Magbanua vs Tabusares

Facts:

1. A Ceres Liner Bus driven by Endreo Magbanua and owned and operated by Vallacar Transit, Inc.
and an Amante Type jeepney driven by Felipe Palacios and owned by Salvador Algara, Sr. figured in
a vehicular accident. The Bus bumped the rear portion of the Jeepney while both vehicles were
running downhill on the same direction.
2. The bus was trying to overtake the jeepney which was overloaded with 35 passengers and the bus
driver said that he did not apply his brakes because he cannot overtake if he will slow down
3. Due to the impact, several passengers of the Jeepney were thrown out and ran over by the Bus and
died as a result of the injuries they sustained. (O)ne of those killed was Jury Tabusares, 27 years of
age, single, an employee of the Maricalum Copper Mines as Oiler 2B and was then receiving
₱1,256.00 monthly salary plus ₱510.00 cost of living allowance (COLA) or a total monthly income
of ₱1,766.00.
4. Hence a compliant for damages was filed by the parents of Jury Tabusares.
5. The court finds that the jeepney was not a passenger jeepney but a private vehicle. This jeep had a
seating capacity of only 16 passengers but it was made to accommodate passengers on its roof and
some were clinging on its side. This act is not only gross negligence but it was violative of the traffic
rules and regulations.
6. On the other hand, the (c)ourt also finds that the driver of the Bus was driving his vehicle negligently
and recklessly because Endreo Magbanua testified and admitted that while driving the bus downhill
and following the Amante type Jeepney ahead of him, he did not apply his brakes because he was
trying to overtake when he bumped the jeep on its rear portion. This act was negligent and reckless
because Endreo Magbanua could have avoided the bumping of the jeepney had he applied his brakes
considering that he has the last clear chance to prevent a collision by slowing down and reducing
speed.1
7. The trial court found that the negligent acts of the drivers of both the jeepney and the Ceres Liner
Bus combined in directly causing the death of Jury Tabusares. It therefore held both drivers
solidarily liable for damages. –
1. The sum of ₱50,000.00 as indemnity for the death of Jury Tabusares;
2. The amount of ₱699,336.00 as indemnity for the loss of the earning capacity of the late
Jury Tabusares;
3. The amount of ₱27,600.00 as reimbursement for actual expenses in connection with the
death and burial of the said deceased;
4. The amount of ₱10,000.00 as moral damages; and
5. The sum of ₱10,000.00 as reasonable attorney’s fees.

8. Petitioners appealed to the CA. They prayed that the decision of the trial court be reversed insofar as
their liabilities are concerned. But the CA affirmed the factual findings of the trial court, but
modified the award of damages, reducing the amount of lost earning to ₱374,392.00
9. Petitioners filed a partial motion for reconsideration of the decision of the Court of Appeals, praying
for a reduction of the amount of damages for loss of earning capacity. The Court of Appeals denied
the motion.6 Hence, this petition
Issue:

Whether or Not the CA correctly applied the formula used in People vs. Lopez in the computation of the
award of damages for loss of earning capacity instead of the formula used in People vs. Muyco, et al. OR

Whether 50% or 80% be deducted as the amount of living expenses that should be deducted from the
deceased’s gross annual income .

Held:

Article 2205 of the New Civil Code allows the recovery of damages for "loss or impairment of earning
capacity in cases of temporary or permanent personal injury." Such damages covers the loss sustained by the
dependents or heirs of the deceased, consisting of the support they would have received from him had he not
died because of the negligent act of another. The loss is not equivalent to the entire earnings of the deceased,
but only that 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.

Thus, the formula for the computation of unearned income is:

Net Earning life gross annual living

= x less
Capacity expectancy income expenses

Life expectancy is determined in accordance with the formula:

2/3 x [80 – age of deceased]

When there is no showing that the living expenses constituted a smaller percentage of the gross
income, the court fix the living expenses at half of the gross income. To hold that one would have used
only a small part of the income, with the larger part going to the support of one’s children, would be
conjectural and unreasonable.

There is no evidence in the case at bar whether the living expenses of the victim, Jury Tabusares, constituted
a bigger or smaller percentage of his gross income. In such case, it is fair to assume that it is 50% of his
gross annual income. Hence, we find that the Court of Appeals did not err in its computation of the award of
loss of unearned income to petitioner.
Fores vs Miranda

Facts:

1. Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While the vehicle was
descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control thereof, causing
it to swerve and to his the bridge wall.
2. Five of the passengers were injured, including the respondent who suffered a fracture of the upper
right humerus.
3. The driver was charged with serious physical injuries through reckless imprudence, and upon
interposing a plea of guilty was sentenced accordingly
4. Petitioner Paz Fores contend that one day before the accident happened, she allegedly sold the
passenger jeep that was involved therein to a certain Carmen Sackerman.
5. The initial problem raised by the petitioner in this appeal may be formulated thus — "Is the approval
of the Public Service Commission necessary for the sale of a public service vehicle even without
conveying therewith the authority to operate the same?" the court of Appeals answered the query in
the affirmative.
6. A transfer contemplated by the law, if made without the requisite approval of the Public Service
Commission, is not effective and binding in so far as the responsibility of the grantee under the
franchise in relation to the public is concerned.

The law was designed primarily for the protection of the public interest; and until the approval of the
public Service Commission is obtained the vehicle is, in contemplation of law, still under the service
of the owner or operator standing in the records of the Commission which the public has a right to
rely upon.

7. The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by the
Court of Appeals to only P2,000, on the ground that a review of the records failed to disclose a
sufficient basis for the trial court's appraisal, since the only evidence presented on this point
consisted of respondent's bare statement that his expenses and loss of income amounted to P20,000.
P200 was also awarded to him being a painter by profession and a professor of fine arts
8. The attorney's fees in the sum of P3,000 also awarded to the respondent are assailed on the ground
that the Court of First Instance did not provided for the same, and since no appeal was interposed by
said respondent, it was allegedly error for the Court of Appeals to award them motu proprio.
Petitioner fails to note that attorney's fees are included in the concept of actual damages under the
Civil Code and may be awarded whenever the court deems it is just and equitable (Art. 2208, Civil
Code of the Philippines). We see no reason to alter these awards.

ISSUE:

WON the award of moral damages is proper

Held:

Moral damages ordered to be paid to the respondent, the same must be discarded

Art. 2219. Moral damages may be recovered in the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

By contrasting the provisions of these two article it immediately becomes apparent that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus), i.e.,
wanton or deliberately injurious conduct, is essential to justify an award of moral damages; and

(b) That a breach of contract can not be considered included in the descriptive term "analogous cases" used
in Art. 2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual
breach, but because the definition of quasi-delict in Art. 2176 of the Code expressly excludes the cases
where there is a "preexisting contractual relation between the parties."

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage dome. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a
passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206,
that entitles the deceased passenger to "demand moral damages for mental anguish by reason of the death
of the deceased"

But the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does not
die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith.
We think it is clear that the mere carelessness of the carrier's driver does not per se constitute of justify an
inference of malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence of
such malice to support the award of moral damages by the Court of Appeals. To award moral damages for
breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as required by
Art. 220, would be to violate the clear provisions of the law, and constitute unwarranted judicial legislation.

Hence, the decision of the Court of Appeals is modified by eliminating the award of P5,000.00 by way of
moral damages. In all other respects, the judgment is affirmed. No costs in this instance
Premiere Development Bank vs CA and Panacor

Facts:

1. Panacor Marketing Corp acquired an exclusive distributorship of products manufactured by Colgate

Palmolive Philippines, Inc. To meet the capital requirements of the exclusive distributorship, which
required an initial inventory level of P7.5 million, Panacor applied for a loan of P4.1 million with
Premiere Development Bank but was rejected by the bank and suggested that its affiliate company
Arizona Transport Corp should instead applied for and was granted P6.1 Million. But only 2.7M was
given to PANACOR.
2. As security for trhe loan, Arizona executed REM against a parcel of land.
3. Since the P2.7 million released by Premiere Bank fell short, Panacor negotiated for a take-out loan
with Iba Finance Corporation in the sum of P10 million, P7.5 million of which will be released
outright in order to take-out the loan from Premiere Bank and the balance of P2.5 million (to
complete the needed capital of P4.1 million with Colgate) to be released after the cancellation by
Premiere of the collateral mortgage on the property covered by TCT No. T-3475. Pursuant to the said
take-out agreement, Iba-Finance was authorized to pay Premiere Bank the prior existing loan
obligations of Arizona in an amount not to exceed P6 million.
4. Iba-Finance sent a letter to Ms. Arlene R. Martillano, officer-in-charge of Premiere Banks San Juan
Branch, informing her of the approved loan in favor of Panacor and Arizona, and requesting for the
release of TCT No. T-3475. Martillano, after reading the letter, affixed her signature of conformity
thereto and sent the original copy to Premiere Banks legal office.
5. On October 12, 1995, Premiere Bank sent a letter-reply[7] to Iba-Finance, informing the latter of its
refusal to turn over the requested documents on the ground that Arizona had existing unpaid loan
obligations and that it was the banks policy to require full payment of all outstanding loan
obligations prior to the release of mortgage documents.
6. Iba-Finance paid to Premiere Bank the amount of P6,235,754.79 representing the full outstanding
loan account of Arizona. Despite such payment, Premiere Bank still refused to release the requested
mortgage documents
7. Panacor requested Iba-Finance for the immediate approval and release of the remaining P2.5 million
loan to meet the required monthly purchases from Colgate. Iba-Finance explained however, that the
processing of the P2.5 million loan application was conditioned, among others, on the submission of
the owners duplicate copy of TCT No. 3475 and the cancellation by Premiere Bank of Arizonas
mortgage.
8. Panacor failed to generate the required capital to meet its distribution and sales targets. Colgate
informed Panacor of its decision to terminate their distribution agreement.
9. Panacor and Arizona filed a complaint for specific performance and damages against Premiere Bank
10. The trial court rendered judgment in favor of the plaintiff Panacor Marketing Corporation and
against the defendant Premiere Bank, ordering the latter to pay the former the following sums,
namely:

1) P4,520,000.00 in addition to legal interest from the time of filing of the complaint until full
payment;

2) P1,000,000.00 as and for exemplary damages;

3) P100,000.00 as and for reasonable attorneys fees; and

4) Costs of suit.

11. Premiere appealed to the CA but it was affirmed the decision of the trial court with modification
reducing the exemplary damages to P500,000.00
 12. Hence, this petition.

ISSUE:

WHETHER OR NOT THERE IS BASIS OR COMPETENT PIECE OF EVIDENCE PRESENTED

DURING THE TRIAL TO SUPPORT AN AWARD OF ACTUAL DAMAGES OF P4,520,000.00.

HELD:

To justify an award for 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.[19] The burden of proof is on the
party who will be defeated if no evidence is 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. In other words, damages cannot be presumed and courts, in making an award, must point
out specific facts that can afford a basis for measuring whatever compensatory or actual damages are borne.
In the instant case, the actual damages were proven through the sole testimony of Themistocles
Ruguero, the vice president for administration of Panacor. Although the lower court fixed the sum of
P4,520,000.00 as the total expenditures incurred by Panacor, it failed to show how and in what manner the
same were substantiated by the claimant with reasonable certainty. Hence, the claim for actual damages
should be admitted with extreme caution since it is only based on bare assertion without support from
independent evidence.
In determining actual damages, the court cannot rely on mere assertions, speculations, conjectures or
guesswork but must depend on competent proof and on the best evidence obtainable regarding the actual
amount of loss.[20]
Even if not recoverable as compensatory damages, Panacor may still be awarded damages in the
concept of temperate or moderate damages. When the court finds that some pecuniary loss has been suffered
but the amount cannot, from the nature of the case, be proved with certainty, temperate damages may be
recovered. Temperate damages may be allowed in cases where from the nature of the case, definite proof of
pecuniary loss cannot be adduced, although the court is convinced that the aggrieved party suffered some
pecuniary loss.
It is obvious that the wrongful acts of Premiere Bank adversely affected, in one way or another, the
commercial credit[22] of Panacor, greatly contributed to, if not, decisively caused the premature stoppage of
its business operations and the consequent loss of business opportunity. Since these losses are not
susceptible to pecuniary estimation, temperate damages may be awarded
The petition was denied and ordering Premiere Bank to pay Panacor Marketing Corporation
P500,000.00 as exemplary damages, P100,000.00 as attorneys fees, and costs, is AFFIRMED, with the
MODIFICATION that the award of P4,520,000.00 as actual damages is DELETED for lack of factual basis.
In lieu thereof, Premiere Bank is ordered to pay Panacor P200,000.00 as temperate damages.
 Cathay Pacific Airways vs Sps Fuentebella

Facts:
1. The case originated from a Complaint[4] for damages filed by respondents Arnulfo and Evelyn
Fuentebella against petitioner Cathay Pacific Airways Ltd., a foreign corporation licensed to do
business in the Philippines. Respondents prayed for a total of PI3 million in damages for the alleged
besmirched reputation and honor, as well as the public embarrassment they had suffered as a result
of a series of involuntary downgrades of their trip from Manila to Sydney via Hong Kong on 25
October 1993 and from Hong Kong to Manila on 2 November 1993
2. The RTC ruled in favor of respondents and awarded P5 million as moral damages, PI million as
exemplary damages, and P500,000 as attorney's fees. Upon review, the CA upheld the disposition
and the awards, with the modification that the attorney's fees be reduced to P100,000.

Petitioner prays that the Complaint be dismissed, or in the alternative, that the damages be
substantially and equitably reduced
Issue:
1.WON there was a breach of contract

2. WON There is basis for the award of moral and exemplary

damages

Held:
3. Moral and exemplary damages are not ordinarily awarded in breach of contract cases. This Court
has held that damages may be awarded only when the breach is wanton and deliberately injurious,
or the one responsible had acted fraudulently or with malice or bad faith. [78] Bad faith is a question
of fact that must be proven by clear and convincing evidence. [79] Both the trial and the appellate
courts found that petitioner had acted in bad faith. Hence, the petitioner is obliged to pay moral and
exemplary damages.
4. However the moral damages was reduced to 500,000.00 considering that the highest amount ever
awarded by this Court for moral damages in cases involving airlines is P500,000 and exemplary
damages of P50,000.00. Jurisprudence shows that P50,000 is sufficient to deter similar acts of bad
faith attributable to airline representatives.
Lara vs Valencia

Facts:

1. The deceased was an inspector of the Bureau of Forestry stationed in Davao with an annual salary of
P1,800. The defendant is engaged in the business of exporting logs from his lumber concession in
Cotabato.
2. Lara went to said concession upon instructions of his chief to classify the logs of defendant which were
about to be loaded on a ship anchored in the port of Parang. The work Lara of lasted for six days during
which he contracted malaria fever.
3. Lara who then in a hurry to return to Davao asked defendant if he could take him in his pick-up as there
was then no other means of transportation, to which defendant agreed, and in that same morning the
pick-up left.
4. Before leaving Parang, defendant invited Lara to sit with him on the front seat but Lara declined
5. Lara sat on a bag.
6. Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the pick-up and as a result he
suffered serious injuries.
7. They brought Lara to the nearest place where they could find a doctor and not having found any they
took him to St. Joseph's Clinic of Kidapawan. But when Lara arrived he was already dead.
8. An action for damages was brought by plaintiffs against defendant in the Court of First Instance of Davao
for the death of one Demetrio Lara, Sr. allegedly caused by the negligent act of defendant. Defendant
denied the charge of negligence.

9. The court after hearing rendered judgment ordering defendant to pay the plaintiffs the following amount:
(a) P10,000 as moral damages; (b) P3,000 as exemplary damages; and (c) P1,000 as attorney's fees, in
addition to the costs of action. Both parties appealed to this Court because the damages claimed in the
complaint exceed the sum of P50,000.

Issue:

WON there enough evidence to show that defendant failed to observe ordinary care or diligence in transporting
the deceased from Parang to Davao on the date in question?

Held:

Lara went to the lumber concession of defendant in answer to a call of duty which he was bound to perform
because of the requirement of his office and he contracted the malaria fever in the course of the performance of
that duty. It should also be noted that defendant was not in duty bound to take the deceased in his own pick-up
to Davao because from Parang to Cotabato there was a line of transportation that regularly makes trips for the
public, and if defendant agreed to take the deceased in his own car, it was only to accommodate him
considering his feverish condition and his request that he be so accommodated. It should also be noted that the
passengers who rode in the pick-up of defendant took their respective seats therein at their own choice and not
upon indication of defendant with the particularity that defendant invited the deceased to sit with him in the front
seat but which invitation the deceased declined. The reason for this can only be attributed to his desire to be at
the back so that he could sit on a bag and travel in a reclining position because such was more convenient for
him due to his feverish condition. All the circumstances therefore clearly indicate that defendant had done what a
reasonable prudent man would have done under the circumstances.

,The law provides that "A passenger must observe the diligence of a good father of a family to avoid injury to
himself" (Article 1761, new Civil Code), which means that if the injury to the passenger has
been proximately caused by his own negligence, the carrier cannot be held liable.

The accident occurred not due to the negligence of defendant but to circumstances beyond his control and so he
should be exempt from liability. , Hence, the decision appealed from is reversed, without pronouncement as to
costs.