TORTS AND DAMAGES

14TH BATCH DIGESTS

1

ROBES-FRANCISCO REALTY & DEVELOPMENT CORPORATION,petitioner,vs.COURT OF FIRST INSTANCE OF RIZAL (BRANCH XXXIV), and LOLITA MILLAN,respondents.

October 30, 1978

FACTS:

Robes-Francisco Realty & Development Corporation, now petitioner, agreed to sell to private respondent Lolita Millan a parcel of land.

Respondent Millan was able to pay the full purchase price of the lot.

A deed of absolute sale was later on executed which contained, among others, this particular provision:

That the VENDOR further warrants that the transfer certificate of title of the above-described parcel of land shall be transferred in the name of the VENDEE within the period of six (6) months from the date of full payment and in case the VENDOR fails to issue said transfer certificate of title, it shall bear the obligation to refund to the VENDEE the total amount already paid for, plus an interest at the rate of 4% per annum. (record on appeal, p. 9)

Notwithstanding the lapse of the above-mentioned stipulated period of six (6) months, the corporation failed to cause the issuance of the corresponding transfer certificate of title over the lot sold to Millan, hence, the latter filed a complaint for specific performance and damages.

CFI: ordered the petitioner to register the deed of absolute sale it had executed in favor of respondent and sentenced defendant to pay plaintiff nominal damages in the amount of P20,000.00 plus attorney's fee in the amount of P5,000.00 and costs.

CFI also found out that the realty corporation failed to cause the issuance of the corresponding transfer certificate of title because the parcel of land conveyed to Millan was included among other properties of the corporation mortgaged to the GSIS to secure an obligation of P10 million and that the owner's duplicate certificate of title of the subdivision was in the possession of the Government Service Insurance System (GSIS).

Petitioner invokes Article 1226 of the Civil Code which provides that in obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary.

ISSUE:

1. WON the provision in the deed of sale is a penal clause which will preclude an award of damages to the vendee Millan. NO

2. WON the award of 20k nominal damages is excessive. YES, hence the SC reduced it to 10k

3. WON the P20,000.00 award may be considered in the nature of exemplary damages. NO

RULING:

1. For very obvious reasons, said clause does not convey any penalty, for even without it, pursuant to Article 2209 of the Civil Code, the vendee would be entitled to recover the amount paid by her withlegal rate of interest which is even more than the 4% providedfor in the clause.Also, the facts show that the right of the vendee to acquire title to the lot bought by her was violated by petitioner and this entitles her at the very least to nominal damages.

The pertinent provisions of our Civil Code follow:

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation arising from any source enumerated in article 1157, or in every case where any property right has been invaded.

Under the foregoing provisions nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. They are recoverable where some injury has been done 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.

2. Theamount of P20,000.00 is excessive. The admitted fact that petitioner corporation failed to convey a transfer certificate of title to respondent Millan because the subdivision property was mortgaged to the GSIS does not in itself show that there was bad faith or fraud. Bad faith is not to be presumed. Moreover, there was the expectation of the vendor that arrangements were possible for the GSIS to make partial releases of the subdivision lots from the overall real estate mortgage. It was simply unfortunate that petitioner did not succeed in that regard.3. In case of breach of contract, exemplary damages may be awarded if the guilty party acted in wanton, fraudulent, reckless, oppressive or malevolent manner.13Furthermore, exemplary or corrective damages are to be imposed by way of example or correction for the public good, only if the injured party has shown that he is entitled to recover moral, temperate or compensatory damages."

Here, respondent Millan did not submit below any evidence to prove that she suffered actual or compensatory damages.G.R. No. 180257 February 23, 2011EUSEBIO GONZALES, Petitioner, vs. PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK, EDNA OCAMPO, and ROBERTO NOCEDA, Respondents.

Facts:

Petitioner was a client of PCIB for a good 15 years. In October 1992, PCIB granted a credit line to Gonzales through the execution of a Credit-On-Hand Loan Agreement. Gonzales drew from said credit line through the issuance of check.

On October 1995, Gonzales and his wife obtained a loan for PhP 500,000. Subsequently, the spouses Panlilio and Gonzales obtained two additional loans from PCIB in the amounts of PhP 1,000,000 and PhP 300,000, respectively. These three loans amounting to PhP 1,800,000 were covered by three promissory notes. To secure the loans, a real estate mortgage over a parcel of land was executed by Gonzales and the spouses Panlilio. Notably, the promissory notes specified, among others, the solidary liability of Gonzales and the spouses Panlilio for the payment of the loans. However, it was the spouses Panlilio who received the loan proceeds of PhP 1,800,000.

The monthly interest dues of the loans were paid by the spouses Panlilio through the automatic debiting of their account with PCIB. But eventually, they defaulted. PCIB called the attention of Gonzales regarding the default.

Meanwhile, Gonzales issued a check in favor of Rene Unson for PhP 250,000 drawn against the credit line. However, upon presentment for payment by Unson of said check, it was dishonored by PCIB due to the termination by PCIB of the credit line under COHLA for the unpaid periodic interest dues from the loans of Gonzales and the spouses Panlilio. PCIB likewise froze the FCD account of Gonzales.

Consequently, Gonzales had a falling out with Unson due to the dishonor of the check. They had a heated argument in the premises of the Philippine Columbian Association, which caused great embarrassment and humiliation to Gonzales. Thereafter, Unson sent a demand letter to Gonzales for the PhP 250,000. Then, the counsel of Unson sent a second demand letter with threat of legal action. With his FCD account that PCIB froze, Gonzales was forced to source out and pay the PhP 250,000 he owed to Unson in cash.

Gonzales, through counsel, wrote PCIB insisting that the check he issued had been fully funded, and demanded the return of the proceeds of his FCD as well as damages for the unjust dishonor of the check. PCIB replied and stood its ground in freezing Gonzales accounts due to the outstanding dues of the loans. Gonzales reiterated his demand, reminding PCIB that it knew well that the actual borrowers were the spouses Panlilio and he never benefited from the proceeds of the loans, which were serviced by the PCIB account of the spouses Panlilio.

PCIBs refusal to heed his demands compelled Gonzales to file the instant case for damages with the RTC, on account of the alleged unjust dishonor of the check issued in favor of Unson.

The RTC found Gonzales solidarily liable with the spouses Panlilio on the three promissory notes relative to the outstanding REM loan. The trial court found no fault in the termination by PCIB of the COHLA with Gonzales and in freezing the latters accounts to answer for the past due PhP 1,800,000 loan. The trial court ruled that the dishonor of the check issued by Gonzales in favor of Unson was proper considering that the credit line under the COHLA had already been terminated or revoked before the presentment of the check.

The CA dismissed Gonzales appeal and affirmed in toto the RTC Decision. Hence, this petition.

Issue:

Whether or not the CA committed error in not awarding damages against respondents despite presentation of clear proof to support action for damages. -YES

Held:

In the instant case, Gonzales suffered from the negligence and bad faith of PCIB. From the testimonies of Gonzales witnesses, the embarrassment and humiliation Gonzales has to endure not only before his former close friend Unson but more from the members and families of his friends and associates in the PCA, which he continues to experience considering the confrontation he had with Unson and the consequent loss of standing and credibility among them from the fact of the apparent bouncing check he issued. Credit is very important to businessmen and its loss or impairment needs to be recognized and compensated.

The termination of the COHLA by PCIB without prior notice and the subsequent dishonor of the check issued by Gonzales constitute acts of contra bonus mores. Art. 21 of the Civil Code refers to such acts when it says, "Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damage."

The Supreme Court finds that such acts warrant the payment of indemnity in the form of nominal damages. Nominal damages "are recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind x x x." The Supreme Court further explained the nature of nominal damages in Almeda v. Cario:

x x x Its award is thus not for the purpose of indemnification for a loss but for the recognition and vindication of a right. Indeed, nominal damages are damages in name only and not in fact. When granted by the courts, they are not treated as an equivalent of a wrong inflicted but simply a recognition of the existence of a technical injury. A violation of the plaintiffs right, even if only technical, is sufficient to support an award of nominal damages. Conversely, so long as there is a showing of a violation of the right of the plaintiff, an award of nominal damages is proper.

In the present case, Gonzales had the right to be informed of the accrued interest and most especially, for the suspension of his COHLA. For failure to do so, the bank is liable to pay nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. In this case, the Court finds that the grant of PhP 50,000 as nominal damages is proper.

Moreover, as held in MERALCO v. CA, failure to give prior notice when required, such as in the instant case, constitutes a breach of contract and is a clear violation of Art. 21 of the Code. In cases such as this, Art. 2219 of the Code provides that moral damages may be recovered in acts referred to in its Art. 21. Further, Art. 2220 of the Code provides that "[w]illful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith." Similarly, "every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same." Evidently, Gonzales is entitled to recover moral damages.

Even in the absence of malice or bad faith, a depositor still has the right to recover reasonable moral damages, if the depositor suffered mental anguish, serious anxiety, embarrassment, and humiliation. Although incapable of pecuniary estimation, moral damages are certainly recoverable if they are the proximate result of the defendants wrongful act or omission. The factual antecedents bolstered by undisputed testimonies likewise show the mental anguish and anxiety Gonzales had to endure with the threat of Unson to file a suit. Gonzales had to pay Unson PhP 250,000, while his FCD account in PCIB was frozen, prompting Gonzales to demand from PCIB and to file the instant suit.

The award of moral damages is aimed at a restoration within the limits of the possible, of the spiritual status quo anteit must always reasonably approximate the extent of injury and be proportional to the wrong committed. Thus, an award of PhP 50,000 is reasonable moral damages for the unjust dishonor of the PhP 250,000 which was the proximate cause of the consequent humiliation, embarrassment, anxiety, and mental anguish suffered by Gonzales from his loss of credibility among his friends, colleagues and peers.

Furthermore, the initial carelessness of the banks omission in not properly informing Gonzales of the outstanding interest duesaggravated by its gross neglect in omitting to give prior notice as stipulated under the COHLA and in not giving actual notice of the termination of the credit linejustifies the grant of exemplary damages of PhP 10,000. Such an award is imposed by way of example or correction for the public good.

Finally, an award for attorneys fees is likewise called for from PCIBs negligence which compelled Gonzales to litigate to protect his interest. In accordance with Art. 2208(1) of the Code, attorneys fees may be recovered when exemplary damages are awarded. We find that the amount of PhP 50,000 as attorneys fees is reasonable.

The petition is partly granted. The CA decision is reversed and set aside. The Philippine Commercial and International Bank (now Banco De Oro) is ORDERED to pay Eusebio Gonzales PhP 50,000 as nominal damages, PhP 50,000 as moral damages, PhP 10,000 as exemplary damages, and PhP 50,000 as attorneys fees.

[G.R. No. 142029. February 28, 2001]

ERLINDA FRANCISCO, doing business in the name and style of Cebu Fountainhead Bakeshop and JULIANA PAMAONG, petitioners, vs.RICARDO FERRER, JR., ANNETTE FERRER, ERNESTO LO AND REBECCA LO, respondents

Mrs. Rebecca Lo and her daughter Annette Ferrer ordered a three layered cake from Fountainhead Bakeshop, Mango Avenue Branch. It was then agreed that the wedding cake shall be delivered at 5:00 oclock in the afternoon at the Cebu Country Club, Cebu City, stating clearly that the wedding is scheduled on December 14, 1992.

On the day of the wedding, December 14, 1992, plaintiffs arrived at the Cebu Country club around 6:00 oclock in the evening. They immediately notice the absence of the wedding cake. At 7:00 oclock in the evening they made a follow-up call to Fountainhead Bakeshop and was informed that it was probably late because of the traffic.

At 8:00 oclock they were informed that no wedding cake will be delivered because the order slip got lost.

At 10:00 oclock in the evening, the wedding cake arrived but plaintiffs declined to accept it, besides their order was a three-layered cake and what was actually delivered was a two-layered one.

Subsequently, defendant Erlinda Francisco sent a letter of apology accompanied with a P5,000.00 check, however, the same was declined by plaintiffs because they felt it was inadequate.

Respondents filed with the Regional Trial Court, Cebu City an action for breach of contract with damages against petitioners.

RTC: in favor of the plaintiffs and against Erlinda Francisco.

Directing the latter to pay the former the following:

1. The cost of the wedding cake in the amount of P3,175.00;

2. Moral damages in the amount of P30,000.00;

3. Attorneys fees in the amount of P10,000.00; and

CA: increasing the trial courts award of moral damages to Ricardo Ferrer, Jr., Annette Ferrer, Ernesto Lo and Rebecca Lo to two hundred fifty thousand pesos (P250,000.00) and awarding exemplary damages in the amount of one hundred thousand pesos (P100,000.00), in addition to the following:

1. The cost of the wedding cake in the amount of P3,175.00;

2. Attorneys fees in the amount of P10,000.00; and

ISSUES: 1. whether the Court of Appeals erred in affirming the trial courts award of moral damages. -yes

(2) whether the Court of Appeals was justified in awarding in addition to moral damages, exemplary damages. - YesHELD: To recover moral damages in an action for breach of contract, the breach must be palpably wanton, reckless, malicious, in bad faith, oppressive or abusive.[11]Under the provisions of this law,[12] in culpa contractual or breach of contract, moral damages may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of his contractual obligation and, exceptionally, when the act of breach of contract itself is constitutive of tort resulting in physical injuries.[13]In this case, [w]e find no such fraud or bad faith.

Moral damages 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.

An award of moral damages would require certain conditions to be met, to wit: (1) first, there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2)second, there must be culpable act or omission factually established; (3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4)fourth, the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. 21In the same fashion, to warrant the award of exemplary damages, [t]he wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. 25The requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages, and only after the claimants right to them has been established; (2) that they can not be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; (3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner. 26Nevertheless, the facts show that when confronted with their failure to deliver on the wedding day the wedding cake ordered and paid for, petitioners gave the lame excuse that delivery was probably delayed because of the traffic, when in truth, no cake could be delivered because the order slip got lost.

For such prevarication, petitioners must be held liable for nominal damages for insensitivity, inadvertence or inattention to their customers anxiety and need of the hour.

Nominal damages are recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff for any loss suffered. WHEREFORE, the Court GRANTS the petition. The Court REVERSES the decision of the Court of Appeals in CA-G. R. CV No. 50894, and in lieu thereof, sentences petitioners to pay respondents, as follows:

1. The cost of the wedding cake in the amount of P3, 175.00;

2. Nominal damages in the amount of P10,000.00;

3. Attorneys fees in the amount of P10,000.00; G.R. No. 190601 February 7, 2011SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO, Petitioners,vs.MAKATI SHANGRI-LA HOTEL and RESORT, INC., also doing business under the name of SHANGRI-LA HOTEL MANILA, Respondent.

CARPIO MORALES, J.:

FACTS:

For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners) booked at the Shangri-la Hotel Makati (the hotel).

Petitioners initially chose a set menu which included black cod, king prawns and angel hair pasta with wild mushroom sauce for the main course which cost P1,000.00 per person. They were, however, given an option in which salmon, instead of king prawns, would be in the menu at P950.00 per person. They in fact partook of the salmon.

Three days before the event, a final food tasting took place. Petitioners aver that the salmon served was half the size of what they were served during the initial food tasting; and when queried about it, the hotel quoted a much higher price (P1,200.00) for the size that was initially served to them. The parties eventually agreed on a final price P1,150 per person.

Petitioners claim that during the reception, respondents representatives, did not show up despite their assurance that they would; their guests complained of the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotels waiters were rude and unapologetic when confronted about the delay; and despite Alvarezs(sales manager) promise that there would be no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for the three-hour extension of the event up to 4:00 A.M. the next day.

Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc. (respondent) and received an apologetic reply from Krister Svensson, the hotels Executive Assistant Manager in charge of Food and Beverage. They nevertheless filed a complaint for breach of contract and damages before the Regional Trial Court (RTC) of Makati City.

In its Answer, respondent claimed that petitioners requested a combination of king prawns and salmon, hence, the price was increased to P1,200.00 per person, but discounted at P1,150.00; that while there was a delay in the service of the meals, the same was occasioned by the sudden increase of guests to 470 from the guaranteed expected minimum number of guests of 350 to a maximum of 380, as stated in the Banquet Event Order (BEO).

By Decision of August 17, 2006, Branch 148 of the Makati RTC rendered judgment in favor of petitioners. In finding for petitioners, the trial court relied heavily on the letter of Svensson. The trial court observed that from "the tenor of the letter . . . the defendant[-herein respondent] admits that the services the plaintiff[-herein petitioners] received were unacceptable and definitely not up to their standards."

On appeal, the Court of Appeals, by Decision of July 27, 2009,6 reversed the trial courts decision, it holding that the proximate cause of petitioners injury was an unexpected increase in their guests.

Petitioners motion for reconsideration having been denied by Resolution of November 19, 2009, the present petition for review was filed.

ISSUE:

Whether or not the doctrine of proximate cause applies to actions involving breach of contract.

RULING:

NO.

The Court finds that since petitioners complaint arose from a contract, the doctrine of proximate cause finds no application to it:

The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in actions involving breach of contract. x x x The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created.

What applies in the present case is Article 1170 of the Civil Code which reads: Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.

The pertinent provisions of the Banquet and Meeting Services Contract between the parties read:

4.5. The ENGAGER must inform the HOTEL at least forty eight (48) hours before the scheduled date and time of the Function of any change in the minimum guaranteed covers. In the absence of such notice, paragraph 4.3 shall apply in the event of under attendance. In case the actual number of attendees exceed the minimum guaranteed number by ten percent (10%), the HOTEL shall not in any way be held liable for any damage or inconveniencewhich may be caused thereby. The ENGAGER shall also undertake to advise the guests of the situation and take positive steps to remedy the same.

Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also defined as the [f]ailure, without legal excuse, to perform any promise which forms the whole or part of the contract.

The appellate court, and even the trial court, observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number of guests. The observation is reflected in the records of the case. Petitioners failure to discharge such obligation thus excused, as the above-quoted paragraph 4.5 of the parties contract provide, respondent from liability for "any damage or inconvenience" occasioned thereby.As for petitioners claim that respondent departed from its verbal agreement with petitioners, the same fails, given that the written contract which the parties entered into the day before the event, being the law between them.

In the present petition, under considerations of equity, the Court deems it just to award the amount of P50,000.00 by way of nominal damages to petitioners, for the discomfiture that they were subjected to during to the event. The Court recognizes that every person is entitled to respect of his dignity, personality, privacy and peace of mind.16 Respondents lack of prudence is an affront to this right.

NOTES:

"EXPECTATION INTEREST," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed.

"RELIANCE INTEREST," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made;

"RESTITUTION INTEREST," which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action.

GR No. 181440 April 13, 2011PEOPLE OF THE PHILIPPINES,Plaintiff-Appellee,vs.AIDA MARQUEZ,Accused-Appellant.

Marquez was charged with Kidnapping under Article 270 of the RPC.

That on or about the 6th day of September, 1998, in the City of Makati, the above-named accused, being entrusted with the custody of a minor, JUSTINE BERNADETTE C. MERANO, a three (3) month old baby girl, did then and there willfully, unlawfully and feloniously deliberately fail to restore the latter to her parent, CAROLINA CUNANAN y MERANO (sic).

According to the complainant, she met Marquez at the beauty parlor where she was working as a beautician. Merano confessed to easily trusting Marquez because aside from her observation that Marquez was close to her employers, Marquez was also nice to her and her co-employees, and was always giving them food and tip.

After a trip to a beach in Laguna, Marquez allegedly borrowed Meranos then three-month old daughter Justine to buy her some clothes, milk and food. Marquez failed to return Justine in the afternoon as promised.

RTC: Guilty beyond reasonable doubt. For the Civil aspect, accused is ordered to pay private complainant PHP50,000.00 for moral damage and PHP20,000.00 for exemplary damage.

CA: MODIFICATIONS that nominal damages of P20,000.00 is awarded in addition to theP50,000.00 moral damages, while the award for exemplary damages is accordingly deleted for lack of basis.HELD:

The award of nominal damages is allowed under Article 2221 of the NCC which states that:

Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

Justine was only three months old when this whole debacle began. She was already nine months old when Merano saw her again. She spent her first birthday at the Reception and Study Center for Children of the DSWD.Evidently, Meranos right as a parent which was violated and invaded must be vindicated and recognized, thereby justifying the award of nominal damages.

G.R. No. 158693 November 17, 2004JENNY M. AGABON and VIRGILIO C. AGABON,petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES,respondents.

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioner Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal. The Labor Arbiter rendered a decision declaring the dismissal illegal. On appeal, the NLRC reversed the decision because it found that the petitioners had abandoned their work and were not entitled to backwages and separation pay. The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment.

SC held that dismissal was valid.

Issue: WHETHER RESPONDENTS ARE LIABLE FOR DAMAGES FOR NON OBSERVANCE OF DUE PROCESS.

Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed.

In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be heldliable for non-compliance with the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be heldliable for non-compliance with the procedural requirements of due process.

Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled inReta v. National Labor Relations Commission.The indemnity to be imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter in theSerranoruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.

Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.[G.R. No. L-8194. July 11, 1956.]EMERENCIANA M. VDA. DE MEDINA, ET AL., Plaintiffs-Appellees, vs. GUILLERMO CRESENCIA, ET AL., Defendants. GUILLERMO CRESENCIA, Appellant.FACTS:

On May 31, 1953, a passenger jeepney driven by Brigido Avorque, smashed into a Meralco post on Azcarraga Street, resulting in the death of Vicente Medina, one of its passengers.

A criminal case for homicide through reckless imprudence was filed against Avorque, to which he pleaded guilty. The heirs of the deceased, however, reserved their right to file a separate action for damages. They brought suit against the driver Brigido Avorque and Appellant Guillermo Cresencia, the registered owner and operator of the jeepney in question.

Defendant Brigido Avorque did not file any answer; ywhile Defendant Cresencia answered, disclaiming liability on the ground that he had sold the jeepney in question on October 14, 1950 to one Maria A. Cudiamat; and that the jeepney had been repeatedly sold by one buyer after another, until the vehicle was purchased by Rosario Avorque, the absolute owner thereof at the time of the accident.

In view of Cresencias answer, Plaintiffs made Rosario Avorque a co-Defendant. The latter admitted having purchased the aforesaid jeepney but alleged in defense that she was never the public utility operator thereof.

The case then proceeded to trial, during which, after the Plaintiffs had presented their evidence, Defendants Guillermo Cresencia and Rosario Avorque made manifestations admitting that the former was still the registered operator of the jeepney in question in the records of the Motor Vehicles Office and the Public Service Commission, while the latter was the owner thereof at the time of the accident.

The lower court held that as far as the public is concerned, Cresencia, in the eyes of the law, continued to be the legal owner of the jeepney in question, rendering judgment against him, jointly and severally with the driver Brigido Avorque, for P6,000 compensatory damages, P30,000 moral damages, P10,000 exemplary damages, P10,000 nominal damages, P5,000 attorneys fees, and costs, while Defendant Rosario Avorque was absolved from liability.

ISSUES:

(1) Whether or not Cresencia should be held jointly and severally liable with the driver of the jeepney for damages, given that he was still the registered owner of the jeepney? YES

(2) Whether or not Defendant Rosario Avorque should subsidiarily answer for the damages sustained by the Plaintiffs, she being the employer of the driver? NO

(3) Whether or not nominal damages should be awarded in the case at bar? NO

RULING:

(1) We have already held in the case of Montoya vs. Ignacio that the law (section 20 [g], C. A. No. 146 as amended) requires the approval of the Public Service Commission in order that a franchise, or any privilege pertaining thereto, may be sold or leased without infringing the certificate issued to the grantee. If the property covered by the franchise is transferred or leased without this requisite approval, the transfer is not binding against the public or the Service Commission. In contemplation of the law, the grantee of record continues to be responsible under the franchise in relation to the Commission and to the public.

As the sale of the jeepney here in question was admittedly without the approval of the Public Service Commission, Appellant herein, Guillermo Cresencia, who is the registered owner and operator thereof, continued to be liable to the Commission and the public for the consequences incident to its operation.

(2) Plaintiffs action for damages is independent of the criminal case filed against Brigido Avorque, and based, not on the employers subsidiary liability under the Revised Penal Code, but on a breach of the carriers contractual obligation to carry his passengers safely to their destination (culpa contractual). Thus, Rosario Avorque is not liable for damages in the case at bar.

It is also for this reason that there is no need of first proving the insolvency of the driver Brigido Avorque before damages can be recovered from the carrier, for in culpa contractual, the liability of the carrier is not merely subsidiary or secondary, but direct and immediate (Articles 1755, 1756, and 1759, New Civil Code).

(3) It is patent upon the record that the award of P10,000 by way of nominal damages is untenable as a matter of law, since nominal damages cannot co-exist with compensatory damages. The purpose of nominal damages is to vindicate or recognize a right that has been violated, in order to preclude further contest thereon and not for the purpose of indemnifying the Plaintiff for any loss suffered by him (Articles 2221, 2223, new Civil Code.)

Since the court below has already awarded compensatory and exemplary damages that are in themselves a judicial recognition that Plaintiffs right was violated, the award of nominal damages is unnecessary and improper. Anyway, ten thousand pesos cannot, in common sense, be deemed nominal. With the modification that the award of P10,000 nominal damages be eliminated, the decision appealed from is affirmed.

G.R. No. 148246 February 16, 2007REPUBLIC OF THE PHILIPPINES,Petitioner,vs. JUAN C. TUVERA, VICTOR P. TUVERA and TWIN PEAKS DEVELOPMENT CORPORATION,Respondents.

FACTS: Twin Peaks was incorporated with Victor Tuvera as on incorporator,who owned 48% of the shares. Victor was the son of respondent Juan Tuvera, who was then Presidential Executive Assistant of President Marcos. President Marcos granted the award of a Timber License Agreement (TLA), in favor of Twin Peaks to operate on 26,000 hectares of forest land and to export 10,000 cubic meters of mahogany of the narra species, without public bidding and despite statutory prohibition. As a result, Twin Peaks was able to engage in logging operations.

In 1988, the PCGG issued a Writ of Sequestration on all assets, properties, records, documents, and shares of stock of Twin Peaks on the ground that all the assets of the corporation are ill-gotten wealth for having been acquired directly or indirectly through fraudulent and illegal means.4This was followed two days later by Mission Order. In 2001,the Sandiganbayan sustained the demurrer to evidence filed by respondent.

ISSUE: WON the respondents are liable for damages?

Ruling: Yes, temperate and exemplary only.

Actual damages must be proven, not presumed.81The Republic failed to prove damages. It is not enough for the Republic to have established, as it did, the legal travesty that led to the wrongful obtention by Twin Peaks of the TLA. It should have established the degree of injury sustained by the State by reason of such wrongful act.

However, there is sufficient basis for an award of temperate damages, also sought by the Republic notwithstanding the fact that a claim for both actual and temperate damages is internally inconsistent. Temperate or moderate damages avail when "the court finds that some pecuniary loss has been suffered but its amount can not from the nature of the case, be proved with certainty."84The textual language might betray an intent that temperate damages do not avail when the case, by its nature, is susceptible to proof of pecuniary loss; and certainly the Republic could have proved pecuniary loss herein.85Still, jurisprudence applying Article 2224 is clear that temperate damages may be awarded even in instances where pecuniary loss could theoretically have been proved with certainty.1awphi1.netThe allowance of temperate damages also paves the way for the award of exemplary damages. Under Article 2234 of the Civil Code, a showing that the plaintiff is entitled to temperate damages allows for the award of exemplary damages. Even as exemplary damages cannot be recovered as a matter of right, the courts are empowered to decide whether or not they should be adjudicated. Ill-gotten wealth cases are hornbook demonstrations where damages by way of example or correction for the public good should be awarded. Fewer causes of action deserve the stigma left by exemplary damages, which "serve as a deterrent against or as a negative incentive to curb socially deleterious actions."92The obtention of the timber license agreement by Twin Peaks through fraudulent and illegal means was highlighted by Juan Tuveras abuse of his position as Presidential Executive Assistant. The consequent exploitation of 26 hectares of forest land benefiting all respondents is a grave case of unjust enrichment at the expense of the Filipino people and of the environment which should never be countenanced. Considering the expanse of forest land exploited by respondents, the volume of timber that was necessarily cut by virtue of their abuse and the estimated wealth acquired by respondents through grave abuse of trust and public office, it is only reasonable that petitioner be granted the amount ofP1,000,000.00 as exemplary damages.

The imposition of exemplary damages is a means by which the State, through its judicial arm, can send the clear and unequivocal signal best expressed in the pithy but immutable phrase, "never again." It is severely unfortunate that the Republic did not exert its best efforts in the full recovery of the actual damages caused by the illegal grant of the Twin Peaks TLA. To the best of our ability, through the appropriate vehicle of exemplary damages, the Court will try to fill in that deficiency. For if there is a lesson that should be learned from the national trauma of the rule of Marcos, it is that kleptocracy cannot pay. As those dark years fade into the backburner of the collective memory, and a new generation emerges without proximate knowledge of how bad it was then, it is useful that the Court serves a reminder here and now.

G.R. No. L-56505 May 9, 1988

MAXIMO PLENO,petitioner,vs.THE HONORABLE COURT OF APPEALS, PHILIPPINE PAPER PRODUCTS, INC., and FLORANTE DE LUNArespondents.

Facts:Philippine Paper Products, Inc., is the owner of a delivery truck. One of its drivers, Florante de Luna, was in charge of and driving said delivery truck (Ford Stake) on the right lane of the South Super Highway in Taguig, Rizal, in a careless, reckless and imprudent manner, by driving the vehicle at a speed greater than what is reasonable and proper at the time without taking necessary precaution to avoid accident to persons and damage to property, that as a consequence of the said driver's reckless and imprudent driving, said vehicle of the defendant Philippine Paper Products, Inc., hit, bumped and sideswiped plaintiffs Volkswagen Delivery Van, driven by said plaintiff causing the Volkswagen Delivery Van to swerve to the right that it rammed into the rear part of a truck parked at the shoulder of the road; that as a result of the vehicular accident, plaintiff suffered various serious injuries, was hospitalized, and because he suffered injuries affecting his brain, he acted beyond normalcy at times.

Plaintiff asked for actual and compensatory damages of approximately P100,000.00; moral damages of P500,000.00 for suffering from bodily pain, mental anguish, serious anxiety for Florante de Luna's wanton and brazen disregard of traffic laws and regulations aggravated by his running away from the scene of the accident, without rendering aid to the victim, plaintiff should be adjudged as exemplary or corrective damages P 300,000.00 as an example to all, owners, operators and drivers of motor vehicles and in the interest of public safety and welfare, as well as the sum of P100,000.00 for the payment of attorney's fees. Plaintiff prays that defendants be jointly and severally ordered to pay him P100,000.00 for actual and compensatory damages; for moral damages P500,000.00; P300,000.00 as exemplary damages; for attorney's fees P100,000.00, interest at the rate of 6% on the actual and moral damage ages and loss of earnings computed from the filing of the complaint until the P100,000.00 and the P500,000.00 are fully paid and the costs of suit.

Defendant Philippine Paper Products., Inc., filed its answer with counterclaim. It averred that it exercised the requisite diligence in the employment and supervision of its employees and laborers as well as in keeping in constant repair and in good condition all its vehicles; and that plaintiff is the one grossly negligent, careless and imprudent in driving and operating his vehicle who has neither the license nor the permit to drive the said vehicle.

RTC: defendants jointly and severally to pay plaintiff (1) P 48,244.08 actual damages: (2) temperate or moderate damage of P200,000.00; (3) moral damages of P200,000.00; (4) exemplary damages of P50,000.00; (5) attorney's fees of P30,000.00; and (6) costs of suit.

CA: affirmed the factual findings of the lower court

The court, however, modified the award on damages such that temperate damages were reduced from P200,000.00 to P100,000.00; moral damages were reduced from P200,000.00 to Pl00,000.00; and attorney's fees were reduced from P30,000.00 to P15,000.00. It further ruled that the employer's ability is subsidiary.

ISSUES: (1) whether or not the employer's liability in quasi-delict is subsidiary. NO

(2) whether or not the appellant court was correct in reducing the amount of damages awarded to the petitioner.

(Appellate court reduced the amount of temperate and moral damages as well as the amount of attorney's fees on the ground that the awards were "too high" .The award of temperate damages was reduced by the appellate court on the ground that the amount of P200,000.00 is rather "too high" especially considering the fact that the driver De Luna is a mere driver and defendant-appellant Corporation is only subsidiarily liable thereof. The award was reduced to P100,000.00)

Ruling:

1. We sustain the view of the petitioner that the liability of an employer in quasi-delict isprimaryandsolidaryand not subsidiary.

2. As stated earlier, the employer's liability in quasi-delict is primary and solidary. The award of temperate, moral, and exemplary damages as well as attorney's fees lies upon the discretion of the court based on the facts and circumstances of each case. The court's discretion is, of course, subject to the condition that the award for damages is not excessive under the attendant facts and circumstance of the case.

Temperate damages are included within the context of compensatory damages (Radio Communications of the Philippines, Inc. (RCPI) v. Court of Appeals, supra.). In arriving at a reasonable level of temperate damages to be awarded, trial courts are guided by our ruling that:

... There are cases where from the nature of the case, defenite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to one's commercial credit or to the goodwill of a business firm is often hard to show certainty in terms of money. Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant's wrongful act. (Araneta v. Bank of America, 40 SCRA 144,145)

In the case of moral damages, the yardstick shaould be that the "amount awarded should not be 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.Moreover, the actual losses sustained by the aggrieved parties and the gravity of the injuries must be considered in arriving at reasonable levels

We rule that the lower court's awards of damages are more consonant with the factual circumstances of the instant case. The trial court's findings of facts are clear and well-developed. Each item of damages is adequately supported by evidence on record. On the other hand, there are no substantial reasons and no references to any misimpressions of facts in the appellate decision. The Court of Appeals has shown no sufficient reasons for altering factual findings which appear correct. We, therefore, affirm the lower court's awards of damages and hold that the appellate court's reduction of the amounts of temperate and moral damages is not justified. However, we modify the award of attorney's fees to P20,000.00 which we deem to be just and equitable under the circumstances of the case.

LETICIA TAN, MYRNA MEDINA, MARILOU SPOONER, ROSALINDA TAN, and MARY JANE TAN, MARY LYN TAN, CELEDONIO TAN, JR., MARY JOY TAN, and MARK ALLAN TAN, represented herein by their mother, LETICIA TAN,Petitioners,vs.OMC CARRIERS, INC. and BONIFACIO ARAMBALA,Respondents.

January 12, 2011FACTS:

The petitioners filed a complaint for damages with the RTC against OMC and Bonifacio Arambala.4The complaint states that on November 24, 1995, at around 6:15 a.m., Arambala was driving a truck5with a trailer6owned by OMC, along Meralco Road, Sucat, Muntinlupa City. When Arambala noticed that the truck had suddenly lost its brakes, he told his companion to jump out. Soon thereafter, he also jumped out and abandoned the truck. Driverless, the truck rammed into the house and tailoring shop owned by petitioner Leticia Tan and her husband Celedonio Tan, instantly killing Celedonio who was standing at the doorway of the house at the time.

ISSUE:

1. WON actual damages must be awarded. NO

2. WON temperate damages must be awarded. YES

3. WON actual damages for loss of earning capacity must be awarded. NO

4. WON the award of exemplary damages must be reduced from 500k to 200k. YES

5. WON legal interest must be awarded based on the damages awarded. YES

RULING:

1. To justify an award of actual damages, there must be competent proof of the actual amount of loss, credence can be given only to claims which are duly supported by receipts.2The petitioners do not deny that they did not submit any receipt to support their claim for actual damages to prove the monetary value of the damage caused to the house and tailoring shop when the truck rammed into them. Thus, no actual damages for the destruction to petitioner Leticia Tans house and tailoring shop can be awarded.

2. Article 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty.The photographs the petitioners presented as evidence show the extent of the damage done to the house, the tailoring shop and the petitioners appliances and equipment.25Irrefutably, this damage was directly attributable to Arambalas gross negligence in handling OMCs truck.

3. Damages for loss of earning capacity are awarded pursuant to Article 2206 of the Civil Code, which states that:

Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death[.]

As a rule, documentary evidence should be presented to substantiate the claim for loss of earning capacity.27By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when: (1) the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case, judicial notice may be taken of the fact that in the deceased's line of work, no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.28According to the petitioners, prior to his death, Celedonio was a self-employed tailor who earned approximatelyP156,000.00 a year, orP13,000.00 a month. At the time of his death in 1995, the prevailing daily minimum wage wasP145.00,29orP3,770.00 per month, provided the wage earner had only one rest day per week. Even if we take judicial notice of the fact that a small tailoring shop normally does not issue receipts to its customers, and would probably not have any documentary evidence of the income it earns, Celedonios alleged monthly income ofP13,000.00 greatly exceeded the prevailing monthly minimum wage; thus, the exception set forth above does not apply.

4. Exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages.35In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.36The grant, however, should be tempered, as it is not intended to enrich one party or to impoverish another.5. Legal interest at the rate of 6% per annum on the amounts must be awarded which starts to run from May 14, 2003, when the trial court rendered judgment. From the time this judgment becomes final and executory, the interest rate shall be 12% per annum on the judgment amount and the interest earned up to that date, until the judgment is wholly satisfied.It based its ruling in Eastern ShippingLines, Inc. v. Court of Appeals,39which held that:

I. When an obligation, regardless of its source,i.e., law, contracts, quasi-contracts, delicts or quasi-delictsis breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.lavvphilII. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money,i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12%per annumto be computed from default,i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at thediscretion of the courtat the rate of 6%per annum.No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12%per annumfrom such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.GIOVANI SERRANO Y CERVANTES, Petitioner vs. PEOPLE OF THE PHILIPPINES, Respondent

GR No. 175023 July 5, 2010

Facts:

The case stemmed from a brawl involving 15 to 18 members of two rival groups that occurred at UP Diliman. The incident resulted in the stabbing of Anthony Galang on the stomach.

Petitioner was charged with frustrated homicide.After considering the evidence, the trial court found petitioner guilty beyond reasonable doubt of frustrated homicide and sentenced him to undergo imprisonment of 4 years, 2 months, 1 day of prision correccional as minimum to 10 years of prision mayor as maximum. He was also ordered to reimburse to complainant the medical expenses incurred in his hospitalization and treatment of his injuries in the amount of Php15,000 and loss of income 1 month in the amount of Php 4,000.

Upon appeal, the CA modified the RTCs decision and found appellant guilty beyond reasonable doubt of the crime of ATTEMPTED HOMICIDE and sentenced to suffer indeterminate penalty of imprisonment of 6 months of arresto mayor as minimum to 4 years and 2 months of prision correccional as maximum; reduced actual damages to Php 3,858.50 and deleted the award for loss of income.

Issue:

Whether or not CA committed an error in awarding actual damages in the amount of Php 3,858.50. YES

Held:

In People v. Andres, the Supreme Court held that if the actual damages, proven by receipts during the trial, amount to less than P25,000.00, the victim shall be entitled to temperate damages in the amount of P25,000.00, in lieu of actual damages. The award of temperate damages is based on Article 2224 of the New Civil Code which states that temperate or moderate damages may be recovered when the court finds that some pecuniary loss was suffered but its amount cannot be proven with certainty. In this case, the victim is entitled to the award of P25,000.00 as temperate damages considering that the amount of actual damages is only P3,858.50. The amount of actual damages shall be deleted.

Lastly, the victim is also entitled to moral damages in the amount of P10,000.00 in accordance with settled jurisprudence. Under Article 2219, paragraph 1 of the New Civil Code, the victim is entitled to moral damages in a criminal offense resulting in physical injuries. Petition is denied. The CAs Decision finding petitioner Giovani Serrano y Cervantes guilty beyond reasonable doubt of Attempted Homicide, is AFFIRMED with MODIFICATION. The petitioner is ORDERED to PAY the victim, Anthony Galang, P25,000.00 as temperate damages; and P10,000.00 as moral damages.PP VS VILLANUEVA AUG 11, 2003[G.R. No. 139177. August 11, 2003]

PEOPLE OF THE PHILIPPINES, appellee, vs. ALVIN VILLANUEVA,appellant.

Accused, with intent to kill, evident premeditation and treachery and being then armed with a knife, did then and there wilfully, unlawfully and feloniously attack, assault and stab with said knife one OTO-LEO BINAY-AN BRABANTE from behind, inflicting three (3) stab wounds upon the latter, one of which penetrated his heart, which directly resulted to (sic) his death, to the damage and prejudice of his heirs.

While the prosecution was adducing its evidence, appellant escaped from detention on October 9, 1997. The lower court thus proceeded with the trial of the case in absentia in accordance with Section 14(2), Article III of the 1987 Constitution.

RTC:convicting appellant of the offense charged

He is hereby sentenced to DEATH, and to pay P50,000.00 for the death of the victim, indemnify the heirs of the victim in the amount of P600,000.00 actual damages, P1,000,000.00 in loss of earning and to pay the cost of the proceedings.On automatic review.ISSUE: w/n the trial court did not err in awarding the aforesaid awards?

HELD:The award of P50,000 as civil indemnity should be upheld without need of proof, the same being in accordance with prevailing jurisprudence and the policy of the Court.However, we do not find the grant of P600,000 for actual damages to be properly substantiated by evidence. The trial court based its award mainly on the testimony of the victims mother and on the submitted list of expenses allegedly incurred in connection with the death, wake and burial of the victim. The award of actual damages may not be made on the basis alone of a handwritten enumeration of the supposed expenses incurred.The recent case of People vs. Abrazaldo allows the grant of temperate damages in the amount of P25,000 if there is no evidence of burial and funeral expenses. This is in lieu of actual damages as it would be unfair for the victims heirs to get nothing, despite the death of their kin, for the reason alone that they cannot produce any receipts. We also ruled there that temperate and actual damages are mutually exclusive in that both may not be awarded at the same time, hence, no temperate damages may be granted if actual damages have already been granted.In the present case, only the amount of P13,100 was supported by receipts. Ordinarily, this is all Otoleo Brabantes heirs should be entitled to by way of actual damages. However, we find this anomalous and unfair because the victims heirs who tried but succeeded in proving actual damages to the extent of P13,100 only, would be in a worse situation than, say, those who might have presented no receipts at all but would now be entitled to P25,000 temperate damages.We therefore rule that when actual damages proven by receipts during the trial amount to less than P25,000, as in this case, the award of temperate damages for P25,000 is justified in lieu of actual damages of a lesser amount. Conversely, if the amount of actual damages proven exceeds P25,000, then temperate damages may no longer be awarded; actual damages based on the receipts presented during trial should instead be granted.Likewise, we cannot sustain the grant of P1,000,000 for loss of earnings. No document whatsoever was submitted to support such an award. The indemnification for loss of earning capacity partakes of the nature of actual damages, which must be duly proven.[35] In this case, Rita Binay-an, mother of the victim, merely declared that her son was a second lieutenant in the Philippine Marines but gave no statement of her sons monthly salary. Thus, the trial court simply presumed the amount of Otoleos earnings. Since the prosecution did not present any evidence of the current income of the victim, the indemnity for lost earnings was speculative and must be rejected.Moral damages cannot also be awarded because no evidence, testimonial or otherwise, was presented by the prosecution to support it. As to exemplary damages, the law is clear that they can be recovered in criminal cases only when the crime is committed with one or more aggravating circumstances,[36] none of which was present in this case.WHEREFORE, the decision of the court a quo is hereby AFFIRMED withMODIFICATION. Appellant Alvin Villanueva is found guilty of murder and is accordingly sentenced to reclusion perpetua. He is also ordered to pay the heirs of the victim the amounts of P50,000 as civil indemnity and P25,000 as temperate damages. The award for the loss of earning capacity of the deceased is deleted.G.R. No. 182460 March 9, 2010PEOPLE OF THE PHILIPPINES,Plaintiff-Appellee,vs.JESSIE VILLEGAS MURCIA,Accused-Appellant.

Facts:

Appellant was accused of the crime of arson

The charge is qualified by the resulting death of Felicidad M. Quilates.

Appellant was also charged in another Information for frustrated homicide

Eulogio estimated the value of his house atP250,000.00,12while another sister of Felicidad, Pacita Quilates, presented a receipt covering the burial expenses for Felicidad, amounting toP10,000.00.13An autopsy was performed on Felicidad, and it was disclosed that she died from "cardio-respiratory arrest secondary to third degree burns involving 90% of body surface to include underlying tissues and organs."14Appellant was the lone witness for the defense.Appellant denied setting the house on fire.16RTC: appellant guilty beyond reasonable doubt of arson and frustrated homicide, thus:

WHEREFORE, xxx crime of arson as charged xxx and he is hereby sentenced to suffer the extreme penalty of death; to indemnify the heirs of the victim Felicidad Quilates, the amount of Php50,000.00 as moral damages; Php50,000.00 as death indemnity; Php10,000.00 as actual damages and another Php10,000.00 as temperate damages.

Further, the accused is ordered to indemnify Eulogio Quilates the amount of P250,000.00, representing the value of the burned house.

In Crim. Case No. 2980-Bg., the Court likewise FINDS and DECLARES the accused JESSIE VILLEGAS MURCIA guilty beyond reasonable doubt of the crime of frustrated homicide as charged xxx; to pay the victim Alicia Q. Manlupig the amount of Php10,000.00 as temperate damages; and to pay the costs.1avvphi1Court of Appeals affirmed the trial court's findings

Appellant admitted to the crime of frustrated homicide, hence the review is limited to the crime of arson.

Issue: WON the award for damages was proper

Ruling:

This Court, however, takes exception to the trial court's award of damages.

With respect to the heirs of Felicidad, We modify the amount of temperate damages fromP10,000.00 toP25,000.00, and accordingly delete the amount of actual damages, in line with the ruling inPeople v. Villanueva.33In said case, the Court held that when actual damages proven by receipts during the trial amount to less thanP25,000.00, the award of temperate damages forP25,000.00 is justified in lieu of actual damages of a lesser amount.34Anent the actual damages awarded to Eulogio amounting toP250,000.00, as indemnification for the burned house, We note that said amount representing the value of the burned house was merely given by Eulogio as an estimate. It was not substantiated by any document or receipt. For one to be entitled to actual damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable by the injured party.35Instead, We award temperate damages in accordance with Art. 2224 of the Civil Code, providing that temperate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proven with certainty.36It is thus reasonable to expect that the value of the house burned down amounted to at leastP200,000.00.

WHEREFORE, the appealed decision finding appellant JESSIE VILLEGAS MURCIA guilty beyond reasonable doubt of the crime of arson and sentencing him toreclusion perpetuais AFFIRMED with MODIFICATIONS:

1. Appellant is ordered to indemnify the heirs of Felicidad Quilates the amount ofP50,000.00 as moral damages;P50,000.00 as death indemnity; andP25,000.00 as temperate damages.

2. The award ofP10,000.00 as actual damages in favor of the heirs of Felicidad Quilates is deleted.

3. Appellant is ordered to pay Eulogio Quilates the amount ofP200,000.00 as temperate damages.

The award ofP250,000.00 as actual damages in favor of Eulogio Quilates is deleted.

G.R. No. 171736 July 5, 2010PENTACAPITAL INVESTMENT CORPORATION, Petitioner, vs.MAKILITO B. MAHINAY, Respondent.x - - - - - - - - - - - - - - - - - - - - - - -xG.R. No. 181482PENTACAPITAL INVESTMENT CORPORATION, Petitioner, vs.MAKILITO B. MAHINAY, Respondent.NACHURA, J.:FACTS: Petitioner filed a complaint for a sum of money against respondent Makilito Mahinay based on two separate loans obtained by the latter, a total amount of P1,936,800.00. These loans were evidenced by two promissory notes dated February 23, 1996. Despite repeated demands, respondent failed to pay the loans, hence, the complaint.

In his Answer with Compulsory Counterclaim, respondent claimed that petitioner had no cause of action because the promissory notes on which its complaint was based were subject to a condition that did not occur. While admitting that he indeed signed the promissory notes, he insisted that he never took out a loan and that the notes were not intended to be evidences of indebtedness. By way of counterclaim, respondent prayed for the payment of moral and exemplary damages plus attorneys fees.

Respondent explained that he was the counsel of Ciudad Real Development Inc. (CRDI). In 1994, Pentacapital Realty Corporation offered to buy parcels of land known as the Molino Properties, owned by CRDI. As the Molino Properties were the subject of a pending case, Pentacapital Realty paid only the down payment amounting to P12,000,000.00. CRDI allegedly instructed Pentacapital Realty to pay the formers creditors, including respondent who thus received a check worth P1,715,156.90. It was further agreed that the balance would be payable upon the submission of an Entry of Judgment showing that the case involving the Molino Properties had been decided in favor of CRDI.

Respondent, Pentacapital Realty and CRDI allegedly agreed that respondent had a charging lien equivalent to 20% of the total consideration of the sale in the amount of P10,277,040.00. Pending the submission of the Entry of Judgment and as a sign of good faith, respondent purportedly returned the P1,715,156.90 check to Pentacapital Realty. However, the Molino Properties continued to be haunted by the seemingly interminable court actions initiated by different parties which thus prevented respondent from collecting his commission.

Admittedly, respondent earlier instituted an action for Specific Performance against Pentacapital Realty before the RTC of Cebu City, Branch 57, praying for the payment of his commission on the sale of the Molino Properties. In an Amended Complaint, respondent referred to the action he instituted as one of Preliminary Mandatory Injunction instead of Specific Performance. Acting on Pentacapital Realtys Motion to Dismiss, the RTC dismissed the case for lack of cause of action. The dismissal became final and executory.

With the dismissal of the aforesaid case, respondent filed a Motion to Permit Supplemental Compulsory Counterclaim. In addition to the damages that respondent prayed for in his compulsory counterclaim, he sought the payment of his commission amounting to P10,316,640.00, plus interest at the rate of 16% per annum, as well as attorneys fees equivalent to 12% of his principal claim. Respondent claimed that Pentacapital Realty is a 100% subsidiary of petitioner. Thus, although petitioner did not directly participate in the transaction between Pentacapital Realty, CRDI and respondent, the latters claim against petitioner was based on the doctrine of piercing the veil of corporate fiction. Simply stated, respondent alleged that petitioner and Pentacapital Realty are one and the same entity belonging to the Pentacapital Group of Companies.

Over the opposition of petitioner, the RTC, in an Order dated August 22, 2002, allowed the filing of the supplemental counterclaim. Aggrieved, petitioner sought recourse in the CA through a special civil action for certiorari, seeking to reverse and set aside the RTC Order. On December 20, 2005, the CA rendered the assailed Decision dismissing the petition. The appellate court sustained the allowance of the supplemental compulsory counterclaim based on the allegations in respondents pleading.

After trial on the merits, the RTC rendered a decision in favor of respondent. This court, instead, finds that defendant (respondent) was able to prove by a clear preponderance of evidence his cause of action against plaintiff as to defendants compulsory and supplemental counterclaims.

On appeal, the CA, in CA-G.R. CV No. 86939, affirmed in toto the above decision. The CA found no basis for petitioner to collect the amount demanded, there being no perfected contract of loan for lack of consideration. As to respondents supplemental compulsory counterclaim, quoting the findings of the RTC, the appellate court held that respondent was able to prove by preponderance of evidence that it was the intent of Pentacapital Group of Companies and CRDI to give him P10,316,640.00 and P1,715,156.90.

Unsatisfied, petitioner moved for reconsideration of the aforesaid Decision, but it was denied in a Resolution31dated January 21, 2008. Hence, the present petition in G.R. No. 181482.

ISSUE: 1) whether the admission of respondents supplemental compulsory counterclaim is proper

RULING: NO. The pertinent provision of the Rules of Court is Section 6 of Rule 10, which reads:Sec. 6. Supplemental pleadings. Upon motion of a party, the court may, upon reasonable notice and upon such terms as are just, permit him to serve a supplemental pleading setting forth transactions, occurrences or events which have happened since the date of the pleading sought to be supplemented. The adverse party may plead thereto within ten (10) days from notice of the order admitting the supplemental pleading.

As a general rule, leave will be granted to a party who desires to file a supplemental pleading that alleges any material fact which happened or came within the partys knowledge after the original pleading was filed, such being the office of a supplemental pleading.

In his Motion to Permit Supplemental Compulsory Counterclaim, respondent admitted that, in his Answer with Compulsory Counterclaim, he claimed that, as one of the corporations composing the Pentacapital Group of Companies, petitioner is liable to him for P10,316,640.00, representing 20% attorneys fees and share in the proceeds of the sale transaction between Pentacapital Realty and CRDI. In the same pleading, he further admitted that he did not include this amount in his compulsory counterclaim because he had earlier commenced another action for the collection of the same amount against Pentacapital Realty before the RTC of Cebu. With the dismissal of the RTC-Cebu case, there was no more legal impediment for respondent to file the supplemental counterclaim.

Moreover, in his Answer with Compulsory Counterclaim, respondent already alleged that he demanded from Pentacapital Group of Companies to which petitioner supposedly belongs, the payment of his 20% commission. This, in fact, was what prompted respondent to file a complaint before the RTC-Cebu for preliminary mandatory injunction for the release of the said amount.

Given these premises, it is obvious that the alleged obligation of petitioner already existed and was known to respondent at the time of the filing of his Answer with Counterclaim. He is, therefore, proscribed from incorporating the same and making such demand via a supplemental pleading. The supplemental pleading must be based on matters arising subsequent to the filing of the original pleading related to the claim or defense presented therein, and founded on the same cause of action.

ISSUE: whether or not respondent is bound by the promissory notes.

RULING: YES.

Under Article 1354 of the Civil Code, it is presumed that consideration exists and is lawful unless the debtor proves the contrary. Moreover, under Section 3, Rule 131 of the Rules of Court, the following are disputable presumptions: (1) private transactions have been fair and regular; (2) the ordinary course of business has been followed; and (3) there was sufficient consideration for a contract. A presumption may operate against an adversary who has not introduced proof to rebut it. The effect of a legal presumption upon a burden of proof is to create the necessity of presenting evidence to meet the legal presumption or the prima facie case created thereby, and which, if no proof to the contrary is presented and offered, will prevail.

In the present case, as proof of his claim of lack of consideration, respondent denied under oath that he owed petitioner a single centavo. He added that he did not apply for a loan and that when he signed the promissory notes, they were all blank forms and all the blank spaces were to be filled up only if the sale transaction over the subject properties would not push through because of a possible adverse decision in the civil cases involving them (the properties). He thus posits that since the sale pushed through, the promissory notes did not become effective.

Contrary to the conclusions of the RTC and the CA, we find such proof insufficient to overcome the presumption of consideration. The presumption that a contract has sufficient consideration cannot be overthrown by the bare, uncorroborated and self-serving assertion of respondent that it has no consideration. The alleged lack of consideration must be shown by preponderance of evidence

As it now appears, the promissory notes clearly stated that respondent promised to pay petitioner P1,520,000.00 and P416,800.00, plus interests and penalty charges, a year after their execution. Nowhere in the notes was it stated that they were subject to a condition. As correctly observed by petitioner, respondent is not only a lawyer but a law professor as well.

Respondents liability is not negated by the fact that he has uncollected commissions from the sale of the Molino properties. As the records of the case show, at the time of the execution of the promissory notes, the Molino properties were subject of various court actions commenced by different parties. Thus, the sale of the properties and, consequently, the payment of respondents commissions were put on hold. The non-payment of his commissions could very well be the reason why he obtained a loan from petitioner.

Aside from the payment of the principal obligation of P1,936,800.00, the parties agreed that respondent pay interest at the rate of 25% from February 17, 1997 until fully paid. Such rate, however, is excessive and thus, void. Since the stipulation on the interest rate is void, it is as if there was no express contract thereon. To be sure, courts may reduce the interest rate as reason and equity demand. In this case, 12% interest is reasonable.

The promissory notes likewise required the payment of a penalty charge of 3% per month or 36% per annum. However, a penalty charge of 3% per month is unconscionable; hence, we reduce it to 1% per month or 12% per annum.

Lastly, respondent promised to pay 25% of his outstanding obligations as attorneys fees in case of non-payment thereof. Attorneys fees here are in the nature of liquidated damages. As long as said stipulation does not contravene law, morals, or public order, it is strictly binding upon respondent. Nonetheless, courts are empowered to reduce such rate if the same is iniquitous or unconscionable pursuant to the above-quoted provision. This sentiment is echoed in Article 2227 of the Civil Code, to wit:

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.

Hence, we reduce the stipulated attorneys fees from 25% to 10%.

GR No. 148246 February 16, 2007REPUBLIC OF THE PHILIPPINES,Petitioner,vs.JUAN C. TUVERA, VICTOR P. TUVERA and TWIN PEAKS DEVELOPMENT CORPORATION,Respondents.

RECOVERY OF ILL-GOTTEN WEALTH.

Twin Peaks Development Corporation was organized on 5 March 1984 as a corporation with a principal purpose of engaging in the real estate business. There were five incorporating stockholders, including respondent Victor Tuvera (Victor) who owned 48% of the shares. Victor was the son of respondent Juan Tuvera, who was the Presidential Executive Assistant of Marcos.

Marcos granted the award of a Timber License Agreement (TLA) in favor of Twin Peaks to operate on 26,000 hectares of forest land with an annual allowable cut of 60,000 cubic meters of timber and to export 10,000 cubic meters of mahogany of the narra species.As a result, Twin Peaks was able to engage in logging operations.

13 June 1988: The PCGG issued a Writ of Sequestration on all assets, properties, records, documents, and shares of stock of Twin Peaks on the ground that all the assets of the corporation are ill-gotten wealth for having been acquired directly or indirectly through fraudulent and illegal means.

ISSUE: WON Juan C. Tuvera who was a Presidential Executive Assistant, by himself and in concert with his co-defendants Ferdinand E. Marcos and Victor Tuvera, took advantage of his relation and connection with the late Marcos, secure (sic) a timber concession and, engage (sic) in a scheme to unjustly enrich himself at the expense of the Republic and the Filipino People.

HELD:

Juan Tuvera "persuaded, induced or influenced" the Director of Forestry to accommodate a timber license agreement in favor of Twin Peaks, despite the failure to undergo public bidding, or to comply with the requisites for the grant of such agreement by negotiation, and in favor of a corporation that did not appear legally capacitated to be granted such agreement. The fact that the principal stockholder of Twin Peaks was his own son establishes his indirect pecuniary interest in the transaction he appears to have intervened in.

The imposition of exemplary damages is a means by which the State, through its judicial arm, can send the clear and unequivocal signal best expressed in the pithy but immutable phrase, "never again." It is severely unfortunate that the Republic did not exert its best efforts in the full recovery of the actual damages caused by the illegal grant of the Twin Peaks TLA. To the best of our ability, through the appropriate vehicle of exemplary damages, the Court will try to fill in that deficiency. For if there is a lesson that should be learned from the national trauma of the rule of Marcos, it is that kleptocracy cannot pay. As those dark years fade into the backburner of the collective memory, and a new generation emerges without proximate knowledge of how bad it was then, it is useful that the Court serves a reminder here and now.

P1 million as EXEMPLARY damages.

G.R. No. 188106 November 25, 2009PEOPLE OF THE PHILIPPINES,Appellee,vs.ANTONIO DALISAY y DESTRESA,Appellant.

Facts:The accused, Antonio Dalisay, is the live-in partner of the victim's mother. The 16-year old victim was raped by the accused, but was also molested even prior to the crime committed. An Information was filed against the accused and in it the victim was identified as the accused's stepdaughter. The RTC convicted Dalisay of qualified rape. Upon appeal, the CA modified the RTC's ruling, convicting the accused of simple rape instead.

Issue:Whether or not Dalisay was properly convicted of simple rape.

Whether or not the victim is entitled to exemplary damages.

Held.1. Yes, Dalisay was properly convicted of simple rape. While it has been proven that appellant was the common-law spouse of the parent of the victim and the child was a minor at the time of the incident, the Court cannot convict appellant of qualified rape because the special qualifying circumstances of minority and relationship were not sufficiently alleged in the information. To recall, the information here erroneously alleged that appellant was the stepfather of the victim. Proven during the trial, however, was that appellant was not married to the victims mother, but was only the common-law spouse of the latter. Following settled jurisprudence, appellant is liable only of simple rape punishable by reclusion perpetua.

2. Yes.

As to the amount of damages, the Court finds as correct the award ofP50,000.00 as civil indemnity andP50,000.00 as moral damages in line with prevailing jurisprudence.

As to the award of exemplary damages, the Court deems it opportune to clarify the basis for and the amount of the same. Article 2229 of the Civil Code provides that

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.

Article 2230 of the same Code further states that

Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. Such damages are separate and distinct from fines and shall be paid to the offended party.

Prior to the effectivity of the Revised Rules of Criminal Procedure, courts generally awarded exemplary damages in criminal cases when an aggravating circumstance, whether ordinary or qualifying, had been proven to have attended the commission of the crime, even if the same was not alleged in the information. This is in accordance with the aforesaid Article 2230. However, with the promulgation of the Revised Rules, courts no longer consider the aggravating circumstances not alleged and proven in the determination of the penalty and in the award of damages. Thus, even if an aggravating circumstance has been proven, but was not alleged, courts will not award exemplary damages (old rule).

In the instant case, the information for rape was filed in 2003 or after the effectivity of the Revised Rules. Following the doctrine in the second set of cases, the Court can very well deny the award of exemplary damages based on Article 2230 because the special qualifying circumstances of minority and relationship, as mentioned above, were not sufficiently alleged.

Nevertheless, by focusing only on Article 2230 as the legal basis for the grant of exemplary damagestaking into account simply the attendance of an aggravating circumstance in the commission of a crime, courts have lost sight of the very reason why exemplary damages are awarded. Catubig is enlightening on this point, thus

Also known as "punitive" or "vindictive" damages, exemplary or corrective damages are intended to serve as a deterrent to serious wrong doings, and as a vindication of undue sufferings and wanton invasion of the rights of an injured or a punishment for those guilty of outrageous conduct.

Being corrective in nature, exemplary damages, therefore, can be awarded, not only in the presence of an aggravating circumstance, but also where the circumstances of the case show the highly reprehensible or outrageous conduct of the offender (NO NEED TO ALLEGE). In much the same way as Article 2230 prescribes an instance when exemplary damages may