him of his aforestated options and render ineffective the
foregoing pronouncements of this Court.15 Here, apparently petitioner filed his claim as an
incident of the main action, as in fact, his motion was for the court's approval of charging
attorney's lien and the prayer thereto was to direct the entry into the case records the
attorney's fees he is claiming. Needless to say, petitioner's motion for approval of charging
attorney's lien and order of payment was not intended to be filed as a separate action.
Nevertheless, it is within petitioner's right to wait for the finality of the judgment, instead of
filing it ahead of the court's resolution, since precisely the basis of the determination of the
attorney's fees is the final disposition of the case, that is, the just compensation to be
awarded tothe private respondents.
Moreover, the RTC/SAC decision became final and executory on March 3, 2009, and
petitioner filed his Motion to Determine Attorney’s Fees on August 10, 2009, or only about
four (4) months from the finality of the RTC/SAC decision. Considering that petitioner and
Atty. Domingo’s agreement was contracted verbally, Article 114516 of the Civil Code allows
petitioner a period of six (6) years within which to file an action to recover professional fees
for services rendered.17 Thus, the disputed motion to approve the charging of attorney's
lien and the order of payment was seasonably filed.
Petitioner claims that he and Atty. Domingo agreed to a contract for contingent fees
equivalent to thirty percent (30%) of the increase of the just compensation awarded, albeit
verbally. However, a contract for contingent fees is an agreement in writing by which the
fees, usually a fixed percentage of what may be recovered in the action, are made to
depend upon the success in the effort to enforce or defend a supposed right. Contingent
fees depend upon an express contract, without which the attorney can only recover on the
basis of quantum meruit.18 Here, considering that the contract was made verbally and that
there was no evidence presented to justify the 30% contingent fees being claimed by
petitioner, the only way to determine his right to appropriate attorney’s fees is to apply the
principle of quantum meruit, to wit:
Quantum meruit– literally meaning as much as he deserves – is used as basis for
determining an attorney’s professional fees in the absence of an express agreement. The
recovery of attorney’s fees on the basis of quantum meruitis a device that prevents an
unscrupulous client from running away with the fruits of the legal services of counsel
without paying for it and also avoids unjust enrichment on the part of the attorney himself.
An attorney must show that he is entitled to reasonable compensation for the effort in
pursuing the client’s cause, taking into account certain factors in fixing the amount of legal
fees.
Further, Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
determining the proper amount of attorney fees, to wit:
Rule 20.1 – A lawyer shall be guided by the following factors in determining his fees:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficult of the questions involved;
c) The important of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of acceptance of the
proffered case;
f) The customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;
g) The amount involved in the controversy and the benefits resulting to the client
from the service;
h) The contingency or certainty of compensation;
 i) The character of the employment, whether occasional or established; and
j) The professional standing of the lawyer.
Private respondents never rebutted the fact that petitioner rendered legal services in the
subject case. It is likewise undisputed that it was petitioner who successfully represented
1âwphi 1
Atty. Domingo in Agrarian Case No. 12-17-G before the Special Agrarian Court, in the
Court of Appeals in CAG.R. SP No. 85394, and before this Court in G.R. No. 180108 where
the case eventually attained finality. It is, therefore, through petitioner's effort for a lengthy
period of seven (7) years that the just compensation for the property owned by deceased
Atty. Domingo increased. It cannot be denied then that private respondents benefited from
the said increase in the just compensation. Thus, considering petitioner's effort and the
amount of time spent in ensuring the successful disposition of the case, petitioner rightfully
deserves to be awarded reasonable attorney's fees for services rendered.
Ordinarily, We would have left it to the trial court the determination of attorney's fees based
on quantum meruit, however, following the several pronouncements of the Court that it will
be just and equitable to now assess and fix the attorney's fees in order that the resolution
thereof would not be needlessly prolonged,19 this Court, which holds and exercises the
power to fix attorney's fees on quantum meruit basis in the absence of an express written
agreement between the attorney and the client, deems it fair to fix petitioner's attorney's
fees at fifteen percent (15%) of the increase in the just compensation awarded to private
respondents.
The fact that the practice of law is not a business and the attorney plays a vital role in the
administration of justice underscores the need to secure him his honorarium lawfully
earned as a means to preserve the decorum and respectability of the legal profession. A
lawyer is as much entitled to judicial protection against injustice, imposition or fraud on the
part of his client as the client against abuse on the part of his counsel. The duty of the court
is not alone to see that a lawyer acts in a proper and lawful manner; it is also its duty to
see that a lawyer is paid his just fees. With his capital consisting of his brains and with his
skill acquired at tremendous cost not only in money but in expenditure of time and energy,
he is entitled to the protection of any judicial tribunal against any attempt on the part of his
client to escape payment of his just compensation. It would be ironic if after putting forth
the best in him to secure justice for his client he himself would not get his due.20
WHEREFORE, the petition is GRANTED. Accordingly, the Court grants the Motion for
Approval of Charging Attorney's Lien filed by petitioner Atty. Augusto M. Aquino. Based on
quantum meruit, the amount of attorney's fees is at the rate of fifteen percent (15%) of the
amount of the increase in valuation of just compensation awarded to the private
respondents.
SO ORDERED.
G.R. No. 155223 April 4, 2007
BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F.
FUJITA, Petitioner,
vs.
FLORA SAN DIEGO-SISON, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Bobie Rose V. Frias represented
by her Attorney-in-fact, Marie Regine F. Fujita (petitioner) seeking to annul the
Decision1 dated June 18, 2002 and the Resolution2 dated September 11, 2002 of the Court
of Appeals (CA) in CA-G.R. CV No. 52839.
Petitioner is the owner of a house and lot located at No. 589 Batangas East, Ayala Alabang,
Muntinlupa, Metro Manila, which she acquired from Island Masters Realty and
Development Corporation (IMRDC) by virtue of a Deed of Sale dated Nov. 16, 1990.3 The
property is covered by TCT No. 168173 of the Register of Deeds of Makati in the name of
IMRDC.4
On December 7, 1990, petitioner, as the FIRST PARTY, and Dra. Flora San Diego-Sison
(respondent), as the SECOND PARTY, entered into a Memorandum of Agreement5 over
the property with the following terms:
NOW, THEREFORE, for and in consideration of the sum of THREE MILLION PESOS
(₱3,000,000.00) receipt of which is hereby acknowledged by the FIRST PARTY from the
SECOND PARTY, the parties have agreed as follows:
 1. That the SECOND PARTY has a period of Six (6) months from the date of the
execution of this contract within which to notify the FIRST PARTY of her intention
to purchase the aforementioned parcel of land together within (sic) the
improvements thereon at the price of SIX MILLION FOUR HUNDRED THOUSAND
PESOS (₱6,400,000.00). Upon notice to the FIRST PARTY of the SECOND
PARTY’s intention to purchase the same, the latter has a period of another six
months within which to pay the remaining balance of ₱3.4 million.
2. That prior to the six months period given to the SECOND PARTY within which
to decide whether or not to purchase the above-mentioned property, the FIRST
PARTY may still offer the said property to other persons who may be interested to
buy the same provided that the amount of ₱3,000,000.00 given to the FIRST
PARTY BY THE SECOND PARTY shall be paid to the latter including interest
based on prevailing compounded bank interest plus the amount of the sale in
excess of ₱7,000,000.00 should the property be sold at a price more than ₱7
million.
3. That in case the FIRST PARTY has no other buyer within the first six months
from the execution of this contract, no interest shall be charged by the SECOND
PARTY on the P3 million however, in the event that on the sixth month the
SECOND PARTY would decide not to purchase the aforementioned property, the
FIRST PARTY has a period of another six months within which to pay the sum of
₱3 million pesos provided that the said amount shall earn compounded bank
interest for the last six months only. Under this circumstance, the amount of P3
million given by the SECOND PARTY shall be treated as [a] loan and the property
shall be considered as the security for the mortgage which can be enforced in
accordance with law.
x x x x.6
Petitioner received from respondent two million pesos in cash and one million pesos in a
post-dated check dated February 28, 1990, instead of 1991, which rendered said check
stale.7 Petitioner then gave respondent TCT No. 168173 in the name of IMRDC and the
Deed of Absolute Sale over the property between petitioner and IMRDC.
Respondent decided not to purchase the property and notified petitioner through a
letter8 dated March 20, 1991, which petitioner received only on June 11, 1991,9 reminding
petitioner of their agreement that the amount of two million pesos which petitioner received
from respondent should be considered as a loan payable within six months. Petitioner
subsequently failed to pay respondent the amount of two million pesos.
On April 1, 1993, respondent filed with the Regional Trial Court (RTC) of Manila, a
complaint10 for sum of money with preliminary attachment against petitioner. The case was
docketed as Civil Case No. 93-65367 and raffled to Branch 30. Respondent alleged the
foregoing facts and in addition thereto averred that petitioner tried to deprive her of the
security for the loan by making a false report11 of the loss of her owner’s copy of TCT No.
168173 to the Tagig Police Station on June 3, 1991, executing an affidavit of loss and by
filing a petition12 for the issuance of a new owner’s duplicate copy of said title with the RTC
of Makati, Branch 142; that the petition was granted in an Order13dated August 31, 1991;
that said Order was subsequently set aside in an Order dated April 10, 199214 where the
RTC Makati granted respondent’s petition for relief from judgment due to the fact that
respondent is in possession of the owner’s duplicate copy of TCT No. 168173, and ordered
the provincial public prosecutor to conduct an investigation of petitioner for perjury and
false testimony. Respondent prayed for the ex-parte issuance of a writ of preliminary
attachment and payment of two million pesos with interest at 36% per annum from
December 7, 1991, ₱100,000.00 moral, corrective and exemplary damages and
₱200,000.00 for attorney’s fees.
In an Order dated April 6, 1993, the Executive Judge of the RTC of Manila issued a writ of
preliminary attachment upon the filing of a bond in the amount of two million pesos.15
Petitioner filed an Amended Answer16 alleging that the Memorandum of Agreement was
conceived and arranged by her lawyer, Atty. Carmelita Lozada, who is also respondent’s
lawyer; that she was asked to sign the agreement without being given the chance to read
the same; that the title to the property and the Deed of Sale between her and the IMRDC
were entrusted to Atty. Lozada for safekeeping and were never turned over to respondent
as there was no consummated sale yet; that out of the two million pesos cash paid, Atty.
Lozada took the one million pesos which has not been returned, thus petitioner had filed a
civil case against her; that she was never informed of respondent’s decision not to
purchase the property within the six month period fixed in the agreement; that when she
demanded the return of TCT No. 168173 and the Deed of Sale between her and the
IMRDC from Atty. Lozada, the latter gave her these documents in a brown envelope on
May 5, 1991 which her secretary placed in her attache case; that the envelope together
with her other personal things were lost when her car was forcibly opened the following
day; that she sought the help of Atty. Lozada who advised her to secure a police report, to
execute an affidavit of loss and to get the services of another lawyer to file a petition for
the issuance of an owner’s duplicate copy; that the petition for the issuance of a new
owner’s duplicate copy was filed on her behalf without her knowledge and neither did she
sign the petition nor testify in court as falsely claimed for she was abroad; that she was a
victim of the manipulations of Atty. Lozada and respondent as shown by the filing of
criminal charges for perjury and false testimony against her; that no interest could be due
as there was no valid mortgage over the property as the principal obligation is vitiated with
fraud and deception. She prayed for the dismissal of the complaint, counter-claim for
damages and attorney’s fees.
Trial on the merits ensued. On January 31, 1996, the RTC issued a decision,17 the
dispositive portion of which reads:
WHEREFORE, judgment is hereby RENDERED:
1) Ordering defendant to pay plaintiff the sum of P2 Million plus interest thereon at
the rate of thirty two (32%) per cent per annum beginning December 7, 1991 until
fully paid.
2) Ordering defendant to pay plaintiff the sum of ₱70,000.00 representing
premiums paid by plaintiff on the attachment bond with legal interest thereon
counted from the date of this decision until fully paid.
3) Ordering defendant to pay plaintiff the sum of ₱100,000.00 by way of moral,
corrective and exemplary damages.
4) Ordering defendant to pay plaintiff attorney’s fees of ₱100,000.00 plus cost of
litigation.18
The RTC found that petitioner was under obligation to pay respondent the amount of two
million pesos with compounded interest pursuant to their Memorandum of Agreement; that
the fraudulent scheme employed by petitioner to deprive respondent of her only security
to her loaned money when petitioner executed an affidavit of loss and instituted a petition
for the issuance of an owner’s duplicate title knowing the same was in respondent’s
possession, entitled respondent to moral damages; and that petitioner’s bare denial cannot
be accorded credence because her testimony and that of her witness did not appear to be
credible.
The RTC further found that petitioner admitted that she received from respondent the two
million pesos in cash but the fact that petitioner gave the one million pesos to Atty. Lozada
was without respondent’s knowledge thus it is not binding on respondent; that respondent
had also proven that in 1993, she initially paid the sum of ₱30,000.00 as premium for the
issuance of the attachment bond, ₱20,000.00 for its renewal in 1994, and ₱20,000.00 for
the renewal in 1995, thus plaintiff should be reimbursed considering that she was
compelled to go to court and ask for a writ of preliminary attachment to protect her rights
under the agreement.
Petitioner filed her appeal with the CA. In a Decision dated June 18, 2002, the CA affirmed
the RTC decision with modification, the dispositive portion of which reads:
WHEREFORE, premises considered, the decision appealed from is MODIFIED in the
sense that the rate of interest is reduced from 32% to 25% per annum, effective June 7,
1991 until fully paid.19
The CA found that: petitioner gave the one million pesos to Atty. Lozada partly as her
commission and partly as a loan; respondent did not replace the mistakenly dated check
of one million pesos because she had decided not to buy the property and petitioner knew
of her decision as early as April 1991; the award of moral damages was warranted since
even granting petitioner had no hand in the filing of the petition for the issuance of an
owner’s copy, she executed an affidavit of loss of TCT No. 168173 when she knew all
along that said title was in respondent’s possession; petitioner’s claim that she thought the
title was lost when the brown envelope given to her by Atty. Lozada was stolen from her
car was hollow; that such deceitful conduct caused respondent serious anxiety and
emotional distress.
The CA concluded that there was no basis for petitioner to say that the interest should be
charged for six months only and no more; that a loan always bears interest otherwise it is
not a loan; that interest should commence on June 7, 199120 with compounded bank
interest prevailing at the time the two million was considered as a loan which was in June
1991; that the bank interest rate for loans secured by a real estate mortgage in 1991
ranged from 25% to 32% per annum as certified to by Prudential Bank,21 that in fairness to
petitioner, the rate to be charged should be 25% only.
Petitioner’s motion for reconsideration was denied by the CA in a Resolution dated
September 11, 2002.
Hence the instant Petition for Review on Certiorari filed by petitioner raising the following
issues:
(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST SHOULD BE
LIMITED TO SIX (6) MONTHS AS CONTAINED IN THE MEMORANDUM OF
AGREEMENT.
(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO MORAL
DAMAGES.
(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND EXEMPLARY
DAMAGES AND ATTORNEY’S FEES IS PROPER EVEN IF NOT MENTIONED
IN THE TEXT OF THE DECISION.22
Petitioner contends that the interest, whether at 32% per annum awarded by the trial court
or at 25% per annum as modified by the CA which should run from June 7, 1991 until fully
paid, is contrary to the parties’ Memorandum of Agreement; that the agreement provides
that if respondent would decide not to purchase the property, petitioner has the period of
another six months to pay the loan with compounded bank interest for the last six months
only; that the CA’s ruling that a loan always bears interest otherwise it is not a loan is
contrary to Art. 1956 of the New Civil Code which provides that no interest shall be due
unless it has been expressly stipulated in writing.
We are not persuaded.
While the CA’s conclusion, that a loan always bears interest otherwise it is not a loan, is
flawed since a simple loan may be gratuitous or with a stipulation to pay interest,23 we find
no error committed by the CA in awarding a 25% interest per annum on the two-million
peso loan even beyond the second six months stipulated period.
The Memorandum of Agreement executed between the petitioner and respondent on
December 7, 1990 is the law between the parties. In resolving an issue based upon a
contract, we must first examine the contract itself, especially the provisions thereof which
are relevant to the controversy.24 The general rule is that if the terms of an agreement are
clear and leave no doubt as to the intention of the contracting parties, the literal meaning
of its stipulations shall prevail.25 It is further required that the various stipulations of a
contract shall be interpreted together, attributing to the doubtful ones that sense which may
result from all of them taken jointly.26
In this case, the phrase "for the last six months only" should be taken in the context of the
entire agreement. We agree with and adopt the CA’s interpretation of the phrase in this
wise:
Their agreement speaks of two (2) periods of six months each. The first six-month period
was given to plaintiff-appellee (respondent) to make up her mind whether or not to
purchase defendant-appellant’s (petitioner's) property. The second six-month period was
given to defendant-appellant to pay the P2 million loan in the event that plaintiff-appellee
decided not to buy the subject property in which case interest will be charged "for the last
six months only", referring to the second six-month period. This means that no interest will
be charged for the first six-month period while appellee was making up her mind whether
to buy the property, but only for the second period of six months after appellee had decided
not to buy the property. This is the meaning of the phrase "for the last six months only".
Certainly, there is nothing in their agreement that suggests that interest will be charged for
six months only even if it takes defendant-appellant an eternity to pay the loan.27
The agreement that the amount given shall bear compounded bank interest for the last six
months only, i.e., referring to the second six-month period, does not mean that interest will
no longer be charged after the second six-month period since such stipulation was made
on the logical and reasonable expectation that such amount would be paid within the date
stipulated. Considering that petitioner failed to pay the amount given which under the
Memorandum of Agreement shall be considered as a loan, the monetary interest for the
last six months continued to accrue until actual payment of the loaned amount.
The payment of regular interest constitutes the price or cost of the use of money and thus,
until the principal sum due is returned to the creditor, regular interest continues to accrue
since the debtor continues to use such principal amount.28 It has been held that for a debtor
to continue in possession of the principal of the loan and to continue to use the same after
maturity of the loan without payment of the monetary interest, would constitute unjust
enrichment on the part of the debtor at the expense of the creditor.29
Petitioner and respondent stipulated that the loaned amount shall earn compounded bank
interests, and per the certification issued by Prudential Bank, the interest rate for loans in
1991 ranged from 25% to 32% per annum. The CA reduced the interest rate to 25% instead
of the 32% awarded by the trial court which petitioner no longer assailed. 1aw phi 1.nét
In Bautista v. Pilar Development Corp.,30 we upheld the validity of a 21% per annum
interest on a ₱142,326.43 loan. In Garcia v. Court of Appeals,31 we sustained the
agreement of the parties to a 24% per annum interest on an ₱8,649,250.00 loan. Thus,
the interest rate of 25% per annum awarded by the CA to a ₱2 million loan is fair and
reasonable.
Petitioner next claims that moral damages were awarded on the erroneous finding that she
used a fraudulent scheme to deprive respondent of her security for the loan; that such
finding is baseless since petitioner was acquitted in the case for perjury and false testimony
filed by respondent against her.
We are not persuaded.
Article 31 of the Civil Code provides that when the civil action is based on an obligation not
arising from the act or omission complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of the result of the latter.32
While petitioner was acquitted in the false testimony and perjury cases filed by respondent
against her, those actions are entirely distinct from the collection of sum of money with
damages filed by respondent against petitioner.
We agree with the findings of the trial court and the CA that petitioner’s act of trying to
deprive respondent of the security of her loan by executing an affidavit of loss of the title
and instituting a petition for the issuance of a new owner’s duplicate copy of TCT No.
168173 entitles respondent to moral damages. Moral damages may be awarded
1a\^ /phi1.net
in culpa contractual or breach of contract cases when the defendant acted fraudulently or
in bad faith. Bad faith does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong. It partakes of
the nature of fraud.33
The Memorandum of Agreement provides that in the event that respondent opts not to buy
the property, the money given by respondent to petitioner shall be treated as a loan and
the property shall be considered as the security for the mortgage. It was testified to by
respondent that after they executed the agreement on December 7, 1990, petitioner gave
her the owner’s copy of the title to the property, the Deed of Sale between petitioner and
IMRDC, the certificate of occupancy, and the certificate of the Secretary of the IMRDC who
signed the Deed of Sale.34 However, notwithstanding that all those documents were in
respondent’s possession, petitioner executed an affidavit of loss that the owner’s copy of
the title and the Deed of Sale were lost.
Although petitioner testified that her execution of the affidavit of loss was due to the fact
that she was of the belief that since she had demanded from Atty. Lozada the return of the
title, she thought that the brown envelope with markings which Atty. Lozada gave her on
May 5, 1991 already contained the title and the Deed of Sale as those documents were in
the same brown envelope which she gave to Atty. Lozada prior to the transaction with
respondent.35 Such statement remained a bare statement. It was not proven at all since
Atty. Lozada had not taken the stand to corroborate her claim. In fact, even petitioner’s
own witness, Benilda Ynfante (Ynfante), was not able to establish petitioner's claim that
the title was returned by Atty. Lozada in view of Ynfante's testimony that after the brown
envelope was given to petitioner, the latter passed it on to her and she placed it in
petitioner’s attaché case36and did not bother to look at the envelope.37
It is clear therefrom that petitioner’s execution of the affidavit of loss became the basis of
the filing of the petition with the RTC for the issuance of new owner’s duplicate copy of
TCT No. 168173. Petitioner’s actuation would have deprived respondent of the security for
her loan were it not for respondent’s timely filing of a petition for relief whereby the RTC
set aside its previous order granting the issuance of new title. Thus, the award of moral
damages is in order.
The entitlement to moral damages having been established, the award of exemplary
damages is proper.38Exemplary damages may be imposed upon petitioner by way of
example or correction for the public good.39 The RTC awarded the amount of ₱100,000.00
as moral and exemplary damages. While the award of moral and exemplary damages in
an aggregate amount may not be the usual way of awarding said damages,40 no error has
been committed by CA. There is no question that respondent is entitled to moral and
exemplary damages.
Petitioner argues that the CA erred in awarding attorney’s fees because the trial court’s
decision did not explain the findings of facts and law to justify the award of attorney’s fees
as the same was mentioned only in the dispositive portion of the RTC decision.
We agree. The factual antecedents are undisputed.

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

No pronouncement as to costs. SEPARATION PAY

Date Hired = August 1990

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

BACKWAGES
DECISION
Date Dismissed = January 24, 1997
PERALTA, J.:
Rate per day = ₱196.00
This is a petition for review on certiorari assailing the Decision dated September 23, 2008
1
Date of Decisions = Aug. 18, 1998
of the Court of Appeals (CA) in CA-G.R. SP No. 98591, and the Resolution2 dated October
9, 2009 denying petitioner’s motion for reconsideration.
 a) 1/24/97 to 2/5/98 = 12.36 mos.
₱196.00/day x 12.36 mos. = ₱62,986.56
b) 2/6/98 to 8/18/98 = 6.4 months
Prevailing Rate per day = ₱62,986.00
₱198.00 x 26 days x 6.4 mos. = ₱32,947.20
TOTAL = ₱95.933.76
xxxx
WHEREFORE, premises considered, judgment is hereby rendered finding respondents
guilty of constructive dismissal and are therefore, ordered:
To pay jointly and severally the complainant the amount of sixty-two thousand nine
hundred eighty-six pesos and 56/100 (₱62,986.56) Pesos representing his separation pay;
To pay jointly and severally the complainant the amount of nine (sic) five thousand nine
hundred thirty-three and 36/100 (₱95,933.36) representing his backwages; and
All other claims are hereby dismissed for lack of merit.
SO ORDERED.4
Respondents appealed to the NLRC, but it was dismissed for lack of merit in the
Resolution5 dated February 29, 2000. Accordingly, the NLRC sustained the decision of the
Labor Arbiter. Respondents filed a motion for reconsideration, but it was denied.6
Dissatisfied, respondents filed a Petition for Review on Certiorari before the CA. On August
24, 2000, the CA issued a Resolution dismissing the petition. Respondents filed a Motion
for Reconsideration, but it was likewise denied in a Resolution dated May 8, 2001.7
Respondents then sought relief before the Supreme Court, docketed as G.R. No. 151332.
Finding no reversible error on the part of the CA, this Court denied the petition in the
Resolution dated April 17, 2002.8
An Entry of Judgment was later issued certifying that the resolution became final and
executory on May 27, 2002.9The case was, thereafter, referred back to the Labor Arbiter.
A pre-execution conference was consequently scheduled, but respondents failed to
appear.10
On November 5, 2002, petitioner filed a Motion for Correct Computation, praying that his
backwages be computed from the date of his dismissal on January 24, 1997 up to the
finality of the Resolution of the Supreme Court on May 27, 2002.11 Upon recomputation,
the Computation and Examination Unit of the NLRC arrived at an updated amount in the
sum of ₱471,320.31.12
On December 2, 2002, a Writ of Execution13 was issued by the Labor Arbiter ordering the
Sheriff to collect from respondents the total amount of ₱471,320.31. Respondents filed a
Motion to Quash Writ of Execution, arguing, among other things, that since the Labor
Arbiter awarded separation pay of ₱62,986.56 and limited backwages of ₱95,933.36, no
more recomputation is required to be made of the said awards. They claimed that after the
decision becomes final and executory, the same cannot be altered or amended
anymore.14 On January 13, 2003, the Labor Arbiter issued an Order15 denying the motion.
Thus, an Alias Writ of Execution16 was issued on January 14, 2003.
Respondents again appealed before the NLRC, which on June 30, 2003 issued a
Resolution17 granting the appeal in favor of the respondents and ordered the recomputation
of the judgment award.
On August 20, 2003, an Entry of Judgment was issued declaring the Resolution of the
NLRC to be final and executory. Consequently, another pre-execution conference was
held, but respondents failed to appear on time. Meanwhile, petitioner moved that an Alias
Writ of Execution be issued to enforce the earlier recomputed judgment award in the sum
of ₱471,320.31.18
The records of the case were again forwarded to the Computation and Examination Unit
for recomputation, where the judgment award of petitioner was reassessed to be in the
total amount of only ₱147,560.19.
Petitioner then moved that a writ of execution be issued ordering respondents to pay him
the original amount as determined by the Labor Arbiter in his Decision dated October 15,
1998, pending the final computation of his backwages and separation pay.
On January 14, 2003, the Labor Arbiter issued an Alias Writ of Execution to satisfy the
judgment award that was due to petitioner in the amount of ₱147,560.19, which petitioner
eventually received.
Petitioner then filed a Manifestation and Motion praying for the re-computation of the
monetary award to include the appropriate interests.19
On May 10, 2005, the Labor Arbiter issued an Order granting the motion, but only up to
20
the amount of ₱11,459.73. The Labor Arbiter reasoned that it is the October 15, 1998
Decision that should be enforced considering that it was the one that became final and
executory. However, the Labor Arbiter reasoned that since the decision states that the
separation pay and backwages are computed only up to the promulgation of the said
decision, it is the amount of ₱158,919.92 that should be executed. Thus, since petitioner
already received ₱147,560.19, he is only entitled to the balance of ₱11,459.73.
Petitioner then appealed before the NLRC,21 which appeal was denied by the NLRC in its
Resolution22 dated September 27, 2006. Petitioner filed a Motion for Reconsideration, but
it was likewise denied in the Resolution23dated January 31, 2007.
Aggrieved, petitioner then sought recourse before the CA, docketed as CA-G.R. SP No.
98591.
On September 23, 2008, the CA rendered a Decision24 denying the petition. The CA opined
that since petitioner no longer appealed the October 15, 1998 Decision of the Labor Arbiter,
which already became final and executory, a belated correction thereof is no longer
allowed. The CA stated that there is nothing left to be done except to enforce the said
judgment. Consequently, it can no longer be modified in any respect, except to correct
clerical errors or mistakes.
Petitioner filed a Motion for Reconsideration, but it was denied in the Resolution 25 dated
October 9, 2009.
Hence, the petition assigning the lone error:
I
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED,
COMMITTED GRAVE ABUSE OF DISCRETION AND DECIDED CONTRARY TO LAW
IN UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC WHICH, IN TURN,
SUSTAINED THE MAY 10, 2005 ORDER OF LABOR ARBITER MAGAT MAKING THE
DISPOSITIVE PORTION OF THE OCTOBER 15, 1998 DECISION OF LABOR ARBITER
LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE BODY OF THE SAME
DECISION.26
Petitioner argues that notwithstanding the fact that there was a computation of backwages
in the Labor Arbiter’s decision, the same is not final until reinstatement is made or until
finality of the decision, in case of an award of separation pay. Petitioner maintains that
considering that the October 15, 1998 decision of the Labor Arbiter did not become final
and executory until the April 17, 2002 Resolution of the Supreme Court in G.R. No. 151332
was entered in the Book of Entries on May 27, 2002, the reckoning point for the
computation of the backwages and separation pay should be on May 27, 2002 and not
when the decision of the Labor Arbiter was rendered on October 15, 1998. Further,
petitioner posits that he is also entitled to the payment of interest from the finality of the
decision until full payment by the respondents.
On their part, respondents assert that since only separation pay and limited backwages
were awarded to petitioner by the October 15, 1998 decision of the Labor Arbiter, no more
recomputation is required to be made of said awards. Respondents insist that since the
decision clearly stated that the separation pay and backwages are "computed only up to
[the] promulgation of this decision," and considering that petitioner no longer appealed the
decision, petitioner is only entitled to the award as computed by the Labor Arbiter in the
total amount of ₱158,919.92. Respondents added that it was only during the execution
proceedings that the petitioner questioned the award, long after the decision had become
final and executory. Respondents contend that to allow the further recomputation of the
backwages to be awarded to petitioner at this point of the proceedings would substantially
vary the decision of the Labor Arbiter as it violates the rule on immutability of judgments.
The petition is meritorious.
The instant case is similar to the case of Session Delights Ice Cream and Fast Foods v.
Court of Appeals (Sixth Division),27 wherein the issue submitted to the Court for resolution
was the propriety of the computation of the awards made, and whether this violated the
principle of immutability of judgment. Like in the present case, it was a distinct feature of
the judgment of the Labor Arbiter in the above-cited case that the decision already provided
for the computation of the payable separation pay and backwages due and did not further
order the computation of the monetary awards up to the time of the finality of the judgment.
Also in Session Delights, the dismissed employee failed to appeal the decision of the labor
arbiter. The Court clarified, thus:
In concrete terms, the question is whether a re-computation in the course of execution of
the labor arbiter's original computation of the awards made, pegged as of the time the
decision was rendered and confirmed with modification by a final CA decision, is legally
proper. The question is posed, given that the petitioner did not immediately pay the awards
stated in the original labor arbiter's decision; it delayed payment because it continued with
the litigation until final judgment at the CA level.
A source of misunderstanding in implementing the final decision in this case proceeds from
the way the original labor arbiter framed his decision. The decision consists essentially of
two parts.
The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the awards
of separation pay in lieu of reinstatement, backwages, attorney's fees, and legal interests.
The second part is the computation of the awards made. On its face, the computation the
labor arbiter made shows that it was time-bound as can be seen from the figures used in
the computation. This part, being merely a computation of what the first part of the decision
established and declared, can, by its nature, be re-computed. This is the part, too, that the
petitioner now posits should no longer be re-computed because the computation is already
in the labor arbiter's decision that the CA had affirmed. The public and private respondents,
on the other hand, posit that a re-computation is necessary because the relief in an illegal
dismissal decision goes all the way up to reinstatement if reinstatement is to be made, or
up to the finality of the decision, if separation pay is to be given in lieu reinstatement.
That the labor arbiter's decision, at the same time that it found that an illegal dismissal had
taken place, also made a computation of the award, is understandable in light of Section
3, Rule VIII of the then NLRC Rules of Procedure which requires that a computation be
made. This Section in part states:
[T]he Labor Arbiter of origin, in cases involving monetary awards and at all events, as far
as practicable, shall embody in any such decision or order the detailed and full amount
awarded.
Clearly implied from this original computation is its currency up to the finality of the labor
arbiter's decision. As we noted above, this implication is apparent from the terms of the
computation itself, and no question would have arisen had the parties terminated the case
and implemented the decision at that point.
However, the petitioner disagreed with the labor arbiter's findings on all counts - i.e., on
the finding of illegality as well as on all the consequent awards made. Hence, the petitioner
appealed the case to the NLRC which, in turn, affirmed the labor arbiter's decision. By law,
the NLRC decision is final, reviewable only by the CA on jurisdictional grounds.
The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds
through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC
exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed
to finality and was subsequently returned to the labor arbiter of origin for execution.
It was at this point that the present case arose. Focusing on the core illegal dismissal
portion of the original labor arbiter's decision, the implementing labor arbiter ordered the
award re-computed; he apparently read the figures originally ordered to be paid to be the
computation due had the case been terminated and implemented at the labor arbiter's
level. Thus, the labor arbiter re-computed the award to include the separation pay and the
backwages due up to the finality of the CA decision that fully terminated the case on the
merits. Unfortunately, the labor arbiter's approved computation went beyond the finality of
the CA decision (July 29, 2003) and included as well the payment for awards the final CA
decision had deleted - specifically, the proportionate 13th month pay and the indemnity
awards. Hence, the CA issued the decision now questioned in the present petition.
We see no error in the CA decision confirming that a re-computation is necessary as it
essentially considered the labor arbiter's original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains the finding of
illegality and its monetary consequences; the second part is the computation of the awards
or monetary consequences of the illegal dismissal, computed as of the time of the labor
arbiter's original decision.28
Consequently, from the above disquisitions, under the terms of the decision which is
sought to be executed by the petitioner, no essential change is made by a recomputation
as this step is a necessary consequence that flows from the nature of the illegality of
dismissal declared by the Labor Arbiter in that decision.29 A recomputation (or an original
computation, if no previous computation has been made) is a part of the law – specifically,
Article 279 of the Labor Code and the established jurisprudence on this provision – that is
read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add
up until full satisfaction, as expressed under Article 279 of the Labor Code. The
recomputation of the consequences of illegal dismissal upon execution of the decision
does not constitute an alteration or amendment of the final decision being implemented.
The illegal dismissal ruling stands; only the computation of monetary consequences of this
dismissal is affected, and this is not a violation of the principle of immutability of final
judgments.30
That the amount respondents shall now pay has greatly increased is a consequence that
it cannot avoid as it is the risk that it ran when it continued to seek recourses against the
Labor Arbiter's decision. Article 279 provides for the consequences of illegal dismissal in
no uncertain terms, qualified only by jurisprudence in its interpretation of when separation
pay in lieu of reinstatement is allowed. When that happens, the finality of the illegal
dismissal decision becomes the reckoning point instead of the reinstatement that the law
decrees. In allowing separation pay, the final decision effectively declares that the
employment relationship ended so that separation pay and backwages are to be computed
up to that point.31
Finally, anent the payment of legal interest. In the landmark case of Eastern Shipping
Lines, Inc. v. Court of Appeals,32 the Court laid down the guidelines regarding the manner
of computing legal interest, to wit:
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
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.33
Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved the amendment of Section 234 of
Circular No. 905, Series of 1982 and, accordingly, issued Circular No. 799,35 Series of
2013, effective July 1, 2013, the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following
revisions governing the rate of interest in the absence of stipulation in loan contracts,
thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. 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 an express contract as to such rate
of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.136 of the Manual of Regulations for
Banks and Sections 4305Q.1,37 4305S.338 and 4303P.139 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest
that would govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall no longer be twelve
percent (12%) per annum - as reflected in the case of Eastern Shipping Lines40and
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,
before its amendment by BSP-MB Circular No. 799 - but will now be six percent (6%) per
annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only
be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per
annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate
of six percent (6%) per annum shall be the prevailing rate of interest when applicable.
Corollarily, in the recent case of Advocates for Truth in Lending, Inc. and Eduardo B.
Olaguer v. Bangko Sentral Monetary Board,41 this Court affirmed the authority of the BSP-
MB to set interest rates and to issue and enforce Circulars when it ruled that "the BSP-MB
may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the
forbearance of any money, goods or credits, including those for loans of low priority such
as consumer loans, as well as such loans made by pawnshops, finance companies and
similar credit institutions. It even authorizes the BSP-MB to prescribe different maximum
rate or rates for different types of borrowings, including deposits and deposit substitutes,
or loans of financial intermediaries."
Nonetheless, with regard to those judgments that have become final and executory prior
to July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.
1awp++i 1
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern
Shipping Lines42 are accordingly modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,
delicts or quasi-delicts is breached, the contravenor can be held liable for
damages. The provisions under Title XVIII on "Damages" of the Civil Code govern
in determining the measure of recoverable damages. 1âwphi1
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil Code.
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.
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.
And, in addition to the above, judgments that have become final and executory prior to July
1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of
interest fixed therein.
WHEREFORE, premises considered, the Decision dated September 23, 2008 of the Court
of Appeals in CA-G.R. SP No. 98591, and the Resolution dated October 9, 2009 are
REVERSED and SET ASIDE. Respondents are Ordered to Pay petitioner:
(1) backwages computed from the time petitioner was illegally dismissed on
January 24, 1997 up to May 27, 2002, when the Resolution of this Court in G.R.
No. 151332 became final and executory;
(2) separation pay computed from August 1990 up to May 27, 2002 at the rate of
one month pay per year of service; and
(3) interest of twelve percent (12%) per annum of the total monetary awards,
computed from May 27, 2002 to June 30, 2013 and six percent (6%) per annum
from July 1, 2013 until their full satisfaction.
The Labor Arbiter is hereby ORDERED to make another recomputation of the total
monetary benefits awarded and due to petitioner in accordance with this Decision.
SO ORDERED
G.R. No. 125817 January 16, 2002
ABELARDO LIM and ESMADITO GUNNABAN, petitioners,
vs.
COURT OF APPEALS and DONATO H. GONZALES, respondents.
BELLOSILLO, J.:
When a passenger jeepney covered by a certificate of public convenience is sold to
another who continues to operate it under the same certificate of public convenience under
the so-called kabit system, and in the course thereof the vehicle meets an accident through
the fault of another vehicle, may the new owner sue for damages against the erring
vehicle? Otherwise stated, does the new owner have any legal personality to bring the
action, or is he the real party in interest in the suit, despite the fact that he is not the
registered owner under the certificate of public convenience?
Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu passenger
jeepney from Gomercino Vallarta, holder of a certificate of public convenience for the
operation of public utility vehicles plying the Monumento-Bulacan route. While private
respondent Gonzales continued offering the jeepney for public transport services he did
not have the registration of the vehicle transferred in his name nor did he secure for himself
a certificate of public convenience for its operation. Thus Vallarta remained on record as
its registered owner and operator. 1âwphi 1.nêt
On 22 July 1990, while the jeepney was running northbound along the North Diversion
Road somewhere in Meycauayan, Bulacan, it collided with a ten-wheeler-truck owned by
petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. Gunnaban
owned responsibility for the accident, explaining that while he was traveling towards Manila
the truck suddenly lost its brakes. To avoid colliding with another vehicle, he swerved to
the left until he reached the center island. However, as the center island eventually came
to an end, he veered farther to the left until he smashed into a Ferroza automobile, and
later, into private respondent's passenger jeepney driven by one Virgilio Gonzales. The
impact caused severe damage to both the Ferroza and the passenger jeepney and left
one (1) passenger dead and many others wounded.
Petitioner Lim shouldered the costs for hospitalization of the wounded, compensated the
heirs of the deceased passenger, and had the Ferroza restored to good condition. He also
negotiated with private respondent and offered to have the passenger jeepney repaired at
his shop. Private respondent however did not accept the offer so Lim offered him
₱20,000.00, the assessment of the damage as estimated by his chief mechanic. Again,
petitioner Lim's proposition was rejected; instead, private respondent demanded a brand-
new jeep or the amount of ₱236,000.00. Lim increased his bid to ₱40,000.00 but private
respondent was unyielding. Under the circumstances, negotiations had to be abandoned;
hence, the filing of the complaint for damages by private respondent against petitioners.
In his answer Lim denied liability by contending that he exercised due diligence in the
selection and supervision of his employees. He further asserted that as the jeepney was
registered in Vallarta’s name, it was Vallarta and not private respondent who was the real
party in interest.1 For his part, petitioner Gunnaban averred that the accident was a
fortuitous event which was beyond his control.2
Meanwhile, the damaged passenger jeepney was left by the roadside to corrode and
decay. Private respondent explained that although he wanted to take his jeepney home he
had no capability, financial or otherwise, to tow the damaged vehicle.3
The main point of contention between the parties related to the amount of damages due
private respondent. Private respondent Gonzales averred that per estimate made by an
automobile repair shop he would have to spend ₱236,000.00 to restore his jeepney to its
original condition.4 On the other hand, petitioners insisted that they could have the vehicle
repaired for ₱20,000.00.5
On 1 October 1993 the trial court upheld private respondent's claim and awarded him
₱236,000.00 with legal interest from 22 July 1990 as compensatory damages and
₱30,000.00 as attorney's fees. In support of its decision, the trial court ratiocinated that as
vendee and current owner of the passenger jeepney private respondent stood for all intents
and purposes as the real party in interest. Even Vallarta himself supported private
respondent's assertion of interest over the jeepney for, when he was called to testify, he
dispossessed himself of any claim or pretension on the property. Gunnaban was found by
the trial court to have caused the accident since he panicked in the face of an emergency
which was rather palpable from his act of directing his vehicle to a perilous streak down
the fast lane of the superhighway then across the island and ultimately to the opposite lane
where it collided with the jeepney.
On the other hand, petitioner Lim's liability for Gunnaban's negligence was premised on
his want of diligence in supervising his employees. It was admitted during trial that
Gunnaban doubled as mechanic of the ill-fated truck despite the fact that he was neither
tutored nor trained to handle such task.6
Forthwith, petitioners appealed to the Court of Appeals which, on 17 July 1996, affirmed
the decision of the trial court. In upholding the decision of the court a quo the appeals court
concluded that while an operator under the kabit system could not sue without joining the
registered owner of the vehicle as his principal, equity demanded that the present case be
made an exception.7 Hence this petition.
It is petitioners' contention that the Court of Appeals erred in sustaining the decision of the
trial court despite their opposition to the well-established doctrine that an operator of a
vehicle continues to be its operator as long as he remains the operator of record. According
to petitioners, to recognize an operator under the kabit system as the real party in interest
and to countenance his claim for damages is utterly subversive of public policy. Petitioners
further contend that inasmuch as the passenger jeepney was purchased by private
respondent for only ₱30,000.00, an award of ₱236,000.00 is inconceivably large and would
amount to unjust enrichment.8
Petitioners' attempt to illustrate that an affirmance of the appealed decision could be
supportive of the pernicious kabit system does not persuade. Their labored efforts to
demonstrate how the questioned rulings of the courts a quoare diametrically opposed to
the policy of the law requiring operators of public utility vehicles to secure a certificate of
public convenience for their operation is quite unavailing.
The kabit system is an arrangement whereby a person who has been granted a certificate
of public convenience allows other persons who own motor vehicles to operate them under
his license, sometimes for a fee or percentage of the earnings.9 Although the parties to
such an agreement are not outrightly penalized by law, the kabit system is invariably
recognized as being contrary to public policy and therefore void and inexistent under Art.
1409 of the Civil Code.
In the early case of Dizon v. Octavio10 the Court explained that one of the primary factors
considered in the granting of a certificate of public convenience for the business of public
transportation is the financial capacity of the holder of the license, so that liabilities arising
from accidents may be duly compensated. The kabit system renders illusory such purpose
and, worse, may still be availed of by the grantee to escape civil liability caused by a
negligent use of a vehicle owned by another and operated under his license. If a registered
owner is allowed to escape liability by proving who the supposed owner of the vehicle is,
it would be easy for him to transfer the subject vehicle to another who possesses no
property with which to respond financially for the damage done. Thus, for the safety of
passengers and the public who may have been wronged and deceived through the
baneful kabit system, the registered owner of the vehicle is not allowed to prove that
another person has become the owner so that he may be thereby relieved of responsibility.
Subsequent cases affirm such basic doctrine.11
It would seem then that the thrust of the law in enjoining the kabit system is not so much
as to penalize the parties but to identify the person upon whom responsibility may be fixed
in case of an accident with the end view of protecting the riding public. The policy therefore
loses its force if the public at large is not deceived, much less involved.
In the present case it is at once apparent that the evil sought to be prevented in enjoining
the kabit system does not exist. First, neither of the parties to the pernicious kabit system
is being held liable for damages. Second, the case arose from the negligence of another
vehicle in using the public road to whom no representation, or misrepresentation, as
regards the ownership and operation of the passenger jeepney was made and to whom
no such representation, or misrepresentation, was necessary. Thus it cannot be said that
private respondent Gonzales and the registered owner of the jeepney were in estoppel for
leading the public to believe that the jeepney belonged to the registered owner. Third, the
riding public was not bothered nor inconvenienced at the very least by the illegal
arrangement. On the contrary, it was private respondent himself who had been wronged
and was seeking compensation for the damage done to him. Certainly, it would be the
height of inequity to deny him his right.
In light of the foregoing, it is evident that private respondent has the right to proceed against
petitioners for the damage caused on his passenger jeepney as well as on his business.
Any effort then to frustrate his claim of damages by the ingenuity with which petitioners
framed the issue should be discouraged, if not repelled.
In awarding damages for tortuous injury, it becomes the sole design of the courts to provide
for adequate compensation by putting the plaintiff in the same financial position he was in
prior to the tort. It is a fundamental principle in the law on damages that a defendant cannot
be held liable in damages for more than the actual loss which he has inflicted and that a
plaintiff is entitled to no more than the just and adequate compensation for the injury
suffered. His recovery is, in the absence of circumstances giving rise to an allowance of
punitive damages, limited to a fair compensation for the harm done. The law will not put
him in a position better than where he should be in had not the wrong happened.12
In the present case, petitioners insist that as the passenger jeepney was purchased in
1982 for only ₱30,000.00 to award damages considerably greater than this amount would
be improper and unjustified. Petitioners are at best reminded that indemnification for
damages comprehends not only the value of the loss suffered but also that of the profits
which the obligee failed to obtain. In other words, indemnification for damages is not limited
to damnum emergens or actual loss but extends to lucrum cessans or the amount of profit
lost.13
Had private respondent's jeepney not met an accident it could reasonably be expected that
it would have continued earning from the business in which it was engaged. Private
respondent avers that he derives an average income of ₱300.00 per day from his
passenger jeepney and this earning was included in the award of damages made by the
trial court and upheld by the appeals court. The award therefore of ₱236,000.00 as
compensatory damages is not beyond reason nor speculative as it is based on a
reasonable estimate of the total damage suffered by private respondent, i.e. damage
wrought upon his jeepney and the income lost from his transportation business. Petitioners
for their part did not offer any substantive evidence to refute the estimate made by the
courts a quo.
However, we are constrained to depart from the conclusion of the lower courts that upon
the award of compensatory damages legal interest should be imposed beginning 22 July
1990, i.e. the date of the accident. Upon the provisions of Art. 2213 of the Civil Code,
interest "cannot be recovered upon unliquidated claims or damages, except when the
demand can be established with reasonable certainty." It is axiomatic that if the suit were
for damages, unliquidated and not known until definitely ascertained, assessed and
determined by the courts after proof, interest at the rate of six percent (6%) per annum
should be from the date the judgment of the court is made (at which time the quantification
of damages may be deemed to be reasonably ascertained).14
In this case, the matter was not a liquidated obligation as the assessment of the damage
on the vehicle was heavily debated upon by the parties with private respondent's demand
for ₱236,000.00 being refuted by petitioners who argue that they could have the vehicle
repaired easily for ₱20,000.00. In fine, the amount due private respondent was not a
liquidated account that was already demandable and payable.
One last word. We have observed that private respondent left his passenger jeepney by
the roadside at the mercy of the elements. Article 2203 of the Civil Code exhorts parties
suffering from loss or injury to exercise the diligence of a good father of a family to minimize
the damages resulting from the act or omission in question. One who is injured then by the
wrongful or negligent act of another should exercise reasonable care and diligence to
minimize the resulting damage. Anyway, he can recover from the wrongdoer money lost
in reasonable efforts to preserve the property injured and for injuries incurred in attempting
to prevent damage to it.15
However we sadly note that in the present case petitioners failed to offer in evidence the
estimated amount of the damage caused by private respondent's unconcern towards the
damaged vehicle. It is the burden of petitioners to show satisfactorily not only that the
injured party could have mitigated his damages but also the amount thereof; failing in this
regard, the amount of damages awarded cannot be proportionately reduced.
WHEREFORE, the questioned Decision awarding private respondent Donato Gonzales
₱236,000.00 with legal interest from 22 July 1990 as compensatory damages and
₱30,000.00 as attorney's fees is MODIFIED. Interest at the rate of six percent (6%) per
annum shall be computed from the time the judgment of the lower court is made until the
finality of this Decision. If the adjudged principal and interest remain unpaid thereafter, the
interest shall be twelve percent (12%) per annum computed from the time judgment
becomes final and executory until it is fully satisfied.
1âwphi 1.nêt

Costs against petitioners.

SO ORDERED.