Part II.

Damages and Other Kinds of Damages After considering the evidence presented by both parties the lower court
expressly found:
Cariaga v LTB Co., 101 Phil 346
. . . While the train was approximately 300 meters from the
DIZON, J.: crossing, the engineer sounded two long and two short whistles
and upon reaching a point about 100 meters from the highway, he
sounded a long whistle which lasted up to the time the train was
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas about to cross it. The bus proceeded on its way without slackening
Bus its speed and it bumped against the train engine, causing the first
Co. — hereinafter referred to as the LTB — driven by Alfredo Moncada, left six wheels of the latter to be derailed.
its station at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga,
a fourth-year medical student of the University of Santo Tomas, as one of its
passengers. At about 3:00 p.m., as the bus reached that part of the poblacion xxx xxx xxx
of Bay, Laguna, where the national highway crossed a railroad track, it
bumped against the engine of a train then passing by with such terrific force
. . . that the train whistle had been sounded several times before
that the first six wheels of the latter were derailed, the engine and the front
it reached the crossing. All witnesses for the plaintiffs and the
part of the body of the bus was wrecked, the driver of the bus died instantly,
defendants are uniform in stating that they heard the train whistle
while many of its passengers, Edgardo among them, were severely injured.
sometime before the impact and considering that some of them
Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m.,
were in the bus at the time, the driver thereof must have heard it
June 18, 1952, to 8:25 a.m., June 20 of the same year when he was taken to
because he was seated on the left front part of the bus and it was
the De los Santos Clinic, Quezon City. He left that clinic on October 14 to be
his duty and concern to observe such fact in connection with the
transferred to the University of Santo Tomas Hospital where he stayed up to
safe operation of the vehicle. The other L.T.B. bus which arrived
November 15. On this last date he was taken back to the De los Santos Clinic
ahead at the crossing, heeded the warning by stopping and
where he stayed until January 15, 1953. He was unconscious during the first
allowing the train to pass and so nothing happened to said vehicle.
35 days after the accident; at the De los Santos Clinic Dr. Gustilo removed
On the other hand, the driver of the bus No. 133 totally ignored
the fractured bones which lacerated the right frontal lobe of his brain and at
the whistle and noise produced by the approaching train and
the University of Santo Tomas Hospital Dr. Gustilo performed another
instead he tried to make the bus pass the crossing before the train
operation to cover a big hole on the right frontal part of the head with a
by not stopping a few meters from the railway track and in
tantalum plate.
proceeding ahead.

The LTB paid the sum of P16,964.45 for all the hospital, medical and
The above findings of the lower court are predicated mainly upon the
miscellaneous expenses incurred from June 18, 1952 to April, 1953. From
testimony of Gregorio Ilusondo, a witness for the Manila Railroad Company.
January 15, 1953 up to April of the same year Edgardo stayed in a private
Notwithstanding the efforts exerted by the LTB to assail his credibility, we do
house in Quezon, City, the LTB having agreed to give him a subsistence
not find in the record any fact or circumstance sufficient to discredit his
allowance of P10.00 daily during his convalescence, having spent in this
testimony. We have, therefore, no other alternative but to accept the findings
connection the total sum of P775.30 in addition to the amount already
of the trial court to the effect, firstly, that the whistle of locomotive was
referred to.
sounded four times — two long and two short — "as the train was
approximately 300 meters from the crossing"; secondly, that another LTB bus
On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, which arrived at the crossing ahead of the one where Edgardo Cariaga was
from the LTB and the MRR Co., and total sum of P312,000.00 as actual, a passenger, paid heed to the warning and stopped before the "crossing",
compensatory, moral and exemplary damages, and for his parents, the sum while — as the LTB itself now admits (Brief p. 5) — the driver of the bus in
of P18,00.00 in the same concepts. The LTB disclaimed liability claiming that question totally disregarded the warning.
the accident was due to the negligence of its co-defendant, the Manila
Railroad Company, for not providing a crossing bar at the point where the
But to charge the MRR Co. with contributory negligence, the LTB claims that
national highway crossed the railway track, and for this reason filed the
the engineer of the locomotive failed to ring the bell altogether, in violation of
corresponding cross-claim against the latter company to recover the total
the section 91 of Article 1459, incorporated in the charter of the said MRR
sum of P18,194.75 representing the expenses paid to Edgardo Cariaga. The
Co. This contention — as is obvious — is the very foundation of the cross-
Manila Railroad Company, in turn, denied liability upon the complaint and
claim interposed by the LTB against its
cross-claim alleging that it was the reckless negligence of the bus driver that
co-defendant. The former, therefore, had the burden of proving it affirmatively
caused the accident.
because a violation of law is never presumed. The record discloses that this
burden has not been satisfactorily discharged.
The lower court held that it was the negligence of the bus driver that caused
the accident and, as a result, rendered judgment sentencing the LTB to pay
The Cariagas, as appellants, claim that the award of P10,000.00
Edgardo Cariaga the sum of P10,490.00 as compensatory damages, with
compensatory damages to Eduardo is inadequate considering the nature and
interest at the legal rate from the filing of the complaint, and dismissing the
the after effects of the physical injuries suffered by him. After a careful
cross-claim against the Manila Railroad Company. From this decision the
consideration of the evidence on this point we find their contentions to be
Cariagas and the LTB appealed.
well-founded.

The Cariagas claim that the trial court erred: in awarding only P10,490.00 as
compensatory damages to Edgardo; in not awarding them actual and moral
damages, and in not sentencing appellant LTB to pay attorney's fees.
On the other hand, the LTB's principal contention in this appeal is that the
trial court should have held that the collision was due to the fault of both the
locomotive driver and the bus driver and erred, as a consequence, in not
holding the Manila Railroad Company liable upon the cross-claim filed
against it.
From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that,
as a result of the injuries suffered by Edgardo, his right forehead was
fractured necessitating the removal of practically all of the right frontal lobe
of his brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it
may be gathered that, because of the physical injuries suffered by Edgardo,
his mentality has been so reduced that he can no longer finish his studies as
a medical student; that he has become completely misfit for any kind of work;
that he can hardly walk around without someone helping him, and has to use
a brace on his left leg and feet.

We shall first dispose of the appeal of the bus company. Its first contention is
that the driver of the train locomotive, like the bus driver, violated the law,
first, in sounding the whistle only when the collision was about to take place
instead of at a distance at least 300 meters from the crossing, and second,
in not ringing the locomotive bell at all. Both contentions are without merits.
Upon the whole evidence on the matter, the lower court found that the
removal of the right frontal lobe of the brain of Edgardo reduced his
intelligence by about 50%; that due to the replacement of the right frontal
bone of his head with a tantalum plate Edgardo has to lead a quite and retired
life because "if the tantalum plate is pressed in or dented it would cause his
death."

1
The impression one gathers from this evidence is that, as a result of the
physical injuries suffered by Edgardo Cariaga, he is now in a helpless
condition, virtually an invalid, both physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the damages for
which the obligor, guilty of a breach of contract but who acted in good faith,
is liable shall be those that are the natural and probable consequences of the
breach and which the parties had forseen or could have reasonably forseen
at the time the obligation was constituted, provided such damages, according
to Art. 2199 of the same Code, have been duly proved. Upon this premise it
claims that only the actual damages suffered by Edgardo Cariaga consisting
of medical, hospital and other expenses in the total sum of P17,719.75 are
within this category. We are of the opinion, however, that the income which
Edgardo Cariaga could earn if he should finish the medical course and pass
the corresponding board examinations must be deemed to be within the
same category because they could have reasonably been foreseen by the
parties at the time he boarded the bus No. 133 owned and operated by the
LTB. At that time he was already a fourth-year student in medicine in a
reputable university. While his scholastic may not be first rate (Exhibits 4, 4-
A to 4-C), it is, nevertheless, sufficient to justify the assumption that he could
have passed the board test in due time. As regards the income that he could
possibly earn as a medical practitioner, it appears that, according to Dr.
Amado Doria, a witness for the LTB, the amount of P300.00 could easily be
expected as the minimum monthly income of Edgardo had he finished his
studies.
Upon consideration of all the facts mentioned heretofore this Court is of the
opinion, and so holds, that the compensatory damages awarded to Edgardo
Cariaga should be increased to P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was denied
by the trial court, the pertinent portion of its decision reading as follows:
Plaintiffs' claim for moral damages cannot also be granted. Article
2219 of the Civil Code enumerates the instances when moral
damages may be covered and the case under consideration does
not fall under any one of them. The present action cannot come
under paragraph 2 of said article because it is not one of the quasi-
delict and cannot be considered as such because of the pre-
existing contractual relation between the Laguna Tayabas Bus
Company and Edgardo Cariaga. Neither could defendant Laguna
Tayabas Bus Company be held liable to pay moral damages to
Edgardo Cariaga under Article 2220 of the Civil Code on account
of breach of its contract of carriage because said defendant did
not act fraudulently or in bad faith in connection therewith.
Defendant Laguna Tayabas Bus Company had exercised due
diligence in the selection and supervision of its employees like the
drivers of its buses in connection with the discharge of their duties
and so it must be considered an obligor in good faith.
The plaintiff Edgardo Cariaga is also not entitled to recover for
attorney's fees, because this case does not fall under any of the
instances enumerated in Article 2208 of the Civil Code.
We agree with the trial court and, to the reason given above, we add those
given by this Court in Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil.,
523, 530, 533):
A mere perusal of plaintiff's complaint will show that this action
against the defendant is predicated on an alleged breach of
contract of carriage, i.e., the failure of the defendants to bring him
"safely and without mishaps" to his destination, and it is to be
noted that the chauffeur of defendant's taxicab that plaintiff used
when he received the injuries involved herein, Gregorio Mira, has
not even made a party defendant to this case.
Considering, therefore, the nature of plaintiff's action in this case,
is he entitled to compensation for moral damages? Article 2219 of
the Civil Code says the following:
Art. 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
2
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30,
32, 34, and 35.
xxx xxx xxx
Of course enumerated in the just quoted Article 2219 only the first
two may have any bearing on the case at bar. We find, however,
with regard to the first that the defendant herein has not committed
in connection with this case any "criminal offense resulting in
physical injuries". The one that committed the offense against the
plaintiff is Gregorio Mira, and that is why he has been already
prosecuted and punished therefor. Altho (a) owners and
managers of an establishment and enterprise are responsible for
damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of
their functions; (b) employers are likewise liable for damages
caused by their employees and household helpers acting within
the scope of their assigned task (Article 218 of the Civil Code);
and (c) employers and corporations engaged in any kind of
industry are subsidiary civilly liable for felonies committed by their
employees in the discharge of their duties (Art. 103, Revised
Penal Code), plaintiff herein does not maintain this action under
the provisions of any of the articles of the codes just mentioned
and against all the persons who might be liable for the damages
caused, but as a result of an admitted breach of contract of
carriage and against the defendant employer alone. We,
therefore, hold that the case at bar does not come within the
exception of paragraph 1, Article 2219 of the Civil Code.
The present complaint is not based either on a "quasi-delict
causing physical injuries" (Art. 2219, par. 2 of the Civil Code).
From the report of the Code Commission on the new Civil Code.
We copy the following:
A question of nomenclature confronted the Commission. After a
careful deliberation, it was agreed to use the term "quasi-delict"
for those obligations which do not arise from law, contracts, quasi-
contracts, or criminal offenses. They are known in Spanish legal
treaties as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-
delitos". The phrase "culpa-extra-contractual" or its translation
"extra-contractual-fault" was eliminated because it did not exclude
quasi-contractual or penal obligations. "Aquilian fault" might have
been selected, but it was thought inadvisable to refer to so ancient
a law as the "Lex Aquilia". So "quasi-delict" was chosen, which
more nearly corresponds to the Roman Law classification of the
obligations and is in harmony with the nature of this kind of liability.
The Commission also thought of the possibility of adopting the
word "tort" from Anglo-American law. But "tort" under that system
is much broader than the Spanish-Philippine concept of
obligations arising from non-contractual negligence. "Tort" in
Anglo-American jurisprudence includes not only negligence, but
also intentional criminal act, such as assault and battery, false
imprisonment and deceit. In the general plan of the Philippine
legal system, intentional and malicious acts are governed by the
 Penal Code, although certain exceptions are made in the Project.
(Report of the Code Commission, pp. 161-162).

In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We

established the distinction between obligation derived from
negligence and obligation as a result of a breach of contract. Thus,
we said:

It is important to note that the foundation of the legal liability of the

defendant is the contract of carriage, and that the obligation to
respond for the damage which plaintiff has suffered arises, if at all,
from the breach of that contract by reason of the failure of
defendant to exercise due care in its performance. That is to
say, its liability is direct and immediate, differing essentially in the
legal viewpoint from the presumptive responsibility for the
negligence of its servants, imposed by Article 1903 of the Civil
Code (Art. 2180 of the new), which can be rebutted by proof of the
exercise of due care in their selection of supervision. Article 1903
is not applicable to obligations arising EX CONTRACTU, but only
to extra-contractual obligations — or to use the technical form of
expression, that article relates only to CULPA AQUILIANA' and
not to CULPA CONTRACTUAL.lawphil.net

The decisions in the cases of Castro vs. Acro Taxicab Co., (82
Phil., 359; 46 Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila
Railroad, 59 Phil., 758) and others, wherein moral damages were
awarded to the plaintiffs, are not applicable to the case at bar
because said decision were rendered before the effectivity of the
new Civil Code (August 30, 1950) and for the further reason that
the complaints filed therein were based on different causes of
action.

In view of the foregoing the sum of P2,000 was awarded as moral

damages by the trial court has to be eliminated, for under the law
it is not a compensation awardable in a case like the one at bar.

What has been said heretofore relative to the moral damages claimed by
Edgardo Cariaga obviously applies with greater force to a similar claim (4th
assignment of error) made by his parents.

The claim made by said spouses for actual and compensatory damages is
likewise without merits. As held by the trial court, in so far as the LTB is
concerned, the present action is based upon a breach of contract of carriage
to which said spouses were not a party, and neither can they premise their
claim upon the negligence or quasi-delict of the LTB for the simple reason
that they were not themselves injured as a result of the collision between the
LTB bus and train owned by the Manila Railroad Company.

Wherefore, modified as above indicated, the appealed judgement is hereby

affirmed in all other respects, with costs against appellant LTB.

3
Villa Rey Transit Inc. v CA, 31 SCRA 511
CONCEPCION, C.J.:
Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision
of the Court of Appeals affirming that of the Court of First Instance of
Pangasinan. The basic facts are set forth in said decision of the Court of
Appeals, from which We quote:
WHEREFORE, judgment is hereby rendered ordering
the defendant to pay to the plaintiffs the amount of
P63,750.00 as damages for breach of contract of
carriage resulting from the death of Policronio Quintos,
Jr.
which, as above indicated, was affirmed by the Court of Appeals. Hence, the
present petition for review on certiorari, filed by Villa Rey Transit, Inc.

The only issue raised in this appeal is the amount of damages recoverable
At about 1:30 in the morning of March 17, 1960, an by private respondents herein. The determination of such amount depends,
Izuzu First Class passenger bus owned and operated mainly upon two (2) factors, namely: (1) the number of years on the basis of
by the defendant, bearing Plate No. TPU-14871- which the damages shall be computed and (2) the rate at which the losses
Bulacan and driven by Laureano Casim, left Lingayen, sustained by said respondents should be fixed.
Pangasinan, for Manila. Among its paying passengers
was the deceased, Policronio Quintos, Jr. who sat on
the first seat, second row, right side of the bus. At about The first factor was based by the trial court — the view of which was
4:55 o'clock a.m. when the vehicle was nearing the concurred in by the Court of Appeals — upon the life expectancy of Policronio
northern approach of the Sadsaran Bridge on the Quintos, Jr., which was placed at 33-1/3 years — he being over 29 years of
national highway in barrio Sto. Domingo, municipality age (or around 30 years for purposes of computation) at the time of his
of Minalin, Pampanga, it frontally hit the rear side of a demise — by applying the formula (2/3 x [80-301 = life expectancy) adopted
bullcart filled with hay. As a result the end of a bamboo in the American Expectancy Table of Mortality or the actuarial of Combined
pole placed on top of the hayload and tied to the cart Experience Table of Mortality. Upon the other hand, petitioner maintains that
to hold it in place, hit the right side of the windshield of the lower courts had erred in adopting said formula and in not acting in
the bus. The protruding end of the bamboo pole, about accordance with Alcantara v. Surro1 in which the damages were computed
8 feet long from the rear of the bullcart, penetrated on a four (4) year basis, despite the fact that the victim therein was 39 years
through the glass windshield and landed on the face of old, at the time of his death, and had a life expectancy of 28.90 years.
Policronio Quintos, Jr. who, because of the impact, fell
from his seat and was sprawled on the floor. The pole
The case cited is not, however, controlling in the one at bar. In the Alcantara
landed on his left eye and the bone of the left side of
case, none of the parties had questioned the propriety of the four-year basis
his face was fractured. He suffered other multiple
adopted by the trial court in making its award of damages. Both parties
wounds and was rendered unconscious due, among
appealed, but only as regards the amount thereof. The plaintiffs assailed the
other causes to severe cerebral concussion. A La
non-inclusion, in its computation, of the bonus that the corporation, which
Mallorca passenger bus going in the opposite direction
was the victim's employer, had awarded to deserving officers and employees,
towards San Fernando, Pampanga, reached the scene
based upon the profits earned less than two (2) months before the accident
of the mishap and it was stopped by Patrolman Felino
that resulted in his death. The defendants, in turn, objected to the sum
Bacani of the municipal police force of Minalin who, in
awarded for the fourth year, which was treble that of the previous years,
the meantime, had gone to the scene to investigate.
based upon the increases given, in that fourth year, to other employees of
Patrolman Bacani placed Policronio Quintos, Jr. and
the same corporation. Neither this objection nor said claim for inclusion of the
three other injured men who rode on the bullcart
bonus was sustained by this Court. Accordingly, the same had not thereby
aboard the La Mallorca bus and brought them to the
laid down any rule on the length of time to be used in the computation of
provincial hospital of Pampanga at San Fernando for
damages. On the contrary, it declared:
medical assistance. Notwithstanding such assistance,
Policronio Quintos, Jr. died at 3:15 p.m. on the same
day, March 17, 1960, due to traumatic shock due to The determination of the indemnity to be awarded to
cerebral injuries. the heirs of a deceased person has therefore no fixed
basis. Much is left to the discretion of the court
considering the moral and material damages involved,
The private respondents, Trinidad, Prima and Julita, all surnamed Quintos,
and so it has been said that "(t)here can be no exact or
are the sisters and only surviving heirs of Policronio Quintos Jr., who died
uniform rule for measuring the value of a human life
single, leaving no descendants nor ascendants. Said respondents herein
and the measure of damages cannot be arrived at by
brought this action against herein petitioner, Villa Rey Transit, Inc., as owner
precise mathematical calculation, but the amount
and operator of said passenger bus, bearing Plate No. TPU-14871-Bulacan,
recoverable depends on the particular facts and
for breach of the contract of carriage between said petitioner and the
circumstances of each case. The life expectancy of the
deceased Policronio Quintos, Jr., to recover the aggregate sum of
deceased or of the beneficiary, whichever is shorter, is
P63,750.00 as damages, including attorney's fees. Said petitioner —
an important factor.' (25 C.J.S. 1241.) Other factors
defendant in the court of first instance — contended that the mishap was due
that are usually considered are: (1) pecuniary loss to
to a fortuitous event, but this pretense was rejected by the trial court and the
plaintiff or beneficiary (25 C.J.S. 1243-1250) ; (2) loss
Court of Appeals, both of which found that the accident and the death of
of support (25 C.J.S., 1250-1251); (3) loss of service
Policronio had been due to the negligence of the bus driver, for whom
(25 C.J.S. 1251-1254); (4) loss of society (25 C.J.S.
petitioner was liable under its contract of carriage with the deceased. In the
1254-1255); (5) mental suffering of beneficiaries (25
language of His Honor, the trial Judge:
C.J.S., 1258-1259) ; and (6) medical and funeral
expenses (26 C.J.S., 1254-1260)."2
The mishap was not the result of any unforeseeable
fortuitous event or emergency but was the direct result
Thus, life expectancy is, not only relevant, but, also, an important element in
of the negligence of the driver of the defendant. The
fixing the amount recoverable by private respondents herein. Although it is
defendant must, therefore, respond for damages
not the sole element determinative of said amount, no cogent reason has
resulting from its breach of contract for carriage. As the
been given to warrant its disregard and the adoption, in the case at bar, of a
complaint alleged a total damage of only P63,750.00
purely arbitrary standard, such as a four-year rule. In short, the Court of
although as elsewhere shown in this decision the
Appeals has not erred in basing the computation of petitioner's liability upon
damages for wake and burial expenses, loss of
the life expectancy of Policronio Quintos, Jr.
income, death of the victim, and attorneys fee reach
the aggregate of P79,615.95, this Court finds it just that
said damages be assessed at total of only P63,750.00 With respect to the rate at which the damages shall be computed, petitioner
as prayed for in plaintiffs' amended complaint. impugns the decision appealed from upon the ground that the damages
awarded therein will have to be paid now, whereas most of those sought to
be indemnified will be suffered years later. This argument is basically true,
The despositive part of the decision of the trial Court reads:
and this is, perhaps, one of the reasons why the Alcantara case points out
the absence of a "fixed basis" for the ascertainment of the damages
4
recoverable in litigations like the one at bar. Just the same, the force of the
said argument of petitioner herein is offset by the fact that, although payment
of the award in the case at bar will have to take place upon the finality of the
decision therein, the liability of petitioner herein had been fixed at the rate
only of P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr.
at the time of his death, as a young "training assistant" in the Bacnotan
Cement Industries, Inc. In other words, unlike the Alcantara case, on which
petitioner relies, the lower courts did not consider, in the present case,
Policronio's potentiality and capacity to increase his future income. Indeed,
upon the conclusion of his training period, he was supposed to have a better
job and be promoted from time to time, and, hence, to earn more, if not —
considering the growing importance of trade, commerce and industry and the
concomitant rise in the income level of officers and employees
therein — much more.

At this juncture, it should be noted, also, that We are mainly concerned with
the determination of the 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 the 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 the necessary expense for his own
living.3 Stated otherwise, the amount recoverable is not loss of the entire
earning, but rather the loss of that portion of the earnings which the
beneficiary would have received.4 In other words, only net earnings, not
gross earning, are to be considered5 that is, the total of the
earnings less expenses necessary in the creation of such earnings or
income6 and less living and other incidental expenses.7

All things considered, We are of the opinion that it is fair and reasonable to
fix the deductible living and other expenses of the deceased at the sum of
P1,184.00 a year, or about P100.00 a month, and that, consequently, the
loss sustained by his sisters may be roughly estimated at P1,000.00 a year
or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of
P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts.
104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil
Code, as construed and applied by this Court;8 (b) P1,727.95, actually spent
by private respondents for medical and burial expenses; and (c) attorney's
fee, which was fixed by the trial court, at P500.00, but which, in view of the
appeal taken by petitioner herein, first to the Court of Appeals and later to
this Supreme Court, should be increased to P2,500.00. In other words, the
amount adjudged in the decision appealed from should be reduced to the
aggregate sum of P49,561.28, with interest thereon, at the legal rate, from
December 29, 1961, date of the promulgation of the decision of the trial court.

Thus modified, said decision and that of the Court of Appeals are hereby
affirmed, in all other respects, with costs against petitioner, Villa Rey Transit,
Inc. It is so ordered.

5
Korean Airlines Co., Ltd. V CA, 234 SCRA 717 (Aug 3, 1994)
CRUZ, J.:
Sometime in 1980, Juanito C. Lapuz, an automotive electrician, was
contracted for employment in Jeddah, Saudi Arabia, for a period of one year
through Pan Pacific Overseas Recruiting Services, Inc. Lapuz was supposed
to leave on November 8, 1980, via Korean Airlines. Initially, he was "wait-
listed," which meant that he could only be accommodated if any of the
confirmed passengers failed to show up at the airport before departure. When
two of such passengers did not appear, Lapuz and another person by the
name of Perico were given the two unclaimed seats.
According to Lapuz, he was allowed to check in with one suitcase and one
shoulder bag at the check-in counter of KAL. He passed through the customs
and immigration sections for routine check-up and was cleared for departure
as Passenger No. 157 of KAL Flight No. KE 903. Together with the other
passengers, he rode in the shuttle bus and proceeded to the ramp of the KAL
aircraft for boarding. However, when he was at the third or fourth rung of the
stairs, a KAL officer pointed to him and shouted "Down! Down!" He was thus
barred from taking the flight. When he later asked for another booking, his
ticket was canceled by KAL. Consequently, he was unable to report for his
work in Saudi Arabia within the stipulated 2-week period and so lost his
employment.
KAL, on the other hand, alleged that on November 8, 1980, Pan Pacific
Recruiting Services Inc. coordinated with KAL for the departure of 30 contract
workers, of whom only 21 were confirmed and 9 were wait-listed passengers.
The agent of Pan Pacific, Jimmie Joseph, after being informed that there was
a possibility of having one or two seats becoming available, gave priority to
Perico, who was one of the supervisors of the hiring company in Saudi
Arabia. The other seat was won through lottery by Lapuz. However, only one
seat became available and so, pursuant to the earlier agreement that Perico
was to be given priority, he alone was allowed to board.
After trial, the Regional Trial Court of Manila, Branch 30, 1 adjudged KAL
liable for damages, disposing as follows:
WHEREFORE, in view of the foregoing consideration, judgment is hereby
rendered sentencing the defendant Korean Air Lines to pay plaintiff Juanito
C. Lapuz the following:
1. The amount of TWO HUNDRED SEVENTY-TWO THOUSAND ONE
HUNDRED SIXTY (P272,160.00) PESOS as actual/compensatory damages,
with legal interest thereon from the date of the filing of the complaint until fully
paid.
2. The sum of TWENTY-FIVE THOUSAND (P25,000.00) PESOS as and for
attorney's fees; and
3. The costs of suit.
The case is hereby dismissed with respect to defendant Pan Pacific
Overseas Recruiting Services, Inc.
The counterclaims and cross-claim of defendant Korean Air Lines Co., Ltd.
are likewise dismissed.
On appeal, this decision was modified by the Court of Appeals 2 as follows:
WHEREFORE, in view of all the foregoing, the appealed judgment is hereby
AFFIRMED with the following modifications: the amount of actual damages
and compensatory damages is reduced to P60,000.00 and defendant-
appellant is hereby ordered to pay plaintiff-appellant the sum of One Hundred
Thousand Pesos (P100,000.00) by way of moral and exemplary damages,
at 6% interest per annum from the date of the filing of the Complaint until fully
paid.
KAL and Lapuz filed their respective motions for reconsideration, which were
both denied for lack of merit. Hence, the present petitions for review which
6
have been consolidated because of the identity of the parties and the
similarity of the issues.
In G. R. No. 114061, KAL assails the decision of the appellate court on the
following grounds:
1. That the Court of Appeals erred in concluding that petitioner committed a
breach of contract of carriage notwithstanding lack of proper, competent and
sufficient evidence of the existence of such contract.
2. That the Court of Appeals erred in not according the proper evidentiary
weight to some evidence presented and the fact that private respondent did
not have any boarding pass to prove that he was allowed to board and to
prove that his airline ticket was confirmed.
3. That the Court of Appeals erred in concluding that the standby passenger
status of private respondent Lapuz was changed to a confirmed status when
his name was entered into the passenger manifest.
4. That the Court of Appeals abused its discretion in awarding moral and
exemplary damages in the amount of P100,000.00 in favor of private
respondent notwithstanding its lack of basis and private respondent did not
state such amount in his complaint nor had private respondent proven the
said damages.
5. That the Court of Appeals erred in dismissing the counterclaims.
6. That the Court of Appeals erred in dismissing the counterclaim of petitioner
against Pan Pacific.
7. That the Court of Appeals erred in ruling that the 6% per annum legal
interest on the judgment shall be computed from the filing of the complaint.
In G. R. No. 113842, Lapuz seeks: (a) the setting aside of the decision of the
Court of Appeals insofar as it modifies the award of damages; b) actual and
compensatory damages in the sum equivalent to 5 years' loss of earnings
based on the petitioner's monthly salary of 1,600 Saudi rials at the current
conversion rate plus the cost of baggage and personal belongings worth
P2,000 and the service fee of P3,000 paid to the recruiting agency, all with
legal interest from the filing of the complaint until fully paid; c) moral damages
of not less than P1 million and exemplary damages of not less than
P500,000.00, both with interest at 6% per annum from the filing of the
complaint; and d) attorney's fees in the sum equivalent to 30% of the award
of damages.
It is evident that the issues raised in these petitions relate mainly to the
correctness of the factual findings of the Court of Appeals and the award of
damages. The Court has consistently affirmed that the findings of fact of the
Court of Appeals and the other lower courts are as a rule binding upon it,
subject to certain exceptions. As nothing in the record indicates any of such
exceptions, the factual conclusions of the appellate court must be affirmed.
The status of Lapuz as standby passenger was changed to that of a
confirmed passenger when his name was entered in the passenger manifest
of KAL for its Flight No. KE 903. His clearance through immigration and
customs clearly shows that he had indeed been confirmed as a passenger of
KAL in that flight. KAL thus committed a breach of the contract of carriage
between them when it failed to bring Lapuz to his destination.
This Court has held that a contract to transport passengers is different in kind
and degree from any other contractual relation. 3 The business of the carrier
is mainly with the traveling public. It invites people to avail themselves of the
comforts and advantages it offers. The contract of air carriage generates a
relation attended with a public duty. Passengers have the right to be treated
by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. 4 So it is
that any discourteous conduct on the part of these employees toward a
passenger gives the latter an action for damages against the carrier.
The breach of contract was aggravated in this case when, instead of
courteously informing Lapuz of his being a "wait-listed" passenger, a KAL
officer rudely shouted "Down! Down!" while pointing at him, thus causing him
embarrassment and public humiliation.
KAL argues that "the evidence of confirmation of a chance passenger status
is not through the entry of the name of a chance passenger in the passenger
manifest nor the clearance from the Commission on Immigration and
Deportation, because they are merely means of facilitating the boarding of a
chance passenger in case his status is confirmed." We are not persuaded.
The evidence presented by Lapuz shows that he had indeed checked in at
the departure counter, passed through customs and immigration, boarded
the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his
baggage had already been loaded in KAL's aircraft, to be flown with him to
Jeddah. The contract of carriage between him and KAL had already been
perfected when he was summarily and insolently prevented from boarding
the aircraft.
KAL's allegation that the respondent court abused its discretion in awarding
moral and exemplary damages is also not tenable.
The Court of Appeals granted moral and exemplary damages because:
The findings of the court a quo that the defendant-appellant has committed
breach of contract of carriage in bad faith and in wanton, disregard of plaintiff-
appellant's rights as passenger laid the basis and justification of an award for
moral damages.
xxxx
In the instant case, we find that defendant-appellant Korean Air Lines acted
in a wanton, fraudulent, reckless, oppressive or malevolent manner when it
"bumped off" plaintiff-appellant on November 8, 1980, and in addition treated
him rudely and arrogantly as a "patay gutom na contract worker fighting
Korean Air Lines," which clearly shows malice and bad faith, thus entitling
plaintiff-appellant to moral damages.
xxxx
Considering that the plaintiff-appellant's entitlement to moral damages has
been fully established by oral and documentary evidence, exemplary
damages may be awarded. In fact, exemplary damages may be awarded,
even though not so expressly pleaded in the complaint (Kapoe vs. Masa, 134
SCRA 231). By the same token, to provide an example for the public good,
an award of exemplary damages is also proper (Armovit vs. Court of
Appeals, supra).
On the other hand, Lapuz's claim that the award of P100,000.00 as moral
and exemplary damages is inadequate is not acceptable either. His prayer
for moral damages of not less than P1 million and exemplary damages of not
less than P500,000.00 is overblown.
The well-entrenched principle is that moral damages depend upon the
discretion of the court based on the circumstances of each case. 5 This
discretion is limited by the principle that the "amount awarded should not be
palpably and scandalously excessive" as to indicate that it was the result of
prejudice or corruption on the part of the trial court. 6 Damages are not
intended to enrich the complainant at the expense of the defendant. They are
awarded only to alleviate the moral suffering that the injured party had
undergone by reason of the defendant's culpable action. 7 There is no hard-
and-fast rule in the determination of what would be a fair amount of moral
damages since each case must be governed by its own peculiar facts.
A review of the record of this case shows that the injury suffered by Lapuz is
not so serious or extensive as to warrant an award of P1.5 million. The
assessment of P100,000 as moral and exemplary damages in his favor is, in
our view, reasonable and realistic.
Lapuz likewise claims that the respondent court could not rule upon the
propriety of the award of actual damages because it had not been assigned
as an error by KAL. Not so. The rule is that only errors specifically assigned
and properly argued in the brief will be considered except errors affecting
jurisdiction over the subject matter and plain as well as clerical errors. 8 But
7
this is not without qualification for, as the Court held in Vda. de Javellana vs.
Court of Appeals: 9
. . . [T]he Court is clothed with ample authority to review matters, even if they
are not assigned as errors in their appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case.
A similar pronouncement was made in Baquiran vs. Court of Appeals 10 in
this wise:
Issues, though not specifically raised in the pleading in the appellate court,
may, in the interest of justice, be properly considered by said court in deciding
a case, if they are questions raised in the trial court and are matters of record
having some bearing on the issue submitted which the parties failed to raise
or the lower court ignored.
The Court of Appeals was therefore justified in decreasing the award of actual
damages even if the issue was not assigned as an error by KAL.
Consideration of this question was necessary for the just and complete
resolution of the present case. Furthermore, there was enough evidence to
warrant the reduction of the original award, as the challenged decision
correctly observed:
A perusal of the plaintiff-appellant's contract of employment shows that the
effectivity of the contract is for only one year, renewable every year for five
years. Although plaintiff-appellant intends to renew his contract, such
renewal will still be subject to his foreign employer. Plaintiff-appellant had not
yet started working with his foreign employer, hence, there can be no basis
as to whether his contract will be renewed by his foreign employer or not.
Thus, the damages representing the loss of earnings of plaintiff-appellant in
the renewal of the contract of employment is at most speculative. Damages
may not be awarded on the basis of speculation or conjecture (Gachalian vs.
Delim, 203 SCRA 126). Hence, defendant-appellant's liability is limited to the
one year contract only. Plaintiff-appellant is, therefore, entitled only to his lost
earnings for one year, i.e., P60,000.00, which is 1/5 of P300,000.00, the total
amount of actual damages, representing lost earnings for five years prayed
for in the Complaint.
Plaintiff-appellant's contention that in computing his lost earnings, the current
rate of the Saudi Rial to the Philippine Peso at the time of payment should be
used, is untenable, considering that in his Complaint, plaintiff-appellant has
quantified in Philippine Peso his lost earnings for five years.
We disagree with the respondent court, however, on the date when the legal
interest should commence to run. The rule is that the legal interest of six
percent (6%) on the amounts adjudged in favor of Lapuz should resume from
the time of the rendition of the trial court's decision instead of November 28,
1980, the date of the filing of the complaint.
On this matter, the Court has held:
If suit were for payment of a definite sum of money, the contention might be
tenable. However, if it is for damages, unliquidated and not known until
definitely ascertained, assessed and determined by the courts after proof,
interest should be from the date of the decision. 11
xxxx
The obligation to pay interest on a sum filed in a judgment exists from the
date of the sentence, when so declared; for until the net amount of the
debtor's liability has been determined, he cannot he considered delinquent in
the fulfillment of his obligation to pay the debt with interest thereon. 12
Finally, we find that the respondent court did not err in sustaining the trial
court's dismissal of KAL's counterclaim against Pan Pacific Overseas
Recruiting Services Inc., whose responsibility ended with the confirmation by
KAL of Lapuz as its passenger in its Flight No. 903.
This is still another case of the maltreatment of our overseas contract
workers, this time by the airline supposed to bring the passenger to his
foreign assignment. Our OCW's sacrifice much in seeking employment
abroad, where they are deprived of the company of their loved ones, the
direct protection of our laws, and the comfort of our own native culture and
way of life. This Court shall exert every effort to vindicate their rights when
they are abused and shall accord them the commensurate reparation of their
injuries consistent with their dignity and worth as members of the working
class.

WHEREFORE, the appealed judgment is AFFIRMED, but with the

modification that the legal interest on the damages awarded to private
respondent should commence from the date of the decision of the trial court
on November 14, 1990. The parties shall bear their own costs.

SO ORDERED.

8
Chapter 3: Other Kinds of Damages
Cases:
George McKee and Araceli Koh McKee v IAC et al, GR No. L-68102 (July
16, 1992) – consolidated case with the case of Carmen Dayrit et al v.
IAC, GR No. L-68103, July 16, 1992)
DAVIDE, JR., J.:
Petitioners urge this Court to review and reverse the Resolution of the Court
of Appeals in C.A.-G.R. CV Nos. 69040-41, promulgated on 3 April 1984,
which set aside its previous Decision dated 29 November 1983 reversing the
Decision of the trial court which dismissed petitioners' complaints in Civil
Case No. 4477 and Civil Case No. 4478 of the then Court of First Instance
(now Regional Trial Court) of Pampanga entitled "Carmen Dayrit Koh, Leticia
Koh, Julieta Koh Tuquero, Araceli Koh McKee and Elizabeth Koh Turla vs.
Jaime Tayag and Rosalinda Manalo," and "George McKee and Araceli Koh
McKee vs. Jaime Tayag and Rosalinda Manalo," respectively, and granted
the private respondents' counterclaim for moral damages, attorney's fees and
litigation expenses.
The said civil cases for damages based on quasi-delict were filed as a result
of a vehicular accident which led to the deaths of Jose Koh, Kim Koh McKee
and Loida Bondoc and caused physical injuries to George Koh McKee,
Christopher Koh McKee and petitioner Araceli Koh McKee.
Petitioners in G.R. No. 68102, parents of the minors George Koh McKee,
Christopher Koh McKee and the deceased Kim Koh McKee, were the
plaintiffs in Civil Case No. 4478, while petitioner Carmen Dayrit Koh and her
co-petitioners in G.R. No. 68103, who are the wife and children, respectively,
of the late Jose Koh, were the plaintiffs in Civil Case No. 4477. Upon the
other hand, private respondents are the owners of the cargo truck which
figured in the mishap; a certain Ruben Galang was the driver of the truck at
the time of the accident.
The antecedent facts are not disputed.
Between nine and ten o'clock in the morning of 8 January 1977, in Pulong
Pulo Bridge along MacArthur Highway, between Angeles City and San
Fernando, Pampanga, a head-on-collision took place between an
International cargo truck, Loadstar, with Plate No. RF912-T Philippines '76
owned by private respondents, and driven by Ruben Galang, and a Ford
Escort car bearing Plate No. S2-850 Pampanga '76 driven by Jose Koh. The
collision resulted in the deaths of Jose Koh, Kim Koh McKee and Loida
Bondoc, and physical injuries to George Koh McKee, Christopher Koh
McKee and Araceli Koh McKee, all passengers of the Ford Escort.
Jose Koh was the father of petitioner Araceli Koh McKee, the mother of
minors George, Christopher and Kim Koh McKee. Loida Bondoc, on the other
hand, was the baby sitter of one and a half year old Kim. At the time of the
collision, Kim was seated on the lap of Loida Bondoc who was at the front
passenger's seat of the car while Araceli and her two (2) sons were seated
at the car's back seat.
Immediately before the collision, the cargo truck, which was loaded with two
hundred (200) cavans of rice weighing about 10,000 kilos, was traveling
southward from Angeles City to San Fernando Pampanga, and was bound
for Manila. The Ford Escort, on the other hand, was on its way to Angeles
City from San Fernando. When the northbound car was about (10) meters
away from the southern approach of the bridge, two (2) boys suddenly darted
from the right side of the road and into the lane of the car. The boys were
moving back and forth, unsure of whether to cross all the way to the other
side or turn back. Jose Koh blew the horn of the car, swerved to the left and
entered the lane of the truck; he then switched on the headlights of the car,
applied the brakes and thereafter attempted to return to his lane. Before he
could do so, his car collided with the truck. The collision occurred in the lane
of the truck, which was the opposite lane, on the said bridge.
The incident was immediately reported to the police station in Angeles City;
consequently, a team of police officers was forthwith dispatched to conduct
an on the spot investigation. In the sketch 1 prepared by the investigating
officers, the bridge is described to be sixty (60) "footsteps" long and fourteen
(14) "footsteps" wide — seven (7) "footsteps" from the center line to the inner
9
edge of the side walk on both sides. 2 Pulong Pulo Bridge, which spans a dry
brook, is made of concrete with soft shoulders and concrete railings on both
sides about three (3) feet high.
The sketch of the investigating officer discloses that the right rear portion of
the cargo truck was two (2) "footsteps" from the edge of the right sidewalk,
while its left front portion was touching the center line of the bridge, with the
smashed front side of the car resting on its front bumper. The truck was about
sixteen (16) "footsteps" away from the northern end of the bridge while the
car was about thirty-six (36) "footsteps" from the opposite end. Skid marks
produced by the right front tire of the truck measured nine (9) "footsteps",
while skid marks produced by the left front tire measured five (5) "footsteps."
The two (2) rear tires of the truck, however, produced no skid marks.
In his statement to the investigating police officers immediately after the
accident, Galang admitted that he was traveling at thirty (30) miles (48
kilometers) per hour.
As a consequence of the collision, two (2) cases, Civil Case No. 4477 and
No. 4478, were filed on 31 January 1977 before the then Court of First
Instance of Pampanga and were raffled to Branch III and Branch V of the
said court, respectively. In the first, herein petitioners in G.R. No. 68103
prayed for the award of P12,000.00 as indemnity for the death of Jose Koh,
P150,000.00 as moral damages, P60,000.00 as exemplary damages,
P10,000.00 for litigation expenses, P6,000.00 for burial expenses, P3,650.00
for the burial lot and P9,500.00 for the tomb, plus attorney's fees. 3 In the
second case, petitioners in G.R. No. 68102 prayed for the following: (a) in
connection with the death of Kim McKee, the sum of P12,000.00 as death
benefit, P3,150.00 for funeral services, P3,650.00 for the cemetery lot,
P3,000.00 for the tomb, P50,000.00 as moral damages, P10,000.00 as
exemplary damages and P2,000.00 as miscellaneous damages; (b) in the
case of Araceli Koh McKee, in connection with the serious physical injuries
suffered, the sum of P100,000.00 as moral damages, P20,000.00 as
exemplary damages, P12,000.00 for loss of earnings, P5,000.00 for the
hospitalization expenses up to the date of the filing of the complaint; and (c)
with respect to George McKee, Jr., in connection with the serious physical
injuries suffered, the sum of P50,000.00 as moral damages, P20,000.00 as
exemplary damages and the following medical expenses: P3,400 payable to
the Medical Center, P3,500.00 payable to the St. Francis Medical Center,
P5,175.00 payable to the Clark Air Base Hospital, and miscellaneous
expenses amounting to P5,000.00. They also sought an award of attorney's
fees amounting to 25% of the total award plus traveling and hotel expenses,
with costs. 4
On 1 March 1977, an Information charging Ruben Galang with the crime of
"Reckless Imprudence Resulting to (sic) Multiple Homicide and Physical
Injuries and Damage to Property" was filed with the trial court. It was
docketed as Criminal Case No. 3751 and was raffled to Branch V of the court,
the same Branch where Civil Case No. 4478 was assigned. 5
In their Answer with Counterclaim in Civil Case No. 4477, private
respondents asserted that it was the Ford Escort car which "invaded and
bumped (sic) the lane of the truck driven by Ruben Galang and, as
counterclaim, prayed for the award of P15,000.00 as attorney's fees,
P20,000.00 as actual and liquidated damages, P100,000.00 as moral
damages and P30,000.00 as business losses. 6 In Civil Case No. 4478,
private respondents first filed a motion to dismiss on grounds of pendency of
another action (Civil Case No. 4477) and failure to implead an indispensable
party, Ruben Galang, the truck driver; they also filed a motion to consolidate
the case with Civil Case No. 4477 pending before Branch III of the same
court, which was opposed by the plaintiffs. 7 Both motions were denied by
Branch V, then presided over by Judge Ignacio Capulong. Thereupon,
private respondents filed their Answer with Counter-claim 8 wherein they
alleged that Jose Koh was the person "at fault having approached the lane
of the truck driven by Ruben Galang, . . . which was on the right lane going
towards Manila and at a moderate speed observing all traffic rules and
regulations applicable under the circumstances then prevailing;" in their
counterclaim, they prayed for an award of damages as may be determined
by the court after due hearing, and the sums of P10,000.00 as attorney's fees
and P5,000.00 as expenses of litigation.
Petitioners filed their Answers to the Counterclaims in both cases.
To expedite the proceedings, the plaintiffs in Civil Case No. 4478 filed on 27
March 1978 a motion to adopt the testimonies of witnesses taken during the
hearing of Criminal Case No. 3751, which private respondents opposed and
which the court denied. 9 Petitioners subsequently moved to reconsider the
order denying the motion for consolidation, 10 which Judge Capulong granted
in the Order of 5 September 1978; he then directed that Civil Case No. 4478
be consolidated with Civil Case No. 4477 in Branch III of the court then
presided over by Judge Mario Castañeda, Jr.
Left then with Branch V of the trial court was Criminal Case No. 3751.
In the civil cases, the plaintiffs presented as witnesses Araceli Koh McKee,
Fernando Nuñag, Col. Robert Fitzgerald, Primitivo Parel, Eugenio Tanhueco,
Carmen Koh and Antonio Koh, 11 and offered several documentary exhibits.
Upon the other hand, private respondents presented as witnesses Ruben
Galang, Zenaida Soliman, Jaime Tayag and Roman Dayrit. 12
4478 likewise separately appealed the 12 November 1980 decision to the
appellate court. The appeals were docketed as C.A.-G.R. No. 69041-R and
C.A.-G.R. No. 69040-R, respectively, and were assigned to the Fourth Civil
Cases Division.
On 4 October 1982, the respondent Court promulgated its decision 20 in C.A.-
G.R. Blg. 24764-CR affirming the conviction of Galang. 21 The dispositive
portion of the decision reads:
DAHIL DITO, ang hatol na paksa ng naritong
paghahabol ay Aming pinagtitibay sa kanyang
kabuuan. Ang naghahabol pa rin ang pinagbabayad ng
gugol ng paghahabol.

In the criminal case, the prosecution presented as witnesses Mrs. Araceli A motion for reconsideration of the decision was denied by the respondent
McKee, Salud Samia, Pfc. Fernando Nuñag, Dr. Ramon Panlilio, Dr. Robert Court in its Kapasiyahan promulgated on 25 November 1982. 22 A petition for
Fitzgerald, Dr. Roberto Yuson, Dr. Hector, Ulanday, Pfc. Benigno de Leon, its review 23 was filed with this Court; said petition was subsequently denied.
Marina Bolos, Primitivo Parel, Rogelio Pineda, Benito Caraan and Eugenio A motion for its reconsideration was denied with finality in the Resolution of
Tanhueco, and offered several documentary exhibits. 13 Upon the other 20 April 1983. 24
hand, the defense presented the accused Ruben Galang, Luciano Punzalan,
Zenaida Soliman and Roman Dayrit, and offered documentary exhibits. 14
On 29 November 1983, respondent Court, by then known as the Intermediate
Appellate Court, promulgated its consolidated decision in A.C.-G.R. CV Nos.
On 1 October 1980, Judge Capulong rendered a decision against the 69040 and 69041, 25 the dispositive portion of which reads:
accused Ruben Galang in the aforesaid criminal case. The dispositive portion
of the decision reads as follows:
WHEREFORE, the decision appealed from it hereby reversed and set aside
and another one is rendered, ordering defendants-appellees to pay plaintiffs-
WHEREFORE, in view of the foregoing, judgment is appellants as follows:
hereby rendered finding the accused Ruben Galang
guilty beyond reasonable doubt of the crime charged in
the information and after applying the provisions of For the death of Jose Koh:
Article 365 of the Revised Penal Code and
indeterminate sentence law, this Court, imposes upon P 50,000.00 as moral damages
said accused Ruben Galang the penalty of six (6) P 12,000.00 as death indemnity
months of arresto mayor as minimum to two (2) years, P 16,000.00 for the lot and tomb
four (4) months and one (1) day of prision (Exhs. U and U-1)
correccional as maximum; the accused is further P 4,000.00 expenses for holding
sentenced to pay and indemnify the heirs of Loida a wake (p. 9, tsn April 19, 1979)
Bondoc the amount of P12,000.00 as indemnity for her P 950.00 for the casket (Exh. M)
death; to reimburse the heirs of Loida Bondoc the P 375.00 for the vault services
amount of P2,000.00 representing the funeral (Exhs. V and V-1)
expenses; to pay the heirs of Loida Bondoc the amount
of P20,000.00 representing her loss of income; to
indemnify and pay the heirs of the deceased Jose Koh For the death of Kim Koh McKee:
the value of the car in the amount of P53,910.95, and
to pay the costs. 15
P 50,000.00 as moral damages
P 12,000.00 as death indemnity
The aforecited decision was promulgated only on 17 November 1980; on the P 1,000.00 for the purchase of
same day, counsel for petitioners filed with Branch III of the court — where the burial lot (Exh. M)
the two (2) civil cases were pending — a manifestation to that effect and P 950.00 for funeral services
attached thereto a copy of the decision. 16 (Exh. M-1)
P 375.00 for vault services
(Exhs. V and V-1)
Upon the other hand, Judge Mario Castañeda, Jr. dismissed the two (2) civil
cases on 12 November 1980 and awarded the private respondents moral
damages, exemplary damages and attorney's fees. 17 The dispositive portion For the physical injuries suffered by George Koh
of the said decision reads as follows: McKee:

WHEREFORE, finding the preponderance of evidence P 25,000.00 as moral damages

to be in favor of the defendants and against the P 672.00 for Clark Field Hospital
plaintiffs, these cases are hereby ordered DISMISSED (Exh. E)
with costs against the plaintiffs. The defendants had P 4,384.00 paid to Angeles
proven their counter-claim, thru evidences (sic) Medical Clinic (Exhs. D, D-1 and
presented and unrebutted. Hence, they are hereby D-2)
awarded moral and exemplary damages in the amount P 1,555.00 paid to St. Francis
of P100,000.00 plus attorney's fee of P15,000.00 and Medical Center (Exhs. B and B-
litigation expenses for (sic) P2,000.00. The actual 1)
damages claimed for (sic) by the defendants is (sic)
hereby dismissing for lack of proof to that effect (sic). 18
For the physical injuries suffered by Araceli Koh
McKee:
A copy of the decision was sent by registered mail to the petitioners on 28
November 1980 and was received on 2 December 1980. 19
P 25,000.00 as moral damages
P 1,055.00 paid to St. Francis
Accused Ruben Galang appealed the judgment of conviction to the Court of Medical Center (Exhs. G and
Appeals. The appeal was docketed as C.A.-G.R. Blg. 24764-CR and was G-1)
assigned to the court's Third Division. Plaintiffs in Civil Cases Nos. 4477 and P 75.00 paid to St. Francis
10
 Medical Center (Exhs. G-2 and
G-3)
P 428.00 to Carmelite General
Hospital (Exh. F)
P 114.20 to Muñoz Clinic (Exh.
MM)
For the physical injuries suffered by Christopher Koh
McKee:
P 10,000.00 as moral damages
P 1,231.10 to St. Francis Medical
Center (Exhs. L and L-1)
P 321.95 to F.C.E.A. Hospital
(Exhs. G and D-1)
In addition, We award P10,000.00 as counsel (sic) fees
in Civil Case No. 4477 and another P10,000.00; as
counsel (sic) fees in Civil Case No. 4478.
No pronouncement as to costs.
SO ORDERED. 26
The decision is anchored principally on the respondent Court's findings that
it was Ruben Galang's inattentiveness or reckless imprudence which caused
the accident. The appellate court further said that the law presumes
negligence on the part of the defendants (private respondents), as employers
of Galang, in the selection and supervision of the latter; it was further
asserted that these defendants did not allege in their Answers the defense of
having exercised the diligence of a good father of a family in selecting and
supervising the said employee.27 This conclusion of reckless imprudence is
based on the following findings of fact:
In the face of these diametrically opposed judicial
positions, the determinative issue in this appeal is
posited in the fourth assigned error as follows:
IV
THE TRIAL COURT ERRED WHEN IT HELD THE (sic) DRIVER OF THE
TRUCK STOPPED HIS TRUCK BLEW HIS HORN SWITCHED ON HIS
HEADLIGHTS AND COULD NOT SWERVE TO THE RIGHT.
Supportive of plaintiffs' version, principal witness Araceli Koh McKee testified
thus:
Q What happened after that, as you approached the bridge?
A When we were approaching the bridge, two (2) boys tried to cross the right
lane on the right side of the highway going to San Fernando. My father, who
is (sic) the driver of the car tried to avoid the two (2) boys who were crossing,
he blew his horn and swerved to the left to avoid hitting the two (2) boys. We
noticed the truck, he switched on the headlights to warn the truck driver, to
slow down to give us the right of way to come back to our right lane.
Q Did the truck slow down?
A No, sir, it did not, just (sic) continued on its way.
Q What happened after that?
A After avoiding the two (2) boys, the car tried to go back to the right lane
since the truck is (sic) coming, my father stepped on the brakes and all what
(sic) I heard is the sound of impact (sic), sir. (tsn, pp. 5-6, July 22, 1977); or
(Exhibit "O" in these Civil Cases).
xxx xxx xxx
11
Q Mrs. how did you know that the truck driven by the herein accused, Ruben
Galang did not reduce its speed before the actual impact of collision (sic) as
you narrated in this Exhibit "1," how did you know (sic)?
A It just kept on coming, sir. If only he reduced his speed, we could have got
(sic) back to our right lane on side (sic) of the highway, sir. (tsn. pp. 33-34
July 22, 1977) or (Exhibit "O" in these Civil Cases) (pp. 30-31, Appellants'
Brief).
Plaintiffs' version was successfully corroborated to Our satisfaction by the
following facts and circumstances:
1. An impartial eye-witness to the mishap, Eugenio Tanhueco, declared that
the truck stopped only when it had already collided with the car:
xxx xxx xxx
Tanhueco repeated the same testimony during the hearing in the criminal
case:
xxx xxx xxx
Tanhueco could (sic) not be tagged as an accommodation witness because
he was one of the first to arrive at the scene of the accident. As a matter of
fact, he brought one of the injured passengers to the hospital.
We are not prepared to accord faith and credit to defendants' witnesses,
Zenaida Soliman, a passenger of the truck, and Roman Dayrit, who
supposedly lived across the street.
Regarding Soliman, experience has shown that in the ordinary course of
events people usually take the side of the person with whom they are
associated at the time of the accident, because, as a general rule, they do
not wish to be identified with the person who was at fault. Thus an imaginary
bond is unconsciously created among the several persons within the same
group (People vs. Vivencio, CA-G.R. No. 00310-CR, Jan. 31, 1962).
With respect to Dayrit, We can not help suspecting (sic) that he is an
accommodation witness. He did not go to the succor of the injured persons.
He said he wanted to call the police authorities about the mishap, but his
phone had no dial tone. Be this (sic) as it may, the trial court in the criminal
case acted correctly in refusing to believe Dayrit.
2. Exhibit 2, the statement of Galang, does not include the claim that Galang
stopped his truck at a safe distance from the car, according to plaintiffs (p.
25, Appellants' Brief). This contention of appellants was completely
passed sub-silencio or was not refuted by appellees in their brief. Exhibit 2 is
one of the exhibits not included in the record. According to the Table of
Contents submitted by the court below, said Exhibit 2 was not submitted by
defendants-appellees. In this light, it is not far-fetched to surmise that
Galang's claim that he stopped was an eleventh-hour desperate attempt to
exculpate himself from imprisonment and damages.
3. Galang divulged that he stopped after seeing the car about 10 meters
away:
ATTY. SOTTO:
Q Do I understand from your testimony that inspite of the fact that you
admitted that the road is straight and you may be able to (sic) see 500-1000
meters away from you any vehicle, you first saw that car only about ten (10)
meters away from you for the first time?
xxx xxx xxx
A I noticed it, sir, that it was about ten (10) meters away.
ATTY. SOTTO:
Q So, for clarification, you clarify and state under your oath that you have
(sic) not noticed it before that ten (10) meters? (Tsn. 3 to 5, Sept. 18, 1979).
(p. 16, Appellants' Brief)
Galang's testimony substantiate (sic) Tanhueco's statement that Galang
stopped only because of the impact. At ten (10) meters away, with the truck
running at 30 miles per hour, as revealed in Galang's affidavit (Exh. 2; p. 25,
Appellants' brief), it is well-nigh impossible to avoid a collision on a bridge.
5. Galang's truck stopped because of the collision, and not because he
waited for Jose Koh to return to his proper lane. The police investigator, Pfc.
Fernando L. Nuñag, stated that he found skid marks under the truck but there
were not (sic) skid marks behind the truck (pp. 19-20, t.s.n., Nov. 3, 1978).
The presence of skid marks show (sic) that the truck was speeding. Since
the skid marks were found under the truck and none were found at the rear
of the truck, the reasonable conclusion is that the skid marks under the truck
were caused by the truck's front wheels when the trucks (sic) suddenly
stopped seconds before the mishap in an endeavor to avoid the same. But,
as aforesaid, Galang saw the car at barely 10 meters away, a very short
distance to avoid a collision, and in his futile endeavor to avoid the collision
he abruptly stepped on his brakes but the smashup happened just the same.
For the inattentiveness or reckless imprudence of Galang, the law presumes
negligence on the part of the defendants in the selection of their driver or in
the supervision over him. Appellees did not allege such defense of having
exercised the duties of a good father of a family in the selection and
supervision of their employees in their answers. They did not even adduce
evidence that they did in fact have methods of selection and programs of
supervision. The inattentiveness or negligence of Galang was the proximate
cause of the mishap. If Galang's attention was on the highway, he would have
sighted the car earlier or at a very safe distance than (sic) 10 meters. He
proceeded to cross the bridge, and tried to stop when a collision was already
inevitable, because at the time that he entered the bridge his attention was
not riveted to the road in front of him.
On the question of damages, the claims of appellants were amply proven,
but the items must be reduced. 28
A motion for reconsideration alleging improper appreciation of the facts was
subsequently filed by private respondents on the basis of which the
respondent Court, in its Resolution of 3 April 1984, 29 reconsidered and set
aside its 29 November 1983 decision and affirmed in toto the trial court's
judgment of 12 November 1980. A motion to reconsider this Resolution was
denied by the respondent Court on 4 July 1984.30
Hence, this petition.
Petitioners allege that respondent Court:
I
. . . COMMITTED A VERY SERIOUS AND GRAVE ERROR WHEN IT
TOTALLY REVERSED ITS DECISION BY MERELY BASING IT FROM (sic)
A MERE "PRESUMPTION," TOTALLY DISREGARDING THE PRIVATE
RESPONDENTS' DRIVER'S ADMISSIONS AND CONFESSIONS, WHO
EXCLUSIVELY COMMITTED THE PROXIMATE CAUSE OF THE
ACCIDENT (sic), FURTHER, IT ALSO DISREGARDED THE EVIDENCE
ADDUCED AND FOUND IN THE RECORDS; THEREFORE,
RESPONDENT COURT'S RESOLUTIONS (ANNEXES A and B, PETITION)
ARE CLEARLY ERRONEOUS, PURELY BASED ON SPECULATIONS,
CONJECTURES AND WITHOUT SURE FOUNDATION IN THE EVIDENCE.
II
. . . GRAVELY ABUSED ITS DISCRETION AND ERRED WHEN IN EFFECT
IT DISREGARDED A DOCTRINE LAID DOWN BY THIS HONORABLE
COURT BY STATING AMONG OTHERS, "IT CANNOT CATEGORICALLY
ADOPT THE FINDINGS OF GUILT IN THE CRIMINAL CASE WHERE THE
DRIVER OF THE TRUCK INVOLVED IN THE ACCIDENT WAS INDICTED.
III
12
. . . PATENTLY COMMITTED GRAVE ABUSE OF DISCRETION AND MADE
A MISLEADING PRONOUNCEMENT, WHEN IT HELD: "IT IS THUS
INCUMBENT UPON THE PLAINTIFFS-APPELLANTS (APPELLEES
WRONGLY MENTIONED IN THE RESOLUTION) TO PROVE THEIR
ALLEGATIONS THAT THE PROXIMATE CAUSE OF THE ACCIDENT WAS
THE NEGLIGENCE OF PRIVATE RESPONDENTS' DRIVER.
IV
. . . COMMITTED ANOTHER GRIEVIOUS (sic) ERROR; COMMITTED
GRAVE ABUSE OF DISCRETION AND CITED ANOTHER CASE WHICH IS
CLEARLY INAPPLICABLE TO THESE CASES.
V
. . . COMMITTED A PATENT ERROR AND GRAVELY ABUSED ITS
DISCRETION IN ADOPTING THE FINDINGS OF THE TRIAL COURT
WHICH ARE CLEARLY ERRONEOUS AND CONTRARY TO THE
EVIDENCE FOUND IN THE RECORDS, SPECIALLY THEY (sic) ARE
CONTRARY TO THE ADMITTED FACTS AND JUDICIAL ADMISSIONS
MADE BY THE PRIVATE RESPONDENTS' DRIVER.
VI
. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF
DISCRETION AND GRAVELY ERRED WHEN IT AWARDED DAMAGES
TO THE PRIVATE RESPONDENTS WHEN SAID AWARD IS NOT
SUPPORTED BY EVIDENCE, IN THE RECORDS, AND SAID AWARD IS
NOT ALLOWED BY LAW AND THE CONSISTENT DECISIONS OF THIS
HONORABLE COURT.
VII
. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF
DISCRETION AND GRAVELY ERRED WHEN IT ERRONEOUSLY SET
ASIDE ITS DECISION AWARDING DAMAGES TO PETITIONERS WHICH
IS CLEARLY IN ACCORDANCE WITH THE EVIDENCE, THE LAW AND
JURISPRUDENCE RELATIVE TO THE AWARD OF DAMAGES. 31
In the Resolution of 12 September 1984, We required private respondents to
Comment on the petition. 32 After the said Comment 33 was filed, petitioners
submitted a Reply 34 thereto; this Court then gave due course to the instant
petitions and required petitioners to file their Brief, 35 which they accordingly
complied with.
There is merit in the petition. Before We take on the main task of dissecting
the arguments and counter-arguments, some observations on the procedural
vicissitudes of these cases are in order.
Civil Cases Nos. 4477 and 4478, which were for the recovery of civil liability
arising from a quasi-delict under Article 2176 in relation to Article 2180 of the
Civil Code, were filed ahead of Criminal Case No. 3751. Civil Case No. 4478
was eventually consolidated with Civil Case No. 4477 for joint trial in Branch
III of the trial court. The records do not indicate any attempt on the part of the
parties, and it may therefore be reasonably concluded that none was made,
to consolidate Criminal Case No. 3751 with the civil cases, or vice-versa. The
parties may have then believed, and understandably so, since by then no
specific provision of law or ruling of this Court expressly allowed such a
consolidation, that an independent civil action, authorized under Article 33 in
relation to Article 2177 of the Civil Code, such as the civil cases in this case,
cannot be consolidated with the criminal case. Indeed, such consolidation
could have been farthest from their minds as Article 33 itself expressly
provides that the "civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence." Be that as
it may, there was then no legal impediment against such consolidation.
Section 1, Rule 31 of the Rules of Court, which seeks to avoid a multiplicity
of suits, guard against oppression and abuse, prevent delays, clear
congested dockets to simplify the work of the trial court, or in short, attain
justice with the least expense to the parties litigants, 36 would have easily
sustained a consolidation, thereby preventing the unseeming, if no ludicrous,
spectacle of two (2) judges appreciating, according to their respective
orientation, perception and perhaps even prejudice, the same
facts differently, and thereafter rendering conflicting decisions. Such was
what happened in this case. It should not, hopefully, happen anymore. In the
recent case of Cojuangco vs. Court or Appeals, 37 this Court held that the
present provisions of Rule 111 of the Revised Rules of Court allow a
consolidation of an independent civil action for the recovery of civil liability
authorized under Articles 32, 33, 34 or 2176 of the Civil Code with the criminal
action subject, however, to the condition that no final judgment has been
rendered in that criminal case.
Let it be stressed, however, that the judgment in Criminal Case No. 3751
finding Galang guilty of reckless imprudence, although already final by virtue
of the denial by no less than this Court of his last attempt to set aside the
respondent Court's affirmance of the verdict of conviction, has no relevance
or importance to this case.
As We held in Dionisio vs. Alvendia, 38 the responsibility arising from fault or
negligence in a quasi-delict is entirely separate and distinct from the civil
liability arising from negligence under the Penal Code. And, as more
concretely stated in the concurring opinion of Justice J.B.L. Reyes, "in the
case of independent civil actions under the new Civil Code, the result of the
criminal case, whether acquittal or conviction, would be entirely irrelevant to
the civil action." 39 In Salta vs. De Veyra and PNB vs. Purisima, 40 this Court
stated:
. . . It seems perfectly reasonable to conclude that the civil actions mentioned
in Article 33, permitted in the same manner to be filed separately from the
criminal case, may proceed similarly regardless of the result of the criminal
case.
Indeed, when the law has allowed a civil case related to a criminal case, to
be filed separately and to proceed independently even during the pendency
of the latter case, the intention is patent to make the court's disposition of the
criminal case of no effect whatsoever on the separate civil case. This must
be so because the offenses specified in Article 33 are of such a nature, unlike
other offenses not mentioned, that they may be made the subject of a
separate civil action because of the distinct separability of their respective
juridical cause or basis of action . . . .
What remains to be the most important consideration as to why the decision
in the criminal case should not be considered in this appeal is the fact that
private respondents were not parties therein. It would have been entirely
different if the petitioners' cause of action was for damages arising from
a delict, in which case private respondents' liability could only be subsidiary
pursuant to Article 103 of the Revised Penal Code. In the absence of any
collusion, the judgment of conviction in the criminal case against Galang
would have been conclusive in the civil cases for the subsidiary liability of the
private respondents. 41
And now to the merits of the petition.
It is readily apparent from the pleadings that the principal issue raised in this
petition is whether or not respondent Court's findings in its challenged
resolution are supported by evidence or are based on mere speculations,
conjectures and presumptions.
The principle is well-established that this Court is not a trier of facts.
Therefore, in an appeal by certiorari under Rule 45 of the Revised Rules of
Court, only questions of law may be raised. The resolution of factual issues
is the function of the lower courts whose findings on these matters are
received with respect and are, as a rule, binding on this Court. 42
The foregoing rule, however, is not without exceptions. Findings of facts of
the trial courts and the Court of Appeals may be set aside when such findings
are not supported by the evidence or when the trial court failed to consider
the material facts which would have led to a conclusion different from what
was stated in its judgment. 43 The same is true where the appellate court's
conclusions are grounded entirely on conjectures, speculations and
surmises 44 or where the conclusions of the lower courts are based on a
misapprehension of facts. 45
It is at once obvious to this Court that the instant case qualifies as one of the
aforementioned exceptions as the findings and conclusions of the trial court
and the respondent Court in its challenged resolution are not supported by
the evidence, are based on an misapprehension of facts and the inferences
13
made therefrom are manifestly mistaken. The respondent Court's decision of
29 November 1983 makes the correct findings of fact.
In the assailed resolution, the respondent Court held that the fact that the car
improperly invaded the lane of the truck and that the collision occurred in said
lane gave rise to the presumption that the driver of the car, Jose Koh, was
negligent. On the basis of this presumed negligence, the appellate court
immediately concluded that it was Jose Koh's negligence that was the
immediate and proximate cause of the collision. This is an unwarranted
deduction as the evidence for the petitioners convincingly shows that the car
swerved into the truck's lane because as it approached the southern end of
the bridge, two (2) boys darted across the road from the right sidewalk into
the lane of the car. As testified to by petitioner Araceli Koh McKee:
Q What happened after that, as you approached the bridge?
A When we were approaching the bridge, two (2) boys tried to cross the right
lane on the right side of the highway going to San Fernando. My father, who
is (sic) the driver of the car tried to avoid the two (2) boys who were crossing,
he blew his horn and swerved to the left to avoid hitting the two (2) boys. We
noticed the truck, he switched on the headlights to warn the truck driver, to
slow down to give us the right of way to come back to our right lane.
Q Did the truck slow down?
A No sir, it did not, just (sic) continued on its way.
Q What happened after that?
A After avoiding the two (2) boys, the car tried to go back to the right lane
since the truck is (sic) coming, my father stepped on the brakes and all what
(sic) I heard is the sound of impact (sic), sir. 46
Her credibility and testimony remained intact even during cross examination.
Jose Koh's entry into the lane of the truck was necessary in order to avoid
what was, in his mind at that time, a greater peril — death or injury to the two
(2) boys. Such act can hardly be classified as negligent.
Negligence was defined and described by this Court in Layugan vs.
Intermediate Appellate Court, 47 thus:
. . . Negligence is the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of
human affairs, would do, or the doing of something which a prudent and
reasonable man would not do (Black's Law Dictionary, Fifth Edition, 930), or
as Judge Cooley defines it, "(T)he failure to observe for the protection of the
interests of another person, that degree of care, precaution, and vigilance
which the circumstances justly demand, whereby such other person suffers
injury." (Cooley on Torts, Fourth Edition, vol. 3, 265)
In Picart vs. Smith (37 Phil 809, 813), decided more than seventy years ago
but still a sound rule, (W)e held:
The test by which to determine the existence of negligence in a particular
case may be stated as follows: Did the defendant in doing the alleged
negligent act use that (reasonable care and caution which an ordinarily
prudent person would have used in the same situation?) If not, then he is
guilty of negligence. The law here in effect adopts the standard supposed to
be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman
law. . . .
In Corliss vs. Manila Railroad Company, 48 We held:
. . . Negligence is want of the care required by the circumstances. It is a
relative or comparative, not an absolute, term and its application depends
upon the situation of the parties and the degree of care and vigilance which
the circumstances reasonably require. Where the danger is great, a high
degree of care is necessary, and the failure to observe it is a want of ordinary
care under the circumstances. (citing Ahern v. Oregon Telephone Co., 35
Pac. 549 (1894).
On the basis of the foregoing definition, the test of negligence and the facts
obtaining in this case, it is manifest that no negligence could be imputed to
Jose Koh. Any reasonable and ordinary prudent man would have tried to
avoid running over the two boys by swerving the car away from where they
were even if this would mean entering the opposite lane. Avoiding such
immediate peril would be the natural course to take particularly where the
vehicle in the opposite lane would be several meters away and could very
well slow down, move to the side of the road and give way to the oncoming
car. Moreover, under what is known as the emergency rule, "one who
suddenly finds himself in a place of danger, and is required to act without
time to consider the best means that may be adopted to avoid the impending
danger, is not guilty of negligence, if he fails to adopt what subsequently and
upon reflection may appear to have been a better method, unless the
emergency in which he finds himself is brought about by his own
negligence." 49
Considering the sudden intrusion of the two (2) boys into the lane of the car,
We find that Jose Koh adopted the best means possible in the given situation
to avoid hitting them. Applying the above test, therefore, it is clear that he
was not guilty of negligence.
In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said
that his negligence was the proximate cause of the collision. Proximate cause
has been defined as:
. . . that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result
would not have occurred. And more comprehensively, the proximate legal
cause is that acting first and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain
of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury as a
natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an
ordinary prudent and intelligent person, have reasonable ground to expect at
the moment of his act or default that an injury to some person might probably
result therefrom. 50
Applying the above definition, although it may be said that the act of Jose
Koh, if at all negligent, was the initial act in the chain of events, it cannot be
said that the same caused the eventual injuries and deaths because of the
occurrence of a sufficient intervening event, the negligent act of the truck
driver, which was the actual cause of the tragedy. The entry of the car into
the lane of the truck would not have resulted in the collision had the latter
heeded the emergency signals given by the former to slow down and give
the car an opportunity to go back into its proper lane. Instead of slowing down
and swerving to the far right of the road, which was the proper precautionary
measure under the given circumstances, the truck driver continued at full
speed towards the car. The truck driver's negligence becomes more apparent
in view of the fact that the road is 7.50 meters wide while the car measures
1.598 meters and the truck, 2.286 meters, in width. This would mean that
both car and truck could pass side by side with a clearance of 3.661 meters
to spare. 51 Furthermore, the bridge has a level sidewalk which could have
partially accommodated the truck. Any reasonable man finding himself in the
given situation would have tried to avoid the car instead of meeting it head-
on.
The truck driver's negligence is apparent in the records. He himself said that
his truck was running at 30 miles (48 kilometers) per hour along the bridge
while the maximum speed allowed by law on a bridge 52 is only 30 kilometers
per hour. Under Article 2185 of the Civil Code, a person driving a vehicle is
presumed negligent if at the time of the mishap, he was violating any traffic
regulation. We cannot give credence to private respondents' claim that there
was an error in the translation by the investigating officer of the truck driver's
response in Pampango as to whether the speed cited was in kilometers per
hour or miles per hour. The law presumes that official duty has been regularly
performed; 53 unless there is proof to the contrary, this presumption holds. In
the instant case, private respondents' claim is based on mere conjecture.
The truck driver's negligence was likewise duly established through the
earlier quoted testimony of petitioner Araceli Koh McKee which was duly
corroborated by the testimony of Eugenio Tanhueco, an impartial eyewitness
to the mishap.
Araceli Koh McKee testified further, thus:
14
xxx xxx xxx
Q Mrs. how did you know that the truck driven by the herein accused, Ruben
Galang did not reduce its speed before the actual impact of collision as you
narrated in this Exhibit "1," how did you know?
A It just kept on coming, sir. If only he reduced his speed, we could have got
(sic) back to our right lane on side (sic) of the highway, sir. (tsn, pp. 33-34,
July 22, 1977) or (Exhibit; "O" in these Civil Cases) (pp. 30-31, Appellants'
Brief)54
while Eugenio Tanhueco testified thus:
Q When you saw the truck, how was it moving?
A It was moving 50 to 60 kilometers per hour, sir.
Q Immediately after you saw this truck, do you know what happened?
A I saw the truck and a car collided (sic), sir, and I went to the place to help
the victims. (tsn. 28, April 19, 1979)
xxx xxx xxx
Q From the time you saw the truck to the time of the impact, will you tell us if
the said truck ever stopped?
A I saw it stopped (sic) when it has (sic) already collided with the car and it
was already motionless. (tsn. 31, April 19, 1979; Emphasis Supplied). (p. 27,
Appellants' Brief). 55
Clearly, therefore, it was the truck driver's subsequent negligence in failing to
take the proper measures and degree of care necessary to avoid the collision
which was the proximate cause of the resulting accident.
Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds
application here. Last clear chance is a doctrine in the law of torts which
states that the contributory negligence of the party injured will not defeat the
claim for damages if it is shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the consequences of the
negligence of the injured party. In such cases, the person who had the last
clear chance to avoid the mishap is considered in law solely responsible for
the consequences thereof.56
In Bustamante vs. Court of Appeals, 57 We held:
The respondent court adopted the doctrine of "last clear chance." The
doctrine, stated broadly, is that the negligence of the plaintiff does not
preclude a recovery for the negligence of the defendant where it appears that
the defendant, by exercising reasonable care and prudence, might have
avoided injurious consequences to the plaintiff notwithstanding the plaintiff's
negligence. In other words, the doctrine of last clear chance means that even
though a person's own acts may have placed him in a position of peril, and
an injury results, the injured person is entitled to recovery (sic). As the
doctrine is usually stated, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his
opponent or that of a third person imputed to the opponent is considered in
law solely responsible for the consequences of the accident. (Sangco, Torts
and Damages, 4th Ed., 1986, p. 165).
The practical import of the doctrine is that a negligent defendant is held liable
to a negligent plaintiff, or even to a plaintiff who has been grossly negligent
in placing himself in peril, if he, aware of the plaintiff's peril, or according to
some authorities, should have been aware of it in the reasonable exercise of
due care, had in fact an opportunity later than that of the plaintiff to avoid an
accident (57 Am. Jur., 2d, pp. 798-799).
In Pantranco North Express, Inc., vs. Baesa, 58 We ruled:
The doctrine of last clear chance was defined by this Court in the case of Ong Costs against private respondents.
v. Metropolitan Water District, 104 Phil. 397 (1958), in this wise:
SO ORDERED.
The doctrine of the last clear chance simply, means that the negligence of a
claimant does not preclude a recovery for the negligence of defendant where
it appears that the latter, by exercising reasonable care and prudence, might
have avoided injurious consequences to claimant notwithstanding his
negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior
or antecedent negligence but the defendant, who had the last fair chance to
avoid the impending harm and failed to do so, is made liable for all the
consequences of the accident notwithstanding the prior negligence of the
plaintiff [Picart v. Smith, 37 Phil. 809 (1918); Glan People's Lumber and
Hardware, et al. vs. Intermediate Appellate Court, Cecilia Alferez Vda. de
Calibo, et al., G.R. No. 70493, May, 18, 1989]. The subsequent negligence
of the defendant in failing to exercise ordinary care to avoid injury to plaintiff
becomes the immediate or proximate cause of the accident which intervenes
between the accident and the more remote negligence of the plaintiff, thus
making the defendant liable to the plaintiff [Picart v. Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making
a defendant liable to a plaintiff who was guilty of prior or antecedent
negligence, although it may also be raised as a defense to defeat claim (sic)
for damages.

Applying the foregoing doctrine, it is not difficult to rule, as We now rule, that
it was the truck driver's negligence in failing to exert ordinary care to avoid
the collision which was, in law, the proximate cause of the collision. As
employers of the truck driver, the private respondents are, under Article 2180
of the Civil Code, directly and primarily liable for the resulting damages. The
presumption that they are negligent flows from the negligence of their
employee. That presumption, however, is only juris tantum, not juris et de
jure. 59 Their only possible defense is that they exercised all the diligence of
a good father of a family to prevent the damage. Article 2180 reads as
follows:

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.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.

xxx xxx xxx

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage.

The diligence of a good father referred to means the diligence in the selection
and supervision of employees. 60 The answers of the private respondents in
Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did
they attempt to prove it.

The respondent Court was then correct in its Decision of 29 November 1983
in reversing the decision of the trial court which dismissed Civil Cases Nos.
4477 and 4478. Its assailed Resolution of 3 April 1984 finds no sufficient legal
and factual moorings.

In the light of recent decisions of this Court, 61 the indemnity for death must,
however, be increased from P12,000.00 to P50,000.00.

WHEREFORE, the instant petition is GRANTED. The assailed Resolution of

the respondent Court of 3 April 1984 is SET ASIDE while its Decision of 29
November 1983 in C.A.-G.R. CV Nos. 69040-41 is REINSTATED, subject to
the modification that the indemnity for death is increased from P12,000.00 to
P50,000.00 each for the death of Jose Koh and Kim Koh McKee.

15
Wassmer v Velez, 12 SCRAS 648, Dec 26, 1964
BENGZON, J.P., J.:
The facts that culminated in this case started with dreams and hopes,
followed by appropriate planning and serious endeavors, but terminated in
frustration and, what is worse, complete public humiliation.
Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise
of love, decided to get married and set September 4, 1954 as the big day.
On September 2, 1954 Velez left this note for his bride-to-be:
Dear Bet —
Will have to postpone wedding — My mother opposes
it. Am leaving on the Convair today.
Please do not ask too many people about the reason
why — That would only create a scandal.
Paquing
But the next day, September 3, he sent her the following telegram:
NOTHING CHANGED REST ASSURED RETURNING
VERY SOON APOLOGIZE MAMA PAPA LOVE .
PAKING
Thereafter Velez did not appear nor was he heard from again.
Sued by Beatriz for damages, Velez filed no answer and was declared in
default. Plaintiff adduced evidence before the clerk of court as commissioner,
and on April 29, 1955, judgment was rendered ordering defendant to pay
plaintiff P2,000.00 as actual damages; P25,000.00 as moral and exemplary
damages; P2,500.00 as attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders, judgment
and proceedings and motion for new trial and reconsideration." Plaintiff
moved to strike it cut. But the court, on August 2, 1955, ordered the parties
and their attorneys to appear before it on August 23, 1955 "to explore at this
stage of the proceedings the possibility of arriving at an amicable settlement."
It added that should any of them fail to appear "the petition for relief and the
opposition thereto will be deemed submitted for resolution."
On August 23, 1955 defendant failed to appear before court. Instead, on the
following day his counsel filed a motion to defer for two weeks the resolution
on defendants petition for relief. The counsel stated that he would confer with
defendant in Cagayan de Oro City — the latter's residence — on the
possibility of an amicable element. The court granted two weeks counted
from August 25, 1955.
Plaintiff manifested on June 15, 1956 that the two weeks given by the court
had expired on September 8, 1955 but that defendant and his counsel had
failed to appear.
Another chance for amicable settlement was given by the court in its order of
July 6, 1956 calling the parties and their attorneys to appear on July 13, 1956.
This time. however, defendant's counsel informed the court that chances of
settling the case amicably were nil.
On July 20, 1956 the court issued an order denying defendant's aforesaid
petition. Defendant has appealed to this Court. In his petition of June 21,
1955 in the court a quo defendant alleged excusable negligence as ground
to set aside the judgment by default. Specifically, it was stated that defendant
filed no answer in the belief that an amicable settlement was being
negotiated.
16
A petition for relief from judgment on grounds of fraud, accident, mistake or
excusable negligence, must be duly supported by an affidavit of merits stating
facts constituting a valid defense. (Sec. 3, Rule 38, Rules of Court.)
Defendant's affidavit of merits attached to his petition of June 21, 1955
stated: "That he has a good and valid defense against plaintiff's cause of
action, his failure to marry the plaintiff as scheduled having been due to
fortuitous event and/or circumstances beyond his control." An affidavit of
merits like this stating mere conclusions or opinions instead of facts is not
valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10, 1951; Vaswani vs. P.
Tarrachand Bros., L-15800, December 29, 1960.)
Defendant, however, would contend that the affidavit of merits was in fact
unnecessary, or a mere surplusage, because the judgment sought to be set
aside was null and void, it having been based on evidence adduced before
the clerk of court. In Province of Pangasinan vs. Palisoc, L-16519, October
30, 1962, this Court pointed out that the procedure of designating the clerk
of court as commissioner to receive evidence is sanctioned by Rule 34 (now
Rule 33) of the Rules of Court. Now as to defendant's consent to said
procedure, the same did not have to be obtained for he was declared in
default and thus had no standing in court (Velez vs. Ramas, 40 Phil. 787;
Alano vs. Court of First Instance, L-14557, October 30, 1959).
In support of his "motion for new trial and reconsideration," defendant asserts
that the judgment is contrary to law. The reason given is that "there is no
provision of the Civil Code authorizing" an action for breach of promise to
marry. Indeed, our ruling in Hermosisima vs. Court of Appeals (L-14628,
Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30,
1960), is that "mere breach of a promise to marry" is not an actionable wrong.
We pointed out that Congress deliberately eliminated from the draft of the
new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts not contrary
to law may be perpetrated with impunity, is not limitless for Article 21 of said
Code provides that "any person who wilfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage."
The record reveals that on August 23, 1954 plaintiff and defendant applied
for a license to contract marriage, which was subsequently issued (Exhs. A,
A-1). Their wedding was set for September 4, 1954. Invitations were printed
and distributed to relatives, friends and acquaintances (Tsn., 5; Exh. C). The
bride-to-be's trousseau, party drsrses and other apparel for the important
occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought.
Bridal showers were given and gifts received (Tsn., 6; Exh. E). And then, with
but two days before the wedding, defendant, who was then 28 years old,:
simply left a note for plaintiff stating: "Will have to postpone wedding — My
mother opposes it ... " He enplaned to his home city in Mindanao, and the
next day, the day before the wedding, he wired plaintiff: "Nothing changed
rest assured returning soon." But he never returned and was never heard
from again.
Surely this is not a case of mere breach of promise to marry. As stated, mere
breach of promise to marry is not an actionable wrong. But to formally set a
wedding and go through all the above-described preparation and publicity,
only to walk out of it when the matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably contrary to good customs for which
defendant must be held answerable in damages in accordance with Article
21 aforesaid.
Defendant urges in his afore-stated petition that the damages awarded were
excessive. No question is raised as to the award of actual damages. What
defendant would really assert hereunder is that the award of moral and
exemplary damages, in the amount of P25,000.00, should be totally
eliminated.
Per express provision of Article 2219 (10) of the New Civil Code, moral
damages are recoverable in the cases mentioned in Article 21 of said Code.
As to exemplary damages, defendant contends that the same could not be
adjudged against him because under Article 2232 of the New Civil Code the
condition precedent is that "the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner." The argument is devoid of merit
as under the above-narrated circumstances of this case defendant clearly
acted in a "wanton ... , reckless [and] oppressive manner." This Court's
opinion, however, is that considering the particular circumstances of this
case, P15,000.00 as moral and exemplary damages is deemed to be a
reasonable award.

PREMISES CONSIDERED, with the above-indicated modification, the lower

court's judgment is hereby affirmed, with costs.

17
Cachero v Manila Yellow Taxicab, 101 Phil 523
FELIX, J.:
There is no dispute as to the following facts: on December 13, 1952, Atty.
Tranquilino F. Cachero boarded a Yellow Taxicab, with plate No. 2159-52
driven by Gregorio Mira Abinion and owned by the Manila Yellow Taxicab
Co., Inc. On passing Oroquieta between Doroteo Jose and Lope de Vega
streets, Gregorio Mira Abinion bumped said taxicab against a Meralco post,
No. 1-4/387, with the result that the cab was badly smashed and the plaintiff
fell out of the vehicle to the ground, suffering thereby physical injuries, slight
in nature.
The chauffeur was subsequently prosecuted by the City Fiscal and on
February 26, 1963, upon his plea of guilty the Municipal Court of Manila
sentenced him to suffer 1 month and 1 day of arresto mayor, and to pay the
costs. On December 17, 1952, Tranquilino F. Cachero addressed a letter to
the Manila Yellow Taxicab Co., Inc., which was followed by another of
January 6, 1953, which reads as follows:
MANILA, January 6, 1953
The MANILA YELLOW TAXICAB CO., INC.
1338 Arlegui, Manila
Dear Sirs:
As you have been already advised by the letter dated December
17, 1952, on December 13, 1952, while I was a passenger of your
taxicab bearing plate No. 2159 and driven by your chauffeur
Gregorio Mira and through his negligence and the bad condition
of the said car, he bumped the same against the pavement on the
street (Oroquieta — between Doroteo Jose and Lope de Vega
streets, Manila) and hit the Meralco post on said street, resulting
in the smashing of the said taxicab, and as a result thereof I was
gravely injured and suffered and is still suffering physical, mental
and moral damages and not being able to resume my daily calling.
For the said damages, I hereby make a demand for the payment
of the sum of P79,245.65, covering expenses for transportation to
the hospital for medical treatment, medicines, doctors bills, actual
monetary loss, moral, compensatory and exemplary damages,
etc., within 5 days from date of receipt hereof.
I trust to hear from you on the matter within the period of 5 days
above specified.
Truly yours,
(Sgd.) TRANQUILINO F. CACHERO
2256 Int. B, Misericordia St.,
Sta. Cruz, Manila
(Exhibit K)
The Taxicab Co. to avoid expenses and time of litigation offered to settle the
case amicably with plaintiff but the latter only agreed to reduce his demand
to the sum of P72,050.20 as his only basis for settlement which, of course,
was not accepted by said company. So plaintiff instituted this action on
February 2, 1953, in the Court of First Instance of Manila, praying in the
complaint that the defendant be condemned to pay him:
(a) The sum of P72,050.20, the total sum of the itemized losses
and/or damages under paragraph 7 of the complaint, with legal
interest thereon from the date of the filing of the complaint;
18
(b) The sum of P5,000 as attorney's fee; and the costs of the suit;
and
Plaintiff further respectfully prays for such other and further reliefs
as the facts and the law pertaining to the case may warrant.
The defendant answered the complaint setting forth affirmative defenses and
a counterclaim for P930 as damages and praying for the dismissal of
plaintiff's action. After hearing the Court rendered decision only July 20, 1954,
the dispositive part of which is as follows:
IN VIEW OF THE FOREGOING, the Court hereby renders
judgment in favor of the plaintiff and against the defendant,
sentencing the latter to pay the former the following: (1) For
medicine, doctor's fees for services rendered and transportation,
P700; (2) professional fee as attorney for the defendant in
Criminal Case No. 364, "People vs. Manolo Maddela et al." of the
Court of First Instance of Nueva Vizcaya, P3,000; (3) professional
fees as attorney for the defendant in Civil Case No. 23891 of the
Municipal Court of Manila, "Virginia Tangulan vs. Leonel da Silva,"
and for the taking of the deposition of Gabina Angrepan in a case
against the Philippine National Bank, P200; and(4) moral
damages in the amount of P2,000.
Defendant's counterclaim is hereby dismissed.
Defendant shall also pay the costs."
From this decision both parties appealed to Us, plaintiff limiting his appeal to
the part of the decision which refers to the moral damages awarded to him
which he considered inadequate, and to the failure of said judgment to grant
the attorney's fees asked for in the prayer of his complaint. Defendant in turn
alleges that the trial Court erred in awarding to the plaintiff the following:
(1) P700 — for medicine, doctor's fees and transportation
expenses;
(2) P3,000 — as supposedly unearned full professional fees as
attorney for the defendant in Criminal Case No. 364, "People vs.
Manolo Maddela et al.";
(3) P200 — as supposedly unearned professional fees as attorney
for the defendant in Civil Case No. 23891 of the Manila Municipal
Court, "Virginia Tangulan vs. Leonel de Silva", and for failure to
take the deposition of a certain Gabina Angrepan in an unnamed
case; and
(4) P2,000 — as moral damages, amounting to the grand total of
P5,900, these amounts being very much greater than what plaintiff
deserves.
In connection with his appeal, plaintiff calls attention to the testimonies of Dr.
Modesto S. Purisima and of Dr. Francisco Aguilar, a member of the staff of
the National Orthopedic Hospital, which he considers necessary as a basis
for ascertaining not only the physical sufferings undergone by him, but also
for determining the adequate compensation for moral damages that he
should be awarded by reason of said accident.
The exact nature of plaintiff's injuries, their degree of seriousness and the
period of his involuntary disability can be determined by the medical
certificate (Exhibit D) issued by the National Orthopedic Hospital on
December 16, 1952, and the testimonies of Dr. Francisco Aguilar, physician
in said hospital, and of Dr. Modesto Purisima, a private practitioner. The
medical certificate (Exhibit D) lists: (a) a subluxation of the right shoulder
joint; (b) a contusion on the right chest; and (c) a "suspicious fracture" of the
upper end of the right humerus. Dr. Aguilar who issued the medical certificate
admitted, however, with regard to the "suspicious fracture", that in his opinion
with (the aid of) the x-ray there was no fracture. According to this doctor
plaintiff went to the National 0rthopedic Hospital at least six times during the
period from December 16, 1952, to April 7, 1953; that he strapped plaintiffs
body (see Exhibit E), which strap was not removed until after a period of six
weeks had elapsed Dr. Modesto Purisima, a private practitioner, testified that
he advised and treated plaintiff from, December 14, 1952, to the end of the shoulder being only subject to total dislocation (due to their
March (1953). Plaintiff was never hospitalized for treatment of the injuries he anatomical design), not to partial ones, and any injury
received in said accident. approximating dislocation but not completely, it being classified as
mere sprains, slight or bad.
Counsel for the defendant delves quite extensively on these injuries. He says
in his brief the following: The second and last injury plaintiff sustained was a contusion.
What is a contusion? It is just a high flown expression for a bruise
or the act of bruising (Dorland, W.A.N., The American Illustrated
Just what is a subluxation? Luxation is another term for Medical Dictionary (13th ed. p. 290). No further discussion need
dislocation (Dorland, W.A.N., The American Illustrated Medical be made on this particular injury since the nature of a bruise is of
Dictionary (13th ed.), p. 652), and hence, a sublaxation is an common knowledge (it's a bit uncomfortable but not disabling
incomplete or partial dislocation (Ibid., p. 1115). While a unless it occurs on movable parts like the fingers or elbow which
dislocation is the displacement of a bone or bones from its or their is not the case, herein having occurred in the right chest) and the
normal setting (and, therefore, applicable and occurs only to joints kind of medical treatment or help it is also well known. (pp. 10-14,
and not to rigid or non-movable parts of the skeletal system) (Ibid., defendant-appellant's brief).
p. 358; Christopher, F., A Textbook of Surgery (5th ed.), p. 342),
it should be distinguished from a fracture which is a break or
rupture in a bone or cartilage, usually due to external violence The trial Judge undoubtedly did not give much value to the testimonies of the
(Christopher, F., A Textbook of Surgery (5th Ed.) p. 194; Dorland, doctors when in the statement of facts made in his decision he referred to the
W.A.N., The American Illustrated Medical Dictionary (13th ed.), physical injuries received by the plaintiff as slight in nature and the latter is
P.459). Because, unlike fracture which may be partial (a crack in estopped from discussing the same in order to make them appear as serious,
the bone) or total (a complete break in the bone), there can be no because in the statement of facts made in his brief as appellant, he says the
half-way situations with regard to dislocations of the shoulder joint following:
(the head or ball of the humerus — the humerus is the bone from
the elbow to the shoulder) must be either inside the socket of the
scapula or shoulder blade (in which case there is no dislocation) The facts of the case as found by the lower court in its decision,
or out of the latter (in which event there is a dislocation), to denote with the permission of this Honorable Court, we respectfully quote
a condition where due to external violence, the muscles and them hereunder as our STATEMENT OF FACTS for the purpose
ligaments connecting the humerus to the scapula have subjected of this appeal.
to strain intense enough to produce temporary distention or
lessening of their tautness and consequently resulting in the Before entering into a discussion of the merits of plaintiff's appeal, We will
loosening or wrenching of the ball of the humerus from its snug fit say a few words as to the nature of the action on which his demand for
in the socket of the scapula, by using the terms subluxation or damages is predicated.
partial dislocation(as used in the medical certificate), is to fall into
a misnomer — a term often used by "chiropractors" and by those
who would want to sound impressive, but generally unfavored by The nature of an action as in contract or in tort is determined from
the medical profession. To describe the above condition more the essential elements of the complaint, taken as a whole, in the
aptly, the medical profession usually employs the case of doubt a construction to sustain the action being given to
expression luxatio imperfecta, or, in simple language, it.
a sprain (Dorland, W.A.N., The American Illustrated Medical
Dictionary (13th ed.), p. 652). The condition we have described is
While the prayer for relief or measure of damages sought does
a paraphrase of the definition of a sprain. Plaintiff suffered this
not necessarily determine the character of the action, it may be
very injury (a sprained or wrenched shoulder joint) and a cursory
material in the determination of the question and therefore entitled
scrutiny of his x-ray plates (Exhibits A and B) by a qualified
to consideration and in case of doubt will open determine
orthopedic surgeon or by a layman with a picture or x-ray plate of
character of the action and indeed there are actions whose
a normal shoulder joint (found in any standard textbook on human
character is necessarily determined thereby. (1 C.J.S. 1100)
anatomy; the one we used was Schemer, J.P., Morris' Human
Anatomy (10 ed., p. 194) for comparison will bear out our claim.
A mere perusal of plaintiff complaint will show that his action against the
defendant is predicated on an alleged breach of contract of carriage, i.e., the
Treatment for a sprain is by the use of adhesive or elastic
failure of the defendant to bring him "safely and without mishaps" to his
bandage, elevation of the joint, heat, effleurage and later massage
destination, and it is to be noted that the chauffeur of defendant's taxicab that
(Christopher, F., A Textbook of Surgery (5th ed., p. 116). The
plaintiff used when he received the injuries involved herein, Gregorio Mira,
treatment given to the plaintiff was just exactly that Dr. Aguilar
has not even been made a party defendant to this case.
bandaged (strapped) plaintiff's right shoulder and chest (t.s.n., p.
31) in an elevated position (with the forearm horizontal to the chest
(see photograph, Exhibit E), and certain vitamins were prescribed Considering, therefore, the nature of plaintiff's action in this case, is he
for him (t.s.n., p. 131). He also underwent massage for some time entitled to compensation for moral damages? Article 2219 of the Civil Code
by Drs. Aguilar and Purisima. The medicines and appurtenances says the following:
to treatment purchased by plaintiff from the Orthopedic Hospital,
Botica Boie and Metro Drug Store were, by his own admission,
adhesive plaster, bandage, gauze, oil and "tintura arnica" (t.s.n., ART. 2219. Moral damages may be recovered in the following and
p. 3 — continuation of transcript ), and Dr. Purisima also analogous cases:
prescribed "Numotizin", a beat generating ointment (t.s.n., p. 23),
all of which are indicated for a sprain, and by their nature, can cure (1) A criminal offense resulting in physical injuries;
nothing more serious than a sprain anyway. Fractures and true
dislocations cannot be cured by the kind of treatment and
medicines which plaintiff received. A true dislocation, for instance, (2) Quasi-delicts causing physical injuries;
is treated by means of reduction through traction of the arm until
the humeral head returns to the proper position in the scapular
socket (pulling the arm at a 60 degree angle and guiding the ball (3) Seduction, abduction, rape, or other lascivious acts;
of the humerus into proper position, in its socket) while the patient
is under deep anaesthesia, and then, completely immobilizing the (4) Adultery or concubinage;
part until the injured capsule has healed (Christopher, F., A
Textbook of Surgery, pp. 343 and 344). No evidence was
submitted that plaintiff ever received the latter kind of treatment. (5) Illegal or arbitrary detention or arrest;
Dr. Purisima even declared that after the plaintiff's first visit to the
Orthopedic Hospital the latter informed him that there was no
(6) Illegal search;
fracture or dislocation (t.s.n., p. 26). Dr. Purisima's statement is
the truth of the matter as we have already explained — joints of

19
 (7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30,
32, 34 and 35.
xxx xxx xxx
Of the cases enumerated in the just quoted Article 2219 only the first two may
have any bearing on the case at bar. We find, however, with regard to the
first that the defendant herein has not committed in connection with this case
any "criminal offense resulting in physical injuries". The one that committed
the offense against the plaintiff is Gregorio Mira, and that is why he has been
already prosecuted and punished therefor. Although (a) owners and
managers of an establishment or enterprise are responsible for damages
caused by their employees in the service of the branches in which the latter
are employed or on the occasion of their functions; (b) employers are likewise
liable for damages caused by their employees and household helpers acting
within the scope of their assigned task (Article 2180 of the Civil Code); and
(c) employers and corporations engaged in any kind of industry are
subsidiarily civilly liable for felonies committed by their employees in the
discharge of their duties (Art. 103, Revised Penal Code), plaintiff herein does
not maintain this action under the provisions of any of the articles of the codes
just mentioned and against all the persons who might be liable for the
damages caused, but as a result of an admitted breach of contract of carriage
and against the defendant employer alone. We, therefore, hold that the case
at bar does not come within the exception of paragraph 1, Article 2219 of the
Civil Code.
The present complaint is not based either on a "quasi delict causing physical
injuries" (Art. 2219 par. 2, of the Civil Code). From the report of the Code
Commission on the new Civil Code We copy the following:
A question of nomenclature confronted the Commission. After a
careful deliberation, it was agreed to use the term "quasi-delict"
for those obligations which do not arise from law, contracts quasi-
contracts or criminal offenses. They are known in Spanish legal
treatises as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-
delitos". The phrase "culpa-extra-contractual" or its translation
"extra-contractual fault" was eliminated because it did not exclude
quasi-contractual or penal obligations. "Aquilian fault" might have
been selected, but it was thought inadvisable to refer to so ancient
a law as the "Lex Aquilia". So "quasi-delicts" was chosen, which
more nearly corresponds to the Roman Law classification of
obligations, and is in harmony with the nature of this kind of
liability.
The Commission also thought of the possibility of adopting the
word "tort" from Anglo-American Law. But "tort" under that system
is much broader than the Spanish-Philippine concept of
obligations arising from non-contractual negligence." "Tort" in
Anglo-American jurisprudence includes not only negligence, but
also intentional criminal acts, such as assault and battery, false
imprisonment and deceit. In the general plan of the Philippine
legal system, intentional and malicious are governed by the Penal
Code, although certain exceptions are made in the Project.
(Report of the Code Commission, pp. 161-162).
In the case of Cangco vs. Manila Railroad, 38 Phil. 768, We established the
distinction between obligation derived from negligence and obligation as a
result of a breach of a contract. Thus, We said:
It is important to note that the foundation of the legal liability of the
defendant is the contract of carriage, and that the obligation to
respond for the damage which plaintiff has suffered arises, if at all,
from the breach of that contract by reason of the failure of
defendant to exercise due care in its performance. That is to
say, its liability is direct and immediate, differing essentially in the
legal view point from that presumptive responsibility for the
negligence of its servants, imposed by Article 1903 of the Civil
Code (Art. 2180 of the new), which can be rebutted by proof of the
20
exercise of due care in their selection or supervision. Article 1903
is not applicable to obligation arising EX CONTRACTU, but only
to extra-contractual obligations or — to use the technical form of
expression, that article, relates only to CULPA AQUILIANA and
not to CULPA CONTRACTUAL.
The decisions in the cases of Castro vs. Acro Taxicab (82 Phil., 359, 46 Off.
Gaz., Na. 5, p. 2023); Lilius et al. vs. Manila Railroad, (59 Phil. 758) and
others, wherein moral damages, are awarded to the plaintiffs, are not
applicable to the case at bar because said decisions were rendered before
the effectivity of the new Civil Code (August 30, 1950) and for the further
reason that the complaints filed therein were based on different causes of
action.
In view of the foregoing the sum of P2,000 awarded as moral damages by
the trial Court has to be eliminated, for under the law it is not a compensation
awardable in a case like the one at bar.
As to plaintiff's demand for P5,000 as attorney's fees, the Civil Code provides
the following:
ART, 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to protect
his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding
against the plaintiff;
(5) Where the defendant acted in gross and evident had faith in
refusing to satisfy the plaintiff's plainly valid, just and demandable
claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers,
laborers and skilled workers;
(8) in actions for indemnity under workmen's compensation and
employers liability laws;
(9) In a separate civil action to recover civil liability arising from a
crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable
that attorney's fees and expenses of litigation should be
recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
The present case does not come under any of exceptions enumerated in the
preceding article, specially of paragraph 2 thereof, because defendant's
failure to meet its responsibility was not the plaintiff to litigate or to incur
expenses to protect his interests. The present action was instituted because
plaintiff an exorbitant amount for damages (P60,000) and naturally the
defendant did not and could not yield to such demand. This is neither a case
that comes under paragraph 11 of Article 2208 because the Lower Court did
not deem it just and equitable to award any amount for attorney's fees. As
We agree with the trial Judge on this point, We cannot declare that he erred
for not awarding to plaintiff any such fees in this case.

Coming now to the appeal of the defendant, the Court, after due
consideration of the evidence appearing on record:

(1) Approves the award of P700 for medicine, doctors' fees and
transportation expenses;

(2) Reduces the award of P3,000 as attorney's fees to the sum of P2,000, as
Manolo Maddela, defendant in Criminal Case No. 364 of the Court of First
Instance of Nueva Vizcaya testified that he has already paid to plaintiff part
of the latter's fees of P3,000, the amount of which was not disclosed, though
it was incumbent upon the plaintiff to establish how much he had been paid
of said fees;

(3) Approves the award of P200 as unearned professional fees as attorney

for the defendant in Civil Case No. 238191 of the Municipal Court of Manila
whom plaintiff was unable to represent, and for the latter's failure to take the
deposition of one Agripina Angrepan due to the automobile accident referred
to in this case.

Before closing this decision We deem it convenient to quote the following

passage of defendant's brief as appellant:

Realizing its obligation under its contract of carriage with the

plaintiff, and because the facts of the case, as have been shown,
mark it as more proper for the Municipal Court only, the defendant,
to avoid the expense and time of litigation, offered to settle the
case amicably with plaintiff, but the latter refused and insisted on
his demand for P72,050.20 (Exhibit K) as the only basis for
settlement, thus adding a clearly petty case to the already
overflowing desk of the Honorable Members of this Court.

We admire and respect at all times a man for standing up and

fighting for his rights, and when said right consists in injuries
sustained due to a breach of a contract of carriage with us,
sympathy and understanding are added thereto. But when a
person starts demanding P72,050.20 for a solitary bruise and
sprain, injuries for which the trial court, even at its generous
although erroneous best, could only grant P5,900, then respect
and sympathy give way to something else. It is time to fight, for, in
our humble opinion, there is nothing more loathsome nor truly
worthy of condemnation than one who uses his injuries for other
purposes than just rectification. If plaintiff's claim is granted, it
would be a blessing, not a misfortune, to be injured. (p. 34-35)

This case was instituted by a lawyer who, as an officer of the courts, should
be the first in helping Us in the administration of justice, and after going over
the record of this case, we do not hesitate to say that the demand of
P72,050.20 for a subluxation of the right humerus bone and an insignificant
contusion in the chest, has not even the semblance of reasonableness. As a
matter of fact, Dr. Aguilar himself said that the x-ray plates (Exhibits A, Band
C) " did not show anything significant except that it shows a slight subluxation
of the right shoulder, and that there is a suspicious fracture", which ultimately
he admitted not to exist. The plaintiff himself must have felt embarrassed by
his own attitude when after receiving defendant's brief as appellant, he
makes in his brief as appellee the categorical statement that he DOES NOT
NOW INSIST NOR PRETEND IN THE LEAST to Collect from the defendant
all the damages he had claimed in his complaint, but instead he is submitting
his case to the sound discretion of the Honorable Court for the award of a
reasonable and equitable damages allowable by law, to compensate the
plaintiff of the suffering and losses he had undergone and incurred of the
accident oftentimes mentioned in this brief in which plaintiff was injured" (p.
17-18).This acknowledgment comes too late, for plaintiff has already
deprived the Court of Appeals of the occasion to exercise its appellate
jurisdiction over this case which he recklessly dumped to this Court. We
certainly cannot look with at favor at his attitude of plaintiff.

WHEREFORE, the decision appealed from is hereby modified by reducing

the amount awarded as professional fees from P3,000 to P2,000 and by
eliminating the moral damages of P2,000 awarded by the Lower Court to the
plaintiff. Said decision is in all other respects affirmed, without
pronouncement as to costs. It is so ordered.

21
Fores v Miranda, 105 Phil 266
REYES, J.B.L., J.:
Defendant-petitioner Paz Fores brings this petition for review of the decision
of the Court of Appeals (C.A. Case No. 1437-R) awarding to the plaintiff-
respondent Ireneo Miranda the sums of P5,000 by way of actual damages
and counsel fees, and P10,000 as moral damages, with costs.
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. The accident occurred on the morning of March
22, 1953. Five of the passengers were injured, including the respondent who
suffered a fracture of the upper right humerus. He was taken to the National
Orthopedic Hospital for treatment, and later was subjected to a series of
operations; the first on May 23, 1953, when wire loops were wound around
the broken bones and screwed into place; a second, effected to insert a metal
splint, and a third one to remove such splint. At the time of the trial, it appears
that respondent had not yet recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless
imprudence, and upon interposing a plea of guilty was sentenced
accordingly.
The contention that the evidence did not sufficiently establish the identity of
the vehicle as the belonging to the petitioner was rejected by the appellate
court which found, among other things, that is carried plate No. TPU-1163,
SERIES OF 1952, Quezon City, registered in the name of Paz Fores,
(appellant herein) and that the vehicle even had the name of "Doña Paz"
painted below its wind shield. No evidence to the contrary was introduced by
the petitioner, who relied on an attack upon the credibility of the two
policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21,
1953, or one day before the accident happened, she allegedly sold the
passenger jeep that was involved therein to a certain Carmen Sackerman.
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?" Assuming the dubious sale to be a fact, the
court of Appeals answered the query in the affirmative. The ruling should be
upheld.
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:
Sec. 20. Subject to established limitations and exceptions and
saving provisions to the contrary, it shall be unlawful for any public
service or for the owner, lessee or operator thereof, without the
previous approval and authority of the Commission previously had
— date of the transfer; but such outcome cannot prejudice rights intervening in
xxx xxx xxx
(g) To sell, alienate, mortgage, encumber or lease its property,
franchises, certificates, privileges, or rights, or any part thereof; or
merge or consolidate its property, franchises, privileges or rights,
or any part thereof, with those of any other public service. The
approval herein required shall be given, after notice to the public
and after hearing the persons interested at a public hearing, if it
be shown that there are just and reasonable grounds for making
the mortgage or encumbrance, for liabilities of more than one year
maturity, or the sale, alienation, lease, merger, or consolidation to
be approved and that the same are not detrimental to the public
interest, and in case of a sale, the date on which the same is to
be consummated shall be fixed in the order of
approval: Provided, however, That nothing herein contained shall
be construed to prevent the transaction from being negotiated or
completed before its approval or to prevent the sale, alienation, or
lease by any public service of any of its property in the ordinary
course of its business.
22
Interpreting the effects of this particular provision of law, we have held in the
recent cases of Montoya vs. Ignacio, * 50 Off. Gaz. No. 1, p. 108; Timbol vs.
Osias, et al., G. R. No. L-7547, April 30, 1955, and Medina vs. Cresencia, 99
Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that 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. Petitioner assails,
however, the applicability of these rulings to the instant case, contending that
in those cases, the operator did not convey, by lease or by sale, the vehicle
independently of his rights under the franchise. This line of reasoning does
not find support in the law. The provisions of the statute are clear and prohibit
the sale, alienation, lease, or encumbrance of the property, franchise,
certificate, privileges or rights, or any part thereof of the owner or operator of
the public service Commission. 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.
The proviso contained in the aforequoted law, to the effect that nothing
therein shall be construed "to prevent the transaction from being negotiated
or complete before its approval", means only that the sale without the
required approval is still valid and binding between the parties (Montoya vs.
Ignacio, supra). The phrase "in the ordinary course of its business" found in
the other proviso" or to prevent the sale, alienation, or lease by any public
service of any of its property". As correctly observed by the lower court, could
not have been intended to include the sale of the vehicle itself, but at most
may refer only to such property that may be conceivably disposed or by the
carrier in the ordinary course of its business, like junked equipment or spare
parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is
enlightening; and there, it was held:
Under the law, the Public Service Commission has not only
general supervision and regulation of, but also full jurisdiction and
control over all public utilities including the property, equipment
and facilities used, and the property rights and franchise enjoyed
by every individual and company engaged i the performance of a
public service in the sense this phrase is used in the Public
Service Act or Act No. 3108). By virtue of the provisions of said
Act, motor vehicles used in the performance of a service, as the
transportation of freight from one point to another, have to this
date been considered — and they cannot but be so considered-
public service property; and, by reason of its own nature, a TH
truck, which means that the operator thereof places it at the
disposal of anybody who is willing to pay a rental of its use, when
he desires to transfer or carry his effects, merchandise or any
other cargo from one place to another, is necessarily a public
service property. (Emphasis supplied)
Of course, this court has held in the case of Bachrach Motor co. vs.
Zamboanga Transportation Co., 52 Phil., 244, that there may be a nunc pro
tunc authorization which has the effect of having the approval retroact to the
the meantime. It appears that no such approval was given by the Commission
before the accident occurred.
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. On the other hand, "it cannot be denied," the lower
court said, "that appellee (respondent) did incur expenses"' It is well to note
further that respondent was a painter by profession and a professor of Fine
Arts, so that the amount of P2,000 awarded cannot be said to be excessive
(see Arts. 2224 and 2225, Civil Code of the Philippines). 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.
Anent the moral damages ordered to be paid to the respondent, the same
must be discarded. We have repeatedly ruled (Cachero vs. Manila Yellow
Taxicab Co. Inc., 101 Phil., 523; 54 Off. Gaz., [26], 6599; Necesito, et al vs.
Paras, 104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages are not
recoverable in damage actions predicted on a breach of the contract of
transportation, in view of Articles 2219 and 2220 of the new Civil Code, which
provide as follows:
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;
xxx xxx xxx
Art. 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under
circumstances, such damages are justify due. The same rule
applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
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" (Necesito vs. Paras, 104
Phil., 84, Resolution on motion to reconsider, September 11, 1958). 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.
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co.,
G.R. No. 49155, December 14, 1948 and Layda vs. Court of Appeals, 90
Phil., 724; but these doctrines were predicated upon our former law of
damages, before judicial discretion in fixing them became limited by the
express provisions of the new Civil Code (previously quoted). Hence, the
aforesaid rulings are now inapplicable.
Upon the other hand, the advantageous position of a party suing a carrier for
breach of the contract of transportations explains, to some extent, the
limitations imposed by the new Code on the amount of the recovery. The
action for breach of contract imposes on the defendant carrier a presumption
23
of liability upon mere proof of injury to the passenger; that latter is relieved
from the duty to established the fault of the carrier, or of his employees, and
the burden is placed on the carrier to prove that it was due to an unforseen
event or to force majeure (Cangco vs. Manila Railroad Co., 38 Phil., 768,
777). Moreover, the carrier, unlike in suits for quasi-delict, may not escape
liability by proving that it has exercised due diligence in the selection and
supervision of its employees (Art. 1759, new civil code; Cangco vs. Manila
Railroad Co., supra; Prado vs. Manila Electric Co., 51 Phil., 900).
The difference in conditions, defenses and proof, as well as the codal concept
of quasi-delict as essentially extra contractual negligence, compel us to
differentiate between action ex contractu, and actions quasi ex delicto, and
prevent us from viewing the action for breach of contract as simultaneously
embodying an action on tort. Neither can this action be taken as one to
enforce on employee's liability under Art. 103 of the Revised Penal Code,
since the responsibility is not alleged to be subsidiary, nor is there on record
any averment or proof that the driver of appellant was insolvent. In fact, he is
not even made a party to the suit.
It is also suggested that a carrier's violation of its engagement to safety
transport the passenger involves a breach of the passenger's confidence,
and therefore should be regarded as a breach of contract in bad faith,
justifying recovery of moral damages under Art. 2220. This theory is
untenable, for under it the carrier would always be deemed in bad faith, in
every case its obligation to the passenger is infringed, and it would be never
accountable for simple negligence; while under the law (Art. 1756). the
presumption is that common carriers acted negligently (and not maliciously),
and Art. 1762 speaks of negligence of the common carrier.
ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in article 1733 and 1755.
ART. 1762. The contributory negligence of the passenger does
not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common carrier,
but the amount of damages shall be equitably reduced.
The distinction between fraud, bad faith or malice in the sense of deliberate
or wanton wrong doing and negligence (as mere carelessness) is too
fundamental in our law to be ignored (Arts. 1170-1172); their consequences
being clearly differentiated by the Code.
ART. 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be those
that are the natural and probable consequences of the breach of
the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor
shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation.
It is to be presumed, in the absence of statutory provision to the contrary, that
this difference was in the mind of the lawmakers when in Art. 2220 they
limited recovery of moral damages to breaches of contract in bad faith. It is
true that negligence may be occasionally so gross as to amount to malice;
but that fact must be shown in evidence, and a carrier's bad faith is not to be
lightly inferred from a mere finding that the contract was breached through
negligence of the carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals
is modified by eliminating the award of P5,000.00 by way of moral damages.
(Court of Appeals Resolution of May 5, 1957). In all other respects, the
judgment is affirmed. No costs in this instance. So ordered.
Tan v Northwest Airlines Inc., 327 SCRA 263
PARDO, J.:
Petitioner Priscilla L. Tan appeals via certiorari from the decision of the Court
of Appeals 1 affirming with modification 2 the decision of the trial
court, 3 ordering respondent to pay petitioner the following amounts: (1)
P15,000.00, as actual damages; (2) P100,000.00, as moral damages; (3)
P50,000.00, as exemplary damages; (4) P30,000.00, as and for attorney's
fees; and (6) costs.
The case before the Court traces its roots from an action for damages for
breach of contract of air carriage for failure to deliver petitioner's baggages
on the date of her arrival filed on June 29, 1994 with the Regional Trial Court,
Makati, Branch 150 against respondent Northwest Airlines, Inc., a foreign
corporation engaged in the business of air transportation.
The antecedent facts are as follows:
On May 31, 1994, Priscilla L. Tan and Connie Tan boarded Northwest
Airlines Flight 29 in Chicago, U. S. A. bound for the Philippines, with a stop-
over at Detroit, U. S. A. They arrived at the Ninoy Aquino International Airport
(NAIA) on June 1, 1994 at about 10:40 in the evening.
Upon their arrival, petitioner and her companion Connie Tan found that their
baggages were missing. They returned to the airport in the evening of the
following day and they were informed that their baggages might still be in
another plane in Tokyo, Japan.
On June 3, 1994, they recovered their baggages and discovered that some
of its contents were destroyed and soiled.
Claiming that they "suffered mental anguish, sleepless nights and great
damage" because of Northwest's failure to inform them in advance that their
baggages would not be loaded on the same flight they boarded and because
of their delayed arrival, they demanded from Northwest Airlines
compensation for the damages they suffered. On June 15, 1994 and June
22, 1994, petitioner sent demand letters to Northwest Airlines, but the latter
did not respond. Hence, the filing of the case with the regional trial court.
In its answer to the complaint, respondent Northwest Airlines did not deny
that the baggages of petitioners were not loaded on Northwest Flight 29.
Petitioner's baggages could not be carried on the same flight because of
"weight and balance restrictions." However, the baggages were loaded in
another Northwest Airlines flight, which arrived in the evening of June 2,
1994.
When petitioner received her baggages in damaged condition, Northwest
offered to either (1) reimburse the cost or repair of the bags; or (2) reimburse
the cost for the purchase of new bags, upon submission of receipts.
After due trial, on June 10, 1996, the trial court rendered decision finding
respondent Northwest Airlines, Inc. liable for damages, as follows:
WHEREFORE judgment is rendered ordering the defendant to
pay the plaintiff the following amounts:
1. P15,000.00, as actual damages;
2. P100,000.00, as moral damages;
3. P50,000.00, as exemplary damages;
4. P30,000.00, as and for attorney's fees and
5. Costs.
SO ORDERED.
24
Given this 10th day of June, 1996 at Makati City.
ERNA FALLORAN ALIPOSA
Judge4
Respondent Northwest Airlines, Inc. appealed from the trial court's decision
to the Court of Appeals contending that the court a quo erred in finding it
guilty of breach of contract of carriage and of willful misconduct and awarded
damages which had no basis in fact or were otherwise excessive.
On September 30, 1998, the Court of Appeals promulgated its decision
partially granting the appeal by deleting the award of moral and exemplary
damages and reducing the attorney's fees, specifically providing that:
WHEREFORE, PREMISES CONSIDERED, the appeal is hereby
GRANTED partially. The Decision of the lower court dated June
10, 1996 is AFFIRMED with the modification that the award of
moral and exemplary damages is deleted and the amount of
attorney's fees is reduced to ten thousand pesos (P10,000.00).
No pronouncement as to costs.
SO ORDERED. 5
Hence, this appeal. 6
The issue is whether respondent is liable for moral and exemplary damages
for willful misconduct and breach of the contract of air carriage.
The petition is without merit.
We agree with the Court of Appeals that respondent was not guilty of willful
misconduct. "For willful misconduct to exist there must be a showing that the
acts complained of were impelled by an intention to violate the law, or were
in persistent disregard of one's rights. It must be evidenced by a flagrantly or
shamefully wrong or improper conduct." 7
Contrary to petitioner's contention, there was nothing in the conduct of
respondent which showed that they were motivated by malice or bad faith in
loading her baggages on another plane. Due to weight and balance
restrictions, as a safety measure, respondent airline had to transport the
baggages on a different flight, but with the same expected date and time of
arrival in the Philippines. As aptly explained by respondent:
To ensure the safety of each flight, Northwest's personnel
determine every flight's compliance with "weight and balance
restrictions." They check the factors like weight of the aircraft used
for the flight gas input, passenger and crew load, baggage weight,
all in relation to the wind factor anticipated on the flight. If there is
an overload, i.e., a perceived safety risk, the aircraft's load will be
reduced by off-loading cargo, which will then be placed on the next
available flight. 8
It is admitted that respondent failed to deliver petitioner's luggages on time.
However, there was no showing of malice in such failure. By its concern for
safety, respondent had to ship the baggages in another flight with the same
date of arrival.
Hence, the Court of Appeals correctly held that respondent did not act in bad
faith. 9
"Bad faith does not simply connote bad judgment or negligence, it imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong,
a breach of known duty through some motive or interest or ill-will that
partakes of the nature of fraud." 10
"Where in breaching the contract of carriage the defendant airline is not
shown to have acted fraudulently or in bad faith, liability for damages is
limited to the natural and probable consequences of the breach of obligation
which the parties had foreseen or could have reasonably foreseen. In that
case, such liability does not include moral and exemplary damages." 11

Consequently, we have no reason to reverse the decision of the Court of

Appeals.

WHEREFORE, the Court DENIES the petition for lack of merit. The Court
AFFIRMS the decision of the Court of Appeals deleting, however, the award
of attorney's fees. No costs. SO ORDERED.

25
Alitalia v IAC, 192 SCRA 9
NARVASA, J.:
Dr. Felipa Pablo — an associate professor in the University of the Philippines,
1 and a research grantee of the Philippine Atomic Energy Agency — was
invited to take part at a meeting of the Department of Research and Isotopes
of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of
the United Nations in Ispra, Italy. 2 She was invited in view of her specialized
knowledge in "foreign substances in food and the agriculture environment."
She accepted the invitation, and was then scheduled by the organizers, to
read a paper on "The Fate of Radioactive Fusion Products Contaminating
Vegetable Crops." 3 The program announced that she would be the second
speaker on the first day of the meeting. 4 To fulfill this engagement, Dr. Pablo
booked passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the
itinerary and time table set for her by ALITALIA. She was however told by the
ALITALIA personnel there at Milan that her luggage was "delayed inasmuch
as the same . . . (was) in one of the succeeding flights from Rome to Milan."
5 Her luggage consisted of two (2) suitcases: one contained her clothing and
other personal items; the other, her scientific papers, slides and other
research material. But the other flights arriving from Rome did not have her
baggage on board.
By then feeling desperate, she went to Rome to try to locate her bags herself.
There, she inquired about her suitcases in the domestic and international
airports, and filled out the forms prescribed by ALITALIA for people in her
predicament. However, her baggage could not be found. Completely
distraught and discouraged, she returned to Manila without attending the
meeting in Ispra, Italy. : nad
Once back in Manila she demanded that ALITALIA make reparation for the
damages thus suffered by her. ALITALIA offered her "free airline tickets to
compensate her for any alleged damages. . . ." She rejected the offer, and
forthwith commenced the action 6 which has given rise to the present
appellate proceedings.
As it turned out, Prof. Pablo's suitcases were in fact located and forwarded
to Ispra, 7 Italy, but only on the day after her scheduled appearance and
participation at the U.N. meeting there. 8 Of course Dr. Pablo was no longer
there to accept delivery; she was already on her way home to Manila. And
for some reason or other, the suitcases were not actually restored to Prof.
Pablo by ALITALIA until eleven (11) months later, and four (4) months after
institution of her action. 9
After appropriate proceedings and trial, the Court of First Instance rendered
judgment in Dr. Pablo's favor: 10
"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum
of TWENTY THOUSAND PESOS (P20,000.00), Philippine
Currency, by way of nominal damages;
(2) Ordering the defendant to pay . . . (her) the sum of FIVE
THOUSAND PESOS (P5,000.00), Philippine Currency, as and for
attorney's fees; (and)
(3) Ordering the defendant to pay the costs of the suit."
ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a
reversal of the judgment. 11 Indeed, the Appellate Court not only affirmed the
Trial Court's decision but also increased the award of nominal damages
payable by ALITALIA to P40,000.00. 12 That increase it justified as follows:
13
"Considering the circumstances, as found by the Trial Court and
the negligence committed by defendant, the amount of
P20,000.00 under present inflationary conditions as awarded . . .
to the plaintiff as nominal damages, is too little to make up for the
plaintiff's frustration and disappointment in not being able to
appear at said conference; and for the embarrassment and
humiliation she suffered from the academic community for failure
to carry out an official mission for which she was singled out by
the faculty to represent her institution and the country. After
weighing carefully all the considerations, the amount awarded to
the plaintiff for nominal damages and attorney's fees should be
increased to the cost of her round trip air fare or at the present
rate of peso to the dollar at P40,000,00."
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make
basically the same points it tried to make before the Trial Court and the
Intermediate Appellate Court, i.e.:
26
1) that the Warsaw Convention should have been applied to limit
ALITALIA'S liability; and
2) that there is no warrant in fact or in law for the award to Dr.
Pablo of nominal damages and attorney's fees. 14
In addition, ALITALIA postulates that it was error for the Intermediate
Appellate Court to have refused to pass on all the assigned errors and in not
stating the facts and the law on which its decision is based. 15
Under the Warsaw Convention, 16 an air carrier is made liable for damages
for:
1) the death, wounding or other bodily injury of a passenger if the
accident causing it took place on board the aircraft or in the course
of its operations of embarking or disembarking; 17
2) the destruction or loss of, or damage to, any registered luggage
or goods, if the occurrence causing it took place during the
carriage by air;" 18 and
3) delay in the transportation by air of passengers, luggage or
goods. 19
In these cases, it is provided in the Convention that the "action for damages,
however, founded, can only be brought subject to conditions and limits set
out" therein. 20
The Convention also purports to limit the liability of the carriers in the
following manner: 21
1. In the carriage of passengers the liability of the carrier for each
passenger is limited to the sum of 250,000 francs . . .
Nevertheless, by special contract, the carrier and the passenger
may agree to a higher limit of liability.: nad
2. a) In the carriage of registered baggage and of cargo, the
liability of the carrier is limited to a sum of 250 francs per
kilogramme, unless the passenger or consignor has made, at the
time when the package was handed over to the carrier, a special
declaration of interest in delivery at destination and has paid a
supplementary sum if the case so requires. In that case the carrier
will be liable to pay a sum not exceeding the declared sum, unless
he proves that sum is greater than the actual value to the
consignor at delivery.
b) In the case of loss, damage or delay of part of registered
baggage or cargo, or of any object contained therein, the weight
to be taken into consideration in determining the amount to which
the carrier's liability is limited shall be only the total weight of the
package or packages concerned. Nevertheless, when the loss,
damage or delay of a part of the registered baggage or cargo, or
of an object contained therein, affects the value of other packages
covered by the same baggage check or the same air way bill, the
total weight of such package or packages shall also be taken into
consideration in determining the limit of liability.
3. As regards objects of which the passenger takes charge himself
the liability of the carrier is limited to 5000 francs per passenger.
4. The limits prescribed . . shall not prevent the court from
awarding, in accordance with its own law, in addition, the whole or
part of the court costs and of the other expenses of litigation
incurred by the plaintiff. The foregoing provision shall not apply if
the amount of the damages awarded, excluding court costs and
other expenses of the litigation, does not exceed the sum which
the carrier has offered in writing to the plaintiff within a period of
six months from the date of the occurrence causing the damage,
or before the commencement of the action, if that is later.
The Warsaw Convention however denies to the carrier availment "of the
provisions which exclude or limit his liability, if the damage is caused by his
wilful misconduct or by such default on his part as, in accordance with the
law of the court seized of the case, is considered to be equivalent to wilful
misconduct," or "if the damage is (similarly) caused . . by any agent of the
carrier acting within the scope of his employment." 22 The Hague Protocol
amended the Warsaw Convention by removing the provision that if the airline
took all necessary steps to avoid the damage, it could exculpate itself
completely, 23 and declaring the stated limits of liability not applicable "if it
is proved that the damage resulted from an act or omission of the carrier, its
servants or agents, done with intent to cause damage or recklessly and with
knowledge that damage would probably result." The same deletion was
effected by the Montreal Agreement of 1966, with the result that a passenger
could recover unlimited damages upon proof of wilful misconduct. 24
The Convention does not thus operate as an exclusive enumeration of the argument that the award to her of such nominal damages is precluded by her
instances of an airline's liability, or as an absolute limit of the extent of that omission to include a specific claim therefor in her complaint, it suffices to
liability. Such a proposition is not borne out by the language of the draw attention to her general prayer, following her plea for moral and
Convention, as this Court has now, and at an earlier time, pointed out. 25 exemplary damages and attorney's fees, "for such other and further just and
Moreover, slight reflection readily leads to the conclusion that it should be equitable relief in the premises," which certainly is broad enough to
deemed a limit of liability only in those cases where the cause of the death comprehend an application as well for nominal damages. Besides, petitioner
or injury to person, or destruction, loss or damage to property or delay in its should have realized that the explicit assertion, and proof, that Dr. Pablo's
transport is not attributable to or attended by any wilful misconduct, bad faith, right had been violated or invaded by it — absent any claim for actual or
recklessness, or otherwise improper conduct on the part of any official or compensatory damages, the prayer thereof having been voluntarily deleted
employee for which the carrier is responsible, and there is otherwise no by Dr. Pablo upon the return to her of her baggage — necessarily raised the
special or extraordinary form of resulting injury. The Convention's provisions, issue of nominal damages.: rd
in short, do not "regulate or exclude liability for other breaches of contract by
the carrier" 26 or misconduct of its officers and employees, or for some This Court also agrees that respondent Court of Appeals correctly awarded
particular or exceptional type of damage. Otherwise, "an air carrier would be attorney's fees to Dr. Pablo, and the amount of P5,000.00 set by it is
exempt from any liability for damages in the event of its absolute refusal, in reasonable in the premises. The law authorizes recovery of attorney's fees
bad faith, to comply with a contract of carriage, which is absurd." 27 Nor may inter alia where, as here, "the defendant's act or omission has compelled the
it for a moment be supposed that if a member of the aircraft complement plaintiff to litigate with third persons or to incur expenses to protect his
should inflict some physical injury on a passenger, or maliciously destroy or interest," 34 or "where the court deems it just and equitable." 35
damage the latter's property, the Convention might successfully be pleaded WHEREFORE, no error being perceived in the challenged decision of the
as the sole gauge to determine the carrier's liability to the passenger. Neither Court of Appeals, it appearing on the contrary to be entirely in accord with
may the Convention be invoked to justify the disregard of some extraordinary the facts and the law, said decision is hereby AFFIRMED, with costs against
sort of damage resulting to a passenger and preclude recovery therefor the petitioner.
beyond the limits set by said Convention. It is in this sense that the
Convention has been applied, or ignored, depending on the peculiar facts SO ORDERED.
presented by each case.:-cralaw
In Pan American World Airways, Inc. v. I.A.C., 28 for example, the Warsaw
Convention was applied as regards the limitation on the carrier's liability,
there being a simple loss of baggage without any otherwise improper conduct
on the part of the officials or employees of the airline or other special injury
sustained by the passenger.
On the other hand, the Warsaw Convention has invariably been held
inapplicable, or as not restrictive of the carrier's liability, where there was
satisfactory evidence of malice or bad faith attributable to its officers and
employees. 29 Thus, an air carrier was sentenced to pay not only
compensatory but also moral and exemplary damages, and attorney's fees,
for instance, where its employees rudely put a passenger holding a first-class
ticket in the tourist or economy section, 30 or ousted a brown Asiatic from
the plane to give his seat to a white man, 31 or gave the seat of a passenger
with a confirmed reservation to another, 32 or subjected a passenger to
extremely rude, even barbaric treatment, as by calling him a "monkey." 33
In the case at bar, no bad faith or otherwise improper conduct may be
ascribed to the employees of petitioner airline; and Dr. Pablo's luggage was
eventually returned to her, belatedly, it is true, but without appreciable
damage. The fact is, nevertheless, that some special species of injury was
caused to Dr. Pablo because petitioner ALITALIA misplaced her baggage
and failed to deliver it to her at the time appointed — a breach of its contract
of carriage, to be sure — with the result that she was unable to read the paper
and make the scientific presentation (consisting of slides, autoradiograms or
films, tables and tabulations) that she had painstakingly labored over, at the
prestigious international conference, to attend which she had traveled
hundreds of miles, to her chagrin and embarrassment and the
disappointment and annoyance of the organizers. She felt, not unreasonably,
that the invitation for her to participate at the conference, extended by the
Joint FAO/IAEA Division of Atomic Energy in Food and Agriculture of the
United Nations, was a singular honor not only to herself, but to the University
of the Philippines and the country as well, an opportunity to make some sort
of impression among her colleagues in that field of scientific activity. The
opportunity to claim this honor or distinction was irretrievably lost to her
because of Alitalia's breach of its contract.
Apart from this, there can be no doubt that Dr. Pablo underwent profound
distress and anxiety, which gradually turned to panic and finally despair, from
the time she learned that her suitcases were missing up to the time when,
having gone to Rome, she finally realized that she would no longer be able
to take part in the conference. As she herself put it, she "was really shocked
and distraught and confused."
Certainly, the compensation for the injury suffered by Dr. Pablo cannot under
the circumstances be restricted to that prescribed by the Warsaw Convention
for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her
luggage. As already mentioned, her baggage was ultimately delivered to her
in Manila, tardily but safely. She is however 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 the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered — and this Court agrees that the respondent Court of Appeals
correctly set the amount thereof at P40,000.00. As to the purely technical
27
Saludo v CA, 207 SCRA 498
REGALADO, J.:
Assailed in this petition for review on certiorari is the decision in CA-G.R. CV
No. 20951 of respondent Court of Appeals1 which affirmed the decision of
the trial court2 dismissing for lack of evidence herein petitioners' complaint in
Civil Case No R-2101 of the then Court of First Instance of Southern Leyte,
Branch I.
The facts, as recounted by the court a quo and adopted by respondent court
after "considering the evidence on record," are as follows:
After the death of plaintiffs' mother, Crispina Galdo Saludo, in Chicago
Illinois, (on) October 23, 1976 (Exh. A), Pomierski and Son Funeral Home of
Chicago, made the necessary preparations and arrangements for the
shipment, of the remains from Chicago to the Philippines. The funeral home
had the remains embalmed (Exb. D) and secured a permit for the disposition
of dead human body on October 25, 1976 (Exh. C), Philippine Vice Consul
in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on October 26, 1976
at the Pomierski & Son Funeral Home, sealed the shipping case containing
a hermetically sealed casket that is airtight and waterproof wherein was
contained the remains of Crispina Saludo Galdo (sic) (Exb. B). On the same
date, October 26, 1976, Pomierski brought the remains to C.M.A.S.
(Continental Mortuary Air Services) at the airport (Chicago) which made the
necessary arrangements such as flights, transfers, etc.; C.M.A.S. is a
national service used by undertakers to throughout the nation (U.S.A.), they
furnish the air pouch which the casket is enclosed in, and they see that the
remains are taken to the proper air freight terminal (Exh. 6-TWA). C.M.A.S.
booked the shipment with PAL thru the carrier's agent Air Care International,
with Pomierski F.H. as the shipper and Mario (Maria) Saludo as the
consignee. PAL Airway Bill No. 079-01180454 Ordinary was issued wherein
the requested routing was from Chicago to San Francisco on board TWA
Flight 131 of October 27, 1976 and from San Francisco to Manila on board
PAL Flight No. 107 of the same date, and from Manila to Cebu on board PAL
Flight 149 of October 29, 1976 (See Exh. E., Also Exh. 1-PAL).
In the meantime, plaintiffs Maria Salvacion Saludo and Saturnino Saludo,
thru a travel agent, were booked with United Airlines from Chicago to
California, and with PAL from California to Manila. She then went to the
funeral director of Pomierski Funeral Home who had her mother's remains
and she told the director that they were booked with United Airlines. But the
director told her that the remains were booked with TWA flight to California.
This upset her, and she and her brother had to change reservations from UA
to the TWA flight after she confirmed by phone that her mother's remains
should be on that TWA flight. They went to the airport and watched from the
look-out area. She saw no body being brought. So, she went to the TWA
counter again, and she was told there was no body on that flight. Reluctantly,
they took the TWA flight upon assurance of her cousin, Ani Bantug, that he
would look into the matter and inform her about it on the plane or have it
radioed to her. But no confirmation from her cousin reached her that her
mother was on the West Coast.
Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA
counter there to inquire about her mother's remains. She was told they did
not know anything about it.
She then called Pomierski that her mother's remains were not at the West
Coast terminal, and Pomierski immediately called C.M.A.S., which in a matter
of 10 minutes informed him that the remains were on a plane to Mexico City,
that there were two bodies at the terminal, and somehow they were switched;
he relayed this information to Miss Saludo in California; later C.M.A.S. called
and told him they were sending the remains back to California via Texas (see
Exh. 6-TWA).
It-turned out that TWA had carried a shipment under PAL Airway Bill No. 079-
ORD-01180454 on TWA Flight 603 of October 27, 1976, a flight earlier than
TWA Flight 131 of the same date. TWA delivered or transferred the said
shipment said to contain human remains to PAL at 1400H or 2:00 p.m. of the
same date, October 27, 1976 (Bee Exh. 1- TWA). "Due to a switch(ing) in
Chicago", this shipment was withdrawn from PAL by CMAS at 1805H (or 6:05
p.m.) of the same date, October 27 (Exh. 3-PAL, see Exh. 3-a-PAL).
28
What transpired at the Chicago (A)irport is explained in a memo or incident
report by Pomierski (Exh. 6-TWA) to Pomierski's lawyers who in turn referred
to said' memo and enclosed it in their (Pomierski's lawyers) answer dated
July 18, 1981 to herein plaintiff's counsel (See Exh. 5-TWA). In that memo or
incident report (Exh. 6-TWA), it is stated that the remains (of Crispina Saludo)
were taken to CMAS at the airport; that there were two bodies at the (Chicago
Airport) terminal, and somehow they were switched, that the remains (of
Crispina Saludo) were on a plane to Mexico City; that CMAS is a national
service used by undertakers throughout the nation (U.S.A.), makes all the
necessary arrangements, such as flights, transfers, etc., and see(s) to it that
the remains are taken to the proper air freight terminal.
The following day October 28, 1976, the shipment or remains of Crispina
Saludo arrived (in) San Francisco from Mexico on board American Airlines.
This shipment was transferred to or received by PAL at 1945H or 7:45 p.m.
(Exh. 2-PAL, Exh. 2-a-PAL). This casket bearing the remains of Crispina
Saludo, which was mistakenly sent to Mexico and was opened (there), was
resealed by Crispin F. Patagas for shipment to the Philippines (See Exh. B-
1). The shipment was immediately loaded on PAL flight for Manila that same
evening and arrived (in) Manila on October 30, 1976, a day after its expected
arrival on October 29, 1976.3
In a letter dated December 15, 1976,4 petitioners' counsel informed private
respondent Trans World Airlines (TWA) of the misshipment and eventual
delay in the delivery of the cargo containing the remains of the late Crispin
Saludo, and of the discourtesy of its employees to petitioners Maria Salvacion
Saludo and Saturnino Saludo. In a separate letter on June 10, 1977
addressed to co-respondent Philippine Airlines (PAL),5 petitioners stated that
they were holding PAL liable for said delay in delivery and would commence
judicial action should no favorable explanation be given.
Both private respondents denied liability. Thus, a damage suit 6 was filed by
petitioners before the then Court of First Instance, Branch III, Leyte, praying
for the award of actual damages of P50,000.00, moral damages of
P1,000,000.00, exemplary damages, attorney's fees and costs of suit.
As earlier stated, the court below absolved the two respondent airlines
companies of liability. The Court of Appeals affirmed the decision of the lower
court in toto, and in a subsequent resolution,7 denied herein petitioners'
motion for reconsideration for lack of merit.
In predictable disagreement and dissatisfaction with the conclusions reached
by respondent appellate court, petitioners now urge this Court to review the
appealed decision and to resolve whether or not (1) the delay in the delivery
of the casketed remains of petitioners' mother was due to the fault of
respondent airline companies, (2) the one-day delay in the delivery of the
same constitutes contractual breach as would entitle petitioners to damages,
(3) damages are recoverable by petitioners for the humiliating, arrogant and
indifferent acts of the employees of TWA and PAL, and (4) private
respondents should be held liable for actual, moral and exemplary damages,
aside from attorney's fees and litigation expenses.8
At the outset and in view of the spirited exchanges of the parties on this
aspect, it is to be stressed that only questions of law may be raised in a
petition filed in this Court to review on certiorari the decision of the Court of
Appeals.9 This being so, the factual findings of the Court of Appeals are final
and conclusive and cannot be reviewed by the Supreme Court. The rule,
however, admits of established exceptions, to wit: (a) where there is grave
abuse of discretion; (b) when the finding is grounded entirely on speculations,
surmises or conjectures;(c) when the inference made is manifestly-mistaken,
absurd or impossible; (d) when the judgment of the Court of Appeals was
based on a misapprehension of facts; (e) when the factual findings are
conflicting; (f) when the Court of Appeals, in making its findings, went beyond
the issues of the case and the same are contrary to the admissions of both
appellant and appellee; 10 (g) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; 11 and (h) where the
findings of fact of the Court of Appeals are contrary to those of the trial court,
or are mere conclusions without citation of specific evidence, or where the
facts of set forth by the petitioner are not disputed by the respondent, or
where the findings of fact of the Court of Appeals are premised on the
absence of evidence and are contradicted by the evidence on record. 12
To distinguish, a question of law is one which involves a doubt or controversy
on what the law is on a certain state of facts; and, a question of fact, contrarily,
is one in which there is a doubt or difference as to the truth or falsehood of
the alleged facts. 13 One test, it has been held, is whether the appellate court
can determine the issue raised without reviewing or evaluating the evidence,
in which case it is a question of law, otherwise it will be a question of fact.14
Respondent airline companies object to the present recourse of petitioners
on the ground that this petition raises only factual questions. 15 Petitioners
maintain otherwise or, alternatively, they are of the position that, assuming
that the petition raises factual questions, the same are within the recognized
exceptions to the general rule as would render the petition cognizable and
worthy of review by the Court. 16
Since it is precisely the soundness of the inferences or conclusions that may
be drawn from the factual issues which are here being assayed, we find that
the issues raised in the instant petition indeed warrant a second look if this
litigation is to come to a reasonable denouement. A discussion seriatim of
said issues will further reveal that the sequence of the events involved is in
effect disputed. Likewise to be settled is whether or not the conclusions of
the Court of Appeals subject of this review indeed find evidentiary and legal
support.
I. Petitioners fault respondent court for "not finding that private respondents
failed to exercise extraordinary diligence required by law which resulted in
the switching and/or misdelivery of the remains of Crispina Saludo to Mexico
causing gross delay in its shipment to the Philippines, and consequently,
damages to petitioners." 17
Petitioner allege that private respondents received the casketed remains of
petitioners' mother on October 26, 1976, as evidenced by the issuance of
PAL Air Waybill No. 079-01180454 18 by Air Care International as carrier's
agent; and from said date, private respondents were charged with the
responsibility to exercise extraordinary diligence so much so that for the
alleged switching of the caskets on October 27, 1976, or one day after private
respondents received the cargo, the latter must necessarily be liable.
To support their assertion, petitioners rely on the jurisprudential dictum, both
under American and Philippine law, that "(t)he issuance of a bill of lading
carries the presumption that the goods were delivered to the carrier issuing
the bill, for immediate shipment, and it is nowhere questioned that a bill of
lading is prima facie evidence of the receipt of the goods by the carrier. . . .
In the absence of convincing testimony establishing mistake, recitals in the
bill of lading showing that the carrier received the goods for shipment on a
specified date control (13 C.J.S. 235)." 19
A bill of lading is a written acknowledgment of the receipt of the goods and
an agreement to transport and deliver them at a specified place to a person
named or on his order. Such instrument may be called a shipping receipt,
forwarder's receipt and receipt for transportation. 20 The designation,
however, is immaterial. It has been hold that freight tickets for bus companies
as well as receipts for cargo transported by all forms of transportation,
whether by sea or land, fall within the definition. Under the Tariff and Customs
Code, a bill of lading includes airway bills of lading. 21 The two-fold character
of a bill of lading is all too familiar; it is a receipt as to the quantity and
description of the goods shipped and a contract to transport the goods to the
consignee or other person therein designated, on the terms specified in such
instrument. 22
Logically, since a bill of lading acknowledges receipt of goods to be
transported, delivery of the goods to the carrier normally precedes the
issuance of the bill; or, to some extent, delivery of the goods and issuance of
the bill are regarded in commercial practice as simultaneous
acts. 23 However, except as may be prohibited by law, there is nothing to
prevent an inverse order of events, that is, the execution of the bill of lading
even prior to actual possession and control by the carrier of the cargo to be
transported. There is no law which requires that the delivery of the goods for
carriage and the issuance of the covering bill of lading must coincide in point
of time or, for that matter, that the former should precede the latter.
Ordinarily, a receipt is not essential to a complete delivery of goods to the
carrier for transportation but, when issued, is competent and prima facie, but
not conclusive, evidence of delivery to the carrier. A bill of lading, when
properly executed and delivered to a shipper, is evidence that the carrier has
received the goods described therein for shipment. Except as modified by
statute, it is a general rule as to the parties to a contract of carriage of goods
in connection with which a bill of lading is issued reciting that goods have
been received for transportation, that the recital being in essence a receipt
29
alone, is not conclusive, but may be explained, varied or contradicted by parol
or other evidence. 24
While we agree with petitioners' statement that "an airway bill estops the
carrier from denying receipt of goods of the quantity and quality described in
the bill," a further reading and a more faithful quotation of the authority cited
would reveal that "(a) bill of lading may contain constituent elements of
estoppel and thus become something more than a contract between the
shipper and the carrier. . . . (However), as between the shipper and the
carrier, when no goods have been delivered for shipment no recitals in the
bill can estop the carrier from showing the true facts . . . Between the
consignor of goods and receiving carrier, recitals in a bill of lading as to the
goods shipped raise only a rebuttable presumption that such goods were
delivered for shipment. As between the consignor and a receiving carrier, the
fact must outweigh the recital." 25 (Emphasis supplied)
For this reason, we must perforce allow explanation by private respondents
why, despite the issuance of the airway bill and the date thereof, they deny
having received the remains of Crispina Saludo on October 26, 1976 as
alleged by petitioners.
The findings of the trial court, as favorably adopted by the Court of Appeals
and which we have earner quoted, provide us with the explanation that
sufficiently over comes the presumption relied on by petitioners in insisting
that the remains of their mother were delivered to and received by private
respondents on October 26, 1976. Thus —
. . . Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00
p.m. on October 26, 1976 at the Pomierski & Son Funeral Home, sealed the
shipping case containing a hermetically sealed casket that is airtight and
waterproof wherein was contained the remains of Crispina Saludo Galdo (sic)
(Exh. B). On the same date October 26, 1976, Pomierski brought the remains
to C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which
made the necessary arrangements such as flights, transfers, etc; C.M.A.S.
is a national service used by undertakers throughout the nation (U.S.A.), they
furnish the air pouch which the casket is enclosed in, and they see that the
remains are taken to the proper air freight terminal (Exh. G-TWA). C.M.A.S.
booked the shipment with PAL thru the carrier's agent Air Care International,
with Pomierski F.H. as the shipper and Mario (Maria) Saludo as the
consignee. PAL Airway Bill No. 079- 01180454 Ordinary was issued wherein
the requested routing was from Chicago to San Francisco on board TWA
Flight-131 of October 27;1976, and from San Francisco to Manila on board
PAL Flight No. 107 of the same date, and from Manila to Cebu on board PAL
Flight 149 of October 29, 1976 (See Exh. E, also Exh. 1-PAL).26 (Emphasis
ours.)
Moreover, we are persuaded to believe private respondent PAL's account as
to what transpired October 26, 1976:
. . . Pursuant thereto, on 26 October 1976, CMAS acting upon the instruction
of Pomierski, F.H., the shipper requested booking of the casketed remains of
Mrs. Cristina (sic) Saludo on board PAL's San Francisco-Manila Flight No.
PR 107 on October 27, 1976.
2. To signify acceptance and confirmation of said booking, PAL issued to said
Pomierski F.H., PAL Airway Bill No. 079-01180454 dated October 27,
1976 (sic, "10/26/76"). PAL confirmed the booking and transporting of the
shipment on board of its Flight PR 107 on October 27, 1976 on the basis of
the representation of the shipper and/or CMAS that the said cargo would
arrive in San Francisco from Chicago on board United Airlines Flight US 121
on 27 October 1976.27
In other words, on October 26, 1976 the cargo containing the casketed
remains of Crispina Saludo was booked for PAL Flight Number PR-107
leaving San Francisco for Manila on October 27, 1976, PAL Airway Bill No.
079-01180454 was issued, not as evidence of receipt of delivery of the cargo
on October 26, 1976, but merely as a confirmation of the booking thus made
for the San Francisco-Manila flight scheduled on October 27, 1976. Actually,
it was not until October 28, 1976 that PAL received physical delivery of the
body at San Francisco, as duly evidenced by the Interline Freight Transfer
Manifest of the American Airline Freight System and signed for by Virgilio
Rosales at 1945H, or 7:45 P.M. on said date.28
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary
responsibility of the common carrier begins from the time the goods are
delivered to the carrier. This responsibility remains in full force and effect
even when they are temporarily unloaded or stored in transit, unless the
shipper or owner exercises the right of stoppage in transitu, 29 and terminates
only after the lapse of a reasonable time for the acceptance, of the goods by
the consignee or such other person entitled to receive them. 30 And, there is
delivery to the carrier when the goods are ready for and have been placed in
the exclusive possession, custody and control of the carrier for the purpose
of their immediate transportation and the carrier has accepted
them. 31 Where such a delivery has thus been accepted by the carrier, the
liability of the common carrier commences eo instanti. 32
Hence, while we agree with petitioners that the extraordinary diligence
statutorily required to be observed by the carrier instantaneously commences
upon delivery of the goods thereto, for such duty to commence there must in
fact have been delivery of the cargo subject of the contract of carriage. Only
when such fact of delivery has been unequivocally established can the
liability for loss, destruction or deterioration of goods in the custody of the
carrier, absent the excepting causes under Article 1734, attach and the
presumption of fault of the carrier under Article 1735 be invoked.
As already demonstrated, the facts in the case at bar belie the averment that
there was delivery of the cargo to the carrier on October 26, 1976. Rather,
as earlier explained, the body intended to be shipped as agreed upon was
really placed in the possession and control of PAL on October 28, 1976 and
it was from that date that private respondents became responsible for the
agreed cargo under their undertakings in PAL Airway Bill No. 079-01180454.
Consequently, for the switching of caskets prior thereto which was not
caused by them, and subsequent events caused thereby, private
respondents cannot be held liable.
Petitioners, proceeding on the premise that there was delivery of the cargo
to private respondents on October 26,1976 and that the latter's extraordinary
responsibility had by then become operative, insist on foisting the blame on
private respondents for the switching of the two caskets which occurred on
October 27, 1976. It is argued that since there is no clear evidence
establishing the fault Continental Mortuary Air Services (CMAS) for the mix-
up, private respondents are presumably negligent pursuant to Article 1735 of
the Civil Code and, for failure to rebut such presumption, they must
necessarily be held liable; or, assuming that CMAS was at fault, the same
does not absolve private respondents of liability because whoever brought
the cargo to the airport or loaded it on the plane did so as agent of private
respondents.
This contention is without merit. As pithily explained by the Court of Appeals:
The airway bill expressly provides that "Carrier certifies goods described
below were received for carriage", and said cargo was "casketed human
remains of Crispina Saludo," with "Maria Saludo as Consignee; Pomierski
F.H. as Shipper; Air Care International as carrier's agent." On the face of the
said airway bill, the specific flight numbers, specific routes of shipment and
dates of departure and arrival were typewritten, to wit: Chicago TWA Flight
131/27 to San Francisco and from San Francisco by PAL 107 on, October
27, 1976 to Philippines and to Cebu via PAL Flight 149 on October 29, 1976.
The airway bill also contains the following typewritten words, as follows: all
documents have been examined (sic). Human remains of Crispina Saludo.
Please return back (sic) first available flight to SFO.
But, as it turned out and was discovered later the casketed human remains
which was issued PAL Airway Bill #079-1180454 was not the remains of
Crispina Saludo, the casket containing her remains having been shipped to
Mexico City.
However, it should be noted that, Pomierski F.H., the shipper of Mrs. Saludo's
remains, hired Continental Mortuary Services (hereafter referred to as
C.M.A.S.), which is engaged in the business of transporting and forwarding
human remains. Thus, C.M.A.S. made all the necessary arrangements such
as flights, transfers, etc. — for shipment of the remains of Crispina Saludo.
The remains were taken on October 26th, 1976, to C.M.A.S. at the airport.
These people made all the necessary arrangements, such as flights,
transfers, etc. This is a national service used by undertakers throughout the
nation. They furnished the air pouch which the casket is enclosed in, and they
see that the remains are taken to the proper air frieght terminal. I was very
30
surprised when Miss Saludo called me to say that the remains were not at
the west coast terminal. I immediately called C.M.A.S. They called me back
in a matter of ten minutes to inform me that the remains were on a plane to
Mexico City. The man said that there were two bodies at the terminal, and
somehow they were switched. . . . (Exb. 6 — "TWA", which is the memo or
incident report enclosed in the stationery of Walter Pomierski & Sons Ltd.)
Consequently, when the cargo was received from C.M.A.S. at the Chicago
airport terminal for shipment, which was supposed to contain the remains of
Crispina Saludo, Air Care International and/or TWA, had no way of
determining its actual contents, since the casket was hermetically sealed by
the Philippine Vice-Consul in Chicago and in an air pouch of C.M.A.S., to the
effect that Air Care International and/or TWA had to rely on the information
furnished by the shipper regarding the cargo's content. Neither could Air Care
International and/or TWA open the casket for further verification, since they
were not only without authority to do so, but even prohibited.
Thus, under said circumstances, no fault and/or negligence can be attributed
to PAL (even if Air Care International should be considered as an agent of
PAL) and/or TWA, the entire fault or negligence being exclusively with
C.M.A.S.33 (Emphasis supplied.)
It can correctly and logically be concluded, therefore, that the switching
occurred or, more accurately, was discovered on October 27, 1976; and
based on the above findings of the Court of appeals, it happened while the
cargo was still with CMAS, well before the same was place in the custody of
private respondents.
Thus, while the Air Cargo Transfer Manifest of TWA of October 27,
197634 was signed by Garry Marcial of PAL at 1400H, or 2:00 P.M., on the
same date, thereby indicating acknowledgment by PAL of the transfer to
them by TWA of what was in truth the erroneous cargo, said misshipped
cargo was in fact withdrawn by CMAS from PAL as shown by the notation on
another copy of said manifest35 stating "Received by CMAS — Due to switch
in Chicago 10/27-1805H," the authenticity of which was never challenged.
This shows that said misshipped cargo was in fact withdrawn by CMAS from
PAL and the correct shipment containing the body of Crispina Saludo was
received by PAL only on October 28, 1976, at 1945H, or 7:45 P.M., per
American Airlines Interline Freight Transfer Manifest No. AA204312.36
Witness the deposition of TWA's ramp serviceman, Michael Giosso, on this
matter:
ATTY. JUAN COLLAS, JR.:
On that date, do (sic) you have occasion to handle or deal with the transfer
of cargo from TWA Flight No. 603 to PAL San Francisco?
MICHAEL GIOSSO: Yes, I did.
ATTY. JUAN COLLAS, JR.: What was your participation with the transfer of
the cargo?
MICHAEL GIOSSO: I manifested the freight on a transfer manifest and
physically moved it to PAL and concluded the transfer by signing it off.
ATTY. JUAN COLLAS, JR.: You brought it there yourself?
MICHAEL GIOSSO: Yes sir.
ATTY. JUAN COLIAS, JR.: Do you have anything to show that PAL received
the cargo from TWA on October 27, 1976?
MICHAEL GIOSSO: Yes, I do.
(Witness presenting a document)
ATTY. JUAN COLLAS, JR.: For purposes of clarity, Exhibit I is designated as
Exhibit I-TWA.
 xxx xxx xxx
ATTY. JUAN COLLAS, JR.: This Exhibit I-TWA, could you tell what it is, what
it shows?
MICHAEL GIOSSO: It shows transfer of manifest on 10-27-76 to PAL at 1400
and verified with two signatures as it completed the transfer.
ATTY. JUAN COLLAS, JR.: Very good,. Who was the PAL employee who
received the cargo?
MICHAEL GIOSSO: The name is Garry Marcial." 37
The deposition of Alberto A. Lim, PAL's cargo supervisor at San Francisco,
as deponent-witness for PAL, makes this further clarification:
ATTY. CESAR P. MANALAYSAY: You mentioned Airway Bill, Mr. Lim. I am
showing to you a PAL Airway Bill Number 01180454 which for purposes of
evidence, I would like to request that the same be marked as evidence Exhibit
I for PAL.
xxx xxx xxx
In what circumstances did you encounter Exhibit I-PAL?
ALBERTO A. LIM: If I recall correctly, I was queried by Manila, our Manila
office with regard to a certain complaint that a consignee filed that this
shipment did not arrive on the day that the consignee expects the shipment
to arrive.
ATTY CESAR P. MANALAYSAY: Okay. Now, upon receipt of that query from
your Manila office, did you conduct any investigation to pinpoint the possible
causes of mishandling?
ALBERTO A. LIM: Yes.
xxx xxx xxx
ATTY. CESAR P. MANALAYSAY: What is the result of your investigation?
ALBERTO A. LIM: In the course of my investigation, I found that we received
the body on October 28, 1976, from American Airlines.
ATTY. CESAR P. MANALAYSAY: What body are you referring to?
xxx xxx xxx
ALBERTO A. LIM: The remains of Mrs. Cristina (sic) Saludo.
ATTY. CESAR P. MANALAYSAY: Is that the same body mentioned in this
Airway Bill?
ALBERTO A. LIM: Yes.
ATTY. CESAR P. MANALAYSAY: What time did you receive said body on
October 28, 1976?
ALBERTO A. LIM: If I recall correctly, approximately 7:45 of October 28,
1976.
ATTY. CESAR P. MANALAYSAY: Do you have any proof with you to back
the statement?
ALBERTO A. LIM: Yes. We have on our records a Transfer Manifest from
American Airlines Number 204312 showing that we received a human
31
remains shipment belong to Mrs. Cristina (sic) Saludo or the human remains
of Mrs. Cristina (sic) Saludo.
ATTY. CESAR P. MAIALAYSAY: At this juncture, may I request that the
Transfer Manifest referred to by the witness be marked as an evidence as
Exhibit II-PAL.
xxx xxx xxx
Mr. Lim, yesterday your co-defendant TWA presented as their Exhibit I
evidence tending to show that on October 27, 1976 at about 2:00 in the,
afternoon they delivered to you a cargo bearing human remains. Could you
go over this Exhibit I and please give us your comments as to that exhibit?
ATTY. ALBERTO C. MENDOZA: That is a vague question. I would rather
request that counsel propound specific questions rather than asking for
comments on Exhibit I-TWA.
ATTY. CESAR P. MANALAYSAY: In that case, I will reform my question.
Could you tell us whether TWA in fact delivered to you the human remains
as indicated in that Transfer Manifest?
ALBERTO A. LIM: Yes, they did.
ATTY. CESAR P. MANALAYSAY: I noticed that the Transfer Manifest of
TWA marked as Exhibit I-TWA bears the same numbers or the same entries
as the Airway Bill marked as Exhibit I-A PAL tending to show that this is the
human remains of Mrs Cristina (sic) Saludo. Could you tell us whether this is
true?
ALBERTO A. LIM: It is true that we received human remains shipment from
TWA as indicated on this Transfer Manifest. But in the course of investigation,
it was found out that the human remains transferred to us is not the remains
of Mrs. Cristina (sic) Saludo this is the reason why we did not board it on our
flight. 38
Petitioners consider TWA's statement that "it had to rely on the information
furnished by the shipper" a lame excuse and that its failure to prove that its
personnel verified and identified the contents of the casket before loading the
same constituted negligence on the part of TWA.39
We upbold the favorable consideration by the Court of Appeals of the
following findings of the trial court:
It was not (to) TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home
delivered the casket containing the remains of Crispina Saludo. TWA would
have no knowledge therefore that the remains of Crispina Saludo were not
the ones inside the casket that was being presented to it for shipment. TWA
would have to rely on there presentations of C.M.A.S. The casket was
hermetically sealed and also sealed by the Philippine Vice Consul in Chicago.
TWA or any airline for that matter would not have opened such a sealed
casket just for the purpose of ascertaining whose body was inside and to
make sure that the remains inside were those of the particular person
indicated to be by C.M.A.S. TWA had to accept whatever information was
being furnished by the shipper or by the one presenting the casket for
shipment. And so as a matter of fact, TWA carried to San Francisco and
transferred to defendant PAL a shipment covered by or under PAL Airway
Bill No. 079-ORD-01180454, the airway bill for the shipment of the casketed
remains of Crispina Saludo. Only, it turned out later, while the casket was
already with PAL, that what was inside the casket was not the body of
Crispina Saludo so much so that it had to be withdrawn by C.M.A.S. from
PAL. The body of Crispina Saludo had been shipped to Mexico. The casket
containing the remains of Crispina Saludo was transshipped from Mexico and
arrived in San Francisco the following day on board American Airlines. It was
immediately loaded by PAL on its flight for Manila.
The foregoing points at C.M.A.S., not defendant TWA much less defendant
PAL, as the ONE responsible for the switching or mix-up of the two bodies at
the Chicago Airport terminal, and started a chain reaction of the misshipment
of the body of Crispina Saludo and a one-day delay in the delivery thereof to
its destination.40
Verily, no amount of inspection by respondent airline companies could have
guarded against the switching that had already taken place. Or, granting that
they could have opened the casket to inspect its contents, private
respondents had no means of ascertaining whether the body therein
contained was indeed that of Crispina Saludo except, possibly, if the body
was that of a male person and such fact was visually apparent upon opening
the casket. However, to repeat, private respondents had no authority to
unseal and open the same nor did they have any reason or justification to
resort thereto.
It is the right of the carrier to require good faith on the part of those persons
who deliver goods to be carried, or enter into contracts with it, and inasmuch
as the freight may depend on the value of the article to be carried, the carrier
ordinarily has the right to inquire as to its value. Ordinarily, too, it is the duty
of the carrier to make inquiry as to the general nature of the articles shipped
and of their value before it consents to carry them; and its failure to do so
cannot defeat the shipper's right to recovery of the full value of the package
if lost, in the absence of showing of fraud or deceit on the part of the shipper.
In the absence of more definite information, the carrier has a the right to
accept shipper's marks as to the contents of the package offered for
transportation and is not bound to inquire particularly about them in order to
take advantage of a false classification and where a shipper expressly
represents the contents of a package to be of a designated character, it is
not the duty of the carrier to ask for a repetition of the statement nor disbelieve
it and open the box and see for itself. 41 However, where a common carrier
has reasonable ground to suspect that the offered goods are of a dangerous
or illegal character, the carrier has the right to know the character of such
goods and to insist on an inspection, if reasonable and practical under the
circumstances, as a condition of receiving and transporting such goods. 42
It can safely be said then that a common carrier is entitled to fair
representation of the nature and value of the goods to be carried, with the
concomitant right to rely thereon, and further noting at this juncture that a
carrier has no obligation to inquire into the correctness or sufficiency of such
information. 43 The consequent duty to conduct an inspection thereof arises
in the event that there should be reason to doubt the veracity of such
representations. Therefore, to be subjected to unusual search, other than the
routinary inspection procedure customarily undertaken, there must exist
proof that would justify cause for apprehension that the baggage is
dangerous as to warrant exhaustive inspection, or even refusal to accept
carriage of the same; and it is the failure of the carrier to act accordingly in
the face of such proof that constitutes the basis of the common carrier's
liability. 44
In the case at bar, private respondents had no reason whatsoever to doubt
the truth of the shipper's representations. The airway bill expressly providing
that "carrier certifies goods received below were received for carriage," and
that the cargo contained "casketed human remains of Crispina Saludo," was
issued on the basis of such representations. The reliance thereon by private
respondents was reasonable and, for so doing, they cannot be said to have
acted negligently. Likewise, no evidence was adduced to suggest even an
iota of suspicion that the cargo presented for transportation was anything
other than what it was declared to be, as would require more than routine
inspection or call for the carrier to insist that the same be opened for scrutiny
of its contents per declaration.
Neither can private respondents be held accountable on the basis of
petitioners' preposterous proposition that whoever brought the cargo to the
airport or loaded it on the airplane did so as agent of private respondents, so
that even if CMAS whose services were engaged for the transit arrangements
for the remains was indeed at fault, the liability therefor would supposedly still
be attributable to private respondents.
While we agree that the actual participation of CMAS has been sufficiently
and correctly established, to hold that it acted as agent for private
respondents would be both an inaccurate appraisal and an unwarranted
categorization of the legal position it held in the entire transaction.
It bears repeating that CMAS was hired to handle all the necessary shipping
arrangements for the transportation of the human remains of Crispina Saludo
to Manila. Hence, it was to CMAS that the Pomierski & Son Funeral Home,
as shipper, brought the remains of petitioners' mother for shipment, with
Maria Saludo as consignee. Thereafter, CMAS booked the shipment with
PAL through the carrier's agent, Air Care International. 45 With its aforestated
functions, CMAS may accordingly be classified as a forwarder which, by
accepted commercial practice, is regarded as an agent of the shipper and
32
not of the carrier. As such, it merely contracts for the transportation of goods
by carriers, and has no interest in the freight but receives compensation from
the shipper as his agent. 46
At this point, it can be categorically stated that, as culled from the findings of
both the trial court and appellate courts, the entire chain of events which
culminated in the present controversy was not due to the fault or negligence
of private respondents. Rather, the facts of the case would point to CMAS as
the culprit. Equally telling of the more likely possibility of CMAS' liability is
petitioners' letter to and demanding an explanation from CMAS regarding the
statement of private respondents laying the blame on CMAS for the incident,
portions of which, reading as follows:
. . . we were informed that the unfortunate a mix-up
occurred due to your negligence. . . .
Likewise, the two airlines pinpoint the responsibility
upon your agents. Evidence were presented to prove
that allegation.
On the face of this overwhelming evidence we could
and should have filed a case against you. . . . 47
clearly allude to CMAS as the party at fault. This is tantamount to an
admission by petitioners that they consider private respondents without fault,
or is at the very least indicative of the fact that petitioners entertained serious
doubts as to whether herein private respondents were responsible for the
unfortunate turn of events.
Undeniably, petitioners' grief over the death of their mother was aggravated
by the unnecessary inconvenience and anxiety that attended their efforts to
bring her body home for a decent burial. This is unfortunate and calls for
sincere commiseration with petitioners. But, much as we would like to give
them consolation for their undeserved distress, we are barred by the inequity
of allowing recovery of the damages prayed for by them at the expense of
private respondents whose fault or negligence in the very acts imputed to
them has not been convincingly and legally demonstrated.
Neither are we prepared to delve into, much less definitively rule on, the
possible liability of CMAS as the evaluation and adjudication of the same is
not what is presently at issue here and is best deferred to another time and
addressed to another forum.
II. Petitioners further fault the Court of Appeals for ruling that there was no
contractual breach on the part of private respondents as would entitle
petitioners to damages.
Petitioners hold that respondent TWA, by agreeing to transport the remains
of petitioners' mother on its Flight 131 from Chicago to San Francisco on
October 27, 1976, made itself a party to the contract of carriage and,
therefore, was bound by the terms of the issued airway bill. When TWA
undertook to ship the remains on its Flight 603, ten hours earlier than
scheduled, it supposedly violated the express agreement embodied in the
airway bill. It was allegedly this breach of obligation which compounded, if
not directly caused, the switching of the caskets.
In addition, petitioners maintain that since there is no evidence as to who
placed the body on board Flight 603, or that CMAS actually put the cargo on
that flight, or that the two caskets at the Chicago airport were to be
transported by the same airline, or that they came from the same funeral
home, or that both caskets were received by CMAS, then the employees or
agents of TWA presumably caused the mix-up by loading the wrong casket
on the plane. For said error, they contend, TWA must necessarily be
presumed negligent and this presumption of negligence stands undisturbed
unless rebutting evidence is presented to show that the switching or
misdelivery was due to circumstances that would exempt the carrier from
liability.
Private respondent TWA professes otherwise. Having duly delivered or
transferred the cargo to its co-respondent PAL on October 27, 1976 at 2:00
P.M., as supported by the TWA Transfer Manifest, TWA faithfully complied
with its obligation under the airway bill. Said faithful compliance was not
affected by the fact that the remains were shipped on an earlier flight as there
was no fixed time for completion of carriage stipulated on. Moreover, the
carrier did not undertake to carry the cargo aboard any specified aircraft, in
view of the condition on the back of the airway bill which provides:
CONDITIONS OF CONTRACT
xxx xxx xxx
It is agreed that no time is fixed for the completion of carriage hereunder and
that Carrier may without notice substitute alternate carriers or aircraft. Carrier
assumes no obligation to carry the goods by any specified aircraft or over
any particular route or routes or to make connection at any point according
to any particular schedule, and Carrier is hereby authorized to select, or
deviate from the route or routes of shipment, notwithstanding that the same
may be stated on the face hereof. The shipper guarantees payment of all
charges and advances.48
Hence, when respondent TWA shipped the body on earlier flight and on a
different aircraft, it was acting well within its rights. We find this argument
tenable.
The contention that there was contractual breach on the part of private
respondents is founded on the postulation that there was ambiguity in the
terms of the airway bill, hence petitioners' insistence on the application of the
rules on interpretation of contracts and documents. We find no such
ambiguity. The terms are clear enough as to preclude the necessity to probe
beyond the apparent intendment of the contractual provisions.
The hornbook rule on interpretation of contracts consecrates the primacy of
the intention of the parties, the same having the force of law between them.
When the terms of the agreement are clear and explicit, that they do not
justify an attempt to read into any alleged intention of the parties, the terms
are to be understood literally just as they appear on the face of the
contract.49 The various stipulations of a contract shall be interpreted
together50 and such a construction is to be adopted as will give effect to all
provisions thereof.51 A contract cannot be construed by parts, but its clauses
should be interpreted in relation to one another. The whole contract must be
interpreted or read together in order to arrive at its true meaning. Certain
stipulations cannot be segregated and then made to control; neither do
particular words or phrases necessarily determine the character of a contract.
The legal effect of the contract is not to be determined alone by any particular
provision disconnected from all others, but in the ruling intention of the parties
as gathered from all the language they have used and from their
contemporaneous and subsequent acts. 52
Turning to the terms of the contract at hand, as presented by PAL Air Waybill
No. 079-01180454, respondent court approvingly quoted the trial court's
disquisition on the aforequoted condition appearing on the reverse side of the
airway bill and its disposition of this particular assigned error:
The foregoing stipulation fully answers plaintiffs' objections to the one-day
delay and the shipping of the remains in TWA Flight 603 instead of TWA
Flight 131. Under the stipulation, parties agreed that no time was fixed to
complete the contract of carriage and that the carrier may, without notice,
substitute alternate carriers or aircraft. The carrier did not assume the
obligation to carry the shipment on any specified aircraft.
xxx xxx xxx
Furthermore, contrary to the claim of plaintiffs-appellants, the conditions of
the Air Waybill are big enough to be read and noticed. Also, the mere fact
that the cargo in question was shipped in TWA Flight 603, a flight earlier on
the same day than TWA Flight 131, did not in any way cause or add to the
one-day delay complained of and/or the switching or mix-up of the bodies.53
Indubitably, that private respondent can use substitute aircraft even without
notice and without the assumption of any obligation whatsoever to carry the
goods on any specified aircraft is clearly sanctioned by the contract of
carriage as specifically provided for under the conditions thereof.
Petitioners' invocation of the interpretative rule in the Rules of Court that
written words control printed words in documents, 54 to bolster their assertion
33
that the typewritten provisions regarding the routing and flight schedule
prevail over the printed conditions, is tenuous. Said rule may be considered
only when there is inconsistency between the written and printed words of
the contract.
As previously stated, we find no ambiguity in the contract subject of this case
that would call for the application of said rule. In any event, the contract
has provided for such a situation by explicitly stating that the above condition
remains effective "notwithstanding that the same (fixed time for completion
of carriage, specified aircraft, or any particular route or schedule) may be
stated on the face hereof." While petitioners hinge private respondents'
culpability on the fact that the carrier "certifies goods described below were
received for carriage," they may have overlooked that the statement on the
face of the airway bill properly and completely reads —
Carrier certifies goods described below were received for carriage subject to
the Conditions on the reverse hereof the goods then being in apparent good
order and condition except as noted hereon. 55 (Emphasis ours.)
Private respondents further aptly observe that the carrier's certification
regarding receipt of the goods for carriage "was of a smaller print than the
condition of the Air Waybill, including Condition No. 5 — and thus if plaintiffs-
appellants had recognized the former, then with more reason they were
aware of the latter. 56
In the same vein, it would also be incorrect to accede to the suggestion of
petitioners that the typewritten specifications of the flight, routes and dates of
departures and arrivals on the face of the airway bill constitute a special
contract which modifies the printed conditions at the back thereof. We
reiterate that typewritten provisions of the contract are to be read and
understood subject to and in view of the printed conditions, fully reconciling
and giving effect to the manifest intention of the parties to the agreement.
The oft-repeated rule regarding a carrier's liability for delay is that in the
absence of a special contract, a carrier is not an insurer against delay in
transportation of goods. When a common carrier undertakes to convey
goods, the law implies a contract that they shall be delivered at destination
within a reasonable time, in the absence, of any agreement as to the time of
delivery. 57 But where a carrier has made an express contract to transport
and deliver property within a specified time, it is bound to fulfill its contract
and is liable for any delay, no matter from what cause it may have
arisen. 58 This result logically follows from the well-settled rule that where the
law creates a duty or charge, and the party is disabled from performing it
without any default in himself, and has no remedy over, then the law will
excuse him, but where the party by his own contract creates a duty or charge
upon himself, he is bound to make it good notwithstanding any accident or
delay by inevitable necessity because he might have provided against it by
contract. Whether or not there has been such an undertaking on the part of
the carrier to be determined from the circumstances surrounding the case
and by application of the ordinary rules for the interpretation of contracts.59
Echoing the findings of the trial court, the respondent court correctly declared
that —
In a similar case of delayed delivery of air cargo under a very similar
stipulation contained in the airway bill which reads: "The carrier does not
obligate itself to carry the goods by any specified aircraft or on a specified
time. Said carrier being hereby authorized to deviate from the route of the
shipment without any liability therefor", our Supreme Court ruled that
common carriers are not obligated by law to carry and to deliver
merchandise, and persons are not vested with the right to prompt delivery,
unless such common carriers previously assume the obligation. Said rights
and obligations are created by a specific contract entered into by the parties
(Mendoza vs. PAL, 90 Phil. 836).
There is no showing by plaintiffs that such a special or
specific contract had been entered into between them
and the defendant airline companies.
And this special contract for prompt delivery should call
the attention of the carrier to the circumstances
surrounding the case and the approximate amount of
damages to be suffered in case of delay (See Mendoza
 vs. PAL, supra). There was no such contract entered
into in the instant case.60
Also, the theory of petitioners that the specification of the flights and dates of
departure and arrivals constitute a special contract that could prevail over the
printed stipulations at the back of the airway bill is vacuous. To countenance
such a postulate would unduly burden the common carrier for that would have
the effect of unilaterally transforming every single bill of lading or trip ticket
into a special contract by the simple expedient of filling it up with the
particulars of the flight, trip or voyage, and thereby imposing upon the carrier
duties and/or obligations which it may not have been ready or willing to
assume had it been timely, advised thereof.
Neither does the fact that the challenged condition No. 5 was printed at the
back of the airway bill militate against its binding effect on petitioners as
parties to the contract, for there were sufficient indications on the face of said
bill that would alert them to the presence of such additional condition to put
them on their guard. Ordinary prudence on the part of any person entering or
contemplating to enter into a contract would prompt even a cursory
examination of any such conditions, terms and/or stipulations.
There is a holding in most jurisdictions that the acceptance of a bill of lading
without dissent raises a presumption that all terms therein were brought to
the knowledge of the shipper and agreed to by him, and in the absence of
fraud or mistake, he is estopped from thereafter denying that he assented to
such terms. This rule applies with particular force where a shipper accepts a
bill of lading with full knowledge of its contents, and acceptance under such
circumstances makes it a binding contract. In order that any presumption of
assent to a stipulation in a bill of lading limiting the liability of a carrier may
arise, it must appear that the clause containing this exemption from liability
plainly formed a part of the contract contained in the bill of lading. A
stipulation printed on the back of a receipt or bill of lading or on papers
attached to such receipt will be quite as effective as if printed on its face, if it
is shown that the consignor knew of its terms. Thus, where a shipper accepts
a receipt which states that its conditions are to be found on the back, such
receipt comes within the general rule, and the shipper is held to have
accepted and to be bound by the conditions there to be found. 61
Granting arguendo that Condition No. 5 partakes of the nature of a contract
of adhesion and as such must be construed strictly against the party who
drafted the same or gave rise to any ambiguity therein, it should be borne in
mind that a contract of adhesion may be struck down as void and
unenforceable, for being subversive of public policy, only when the weaker
party is imposed upon in dealing with the dominant bargaining party and is
reduced to the alternative of taking it or leaving it, completely deprived of the
opportunity to bargain on equal footing. 62 However, Ong Yiu vs. Court of
Appeals, et al 63 instructs us that contracts of adhesion are not entirely
prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, be gives his consent. Accordingly, petitioners, far from
being the weaker party in this situation, duly signified their presumed assent
to all terms of the contract through their acceptance of the airway bill and are
consequently bound thereby. It cannot be gainsaid that petitioners' were not
without several choices as to carriers in Chicago with its numerous airways
and airliner servicing the same.
We wish to allay petitioners' apprehension that Condition No. 5 of the airway
bill is productive of mischief as it would validate delay in delivery, sanction
violations of contractual obligations with impunity or put a premium on
breaches of contract.
Just because we have said that condition No. 5 of the airway bill is binding
upon the parties to and fully operative in this transaction, it does not mean,
and let this serve as fair warning to respondent carriers, that they can at all
times whimsically seek refuge from liability in the exculpatory sanctuary of
said Condition No. 5 or arbitrarily vary routes, flights and schedules to the
prejudice of their customers. This condition only serves to insulate the carrier
from liability in those instances when changes in routes, flights and schedules
are clearly justified by the peculiar circumstances of a particular case, or by
general transportation practices, customs and usages, or by contingencies
or emergencies in aviation such as weather turbulence, mechanical failure,
requirements of national security and the like. And even as it is conceded
that specific routing and other navigational arrangements for a trip, flight or
voyage, or variations therein, generally lie within the discretion of the carrier
in the absence of specific routing instructions or directions by the shipper, it
is plainly incumbent upon the carrier to exercise its rights with due deference
to the rights, interests and convenience of its customers.
34
A common carrier undertaking to transport property has the implicit duty to
carry and deliver it within reasonable time, absent any particular stipulation
regarding time of delivery, and to guard against delay. In case of any
unreasonable delay, the carrier shall be liable for damages immediately and
proximately resulting from such neglect of duty. 64 As found by the trial court,
the delay in the delivery of the remains of Crispina Saludo, undeniable and
regrettable as it was, cannot be attributed to the fault, negligence or malice
of private respondents,65 a conclusion concurred in by respondent court and
which we are not inclined to disturb.
We are further convinced that when TWA opted to ship the remains of
Crispina Saludo on an earlier flight, it did so in the exercise of sound
discretion and with reasonable prudence, as shown by the explanation of its
counsel in his letter of February 19, 1977 in response to petitioners' demand
letter:
Investigation of TWA's handling of this matter reveals
that although the shipment was scheduled on TWA
Flight 131 of October 27, 1976, it was actually boarded
on TWA Flight 603 of the same day, approximately 10
hours earlier, in order to assure that the shipment
would be received in San Francisco in sufficient time
for transfer to PAL. This transfer was effected in San
Francisco at 2:00 P.M. on October 27, 1976. 66
Precisely, private respondent TWA knew of the urgency of the shipment by
reason of this notation on the lower portion of the airway bill: "All documents
have been certified. Human remains of Cristina (sic) Saludo. Please return
bag first available flight to SFO." Accordingly, TWA took it upon itself to carry
the remains of Crispina Saludo on an earlier flight, which we emphasize it
could do under the terms of the airway bill, to make sure that there would be
enough time for loading said remains on the transfer flight on board PAL.
III. Petitioners challenge the validity of respondent court's finding that private
respondents are not liable for tort on account of the humiliating, arrogant and
indifferent acts of their officers and personnel. They posit that since their
mother's remains were transported ten hours earlier than originally
scheduled, there was no reason for private respondents' personnel to
disclaim knowledge of the arrival or whereabouts of the same other than their
sheer arrogance, indifference and extreme insensitivity to the feelings of
petitioners. Moreover, being passengers and not merely consignors of
goods, petitioners had the right to be treated with courtesy, respect, kindness
and due consideration.
In riposte, TWA claims that its employees have always dealt politely with all
clients, customers and the public in general. PAL, on the other hand, declares
that in the performance of its obligation to the riding public, other customers
and clients, it has always acted with justice, honesty, courtesy and good faith.
Respondent appellate court found merit in and reproduced the trial court's
refutation of this assigned error:
About the only evidence of plaintiffs that may have
reference to the manner with which the personnel of
defendants treated the two plaintiffs at the San
Francisco Airport are the following pertinent portions of
Maria Saludo's testimony:
Q When you arrived there, what did you do, if any?
A I immediately went to the TWA counter and I inquired about whether my
mother was there or if' they knew anything about it.
Q What was the answer?
A They said they do not know. So, we waited.
Q About what time was that when you reached San Francisco from Chicago?
A I think 5 o'clock. Somewhere around that in the afternoon.
Q You made inquiry it was immediately thereafter?
A Right after we got off the plane.
Q Up to what time did you stay in the airport to wait until the TWA people
could tell you the whereabouts?
A Sorry, Sir, but the TWA did not tell us anything. We stayed there until about
9 o'clock. They have not heard anything about it. They did not say anything.
Q Do you want to convey to the Court that from 5 up to 9 o'clock in the
evening you yourself went back to the TWA and they could not tell you where
the remains of your mother were?
A Yes sir.
Q And after nine o'clock, what did you do?
A I told my brother my Mom was supposed to be on the Philippine Airlines
flight. "Why don't" we check with PAL instead to see if she was there?" We
tried to comfort each other. I told him anyway that was a shortest flight from
Chicago to California. We will be with our mother on this longer flight. So, we
checked with the PAL.
Q What did you find?
A We learned, Yes, my Mom would be on the flight.
Q Who was that brother?
A Saturnino Saludo.
Q And did you find what was your flight from San Francisco to the
Philippines?
A I do not know the number. It was the evening flight of the Philippine
Airline(s) from San Francisco to Manila.
Q You took that flight with your mother?
A We were scheduled to, Sir.
Q Now, you could not locate the remains of your mother in San Francisco
could you tell us what did you feel?
A After we were told that my mother was not there?
Q After you learned that your mother could not fly with you from Chicago to
California?
A Well, I was very upset. Of course, I wanted the confirmation that my mother
was in the West Coast. The fliqht was about 5 hours from Chicago to
California. We waited anxiously all that time on the plane. I wanted to be
assured about my mother's remains. But there was nothing and we could not
get any assurance from anyone about it.
Q Your feeling when you reached San Francisco and you could not find out
from the TWA the whereabouts of the remains, what did you feel?
A Something nobody would be able to describe unless he experiences it
himself. It is a kind of panic. I think it's a feeling you are about to go crazy. It
is something I do not want to live through again. (Inting, t.s.n., Aug. 9, 1983,
pp. 14-18).
The foregoing does not show any humiliating or
arrogant manner with which the personnel of both
35
defendants treated the two plaintiffs. Even their alleged
indifference is not clearly established. The initial
answer of the TWA personnel at the counter that they
did not know anything about the remains, and later,
their answer that they have not heard anything about
the remains, and the inability of the TWA counter
personnel to inform the two plaintiffs of the
whereabouts of the remains, cannot be said to be total
or complete indifference to the said plaintiffs. At any
rate, it is any rude or discourteous conduct,
malfeasance or neglect, the use of abusive or insulting
language calculated to humiliate and shame
passenger or had faith by or on the part of the
employees of the carrier that gives the passenger an
action for damages against the carrier (Zulueta vs. Pan
American World Airways, 43 SCRA 397; Air France vs.
Carrascoso, et al., 18 SCRA 155; Lopez, et al. vs. Pan
American World Airways, 16 SCRA 431; Northwest
Airlines, Inc. vs. Cuenca, 14 SCRA 1063), and none of
the above is obtaining in the instant case. 67
We stand by respondent court's findings on this point, but only to the extent
where it holds that the manner in which private respondent TWA's employees
dealt with petitioners was not grossly humiliating, arrogant or indifferent as
would assume the proportions of malice or bad faith and lay the basis for an
award of the damages claimed. It must however, be pointed out that the
lamentable actuations of respondent TWA's employees leave much to be
desired, particularly so in the face of petitioners' grief over the death of their
mother, exacerbated by the tension and anxiety wrought by the impasse and
confusion over the failure to ascertain over an appreciable period of time what
happened to her remains.
Airline companies are hereby sternly admonished that it is their duty not only
to cursorily instruct but to strictly require their personnel to be more
accommodating towards customers, passengers and the general public.
After all, common carriers such as airline companies are in the business of
rendering public service, which is the primary reason for their
enfranchisement and recognition in our law. Because the passengers in a
contract of carriage do not contract merely for transportation, they have a
right to be treated with kindness, respect, courtesy and consideration. 68 A
contract to transport passengers is quite different in kind and degree from
any other contractual relation, and generates a relation attended with public
duty. The operation of a common carrier is a business affected with public
interest and must be directed to serve the comfort and convenience of
passengers. 69 Passengers are human beings with human feelings and
emotions; they should not be treated as mere numbers or statistics for
revenue.
The records reveal that petitioners, particularly Maria and Saturnino Saludo,
agonized for nearly five hours, over the possibility of losing their mother's
mortal remains, unattended to and without any assurance from the
employees of TWA that they were doing anything about the situation. This is
not to say that petitioners were to be regaled with extra special attention.
They were, however, entitled to the understanding and humane
consideration called for by and commensurate with the extraordinary
diligence required of common carriers, and not the cold insensitivity to their
predicament. It is hard to believe that the airline's counter personnel were
totally helpless about the situation. Common sense would and should have
dictated that they exert a little extra effort in making a more extensive inquiry,
by themselves or through their superiors, rather than just shrug off the
problem with a callous and uncaring remark that they had no knowledge
about it. With all the modern communications equipment readily available to
them, which could have easily facilitated said inquiry and which are used as
a matter of course by airline companies in their daily operations, their
apathetic stance while not legally reprehensible is morally deplorable.
Losing a loved one, especially one's, parent, is a painful experience. Our
culture accords the tenderest human feelings toward and in reverence to the
dead. That the remains of the deceased were subsequently delivered, albeit
belatedly, and eventually laid in her final resting place is of little consolation.
The imperviousness displayed by the airline's personnel, even for just that
fraction of time, was especially condemnable particularly in the hour of
bereavement of the family of Crispina Saludo, intensified by anguish due to
the uncertainty of the whereabouts of their mother's remains. Hence, it is
quite apparent that private respondents' personnel were remiss in the
observance of that genuine human concern and professional attentiveness
required and expected of them.
The foregoing observations, however, do not appear to be applicable or
imputable to respondent PAL or its employees. No attribution of discourtesy
or indifference has been made against PAL by petitioners and, in fact,
petitioner Maria Saludo testified that it was to PAL that they repaired after
failing to receive proper attention from TWA. It was from PAL that they
received confirmation that their mother's remains would be on the same flight
to Manila with them.

We find the following substantiation on this particular episode from the

deposition of Alberto A. Lim, PAL's cargo supervisor earlier adverted to,
regarding their investigation of and the action taken on learning of petitioner's
problem:

ATTY. ALBERTO C. MENDOZA: Yes.

Mr. Lim, what exactly was your procedure adopted in your so called
investigation?

ALBERTO A. LIM: I called the lead agent on duty at that time and requested
for a copy of airway bill, transfer manifest and other documents concerning
the shipment.

ATTY ALBERTO C. MENDOZA: Then, what?

ALBERTO A. LIM: They proceeded to analyze exactly where PAL failed, if

any, in forwarding the human remains of Mrs. Cristina (sic) Saludo. And I
found out that there was not (sic) delay in shipping the remains of Mrs. Saludo
to Manila. Since we received the body from American Airlines on 28 October
at 7:45 and we expedited the shipment so that it could have been loaded on
our flight leaving at 9:00 in the evening or just barely one hour and 15 minutes
prior to the departure of the aircraft. That is so (sic) being the case, I reported
to Manila these circumstances. 70

IV. Finally, petitioners insist, as a consequence of the delay in the shipment

of their mother's remains allegedly caused by wilful contractual breach, on
their entitlement to actual, moral and exemplary damages as well as
attorney's fees, litigation expenses, and legal interest.

The uniform decisional tenet in our jurisdiction bolds that moral damages may
be awarded for wilful or fraudulent breach of contract 71 or when such breach
is attended by malice or bad faith. 72 However, in the absence of strong and
positive evidence of fraud, malice or bad faith, said damages cannot be
awarded.73 Neither can there be an award of exemplary damages 74 nor of
attorney's fees 75 as an item of damages in the absence of proof that
defendant acted with malice, fraud or bad faith.

The censurable conduct of TWA's employees cannot, however, be said to

have approximated the dimensions of fraud, malice or bad faith. It can be
said to be more of a lethargic reaction produced and engrained in some
people by the mechanically routine nature of their work and a racial or
societal culture which stultifies what would have been their accustomed
human response to a human need under a former and different ambience.

Nonetheless, the facts show that petitioners' right to be treated with due
courtesy in accordance with the degree of diligence required by law to be
exercised by every common carrier was violated by TWA and this entitles
them, at least, to nominal damages from TWA alone. Articles 2221 and 2222
of the Civil Code make it clear that nominal damages are not intended for
indemnification of loss suffered but for the vindication or recognition of a right
violated of invaded. They are recoverable where some injury has been done
but the amount of which the evidence fails to show, the assessment of
damages being left to the discretion of the court according to the
circumstances of the case.76 In the exercise of our discretion, we find an
award of P40,000.00 as nominal damages in favor of, petitioners to be a
reasonable amount under the circumstances of this case.

Prudencio v Alliance Transport System Inc., 148 SCRA 440

WHEREFORE, with the modification that an award of P40,000.00 as and by
way of nominal damages is hereby granted in favor of petitioners to be paid
by respondent Trans World Airlines, the appealed decision is AFFIRMED in PARAS, J.:
all other respects.
This is a petition for review on certiorari of the decision 1 of the Court of
SO ORDERED. Appeals dated May 4,1971 in CA-G.R. No. 34832R entitled Dra. Sofia L.

36
Prudenciado v. Alliance Transport System, Inc. and Jose Leyson, which
modified the decision 2 of the Court of First Instance of Rizal, Quezon City, in
Civil Case No. Q-5235 reducing the amount of moral damages from P25,000
to P2,000 and eliminating the award of exemplary damages and attorney's
fees but granting actual damages of P2,451.27.
The decretal portion of said decision reads:
WHEREFORE, the decision appealed from is hereby
modified, ordering appellants jointly and severally to
pay plaintiff the sum of P2,451.27 for actual damages
representing the cost of the repair of the car of Plaintiff;
(2) the sum of P2,000.00 as moral damages. No
pronouncement as to costs.
The antecedent facts of this case as found by the trial court and by the Court
of Appeals are as follows:
At about 2:05 p.m. of May 11, 1960, Dra. Sofia L. Prudenciado was driving
her own Chevrolet Bel Air car along Arroceros Street with the intention of
crossing Taft Avenue in order to turn left, to go to the Philippine Normal
College Compound where she would hold classes. She claimed that she was
driving her car at the rate of 10 kmph; that before crossing Taft Ave. she
stopped her car and looked to the right and to the left and not noticing any
on-coming vehicle on either side she slowly proceeded on first gear to cross
the same, but when she was almost at the center, near the island thereof,
Jose Leyson who was driving People's Taxicab owned and operated by
Alliance Transport System, Inc., suddenly bumped and struck Dra.
Prudenciado's car, thereby causing physical injuries in different parts of her
body, suffering more particularly brain concussion which subjected her to
several physical examinations and to an encephalograph test while her car
was damaged to the extent of P2,451.27. The damage to the taxicab
amounted to P190.00 (Decision in Civil Case No. Q-5235, CFI, Rizal; Record
on Appeal, pp. 63-64; Decision, CA-G.R. No. 34832-R, Rollo, pp. 37-38).
Dra. Prudenciado filed a complaint for damages at the Court of First Instance
of Rizal, Quezon City against the Alliance Transport System and Jose Leyson
docketed as aforestated, Civil Case No. Q-5232 (Record on Appeal, pp. 2-
11).
After due hearing, the Court of First Instance of Rizal, Quezon City, found
Jose Leyson guilty of negligence in the performance of his duties as taxicab
driver which is the proximate cause of the accident in question. On the other
hand, defendant Alliance Transport System, Inc. failed to prove to the
satisfaction of the court that it had exercised the required diligence of a good
father of the family in the selection, supervision and control of its employees
including defendant Leyson. Consequently, both defendants were held jointly
and severally liable for the physical injuries suffered by the plaintiff Dra. Sofia
L. Prudenciado as well as for the damage to her car, in addition to the other
consequential damages prayed for. The dispositive portion of said decision
reads:
IN VIEW OF THE FOREGOING CONSIDERATIONS
judgment is rendered, one in favor of plaintiff and
against the defendants, by ordering the said
defendants, jointly and severally, to pay the plaintiff the
sum of P2,451.27 for actual damages representing the
cost for the repair of the car of plaintiff; P25,000.00 as
moral damages; P5,000.00 as exemplary damages;
and the further sum of P3,000.00 as attorney's fees,
with costs against the defendants. (Record on Appeal,
pp. 71-73).
On appeal, the Court of Appeals rendered the assailed decision on May 14,
1971 and denied petitioner's motion for reconsideration in its resolution dated
July 20, 1971.
Hence, this petition.
The petition was given due course in the resolution of this Court dated
September 6, 1971 and petitioner filed her brief on November 10, 1971
(Rollo, p. 69) while respondents filed their brief on January 24, 1972 (Rollo,
p. 86). Petitioner filed her Reply Brief on March 1, 1972 (Rollo, p. 96); after
37
which the case was considered submitted for decision on the same date
(Rollo, p. 99).
In her brief, petitioner raised the following assignment of errors:
I
THE RESPONDENT COURT OF APPEALS ERRED IN REDUCING THE
AWARD OF MORAL DAMAGES TO THE PETITIONER FROM P25,000.00
AWARDED BY THE COURT OF FIRST INSTANCE OF RIZAL, BRANCH V,
QUEZON CITY, TO P2,000.00 NOTWITHSTANDING THE FACT THAT
THERE WAS NO FINDING THAT THE AWARD WAS PALPABLY AND
SCANDALOUSLY EXCESSIVE AS TO INDICATE THAT IT WAS THE
RESULT OF PASSION OR CORRUPTION ON THE PART OF THE TRIAL
COURT;
II
THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE
AWARD OF EXEMPLARY DAMAGES OF P5,000.00 NOTWITHSTANDING
THE FACT THAT THE FINDING OF THE SAID COURT ON THE EVIDENCE
AND THE LAW APPLICABLE JUSTIFIED THE AWARD OF EXEMPLARY
DAMAGES AS HELD BY THE SAID TRIAL COURT;
III
THE COURT OF APPEALS ERRED IN FINDING THAT HER DEMOTION IN
RANK AS A PROFESSOR IN THE UNITED STATES WAS NOT
SUBSTANTIATED AND IN MAKING THIS FINDING A BASIS FOR THE
REDUCTION OF THE AWARD OF MORAL DAMAGES,
NOTWITHSTANDING THAT IT IS ALREADY TOO FAR FETCHED AND IT
MERELY CONFIRMS THE TRUTH OF THE FACT THAT THE ACCUSED
SUFFERED LOSS OF HER USUAL LIVELINESS; VIVACITY ACTIVITY
SELF-CONFIDENCE AND THAT SHE FEELS UNCERTAIN AND
INSECURE AND THAT SHE WAS SUBJECTED TO EXTREME FRIGHT
AND SERIOUS ANXIETY, SERIOUS APPREHENSION OF LOSING HER
LIFE OR HER SENSES OR REASON AND OF HER PHYSICAL MOBILITY
ANYTIME AND THAT SHE SUFFERED GREAT SHOCK AND SEVERE
PAINS ON HER BACK NEAR THE LEFT SIDE OF HER SPINAL COLUMN
OF THE LUMBAR REGION;
IV
THE RESPONDENT COURT OF APPEALS ALSO ERRED IN
ELIMINATING THE AWARD OF ATTORNEY'S FEES TO THE
PETITIONERS NOTWITHSTANDING THE FACT THAT SAID AWARD IS
LEGAL AND PROPER;
V
THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE
COSTS TAXED AGAINST THE RESPONDENTS NOTWITHSTANDING
THE FACT THAT SAID COSTS ARE LEGAL AND PROPER;
VI
THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT THE
CLAIM OF DR. SOFIA L. PRUDENCIADO OF HER LOSS OF HER USUAL
LIVELINESS, VIVACITY ACTIVITY AND HER USUAL SELF CONFIDENCE,
SUCH THAT SHE NOW FEELS UNCERTAIN AND INSECURE... EXTREME
FRIGHT AND SERIOUS ANXIETY, SERIOUS APPREHENSION OF
LOSING HER LIFE OR HER SENSES OR REASON; OF HER PHYSICAL
MOBILITY ANYTIME ... GREAT SHOCK AND SEVERE PAINS ON HER
BACK NEAR THE LEFT SIDE OF HER SPINAL COLUMN IN THE LUMBAR
REGION IS UNCORROBORATED NOTWITHSTANDING THE FACT OF
THE CERTIFICATE, EXHIBIT "G" OF DR. DOMINADOR VERGARA, OF
THE VETERANS MEMORIAL HOSPITAL AND DR. CONRADO ARAMIL,
BRAIN SPECIALIST AND THE CORROBORATING TESTIMONY OF THE
LATTER AFTER EXAMINATION AND TREATMENT OF PETITIONER;
VII
THE RESPONDENT COURT OF APPEALS ERRED IN SO MODIFYING
THE DECISION OF THE TRIAL COURT NOTWITHSTANDING THE FACT
THAT IT HAD NO POWER TO DO SO UNDER THE FACTS AND
CIRCUMSTANCES OF THIS CASE AS FOUND BY THE COURT OF
APPEALS;
VIII
THE RESPONDENT COURT OF APPEALS ERRED IN MODIFYING THE
DECISION OF THE TRIAL COURT NOTWITHSTANDING THE FACT THAT
THE DECISION OF SAID TRIAL COURT IS IN ACCORDANCE WITH LAW.
The Court of Appeals and the trial court are in accord in the finding that the
accident was caused by the negligence of the taxi driver. The bone of
contention is however in the award of damages, which crystalizes the errors
assigned into one issue, which is whether or not the Court of Appeals is
justified in modifying or changing the grant of damages by the trial court.
It is well settled that factual findings of the Court of Appeals are binding on
the Supreme Court, but said findings are subject to scrutiny if such are
diametrically opposed to those of the trial court (Samson v. CA, et al. G.R.
No. L-40071, January 29, 1986).
The Court of Appeals concedes that a concussion of the brain was suffered
by Dra. Prudenciado but as to how serious was the concussion or how it had
later become, and the disastrous extent of the injuries which she alleges to
have sustained as a result of the accident, are seriously doubted by said
Appellate Court.
Specifically, said Court finds that Dra. Prudenciado's claim (which was
sustained b the trial court) that because of aforesaid concussion, she
eventually lost her usual liveliness, vivacity activity and her usual self-
confidence, to the extent that now she feels uncertain and insecure, not to
mention a sense of extreme fright and serious anxiety, serious apprehension
of losing her life, or her senses or reason or her physical mobility
momentarily, plus experiences of great shock and severe pains on her back
near the left side of her spinal column in the lumbar region, was not supported
by the deposition of Dr. Conrado Aramil the list who attended to the plaintiff
from May 14 to May 26, 1960 (TSN, July 13, 1960, pp. 72-73). From said
deposition, it was gathered that Dra. Prudenciado suffered a mild
abnormality, compatible with mold concussion of the brain (TSN, July 13,
1960, pp. 47-48); that the symptoms of any brain concussion usually are
headache, dizziness, voting and lack of pep or alertness; and that the
possible after effects that may be produced are persistent or irregular
headaches, fluctuating dizziness. Accordingly, Dra. Prudenciado was
advised "Just to watch herself if she would develop any alarming symptoms
such as headache, dizziness or vomitings, to have her re-checked after
several months for her to be sure." (Ibid, pp. 51-52). It might also produce
intellectual deterioration or lessening of intelligence, and even insanity.
Dra. Prudenciado sought to establish that she had precisely suffered are
those after effects except insanity; but the Court of Appeals ruled that her
proof consisted merely in her own uncorroborated testimony. In support of
her allegation she could not show any medical certificate tending to prove
that she was indeed medically treated abroad for her brain ailment nor was
there any showing in the documents presented that she was demoted to the
rank of technical assistant because the San Francisco State College does
not believe in her mental capacity any more.
Finally, her statements that she is almost completely losing her voice, that
she has a terrible headache when her head is pressed, that she has lost her
sense of taste, that she is nervous and temperamental and that she has
lapses of memory, are belied by the deposition of Dr. Aramil that the patient's
EEG was already normal on May 26, 1960; and on cross-examination he
declared that she was clinically symtomless when she was discharged from
the hospital (TSN, July 13, 1960, pp. 75-76; 78-79).
There is no argument that moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the
proximate result of defendant's wrongful act or omission (People v. Baylon,
129 SCRA 62 [1984]).
38
In the same manner, it is undisputed that the trial courts are given discretion
to determine the amount of moral damages Alcantara v. Surro, 93 Phil. 472)
and that the Court of Appeals can only modify or change the amount awarded
when they are palpably and scandalously excessive "so as to indicate that it
was the result of passion, prejudice or corruption on the part of the trial court
(Gellada v. Warner Barnes & Co., Inc., 57 O.G. (4) 7347, 7358; Sadie v.
Bachrach Motors Co., Inc., 57 O.G. (4) 636 and Adone v. Bachrach Motor
Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral
and exemplary damages are far too excessive compared to the, actual losses
sustained by the aggrieved party, this Court ruled that they should be reduced
to more reasonable amounts.
Thus, in the case of San Andres v. Court of Appeals (116 SCRA 85 [1982])
the Supreme Court ruled that while the amount of moral damages is a matter
left largely to the sound discretion of a court, the same when found excessive
should be reduced to more reasonable amounts, considering the attendant
facts and circumstances. 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 a much later case (Siguenza v. Court of Appeals, 137 SCRA 578-579
[1985]), the Supreme court, reiterating the above ruling, reduced the awards
of moral and exemplary damages which were far too excessive compared to
the actual losses sustained by the aggrieved parties and where the records
show that the injury suffered was not serious or gross and, therefore, out of
proportion to the amount of damages generously awarded by the trial court.
In any case the Court held that "moral damages are emphatically not
intended to enrich a complainant at the expense of a defendant. They are
awarded only to enable the injured party to obtain means, diversion or
amusements that will serve to alleviate the moral suffering he has undergone,
by reason of the defendants' culpable action." The award of moral damages
must be proportionate to the suffering inflicted & B Surety & Insurance Co.,
Inc. v. Intermediate Appellate Court, 129 SCRA 745 [1984] citing Grand
Union Supermarket, Inc. v. Espino, Jr., 94 SCRA 966).
Coming back to the case at bar, a careful review of the records makes it
readily apparent that the injuries sustained by Dra. Prudenciado are not as
serious or extensive as they were claimed to be, to warrant the damages
awarded by the trial court. In fact, a closer scrutiny of the exhibits showing a
moderate damage to the car can by no stretch of the imagination produce a
logical conclusion that such disastrous effects of the accident sought to be
established, actually took place, not to mention the fact that such were not
supported by the medical findings presented. Unquestionably, therefore, the
damages imposed' by the lower court should be reduced to more reasonable
levels.
On the other hand, it will be observed that the reduction of the damages made
by the Court of Appeals is both too drastic and unrealistic, to pass the test of
reasonableness, which appears to be the underlying basis to justify such
reduction.
While the damages sought to be recovered were not satisfactorily
established to the extent desired by the petitioner, it was nonetheless not
disputed that an accident occurred due to the fault and negligence of the
respondents; that Dra. Prudenciado suffered a brain concussion which
although mild can admittedly produce the effects complained of by her and
that these symptoms can develop after several years and can lead to some,
serious handicaps or predispose the patient to other sickness (TSN, July 13,
1960, pp. 52-54). Being a doctor by profession, her fears can be more real
and intense than an ordinary person. Otherwise stated, she is undeniably a
proper recipient of moral damages which are proportionate to her suffering.
As to exemplary damages, Article 2231 of the Civil Code provides:
In quasi-delicts, exemplary damages may be granted if
the defendant acted with grave negligence.
The rationale behind exemplary or corrective damages is, as the name
implies, to provide an example or correction for the public good (Lopez, et al.
v. Pan American World Airways, 16 SCRA 431).
The findings of the trial court in the case at bar which became the basis of
the award of exemplary damages are to the effect that it is more apparent
from the facts, conditions and circumstances obtaining in the record of the
case that respondent driver was running at high speed after turning to the
right along Taft Ave. coming from Ayala Boulevard, considering that the traffic
was clear. Failing to notice petitioner's car, he failed to apply his brakes and
did not even swerve to the right to avoid the collision (Record on Appeal, pp.
69-70).

The Court of Appeals conforms with aforesaid findings of the trial court but is
not prepared to accept that there was gross negligence on the part of the
driver to justify the imposition of exemplary damages.

However, a driver running at full speed on a rainy day, on a slippery road in

complete disregard of the hazards to life and limb of other people cannot be
said to be acting in anything less than gross negligence. The frequent
incidence of accidents of this nature caused by taxi drivers indeed demands
corrective measures.

PREMISES CONSIDERED, the assailed decision of the Court of Appeals is

hereby MODIFIED insofar as the award of damages is concerned; and
respondents are ordered to jointly and severally pay the petitioner; (1) the
sum of P2,451.27 for actual damages representing the cost of the repair of
her car; (2) the sum of P15,000.00 as moral damages; (3) the sum of
P5,000.00 as exemplary damages; and (4) the sum of P3,000.00 as
attorney's fees. No pronouncement as to costs.

SO ORDERED.

Lopez v Pan American World Airways, 16SCRA 431

BENGZON, J.P., J.:

Plaintiffs and defendant appeal from a decision of the Court of First Instance
of Rizal. Since the value in controversy exceeds P200,000 the appeals were

39
taken directly to this Court upon all questions involved (Sec. 17, par. 3[5],
Judiciary Act).
Stated briefly the facts not in dispute are as follows: Reservations for first
class accommodations in Flight No. 2 of Pan American World Airways —
hereinafter otherwise called PAN-AM — from Tokyo to San Francisco on May
24, 1960 were made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency, specifically, by
Delfin Faustino, for then Senator Fernando Lopez, his wife Maria J. Lopez,
his son-in-law Alfredo Montelibano, Jr., and his daughter, Mrs. Alfredo
Montelibano, Jr., (Milagros Lopez Montelibano). PAN-AM's San Francisco
head office confirmed the reservations on March 31, 1960.
First class tickets for the abovementioned flight were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez and his party.
The total fare of P9,444 for all of them was fully paid before the tickets were
issued.
As scheduled Senator Lopez and party left Manila by Northwest Airlines on
May 24, 1960, arriving in Tokyo at 5:30 P.M. of that day. As soon as they
arrived Senator Lopez requested Minister Busuego of the Philippine
Embassy to contact PAN-AM's Tokyo office regarding their first class
accommodations for that evening's flight. For the given reason that the first
class seats therein were all booked up, however, PAN-AM's Tokyo office
informed Minister Busuego that PAN-AM could not accommodate Senator
Lopez and party in that trip as first class passengers. Senator Lopez
thereupon gave their first class tickets to Minister Busuego for him to show
the same to PAN-AM's Tokyo office, but the latter firmly reiterated that there
was no accommodation for them in the first class, stating that they could not
go in that flight unless they took the tourist class therein.
Due to pressing engagements awaiting Senator Lopez and his wife, in the
United States — he had to attend a business conference in San Francisco
the next day and she had to undergo a medical check-up in Mayo Clinic,
Rochester, Minnesota, on May 28, 1960 and needed three days rest before
that in San Francisco — Senator Lopez and party were constrained to take
PAN-AM's flight from Tokyo to San Francisco as tourist passengers. Senator
Lopez however made it clear, as indicated in his letter to PAN-AM's Tokyo
office on that date (Exh. A), that they did so "under protest" and without
prejudice to further action against the airline.1äwphï1.ñët
Suit for damages was thereafter filed by Senator Lopez and party against
PAN-AM on June 2, 1960 in the Court of First Instance of Rizal. Alleging
breach of contracts in bad faith by defendant, plaintiffs asked for P500,000
actual and moral damages, P100,000 exemplary damages, P25,000
attorney's fees plus costs. PAN-AM filed its answer on June 22, 1960,
asserting that its failure to provide first class accommodations to plaintiffs
was due to honest error of its employees. It also interposed a counterclaim
for attorney's fees of P25,000.
Subsequently, further pleadings were filed, thus: plaintiffs' answer to the
counterclaim, on July 25, 1960; plaintiffs' reply attached to motion for its
admittance, on December 2, 1961; defendant's supplemental answer, on
March 8, 1962; plaintiffs' reply to supplemental answer, on March 10, 1962;
and defendant's amended supplemental answer, on July 10, 1962.
After trial — which took twenty-two (22) days ranging from November 25,
1960 to January 5, 1963 — the Court of First Instance rendered its decision
on November 13, 1963, the dispositive portion stating:
In view of the foregoing considerations, judgment is hereby
rendered in favor of the plaintiffs and against the defendant, which
is accordingly ordered to pay the plaintiffs the following: (a)
P100,000.00 as moral damages; (b) P20,000.00 as exemplary
damages; (c) P25,000.00 as attorney's fees, and the costs of this
action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved for reconsideration of said
judgment, asking that moral damages be increased to P400,000 and that six
per cent (6%) interest per annum on the amount of the award be granted.
And defendant opposed the same. Acting thereon the trial court issued an
40
order on December 14, 1963, reconsidering the dispositive part of its decision
to read as follows:
In view of the foregoing considerations, judgment is hereby
rendered in favor of the plaintiffs and against the defendant, which
is accordingly ordered to pay the plaintiffs the following: (a)
P150,000.00 as moral damages; (b) P25,000.00 as exemplary
damages; with legal interest on both from the date of the filing of
the complaint until paid; and (c) P25,000.00 as attorney's fees;
and the costs of this action.
So ordered.
It is from said judgment, as thus reconsidered, that both parties have
appealed.
Defendant, as stated, has from the start admitted that it breached its
contracts with plaintiffs to provide them with first class accommodations in its
Tokyo-San Francisco flight of May 24, 1960. In its appeal, however, it takes
issue with the finding of the court a quo that it acted in bad faith in the branch
of said contracts. Plaintiffs, on the other hand, raise questions on
the amount of damages awarded in their favor, seeking that the same be
increased to a total of P650,000.
Anent the issue of bad faith the records show the respective contentions of
the parties as follows.
According to plaintiffs, defendant acted in bad faith because it deliberately
refused to comply with its contract to provide first class accommodations to
plaintiffs, out of racial prejudice against Orientals. And in support of its
contention that what was done to plaintiffs is an oftrepeated practice of
defendant, evidence was adduced relating to two previous instances of
alleged racial discrimination by defendant against Filipinos in favor of "white"
passengers. Said previous occasions are what allegedly happened to (1)
Benito Jalbuena and (2) Cenon S. Cervantes and his wife.
And from plaintiffs' evidence this is what allegedly happened; Jalbuena
bought a first class ticket from PAN-AM on April 13, 1960; he confirmed it on
April 15, 1960 as to the Tokyo-Hongkong flight of April 20, 1960; PAN-AM
similarly confirmed it on April 20, 1960. At the airport he and another Oriental
— Mr. Tung — were asked to step aside while other passengers - including
"white" passengers — boarded PAN-AM's plane. Then PAN-AM officials told
them that one of them had to stay behind. Since Mr. Tung was going all the
way to London, Jalbuena was chosen to be left behind. PAN-AM's officials
could only explain by saying there was "some mistake". Jalbuena thereafter
wrote PAN-AM to protest the incident (Exh. B).
As to Cenon S. Cervantes it would appear that in Flight No. 6 of PAN-AM on
September 29, 1958 from Bangkok to Hongkong, he and his wife had to take
tourist class, although they had first class tickets, which they had previously
confirmed, because their seats in first class were given to "passengers from
London."
Against the foregoing, however, defendant's evidence would seek to
establish its theory of honest mistake, thus:
The first class reservations of Senator Lopez and party were made on March
29, 1960 together with those of four members of the Rufino family, for a total
of eight (8) seats, as shown in their joint reservation card (Exh. 1).
Subsequently on March 30, 1960, two other Rufinos secured reservations
and were given a separate reservation card (Exh. 2). A new reservation card
consisting of two pages (Exhs. 3 and 4) was then made for the original of
eight passengers, namely, Senator Lopez and party and four members of the
Rufino family, the first page (Exh. 3) referring to 2 Lopezes, 2 Montelibanos
and 1 Rufino and the second page (Exh. 4) referring to 3 Rufinos. On April
18, 1960 "Your Travel Guide" agency cancelled the reservations of the
Rufinos. A telex message was thereupon sent on that date to PAN-AM's head
office at San Francisco by Mariano Herranz, PAN-AM's reservations
employee at its office in Escolta, Manila. (Annex A-Acker's to Exh. 6.) In said
message, however, Herranz mistakenly cancelled all the seats that had been
reserved, that is, including those of Senator Lopez and party.
The next day — April 1960 — Herranz discovered his mistake, upon seeing
the reservation card newly prepared by his co-employee Pedro Asensi for
Sen. Lopez and party to the exclusion of the Rufinos (Exh. 5). It was then
that Herranz sent another telex wire to the San Francisco head office, stating
his error and asking for the reinstatement of the four (4) first class seats
reserved for Senator Lopez and party (Annex A-Velasco's to Exh. 6). San
Francisco head office replied on April 22, 1960 that Senator Lopez and party
are waitlisted and that said office is unable to reinstate them (Annex B-
Velasco's to Exh. 6).
Since the flight involved was still more than a month away and confident that
reinstatement would be made, Herranz forgot the matter and told no one
about it except his co-employee, either Armando Davila or Pedro Asensi or
both of them (Tsn., 123-124, 127, Nov. 17, 1961).
Subsequently, on April 27, 1960, Armando Davila, PAN-AM's reservations
employee working in the same Escolta office as Herranz, phoned PAN-AM's
ticket sellers at its other office in the Manila Hotel, and confirmed the
reservations of Senator Lopez and party.
PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's
mistake after "Your Travel Guide" phone on May 18, 1960 to state that
Senator Lopez and party were going to depart as scheduled. Accordingly,
Jose sent a telex wire on that date to PAN-AM's head office at San Francisco
to report the error and asked said office to continue holding the reservations
of Senator Lopez and party (Annex B-Acker's to Exh. 6). Said message was
reiterated by Jose in his telex wire of May 19, 1960 (Annex C-Acker's to Exh.
6). San Francisco head office replied on May 19, 1960 that it regrets being
unable to confirm Senator Lopez and party for the reason that the flight was
solidly booked (Exh. 7). Jose sent a third telex wire on May 20, 1960
addressed to PAN-AM's offices at San Francisco, New York (Idlewild Airport),
Tokyo and Hongkong, asking all-out assistance towards restoring the
cancelled spaces and for report of cancellations at their end (Annex D-
Acker's to Exh. 6). San Francisco head office reiterated on May 20, 1960 that
it could not reinstate the spaces and referred Jose to the Tokyo and
Hongkong offices (Exh. 8). Also on May 20, the Tokyo office of PAN-AM
wired Jose stating it will do everything possible (Exh. 9).
Expecting that some cancellations of bookings would be made before the
flight time, Jose decided to withhold from Senator Lopez and party, or their
agent, the information that their reservations had been cancelled.
Armando Davila having previously confirmed Senator Lopez and party's first
class reservations to PAN-AM's ticket sellers at its Manila Hotel office, the
latter sold and issued in their favor the corresponding first class tickets on the
21st and 23rd of May, 1960.
From the foregoing evidence of defendant it is in effect admitted that
defendant — through its agents — first cancelled plaintiffs, reservations by
mistake and thereafter deliberately and intentionally withheld from plaintiffs
or their travel agent the fact of said cancellation, letting them go on believing
that their first class reservations stood valid and confirmed. In so misleading
plaintiffs into purchasing first class tickets in the conviction that they had
confirmed reservations for the same, when in fact they had none, defendant
wilfully and knowingly placed itself into the position of having to breach its a
foresaid contracts with plaintiffs should there be no last-minute cancellation
by other passengers before flight time, as it turned out in this case. Such
actuation of defendant may indeed have been prompted by nothing more
than the promotion of its self-interest in holding on to Senator Lopez and party
as passengers in its flight and foreclosing on their chances to seek the
services of other airlines that may have been able to afford them first class
accommodations. All the time, in legal contemplation such conduct already
amounts to action in bad faith. For bad faith means a breach of a known duty
through some motive of interest or ill-will (Spiegel vs. Beacon Participations,
8 NE 2d 895, 907). As stated in Kamm v. Flink, 113 N.J.L. 582, 175 A. 62, 99
A.L.R. 1, 7: "Self-enrichment or fraternal interest, and not personal ill-will,
may well have been the motive; but it is malice nevertheless."
As of May 18, 1960 defendant's reservations supervisor, Alberto Jose knew
that plaintiffs' reservations had been cancelled. As of May 20 he knew that
the San Francisco head office stated with finality that it could not reinstate
plaintiffs' cancelled reservations. And yet said reservations supervisor made
the "decision" — to use his own, word — to withhold the information from the
plaintiffs. Said Alberto Jose in his testimony:
41
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15) years of service with the air
lines business my experience is that even if the flights are solidly
booked months in advance, usually the flight departs with plenty
of empty seats both on the first class and tourist class. This is due
to late cancellation of passengers, or because passengers do not
show up in the airport, and it was our hope others come in from
another flight and, therefore, are delayed and, therefore, missed
their connections. This experience of mine, coupled with that wire
from Tokyo that they would do everything possible prompted me
to withhold the information, but unfortunately, instead of the first
class seat that I was hoping for and which I anticipated only the
tourists class was open on which Senator and Mrs. Lopez, Mr. and
Mrs. Montelibano were accommodated. Well, I fully realize now
the gravity of my decision in not advising Senator and Mrs. Lopez,
Mr. and Mrs. Montelibano nor their agents about the erroneous
cancellation and for which I would like them to know that I am very
sorry.
xxx xxx xxx
Q So it was not your duty to notify Sen. Lopez and parties that
their reservations had been cancelled since May 18, 1960?
A As I said before it was my duty. It was my duty but as I said
again with respect to that duty I have the power to make a decision
or use my discretion and judgment whether I should go ahead and
tell the passenger about the cancellation. (Tsn., pp. 17-19, 28-29,
March 15, 1962.)
At the time plaintiffs bought their tickets, defendant, therefore, in breach of its
known duty, made plaintiffs believe that their reservation had not been
cancelled. An additional indication of this is the fact that upon the face of the
two tickets of record, namely, the ticket issued to Alfredo Montelibano, Jr. on
May 21, 1960 (Exh. 22) and that issued to Mrs. Alfredo Montelibano, Jr., on
May 23, 1960 (Exh. 23), the reservation status is stated as "OK". Such willful-
non-disclosure of the cancellation or pretense that the reservations for
plaintiffs stood — and not simply the erroneous cancellation itself — is the
factor to which is attributable the breach of the resulting contracts. And, as
above-stated, in this respect defendant clearly acted in bad faith.
As if to further emphasize its bad faith on the matter, defendant subsequently
promoted the employee who cancelled plaintiffs' reservations and told them
nothing about it. The record shows that said employee — Mariano Herranz
— was not subjected to investigation and suspension by defendant but
instead was given a reward in the form of an increase of salary in June of the
following year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by the defendant, there would
at least be negligence so gross and reckless as to amount to malice or bad
faith (Fores vs. Miranda, L-12163, March 4, 1959; Necesito v. Paras, L-
10605-06, June 30, 1958). Firstly, notwithstanding the entries in the
reservation cards (Exhs. 1 & 3) that the reservations cancelled are those of
the Rufinos only, Herranz made the mistake, after reading said entries, of
sending a wire cancelling all the reservations, including those of Senator
Lopez and party (Tsn., pp. 108-109, Nov. 17, 1961). Secondly, after sending
a wire to San Francisco head office on April 19, 1960 stating his error and
asking for reinstatement, Herranz simply forgot about the matter.
Notwithstanding the reply of San Francisco head Office on April 22, 1960 that
it cannot reinstate Senator Lopez and party (Annex B-Velasco's to Exh. 6), it
was assumed and taken for granted that reinstatement would be made.
Thirdly, Armando Davila confirmed plaintiff's reservations in a phone call on
April 27, 1960 to defendant's ticket sellers, when at the time it appeared in
plaintiffs' reservation card (Exh. 5) that they were only waitlisted passengers.
Fourthly, defendant's ticket sellers issued plaintiffs' tickets on May 21 and 23,
1960, without first checking their reservations just before issuing said tickets.
And, finally, no one among defendant's agents notified Senator Lopez and
party that their reservations had been cancelled, a precaution that could have
averted their entering with defendant into contracts that the latter had already
placed beyond its power to perform.
Accordingly, there being a clear admission in defendant's evidence of facts
amounting to a bad faith on its part in regard to the breach of its contracts
with plaintiffs, it becomes unnecessary to further discuss the evidence
adduced by plaintiffs to establish defendant's bad faith. For what is admitted
in the course of the trial does not need to be proved (Sec. 2, Rule 129, Rules
of Court).
Addressing ourselves now to the question of damages, it is well to state at
the outset those rules and principles. First, moral damages are recoverable
in breach of contracts where the defendant acted fraudulently or in bad faith
(Art. 2220, New Civil Code). Second, in addition to moral damages,
exemplary or corrective damages may be imposed by way of example or
correction for the public good, in breach of contract where the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner
(Articles 2229, 2232, New Civil Code). And, third, a written contract for an
attorney's services shall control the amount to be paid therefor unless found
by the court to be unconscionable or unreasonable (Sec. 24, Rule 138, Rules
of Court).
First, then, as to moral damages. As a proximate result of defendant's breach
in bad faith of its contracts with plaintiffs, the latter suffered social humiliation,
wounded feelings, serious anxiety and mental anguish. For plaintiffs were
travelling with first class tickets issued by defendant and yet they were given
only the tourist class. At stop-overs, they were expected to be among the
first-class passengers by those awaiting to welcome them, only to be found
among the tourist passengers. It may not be humiliating to travel as tourist
passengers; it is humiliating to be compelled to travel as such, contrary to
what is rightfully to be expected from the contractual undertaking.
Senator Lopez was then Senate President Pro Tempore. International
carriers like defendant know the prestige of such an office. For the Senate is
not only the Upper Chamber of the Philippine Congress, but the nation's
treaty-ratifying body. It may also be mentioned that in his aforesaid office
Senator Lopez was in a position to preside in impeachment cases should the
Senate sit as Impeachment Tribunal. And he was former Vice-President of
the Philippines. Senator Lopez was going to the United States to attend a
private business conference of the Binalbagan-Isabela Sugar Company; but
his aforesaid rank and position were by no means left behind, and in fact he
had a second engagement awaiting him in the United States: a banquet
tendered by Filipino friends in his honor as Senate President Pro
Tempore (Tsn., pp. 14-15, Nov. 25, 1960). For the moral damages sustained
by him, therefore, an award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and
therefore his humiliation. In addition she suffered physical discomfort during
the 13-hour trip,(5 hours from Tokyo to Honolulu and 8 hours from Honolulu
to San Francisco). Although Senator Lopez stated that "she was quite well"
(Tsn., p. 22, Nov. 25, 1960) — he obviously meant relatively well, since the
rest of his statement is that two months before, she was attackedby severe
flu and lost 10 pounds of weight and that she was advised by Dr. Sison to go
to the United States as soon as possible for medical check-up and relaxation,
(Ibid). In fact, Senator Lopez stated, as shown a few pages after in the
transcript of his testimony, that Mrs. Lopez was sick when she left the
Philippines:
A. Well, my wife really felt very bad during the entire trip from
Tokyo to San Francisco. In the first place, she was sick when we
left the Philippines, and then with that discomfort which she
[experienced] or suffered during that evening, it was her worst
experience. I myself, who was not sick, could not sleep because
of the discomfort. (Tsn., pp. 27-28, Nov. 25, 1960).
It is not hard to see that in her condition then a physical discomfort sustained
for thirteen hours may well be considered a physical suffering. And even
without regard to the noise and trepidation inside the plane — which
defendant contends, upon the strengh of expert testimony, to be practically
the same in first class and tourist class — the fact that the seating spaces in
the tourist class are quite narrower than in first class, there beingsix seats to
a row in the former as against four to a row in the latter, and that in tourist
class there is very little space for reclining in view of the closer distance
between rows (Tsn., p. 24, Nov. 25, 1960), will suffice to show that the
aforesaid passenger indeed experienced physical suffering during the trip.
Added to this, of course, was the painfull thought that she was deprived by
defendant — after having paid for and expected the same — of the most
suitable, place for her, the first class, where evidently the best of everything
would have been given her, the best seat, service, food and treatment. Such
difference in comfort between first class and tourist class is too obvious to be
recounted, is in fact the reason for the former's existence, and is recognized
by the airline in charging a higher fare for it and by the passengers in paying
42
said higher rate Accordingly, considering the totality of her suffering and
humiliation, an award to Mrs. Maria J. Lopez of P50,000.00 for moral
damages will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members
of the family of Senator Lopez. They formed part of the Senator's party as
shown also by the reservation cards of PAN-AM. As such they likewise
shared his prestige and humiliation. Although defendant contends that a few
weeks before the flight they had asked their reservations to be charged from
first class to tourist class — which did not materialize due to alleged full
booking in the tourist class — the same does not mean they suffered no
shared in having to take tourist class during the flight. For by that time they
had already been made to pay for first class seats and therefore to expect
first class accommodations. As stated, it is one thing to take the tourist class
by free choice; a far different thing to be compelled to take it notwithstanding
having paid for first class seats. Plaintiffs-appellants now ask P37,500.00
each for the two but we note that in their motion for reconsideration filed in
the court a quo, they were satisfied with P25,000.00 each for said persons.
(Record on Appeal, p. 102). For their social humiliation, therefore, the award
to them of P25,000.00 each is reasonable.
The rationale behind exemplary or corrective damages is, as the name
implies, to provide an example or correction for public good. Defendant
having breached its contracts in bad faith, the court, as stated earlier, may
award exemplary damages in addition to moral damages (Articles 2229,
2232, New Civil Code).
In view of its nature, it should be imposed in such an amount as to sufficiently
and effectively deter similar breach of contracts in the future by defendant or
other airlines. In this light, we find it just to award P75,000.00 as exemplary
or corrective damages.
Now, as to attorney's fees, the record shows a written contract of services
executed on June 1, 1960 (Exh. F) whereunder plaintiffs-appellants engaged
the services of their counsel — Atty. Vicente J. Francisco — and agreedto
pay the sum of P25,000.00 as attorney's fees upon the termination of the
case in the Court of First Instance, and an additional sum of P25,000.00 in
the event the case is appealed to the Supreme Court. As said earlier, a
written contract for attorney's services shall control the amount to be paid
therefor unless found by the court to be unconscionable or unreasonable. A
consideration of the subject matter of the present controversy, of the
professional standing of the attorney for plaintiffs-appellants, and of the
extent of the service rendered by him, shows that said amount provided for
in the written agreement is reasonable. Said lawyer — whose prominence in
the legal profession is well known — studied the case, prepared and filed the
complaint, conferred with witnesses, analyzed documentary evidence,
personally appeared at the trial of the case in twenty-two days, during a
period of three years, prepared four sets of cross-interrogatories for
deposition taking, prepared several memoranda and the motion for
reconsideration, filed a joint record on appeal with defendant, filed a brief for
plaintiffs as appellants consisting of 45 printed pages and a brief for plaintiffs
as appellees consisting of 265 printed pages. And we are further convinced
of its reasonableness because defendant's counsel likewise valued at
P50,000.00 the proper compensation for his services rendered to defendant
in the trial court and on appeal.
In concluding, let it be stressed that the amount of damages awarded in this
appeal has been determined by adequately considering the official, political,
social, and financial standing of the offended parties on one hand, and the
business and financial position of the offender on the other (Domingding v.
Ng, 55 O.G. 10). And further considering the present rate of exchange and
the terms at which the amount of damages awarded would approximately be
in U.S. dollars, this Court is all the more of the view that said award is proper
and reasonable.
Wherefore, the judgment appealed from is hereby modified so as to award in
favor of plaintiffs and against defendant, the following: (1) P200,000.00 as
moral damages, divided among plaintiffs, thus: P100,000.00 for Senate
President Pro Tempore Fernando Lopez; P50,000.00 for his wife Maria J.
Lopez; P25,000.00 for his son-in-law Alfredo Montelibano, Jr.; and
P25,000.00 for his daughter Mrs. Alfredo Montelibano, Jr.; (2) P75,000.00 as
exemplary or corrective damages; (3) interest at the legal rate of 6% per
annum on the moral and exemplary damages aforestated, from December
14, 1963, the date of the amended decision of the court a quo, until said
damages are fully paid; (4) P50,000.00 as attorney's fees; and (5) the costs.
Counterclaim dismissed.So ordered.
 The Heirs of George Y. Poe v Malayan Insurance Co. Inc., GR No.
156302, April 7, 2009

CHICO-NAZARIO, J.:

43
The instant Petition for Review under Rule 451 of the Rules of Court assails
the Decision2 dated 26 June 2002 of the Court of Appeals in CA-G.R. SP No.
67297, which granted the Petition for Certiorari of respondent Malayan
Insurance Company, Inc. (MICI) and recalled and set aside the Order3 dated
6 September 2001 of the Regional Trial Court (RTC), Branch 73, of Antipolo
City, in Civil Case No. 93-2705. The RTC, in its recalled Order, denied the
Notice of Appeal of MICI and granted the Motion for the Issuance of a Writ of
Execution filed by petitioners Heirs of George Y. Poe. The present Petition
also challenges the Resolution4 dated 29 November 2002 of the appellate
court denying petitioners' Motion for Reconsideration.
Records show that on 26 January 1996 at about 4:45 a.m., George Y. Poe
(George) while waiting for a ride to work in front of Capital Garments
Corporation, Ortigas Avenue Extension, Barangay Dolores, Taytay, Rizal,
was run over by a ten-wheeler Isuzu hauler truck with Plate No. PMH-858
owned by Rhoda Santos (Rhoda), and then being driven by Willie Labrador
(Willie).5 The said truck was insured with respondent MICI under Policy No.
CV-293-007446-8.
To seek redress for George's untimely death, his heirs and herein petitioners,
namely, his widow Emercelinda, and their children Flerida and Fernando,
filed with the RTC a Complaint for damages against Rhoda and respondent
MICI, docketed as Civil Case No. 93-2705.6 Petitioners identified Rhoda and
respondent MICI, as follows:
Defendant RHODA SANTOS is likewise of legal age, Filipino and a resident
of Real Street, Pamplona, Las Piñas, Metro Manila where she may be served
with summons and other court processes.
[Herein respondent] MALAYAN INSURANCE COMPANY, INC. (hereinafter
"[MICI]" for brevity) is a corporation duly organized and existing under
Philippine law with address at Yuchengco Bldg., 484 Q. Paredes Street,
Binondo, Manila where it may be served with summons and other processes
of this Honorable Court;
Defendant Rhoda Santos, who is engaged in the business, among others, of
selling gravel and sand is the registered owner of one Isuzu Truck, with Plate
No. PMH-858 and is the employer of Willie Labrador the authorized driver of
the aforesaid truck.
[Respondent MICI] on the other hand is the insurer of Rhoda Santos under a
valid and existing insurance policy duly issued by said [MICI], Policy No. CV-
293-007446-8 over the subject vehicle owned by Rhoda Santos, Truck-
Hauler Isuzu 10 wheeler with plate no. PMH-858, serial no. SRZ451-1928340
and motor no. 10PA1-403803. Under said insurance policy, [MICI] binds
itself, among others, to be liable for damages as well as any bodily injury to
third persons which may be caused by the operation of the insured vehicle.7
And prayed that:
[J]udgment issue in favor of [herein petitioners] ordering [Rhoda and herein
respondent MICI] jointly and solidarily to pay the [petitioners] the following:
1. Actual damages in the total amount of THIRTY SIX THOUSAND
(P36,000.00) PESOS for funeral and burial expenses;
2. Actual damages in the amount of EIGHT HUNDRED FIVE THOUSAND
NINE HUNDRED EIGHTY FOUR (P805,984.00) PESOS as loss of earnings
and financial support given by the deceased by reason of his income and
employment;
3. Moral damages in the amount of FIFTY THOUSAND (P50,000.00)
PESOS;
4. Exemplary damages in the amount of FIFTY THOUSAND (P50,000.00)
PESOS;
5. Attorney's fees in the amount of FIFTY THOUSAND (P50,000.00) PESOS
and litigation expense in the amount of ONE THOUSAND FIVE HUNDRED
(P1,500.00) PESOS for each court appearance;
44
6. The costs of suit.
Other reliefs just and equitable in the premises are likewise prayed for.8
Rhoda and respondent MICI made the following admissions in their Joint
Answer9 :
That [Rhoda and herein respondent MICI] admit the allegations in
paragraphs 2, 3 and 4 of the complaint;
That [Rhoda and respondent MICI] admit the allegations in paragraph 5 of
the complaint that the cargo truck is insured with [respondent] Malayan
Insurance Company, Inc. [(MICI)] however, the liability of the insured
company attached only if there is a judicial pronouncement that the insured
and her driver are liable and moreover, the liability of the insurance company
is subject to the limitations set forth in the insurance policy.10
Rhoda and respondent MICI denied liability for George's death averring,
among other defenses, that: a) the accident was caused by the negligent act
of the victim George, who surreptitiously and unexpectedly crossed the road,
catching the driver Willie by surprise, and despite the latter's effort to swerve
the truck to the right, the said vehicle still came into contact with the victim;
b) the liability of respondent MICI, if any, would attach only upon a judicial
pronouncement that the insured Rhoda and her driver Willie are liable; c) the
liability of MICI should be based on the extent of the insurance coverage as
embodied in Rhoda's policy; and d) Rhoda had always exercised the
diligence of a good father of a family in the selection and supervision of her
driver Willie.
After the termination of the pre-trial proceedings, trial on the merits ensued.
Petitioners introduced and offered evidence in support of their claims for
damages against MICI, and then rested their case. Thereafter, the hearings
for the reception of the evidence of Rhoda and respondent MICI were
scheduled, but they failed to adduce their evidence despite several
postponements granted by the trial court. Thus, during the hearing on 9 June
1995, the RTC, upon motion of petitioners' counsel, issued an
Order11 declaring that Rhoda and respondent MICI had waived their right to
present evidence, and ordering the parties to already submit their respective
Memorandum within 15 days, after which, the case would be deemed
submitted for decision.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Rhoda and respondent MICI filed a Motion for Reconsideration12 of the Order
dated 9 June 1995, but it was denied by the RTC in another Order dated 11
August 1995.13
Consequently, Rhoda and respondent MICI filed a Petition for Certiorari,
Mandamus,14 Prohibition and Injunction with Prayer for a Temporary
Restraining Order and Writ of Preliminary Injunction, assailing the Orders
dated 9 June 1995 and 11 August 1995 of the RTC foreclosing their right to
adduce evidence in support of their defense. The Petition was docketed as
CA-G.R. SP No. 38948.
The Court of Appeals, through its Third Division, promulgated a Decision15 on
29 April 1996, denying due course to the Petition in CA-G.R. SP No. 38948.
Rhoda and respondent MICI elevated the matter to the Supreme Court via a
Petition for Certiorari,16 docketed as G.R. No. 126244. This Court likewise
dismissed the Petition in G.R. No. 126244 in a Resolution dated 30
September 1996.17 Entry of Judgment was made in G.R. No. 126244 on 8
November 1996.18
On 28 February 2000, the RTC rendered a Decision in Civil Case No. 93-
2705, the dispositive portion of which reads:
Wherefore, [Rhoda and herein respondent MICI] are hereby ordered to pay
jointly and solidarily to the [herein petitioners] the following:
1. Moral damages amounting to P100,000.00;
2. Actual damages for loss of earning capacity amounting to P805,984.00;
3. P36,000.00 for funeral expenses;
4. P50,000.00 as exemplary damages;
5. P50,000.00 for attorney's fees plus P1,500 per court appearance; and
6. Cost of suit.19
Rhoda and respondent MICI received their copy of the foregoing RTC
Decision on 14 March 2000.20 On 22 March 2000, respondent MICI and
Rhoda filed a Motion for Reconsideration21 of said Decision, averring therein
that the RTC erred in ruling that the obligation of Rhoda and respondent MICI
to petitioners was solidary or joint and several; in computing George's loss of
earning capacity not in accord with established jurisprudence; and in
awarding moral damages although it was not buttressed by evidence.
Resolving the Motion of respondent MICI and Rhoda, the RTC issued an
Order22 on 24 January 2001 modifying and amending its Decision dated 28
February 2000, and dismissing the case against respondent MICI.
The RTC held that:
After a careful evaluation of the issues at hand, the contention of the [herein
respondent MICI] as far as the solidary liability of the insurance company with
the other defendant [Rhoda] is meritorious. However, the assailed Decision
can be modified or amended to correct the same honest inadvertence without
necessarily reversing it and set aside to conform with the evidence on hand.
The RTC also re-computed George's loss of earning capacity, as follows:
The computation of actual damages for loss of earning capacity was
determined by applying the formula adopted in the American Expectancy
Table of Mortality or the actuarial of Combined Experience Table of Mortality
applied in x x x Villa Rey Transit, Inc. v. Court of Appeals (31 SCRA 521).
Moral damages is awarded in accordance with Article 2206 of the New Civil
Code of the Philippines. While death indemnity in the amount of P50,000.00
is automatically awarded in cases where the victim had died (People v. Sison,
September 14, 1990 [189 SCRA 643]).23
In the end, the RTC decreed:
WHEREFORE, in view of the foregoing consideration, the Decision of this
Court dated 28 February 2000 is hereby amended or modified. Said Decision
should read as follows:
"Wherefore, defendant Rhoda Santos is hereby ordered to pay to the [herein
petitioners] the following:
1. Moral damages amounting to P100,000.00;
2. Actual damages for loss of earning capacity amounting to P102,106.00;
3. P36,000.00 for funeral expenses;
4. P50,000.00 as death indemnity;
5. P50,000.00 for attorney's fees plus P1,500.00 per court appearance;
6. Costs of the suit.
The case against Malayan Insurance Company, Inc. is hereby dismissed."24
It was petitioners' turn to file a Motion for Reconsideration25 of the 24 January
2001 Order, to which respondent MICI filed a "Vigorous Opposition to the
Plaintiff's Motion for Reconsideration."26
45
On 15 June 2001, the RTC issued an Order reinstating its Decision dated 28
February 2000, relevant portions of which state:
Finding the arguments raised by the [herein petitioners] in their Motion for
Reconsideration of the Order of this Court dated January 24, 2001 to be more
meritorious to [herein respondent's] Malayan Insurance Co., Inc. (sic)
arguments in its vigorous opposition thereto, said motion is hereby granted.
Accordingly, the Order under consideration is hereby reconsidered and set
aside. The decision of this Court dated February 28, 2000 is hereby
reinstated.
Notify parties herein.27
Respondent MICI received a copy of the 15 June 2001 Order of the RTC on
27 June 2001.
Aggrieved by the latest turn of events, respondent MICI filed on 9 July 2001
a Notice of Appeal28 of the 28 February 2000 Decision of the RTC, reinstated
by the 15 June 2001 Resolution of the same court. Rhoda did not join
respondent MICI in its Notice of Appeal.29
Petitioners filed their Opposition30 to the Notice of Appeal of respondent
MICI, with a Motion for the Issuance of Writ of Execution.
After considering the recent pleadings of the parties, the RTC, in its Order
dated 6 September 2001, denied the Notice of Appeal of respondent MICI
and granted petitioners' Motion for the Issuance of Writ of Execution. The
RTC reasoned in its Order:
The records disclosed that on February 28, 2000 this Court rendered a
Decision in favor of the [herein petitioners] and against [Rhoda and herein
respondent MICI]. The Decision was said to have been received by MICI on
March 14, 2000. Eight days after or on March 22, 2000, MICI mailed its
Motion for Reconsideration to this Court and granted the same in the Order
dated January 24, 2001. From this Order, [petitioners] filed a Motion for
Reconsideration on February 21, 2001 to which MICI filed a vigorous
opposition. On June 15, 2001 this Court granted [petitioners'] motion
reinstating the Decision dated February 28, 2000. According to MICI, the
June 15, 2001 order was received by it on June 27, 2001. MICI filed a Notice
of Appeal on July 9, 2001 or twelve (12) days from receipt of said Order.
[Petitioners] contend that the Notice of Appeal was filed out of time while
[respondent] MICI opposes, arguing otherwise. The latter interposed that the
Order dated June 15, 2001 is in reality a new Decision thereby giving it a
fresh fifteen (15) days within which to file notice of appeal.
[Respondent] MICI's contention is not meritorious. The fifteen (15) day period
within which to file a notice of appeal should be reckoned from the date it
received the Decision on March 14, 2000. So that when MICI mailed its
Motion for Reconsideration on March 22, 2000, eight (8) days had already
lapsed, MICI has remaining seven (7) days to file a notice of appeal.
However, when it received the last Order of this Court it took [respondent]
MICI twelve (12) days to file the same. Needless to say, MICI's Notice of
Appeal was filed out of time. The Court cannot countenance the argument of
MICI that a resolution to a motion for a final order or judgment will have the
effect of giving a fresh reglementary period. This would be contrary to what
was provided in the rules of procedure.31
Accordingly, the RTC adjudged:
WHEREFORE, premises considered, [herein respondent] MICI's Notice of
Appeal is hereby Denied for having filed out of time making the Decision of
this Court dated February 28, 2000 as final and executory. Accordingly, the
Motion for Issuance of Writ of Execution filed by [herein petitioners] is hereby
Granted.
Notify parties herein.32
Respondent MICI filed a Petition for Certiorari33 under Rule 65 of the Rules
of Court before the Court of Appeals, which was docketed as CA-G.R. SP
No. 67297. The Petition assailed, for having been rendered by the RTC with
grave abuse of discretion amounting to lack or excess of jurisdiction, the
following: (1) the Order dated 6 September 2001, denying the Notice of
Appeal of respondent MICI and granting petitioners' Motion for the Issuance
of Writ of Execution; (2) the Decision dated 28 February 2000, holding Rhoda
and respondent MICI jointly and severally liable for George's death; and (3)
the Order dated 15 June 2001, reinstating the Decision dated 28 February
2000.
The Court of Appeals granted the Petition for Certiorari of respondent MICI
in a Decision dated 26 June 2000, ratiocinating thus:
Prescinding therefrom, we hold that the fifteen (15) day period to appeal
must be reckoned from the time the [herein respondent] Malayan
received the order dated 15 June 2001 reversing in toto the order of 24
January 2000 and reinstating in full the Decision dated 28 February
2000. Thus, [respondent] Malayan had until 12 July 2001 within which to file
its notice of appeal. Therefore, when [respondent] Malayan filed its notice of
appeal on 09 July 2001, it was well within the reglementary period and should
have been given due course by the public respondent court.
It was therefore, an excess of jurisdiction on the part of the public respondent
court when it reckoned the [respondent] Malayan's period to appeal on the
date it received on 14 March 2000 the former's decision dated 28 February
2000. As earlier expostulated, the said decision was completely vacated
insofar as the [respondent] Malayan is concerned when the public
respondent court in its order dated 24 January 2001 dismissed the case
against the former. Thus, to reckon the fifteen (15) days to appeal from the
day the [respondent] Malayan received the said decision on 14 March 2000,
is the height of absurdity because there was nothing for the [respondent]
Malayan to appeal inasmuch as the public respondent court vacated the said
decision in favor of the former.
The aforesaid conclusion finds support in Sta. Romana v. Lacson (104 SCRA
93), where the court, relying on the case of Magdalena Estate, Inc. v. Caluag,
11 SCRA 334, held that where the court of origin made a thoroughly (sic)
restudy of the original judgment and rendered the amended and clarified
judgment only after considering all the factual and legal issues, the amended
and clarified decision was an entirely new decision which superseded (sic).
For all intents and purposes, the court concluded the trial court rendered a
new judgment from which the time to appeal must be reckoned.
In the instant case, what is involved is not merely a substantial amendment
or modification of the original decision, but the total reversal thereof in the
order dated 24 January 2000. Given the rationale in the aforecited cases, it
is only logical that the period of appeal be counted from 27 June 2001, the
date that [respondent] Malayan received the order dated 15 June 2001
reversing in toto the order of 24 January 2000 and reinstating the Decision
dated 28 February 2000.34 (Emphasis supplied.)
The fallo of the Decision of the Court of Appeals reads:
WHEREFORE, in consideration of the foregoing premises, the petition
for certiorari is partially GRANTED. Accordingly, the public respondent
court's order dated 06 September 2001 is hereby RECALLED and SET
ASIDE.
Public respondent court is hereby directed to approve the petitioner
Malayan's notice of appeal and to refrain from executing the writ of execution
granted on 06 September 2001.35
The Court of Appeals denied petitioners' Motion for Reconsideration in a
Resolution dated 29 November 2002.
Understandably distraught, petitioners come before this Court in this Petition
for Review, which raise the following issues:
I.
Whether or not the respondent Court of Appeals committed grave abuse of
discretion when it ruled that private respondent could file a Petition
46
for Certiorari even though its Motion for Reconsideration was still pending
resolution with the lower court.
II.
Whether or not the respondent Court of Appeals committed grave abuse of
discretion when it ruled that the private respondent had filed its Notice of
Appeal with the trial court within the reglementary period.36
The Court first turns its attention to the primary issue for its resolution:
whether the Notice of Appeal filed by respondent MICI before the RTC was
filed out of time.
The period for filing a Notice of Appeal is set by Rule 41, Section 3 of the
1997 Rules of Court:
SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a
record on appeal is required, the appellants shall file a notice of appeal and
a record on appeal within thirty (30) days from notice of the judgment or final
order. x x x.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial
or reconsideration shall be allowed.
It is clear under the Rules that an appeal should be taken within 15 days from
the notice of judgment or final order appealed from.37 A final judgment or
order is one that finally disposes of a case, leaving nothing more for the court
to do with respect to it. It is an adjudication on the merits which, considering
the evidence presented at the trial, declares categorically what the rights and
obligations of the parties are; or it may be an order or judgment that dismisses
an action.38
Propitious to petitioners is Neypes v. Court of Appeals,39 which the Court
promulgated on 14 September 2005, and wherein it laid down the fresh
period rule:
To standardize the appeal periods provided in the Rules and to afford litigants
fair opportunity to appeal their cases, the Court deems it practical to allow
a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion
for a new trial or motion for reconsideration.
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42
on petitions for review from the Regional Trial Courts to the Court of
Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of
Appeals and Rule 45 governing appeals by certiorari to the Supreme Court.
The new rule aims to regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.
(Emphases ours.)
The fresh period of 15 days becomes significant when a party opts to file a
motion for new trial or motion for reconsideration. In this manner, the trial
court which rendered the assailed decision is given another opportunity to
review the case and, in the process, minimize and/or rectify any error of
judgment.40 With the advent of the fresh period rule, parties who availed
themselves of the remedy of motion for reconsideration are now allowed to
file a notice of appeal within fifteen days from the denial of that motion.41
The Court has accentuated that the fresh period rule is not inconsistent with
Rule 41, Section 3 of the Rules of Court which states that the appeal shall be
taken "within fifteen (15) days from notice of judgment or final order appealed
from." The use of the disjunctive word "or" signifies disassociation and
independence of one thing from another. It should, as a rule, be construed in
the sense which it ordinarily implies.42 Hence, the use of "or" in the above
provision supposes that the notice of appeal may be filed within 15 days from
the notice of judgment or within 15 days from notice of the final order in the
case.
Applying the fresh period rule, the Court agrees with the Court of Appeals
and holds that respondent MICI seasonably filed its Notice of Appeal with the
RTC on 9 July 2001, just 12 days from 27 June 2001, when it received the
denial of its Motion for Reconsideration of the 15 June 2001 Resolution
reinstating the 28 February 2000 Decision of the RTC.
The fresh period rule may be applied to the case of respondent MICI,
although the events which transpired concerning its Notice of Appeal took
place in June and July 2001, inasmuch as rules of procedure may be given
retroactive effect on actions pending and undetermined at the time of their
passage. The Court notes that Neypes was promulgated on 14 September
2005, while the instant Petition was still pending before this Court.
Reference may be made to Republic v. Court of Appeals,43 involving the
retroactive application of A.M. No. 00-2-03-SC which provided that the 60-
day period within which to file a Petition for Certiorari shall be reckoned from
receipt of the order denying the motion for reconsideration. In said case, the
Court declared that rules of procedure "may be given retroactive effect to
actions pending and undetermined at the time of their passage and this will
not violate any right of a person who may feel that he is adversely affected,
inasmuch as there is no vested rights in rules of procedure."
Hence, the fresh period rule laid down in Neypes was applied by the Court in
resolving the subsequent cases of Sumaway v. Urban Bank, Inc.,44 Elbiña v.
Ceniza,45 First Aqua Sugar Traders, Inc. v. Bank of the Philippine
Islands,46 even though the antecedent facts giving rise to said cases
transpired before the promulgation of Neypes.
In De los Santos v. Vda de Mangubat,47 particularly, the Court applied the
fresh period rule, elucidating that procedural law refers to the adjective law
which prescribes rules and forms of procedure in order that courts may be
able to administer justice. Procedural laws do not come within the legal
conception of a retroactive law, or the general rule against the retroactive
operation of statutes. The fresh period rule is irrefragably procedural,
prescribing the manner in which the appropriate period for appeal is to be
computed or determined and, therefore, can be made applicable to actions
pending upon its effectivity without danger of violating anyone else's rights.
Since the Court affirms the ruling of the Court of Appeals that respondent
MICI filed its Notice of Appeal with the RTC within the reglementary period,
the appropriate action, under ordinary circumstances, would be for the Court
to remand the case to the RTC so that the RTC could approve the Notice of
Appeal of respondent MICI and respondent MICI could already file its appeal
with the Court of Appeals.
However, considering that the case at bar has been pending for almost
sixteen years,48 and the records of the same are already before this Court,
remand is no longer necessary.
Jurisprudence dictates that remand of a case to a lower court does not follow
if, in the interest of justice, the Supreme Court itself can resolve the dispute
based on the records before it. As a rule, remand is avoided in the following
instances: (a) where the ends of justice would not be subserved by a remand;
or (b) where public interest demands an early disposition of the case; or (c)
where the trial court has already received all the evidence presented by both
parties, and the Supreme Court is in a position, based upon said evidence,
to decide the case on its merits.49 In Lao v. People,50 the Supreme Court, in
consideration of the years that it had taken for the controversy therein to
reach it, concluded that remand of the case to a lower court was no longer
the more expeditious and practical route to follow, and it then decided the
said case based on the evidentiary record before it.
The consistent stand of the Court has always been that a case should be
decided in its totality, resolving all interlocking issues in order to render justice
to all concerned and to end the litigation once and for all. Verily, courts should
always strive to settle the entire controversy in a single proceeding, leaving
no root or branch to bear the seed of future litigation.51 Where the public
interest so demands, the court will broaden its inquiry into a case and decide
the same on the merits rather than merely resolve the procedural question
raised.52 Such rule obtains in this case.
The Court is convinced that the non-remanding of the case at bar is
absolutely justified. Petitioners have already suffered from the tragic loss of
a loved one, and must not be made to endure more pain and uncertainty
47
brought about by the continued pendency of their claims against those liable.
The case has been dragging on for almost 16 years now without the
petitioners having been fully compensated for their loss. The Court cannot
countenance such a glaring indifference to petitioners' cry for justice. To be
sure, they deserve nothing less than full compensation to give effect to their
substantive rights.53
The complete records of the present case have been elevated to this Court,
and the pleadings and evidence therein could fully support its factual
adjudication. Indeed, after painstakingly going over the records, the Court
finds that the material and decisive facts are beyond dispute: George was
killed when he was hit by the truck driven by Willie, an employee of Rhoda;
and the truck is insured with respondent MICI. The only issue left for the Court
to resolve is the extent of the liability of Rhoda and respondent MICI for
George's death and the appropriate amount of the damages to be awarded
to petitioners.
The Court now turns to the issue of who is liable for damages for the death
of George.
Respondent MICI does not deny that it is the insurer of the truck.
Nevertheless, it asserts that its liability is limited, and it should not be held
solidarily liable with Rhoda for all the damages awarded to petitioners.
A solidary or joint and several obligation is one in which each debtor is liable
for the entire obligation, and each creditor is entitled to demand the whole
obligation. In a joint obligation, each obligor answers only for a part of the
whole liability and to each obligee belongs only a part of the correlative rights.
Well-entrenched is the rule that solidary obligation cannot lightly be inferred.
There is solidary liability only when the obligation expressly so states, when
the law so provides or when the nature of the obligation so requires.54
It is settled that where the insurance contract provides for indemnity against
liability to third persons, the liability of the insurer is direct and such third
persons can directly sue the insurer. The direct liability of the insurer under
indemnity contracts against third party liability does not mean, however, that
the insurer can be held solidarily liable with the insured and/or the other
parties found at fault, since they are being held liable under different
obligations. The liability of the insured carrier or vehicle owner is based on
tort, in accordance with the provisions of the Civil Code;55 while that of the
insurer arises from contract, particularly, the insurance policy. The third-party
liability of the insurer is only up to the extent of the insurance policy and that
required by law; and it cannot be held solidarily liable for anything beyond
that amount.56 Any award beyond the insurance coverage would already be
the sole liability of the insured and/or the other parties at fault.57
In Vda. de Maglana v. Consolacion,58 it was ruled that an insurer in an
indemnity contract for third-party liability is directly liable to the injured party
up to the extent specified in the agreement, but it cannot be held solidarily
liable beyond that amount. According to respondent MICI, its liability as
insurer of Rhoda's truck is limited. Following Vda. de Maglana, petitioners
would have had the option either (1) to claim the amount awarded to them
from respondent MICI, up to the extent of the insurance coverage, and the
balance from Rhoda; or (2) to enforce the entire judgment against Rhoda,
subject to reimbursement from respondent MICI to the extent of the insurance
coverage. The Court, though, is precluded from applying its ruling in Vda. de
Maglana by the difference in one vital detail between the said case and the
one at bar. The insurer was able to sufficiently establish its limited liability in
Vda. de Maglana, while the same cannot be said for respondent MICI herein.
The Court highlights that in this case, the insurance policy between Rhoda
and respondent MICI, covering the truck involved in the accident which killed
George, was never presented. There is no means, therefore, for this Court to
ascertain the supposed limited liability of respondent MICI under said policy.
Without the presentation of the insurance policy, the Court cannot determine
the existence of any limitation on the liability of respondent MICI under said
policy, and the extent or amount of such limitation.
It should be remembered that respondent MICI readily admits that it is the
insurer of the truck that hit and killed George, except that it insists that its
liability under the insurance policy is limited. As the party asserting its limited
liability, respondent MICI then has the burden of evidence to establish its
claim. In civil cases, the party that alleges a fact has the burden of proving it.
Burden of proof is the duty of a party to present evidence on the facts in issue
necessary to prove its claim or defense by the amount of evidence required
by law.59 Regrettably, respondent MICI failed to discharge this burden.60 The
Court cannot rely on mere allegations of limited liability sans proof.
The failure of respondent MICI to present the insurance policy - which,
understandably, is not in petitioners' possession, but in the custody and
absolute control of respondent MICI as the insurer and/or Rhoda as the
insured - gives rise to the presumption that its presentation is prejudicial to
the cause of respondent MICI.61 When the evidence tends to prove a material
fact which imposes a liability on a party, and he has it in his power to produce
evidence which, from its very nature, must overthrow the case made against
him if it is not founded on fact, and he refuses to produce such evidence, the
presumption arises that the evidence, if produced, would operate to his
prejudice and support the case of his adversary.62
Respondent MICI had all the opportunity to prove before the RTC that its
liability under the insurance policy it issued to Rhoda, was limited; yet,
respondent MICI failed to do so. The failure of respondent MICI to rebut that
which would have naturally invited an immediate, pervasive, and stiff
opposition from it created an adverse inference that either the controverting
evidence to be presented by respondent MICI would only prejudice its case,
or that the uncontroverted evidence of petitioners indeed speaks of the truth.
And such adverse inference, recognized and adhered to by courts in judging
the weight of evidence in all kinds of proceedings, surely is not without basis
- its rationale and effect rest on sound, logical and practical considerations,
viz:
The presumption that a man will do that which tends to his obvious
advantage, if he possesses the means, supplies a most important test for
judging of the comparative weight of evidence x x x If, on the supposition that
a charge or claim is unfounded, the party against whom it is made has
evidence within his reach by which he may repel that which is offered to his
prejudice, his omission to do so supplies a strong presumption that the
charge or claim is well founded; it would be contrary to every principle of
reason, and to all experience of human conduct, to form any other
conclusion." (Starkie on Evidence, p. 846, Moore on Facts, Vol. I, p. 544)
x x x
The ordinary rule is that one who has knowledge peculiarly within his own
control, and refuses to divulge it, cannot complain if the court puts the most
unfavorable construction upon his silence, and infers that a disclosure would
have shown the fact to be as claimed by the opposing party." (Societe, etc.,
v. Allen, 90 Fed. Rep. 815, 817, 33 C.C.A. 282, per Taft, C.J., Moore on
Facts, Vol. I, p. 561).63
The inference still holds even if it be assumed, for argument's sake, that the
solidary liability of respondent MICI with Rhoda is improbable, for it has
likewise been said that:
Weak evidence becomes strong by the neglect of the party against whom it
is put in, in not showing by means within the easy control of that party that
the conclusion drawn from such evidence is untrue. (Pittsburgh, etc., R. Co.
v. Callaghan, 50 III. App. 676, 681, Moore on Facts, Vol. I, p. 572).64
Given the admission of respondent MICI that it is the insurer of the truck
involved in the accident that killed George, and in the utter absence of proof
to establish both the existence and the extent/amount of the alleged limited
liability of respondent MICI as insurer, the Court could only conclude that
respondent MICI had agreed to fully indemnify third-party liabilities.
Consequently, there is no more difference in the amounts of damages which
petitioners can recover from Rhoda or respondent MICI; petitioners can
recover the said amounts in full from either of them, thus, making their
liabilities solidary or joint and several.
The Court now comes to the issue of the amounts of the damages awarded.
In its Decision dated 22 February 2000, the RTC awarded petitioners moral
and actual damages, as well as funeral expenses and attorney's fees.
Subsequently, in its Order dated 24 January 2001, the RTC reduced the
amount of actual damages from P805,984.00 to P102,106.00, but
additionally awarded death indemnity in the amount of P50,000.00. Its award
of moral damages and funeral expenses as well as attorney's fees remained
constant in its 28 February 2000 decision and was carried over to its 24
January 2001 Order.
48
The Court shall now proceed to scrutinize said award of damages.
As regards the award of actual damages, Article 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."
The RTC awarded P36,000.00 for burial expenses. The award of P36,000.00
for burial expenses is duly supported by receipts evidencing that petitioners
did incur this expense. The petitioners held a wake for two days at their
residence and another two days at the Loyola Memorial Park.65 The amount
covered the expenses by petitioners for the wake, funeral and burial of
George.66
As to compensation for loss of earning capacity, the RTC initially
awarded P805,984.00 in its 28 February 2000 Decision, which it later
reduced to P102,106.00 on 24 January 2001.
Article 2206 of the Civil Code provides that in addition to the indemnity for
death caused by a crime or quasi-delict, the "defendant shall be liable for the
loss of the earning capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter, x x x." Compensation of this nature is awarded not
for loss of earnings but for loss of capacity to earn money. Hence, it is proper
that compensation for loss of earning capacity should be awarded to the
petitioners in accordance with the formula established in decided cases for
computing net earning capacity, to wit:
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]67
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.
The second factor is computed by multiplying the life expectancy by the net
earnings of the deceased, i.e., the total earnings less expenses necessary in
the creation of such earnings or income and less living and other incidental
expenses. The 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, the Court deducts from his gross earnings the necessary
expenses supposed to be used by the deceased for his own needs. The
Court explained in Villa Rey Transit v. Court of Appeals68 :
[The award of damages for loss of earning capacity is] concerned with the
determination of the 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 the 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 the entire earning, but
rather the loss of that portion of the earnings which the beneficiary would
have received. In other words, only net earnings, 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."
Applying the aforestated jurisprudential guidelines in the computation of the
amount of award for damages set out in Villa Rey, the Court computes the
award for the loss of George's earning capacity as follows:
 (1) Funeral expenses P36,000.00;
Life expectancy = 2/3 x [80 - age of deceased at the time of death]
2/3 x [80 - 56]
2/3 x [24] (2) Actual damages for loss of earning capacity P611,386.92;

(3) Moral damages amounting to P100,000.00;

FORMULA - NET EARNING CAPACITY (NEC)

(4) Death indemnity P50,000.00; and

If:

(5) Attorney's fees P50,000.00 plus P1,500.00 per court appearance.

Age at time of death of George Poe = 5869

No costs.
Monthly Income at time of death = P6,94670

SO ORDERED.
Gross Annual Income (GAI) = [(6,946) (12)] = P83,352

Reasonable/Necessary Living Expenses (R/NLE) = 50%71 of GAI = P41,676

NEC = [2/3 (80-58)] [83,352-41,676]

= [2/3 (22)] [41,676]
= [14.67] [41,676]
= P611,386.92

Therefore, George's lost net earning capacity is equivalent to P611,386.92

The RTC awarded moral damages72 in the amount of P100,000.00. With

respect to moral damages, the same are awarded under the following
circumstances:

The award of moral damages is aimed at a restoration, within the limits of the
possible, of the spiritual status quo ante. 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. The amount of the award bears no relation whatsoever
with the wealth or means of the offender.

In the instant case, petitioners' testimonies reveal the intense suffering which
they continue to experience as a result of George's death.73 It is not difficult
to comprehend that the sudden and unexpected loss of a husband and father
would cause mental anguish and serious anxiety in the wife and children he
left behind. Moral damages in the amount of P100,000.00 are proper for
George's death.74 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

The RTC also awarded P50,000.00 as death indemnity which the Court shall
not disturb. The award of P50,000.00 as death indemnity is in accordance
with current rulings of the Court.75

Finally, the RTC awarded attorneys fees to petitioners. Petitioners are

entitled to attorney's fees. Under Article 2008 of the Civil Code, 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. 76 In
Metro Manila Transit Corporation v. Court of Appeals,77 the Court held that
an award of P50,000.00 as attorney's fees was reasonable. Hence,
petitioners are entitled to attorney's fees in that amount.78

WHEREFORE, premises considered, the instant Petition is PARTIALLY

GRANTED. While the Court AFFIRMS the Decision, dated 26 June 2002,
and Resolution, dated 29 November 2002, of the Court of Appeals in CA-
G.R. SP No. 67297, granting the Petition for Certiorari of respondent
Malayan Insurance Company, Inc., the Court, nonetheless, RESOLVES, in
consideration of the speedy administration of justice, and the peculiar
circumstances of the case, to give DUE COURSE to the present Petition and
decide the same on its merits.

Rhoda Santos and respondent Malayan Insurance Company, Inc. are hereby
ordered to pay jointly and severally the petitioners Heirs of George Y. Poe
the following:

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