G.R. No. 117103 January 21, 1999Spouses RENATO S. ONG and FRANCIA N. ONG,petitioners,vs.COURT OF APPEALS, INLAND RAILWAYS, INC. and PHILTRANCO SERVICE ENTERPRISE, INC.,respondents.PANGANIBAN,J.:Evidence not formally offered during the trial cannot be used for or against a party litigant. Neither may it be taken into account on appeal. Furthermore, actual and moral damages must be proven before any award thereon can be granted.The CaseBefore us is a Petition for Review onCertiorariof the Decision dated May 20, 1993 and the Resolution dated June 8, 1994, both promulgated by the Court of Appeals1in CA-GR CV No. 33755, modifying the Decision of the trial court in an action for damages filed by spouses Renato and Francia Ong (petitioners herein) against Philtranco Service Enterprise, Inc. and Inland Trailways, Inc. (respondents herein, hereafter referred to as "Philtranco" and "Inland," respectively).The assailed Decision disposed as follows:2WHEREFORE, the appealed decision is herebyMODIFIEDby ordering INLAND TRAILWAYS, INC. to pay [petitioners] P3,977.00 for actual damages, P30,000.00 as moral damages and ten (10) percent as contingent attorney's fees and to pay the costs of the suit.Reconsideration was denied in the assailed Resolution:3WHEREFORE, IN VIEW OF THE FOREGOING, both motions for reconsideration filed by [petitioners] and . . . Inland Trailways, Inc. are hereby DENIED.The FactsOn February 9, 1987, petitioners boarded as paying passengers Bus-No. 101 with late No. EVB-508 ("Inland bus," for convenience), which was owned and operated by Inland Trailways under a Lease Agreement with Philtranco. It was driven by Calvin Coronel.4Around 3:50 in the morning of said date, when the Inland bus slowed down to avoid a stalled cargo truck in Tiaong, Quezon, it was bumped from the rear by another bus, owned and operated by Philtranco and driven by Apolinar Miralles. Francia sustained wounds and fractures in both of her legs and her right arm, while Renato suffered injuries on his left chest, right knee, right arm and left eye.5They were brought to the San Pablo City District Hospital for treatment and were confined there from February 9 to 18, 1987.6On December 22, 1988, petitioners filed an action for damages against Philtranco and Inland.7In their Complaint, they alleged that they suffered injuries, preventing Francia from operating asari-saristore at Las Pia's, Metro Manila, where she derived a daily income of P200; and Renato from continuing his work as an overseas contract worker (pipe welder) with a monthly salary of $690. Stating that they incurred P10,000 as medical and miscellaneous expenses, they also claimed moral damages of P500,000 each, exemplary and corrective damages of P500,000 each, and compensatory damages of P500,000 each plus 35 percent thereof as attorney's fees. In addition to their testimonies, petitioners also presented the following documentary evidence:Exhibit A Philtranco Bus Ticket No. 333398B Philtranco Bus Ticket No. 333399C Certification dated February 12, 1987D Medical Certificate of Francis Ong dated February 18, 1987E Medical Certificate of Renato S. Ong dated February 18, 1987F Statement of Account of Francia N. Ong in the amount of P1,153.50G Statement of Account of Renato S. Ong in the amount of P1,973.50H Receipt dated February 9, 1987I Receipt dated March 3, 1987J Receipt dated February 18, 1987K Receipt dated February 24, 1987L & - L-1 Picture of face of Renato S. OngM & M-1 Picture of face of Renato S. OngN Payroll Summary for [period ending] November 1986O Payroll Summary for [period ending] December, 1986Philtranco answered that the Inland bus with Plate No. EVB-508 (which had transported petitioners) was registered and owned by Inland; that its driver, Calvin Coronel, was an employee of Inland; that Philtranco was merely leasing its support facilities, including the use of its bus tickets, to Inland; and that under their Agreement, Inland would be solely liable for all claims and liabilities arising from the operation of said bus. Philtranco further alleged that, with respect to its own bus (which bumped the Inland bus), it exercised the diligence of a good father of a family in the selection and supervision of its drivers, and that the proximate cause of the accident was the negligence of either the cargo truck or the Inland bus which collided with said cargo truck.Inland answered that, according to the Police Report, it was Apolinar Miralles, the driver of the Philtranco bus, who was at fault, as shown by his flight from the situs of the accident; that said bus was registered and owned by Philtranco; and that the driver of the Inland bus exercised extraordinary diligence as testified to by its passengers. Inland and Philtranco filed cross-claims against each other.Both respondents moved to submit the case for decision without presenting further evidence. Consequently, the trial court, in its Order dated July 5, 1989, resolved:8When this case was called for continuation of presentation of plaintiffs evidence, over objections from counsels for defendants, plaintiffs counsel was allowed to recall his first witness, Renato S. Ong, for some additional direct questions[;] and after cross-examination by defendant Inland Trailways, Inc., adopted by defendant Philtranco Service Enterprise, Inc., plaintiff presented his second witness, [Francia] Ong, whose testimony on direct, cross and redirect was terminated[;] and as prayed for, counsel for the plaintiffs shall have five (5) days from today within which to submit his formal offer of evidence, furnishing copies thereof to defendants who shall have five (5) days from their receipt within which to submit comments after which the same shall be deemed submitted for resolution.By agreement, considering the stipulations of parties made of record regarding factual issues except as to whether or not the bus is included in the lease, counsels for the two (2) defendants are given a period of ten (10) days from today within which to submit simultaneous offer[s] of admission and denials not only on the above exception but on any other relevant matter.Considering that the documents are admitted, there is no necessity of any formal written offer of evidence and, therefore, after all the foregoing, the case shall be deemed submitted for decision upon simultaneous memoranda of the parties and upon submission of complete transcripts.Thereafter, the trial court rendered its May 7, 1991 Decision, which disposed as follows:9IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the [petitioners] absolving Inland Trailways, Inc., from any liability whatsoever, and against . . . Philtranco Service Enterprise, Inc., ordering the latter to pay the [petitioners] 1) P10,000.00 as actual damages for medical and miscellaneous expenses;2) P50,000.00 as compensatory damages for the [diminution] of the use of the right arm of [petitioner]-wife;3) P48,000.00 as unrealized profit or income;4) P50,000.00 as moral damages;5) 25% of the foregoing as contingent attorney's fees; and6) the costs.According to the trial court, the proximate cause of the accident was "the bumping from behind by the Philtranco bus with Plate No. 259 driven by Apolinar Miralles" based on the Police Report and the affidavits of passengers, to which Philtranco did not object. As it failed to prove that it exercised due diligence in the selection and supervision of its employees under Article 2176 of the Civil Code, Philtranco was held liable based onculpa aquiliana.Ruling of the Court of AppealsOn appeal, the Court of Appeals (CA) resolved that Philtranco's liability for damages could not be predicated upon the Police Report which had not been formally offered in evidence. The report was merely annexed to the answer of Inland, and petitioner did not adopt or offer it as evidence. Consequently, it had no probative value and, thus, Philtranco should be absolved from liability.Instead, the appellate court found that petitioners sufficiently established a claim against Inland based onculpa contractual. As a common carrier, Inland was required to observe extra ordinary diligence under Articles 1735 and 1750 of the Code. Its liability arose from its failure to transport its passengers and cargo safely, and a finding of fault or negligence was not necessary to hold it liable for damages. Inland failed to overcome this presumption of negligence by contrary evidence; thus, it was liable for breach of its contractual obligation to petitioners under Article 2201 of the Civil Code.The liability of Inland for medical and miscellaneous expenses was reduced, as the evidence on record showed that petitioners spent only P3,977. Deemed self-serving was Francia's testimony that the use of her right arm was diminished and that she lost income. Thus, the award for unearned income was disallowed and the amount of moral damages was reduced to P30,000.Hence, this petition.10The IssuesIn their Memorandum,11petitioners raise the following issues:12[I] Whether or not public respondent committed grave abuse of discretion in completely reversing the decision of the Regional Trial Court, ordering Philtranco to indemnify petitioners and in lieu thereof, order[ing] Inland to pay petitioners for their damages.[II] Whether or not public respondent committed grave abuse of discretion in disallowing the P50,000.00 awarded to petitioner, Francia Ong for the diminution of the use of her right arm and the P48,000.00 representing unrealized income.[III] Whether or not public respondent committed grave abuse of discretion in reducing the award for actual and miscellaneous expenses from P10,000.00 to P3,977.00; the award of P50,000.00 moral damages to P30,000.00; and the 25% contingent attorney's fees to10% thereof.Simply stated, the main issues raised are: (1) whether the Police Report, which was not formally offered in evidence, could be used to establish a claim against Philtranco based onculpa aquiliana; and (2) whether the reduction in the amounts of damages awarded was proper.The Court's RulingThe petition is devoid of merit.First Issue:Retirement of Formal Offer of EvidencePetitioners take exception to the rule requiring documents to be formally offered in evidence before they can be given any probative value, arguing that the parties agreed to submit the case for resolution based on the July 5, 1989 Order of the trial court. Because of the agreement, petitioners assumed that all the pieces of documentary evidence, including the Complaint and its Annexes, as well as those in the respective Answers of the private respondents, were deemed admitted.We disagree. Section 34, Rule 132 of the Rules of Court, provides that "[t]he court shall consider no evidence which has not been formally offered." A formal offer is necessary, since judges are required to base their findings of fact and their judgment solely and strictly upon the evidence offered by the parties at the trial. To allow parties to attach any document to their pleadings and then expect the court to consider it as evidence, even without formal offer and admission, may draw unwarranted consequences. Opposing parties will be deprived of their chance to examine the document and to object to its admissibility. On the other hand, the appellate court will have difficulty reviewing documents not previously scrutinized the court below.13In adhering to this rule, the appellate court cannot be faulted with reversible error, as it held:14. . . [T]he burden of proof lies with the plaintiff in establishing fault or negligence on the part of the defendant (Ong vs. Metropolitan Water). This, however, plaintiff-appellees failed to establish. Albeit, there was a police investigation report finding the driver of PHILTRANCO negligent which became the basis of the courta qou[for] holding PHILTRANCO liable, this piece of evidence was merely attached as Annex "1" of INLAND's answer, nothing more. It was not presented and even offered as evidence by INLAND nor utilized by plaintiffs-appellees. Thus, even assuming arguendo that the same had been identified in court, it would have no evidentiary value. Identification of documentary evidence must be distinguished from its formal offer as an exhibit. The first is done in the course of the trial and is accompanied by the marking of the evidence as an exhibit. The second is done only when the party rests its case and not before. The mere fact that a particular document is identified and marked as an exhibit does not mean it will be or has been offered as part of the evidence of the party. The party may decide to offer it if it believes this will advance the cause, and then again it may decide not to do so at all (People vs. Santito, Jr., 201 SCRA 87).In the case at bar, the defendant INLAND and plaintiffs-appellees did not identify the said Annex "1" or the Police Investigation Report as evidence. Thus, under Section 35 of Rule 132 of the Revised Rules on Evidence, the court shall consider no evidence which has not been formally offered. Corollary, the Police Investigation Report of Annex "1" cannot be given any evidentiary value.Absen[t] Annex "1" which was the basis of the trial court in finding PHILTRANCO liable, the latter is thus exonerated from liability.Petitioners similarly erred in presuming that said Annex was admitted in evidence by virtue of the Order of July 5, 1989. Their presumption has no basis. The Order required counsel for the petitioners to "submit his formal offer of evidence, furnishing copies thereof to defendants who shall have five (5) days from their receipt within which to submit comments after which the same shall be deemed submitted for resolution."15In compliance, petitioners filed a written offer of evidence on July 12, 1989.16Such offer led the trial court, in its Order of August 2, 1989, to formally admit in evidence Exhibits "A"-"O."17Clearly, the Police Report was neither offered by the petitioners nor admitted by the trial court.Moreover, the petitioners' allegations in their Complaint did not establish a cause of action against Philtranco. They similarly failed to make any reference to said Police Report during the presentation of their case. This is precisely why Respondent Philtranco opted not to present further evidence. A document or an article is valueless unless it is formally offered in evidence, and the opposing counsel is given an opportunity to object to it and to cross-examine any witness called to present or identify it.18Evidence not formally offered before the trial court cannot be considered on appeal, for to consider them at such stage will deny the other parties their right to rebut them.19There is no agreement to submit the case based on the pleading, as contended by the petitioners. The parties had no such intention, nor did said Order evince such an agreement.Second Issue:Damages Require EvidencePetitioners aver that there was grave abuse of discretion when the amount of actual damages awarded was reduced from P10,000 to P3,977, even if the original amount did not even include the medical expenses that Francia continued to incur; and when the award of P48,000 as unrealized income was deleted despite her testimony which was given credence by the trial court.The Court disagrees. Grantingarguendothat there was an agreement to submit the case for decision based on the pleadings, this does not necessarily imply that petitioners are entitled to the award of damages. The fundamental principle of the law on damages is that one injured by a breach of contract (in this case, the contract of transportation) or by a wrongful or negligent act or omission shall have a fair and just compensation, commensurate with the loss sustained as a consequence of the defendant's acts. Hence, actual pecuniary compensation is the general rule, except where the circumstances warrant the allowance of other kinds of damages.Actual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. Except as provided by law or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as he has duly proven.To be recoverable, actual damages must be pleaded and proven in Court. In no instance may the trial judge award more than those so pleaded and proven. Damages cannot be presumed. The award there of must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative and nonsubstantial proof. Article 2199 of the Civil Code expressly mandates 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."The lack of basis for such award was patent in the trial court Decision:The records will show that from the documentary evidence, [petitioners] have jointly spent the sum of P3,977.00. [Respondent] Philtranco has not presented any evidence that it has advanced any amount for medicine, hospitalization and doctor's fees, but on the contrary, [petitioners] have testified that they paid for their expenses except at the initial stage wherein a representative of [respondent] Philtranco went to the hospital to get the receipts of medicines only and paid (t.s.n. June 29, 1989, p. 6). Considering the claim of the [petitioners], as alleged in their complaint they spent P10,000.00 representing medical and miscellaneous expenses[;] considering that they have gone for consultation to at least two (2) different doctors, this Court may take judicial notice of the fact that miscellaneous expenses [are] bound to be incurred to cover transportation and food, and therefore, finds the amount of P10,000.00 as actual damages to be reasonable.Damages, after all, are not intended to enrich the complainant at the expense of the defendant.20Moral Damages and Diminutionof Use of Francia's ArmPetitioners protest the deletion of the amount of P50,000 earlier awarded by the trial court because of the diminution of the use of Francia's right arm, arguing that she stated during direct examination that it could no longer perform its normal functions,21and that private respondents impliedly admitted this matter when they failed to present controverting evidence.A person is entitled to the physical integrity of his or her body, and if that integrity is violated, damages are due and assessable. However, physical injury, like loss or diminution of use of an arm or a limb, is not a pecuniary loss. Indeed, it is nor susceptible of exact monetary estimation.Thus, the usual practice is to award moral damages for physical injuries sustained. InMayo v. People,22the Court held that the permanent scar on the forehead and the loss of the use of the right eye entitled the victim to moral damages. The victim, in said case, devastated by mental anguish, wounded feelings and shock, which she experienced as a result of her false eye and the scar on her forehead. Furthermore, the loss of vision in her right eye hampered her professionally for the rest of her life.In the case at bar, it was sufficiently shown during the trial that Francia's right arm could not function in a normal manner and that, as a result, she suffered mental anguish and anxiety. Thus, an increase in the amount of moral damages awarded, from P30,000 to P50,000, appears to be reasonable and justified. Renato also suffered mental anxiety and anguish from the accident. Thus, he should be separately awarded P30,000 as moral damages.In some instances, the Court awards the cost of medical procedures to restore the injured person to his or her former condition. However, this award necessitates expert testimony on the cost of possible restorative medical procedure. InGatchalian v. Delim,23the Court, reasoning that a scar resulting from the infliction of injury on the face of a woman gave rise to a legitimate claim for restoration to herconditio ante, granted P15,000 as actual damages for plastic surgery. It bears emphasis that the said amount was based on expert testimony.24In another case, the Court granted actual or compensatory damages in the sum of P18,000 for the surgical intervention necessary to arrest the degeneration of the mandible of a young boy. Again, there was an expert testimony that such medical procedure would cost P3,000 and would have to be repeated several times to restore him to nearly normal condition.25In the case at bar, petitioner failed to present evidence regarding thefeasibility or practicabilityand the cost of a restorative medical operation on her arm. Thus, there is no basis to grant her P48,000 for such expense.Unrealized IncomeProtesting the deletion of the award for Francia's unrealized income, petitioners contend that Francia's injuries and her oral testimony adequately support their claim. The Court disagrees. Although actual damages include indemnification for profits which the injured party failed to obtain (lucro cesanteor lucrum cesans),26the rule requires that said person produce the "best evidence of which his case is susceptible.27The bare and unsubstantiated assertion of Francia that she usually earned P200 a day from her market stall is not the best evidence to prove her claim of unrealized income for the eight-month period that her arm was in plaster cast. Her testimony that was their lessor who filed their income tax returns and obtained business licenses for them does not justify her failure to present more credible evidence of her income. Furthermore, after her ten-day confinement at the San Pablo Hospital,28she could have returned so her work at the public market despite the plaster cast on her right arm, since she claimed to have two nieces as helpers.29Clearly, the appellate court was correct in deleting the award for unrealized income, because of petitioner's utter failure to substantiate her claim.Attorney's FeesCounsel for petitioner deeply laments the reduction in the award of attorney's fees. He alleges that he had to use his own money for transportation, stenographic transcriptions and other court expenses, and for such reason, avers that the award of 25 percent attorney's fees made by the trial court was proper.Under the Civil Code, an award of attorney's fees is an indemnity for damages ordered by a court to be paid by the losing party to the prevailing party, based on any of the cases authorized by law.30It is payable not to the lawyer but to the client, unless the two have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. The Court has established a set standards in fixing the amount of attorney's fees:31(1) [T]he amount and character of the services rendered; (2) labor, time and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not.Counsel's performance, however, does not justify the award of 25 percent attorney's fees. It is well-settled that such award is addressed to sound judicial discretion and subject to judicial control.32We do not see any abuse thereof in the case at bar. In fact, the appellate court had been generous to petitioners' counsel, considering that the nature of the case was not exceptionally difficult, and he was not required to exert Herculean efforts. All told, his handling of the case was sorely, inadequate, as shown by his failure to follow elementary norms of civil procedure and evidence.WHEREFORE, the assailed Decision is AFFIRMED with the MODIFICATION that Renato and Francia Ong are separately awarded moral damages in the amount of P30,000 and P50,000, respectively. The ten percent (10%) attorney's fees shall be based on the total modified award.1wphi1.ntSO ORDERED.

G.R. No. 107518 October 8, 1998PNOC SHIPPING AND TRANSPORT CORPORATION,petitioner,vs.HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING CORPORATION,respondents.ROMERO,J.:A party is entitled to adequate compensation only for such pecuniary loss actually suffered and duly proved.1Indeed, basic is the rule that to recover actual damages, the amount of loss must not only be capable of proof but must actually be proven with a reasonable degree of certainty, premised upon competent proof or best evidence obtainable of the actual amount thereof.2The claimant is duty-bound to point out specific facts that afford a basis for measuring whatever compensatory damages are borne.3A court cannot merely rely on speculations, conjectures, or guesswork as to the fact and amount of damages4as well as hearsay5or uncorroborated testimony whose truth is suspect.6Such are the jurisprudential precepts that the Court now applies in resolving the instant petition.The records disclose that in the early morning of September 21, 1977, theM/V Maria Efigenia XV,owned by private respondent Maria Efigenia Fishing Corporation, was navigating the waters near Fortune Island in Nasugbu, Batangas on its way to Navotas, Metro Manila when it collided with the vesselPetroparcelwhich at the time was owned by the Luzon Stevedoring Corporation (LSC).After investigation was conducted by the Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro rendered a decision finding thePetroparcelat fault. Based on this finding by the Board and after unsuccessful demands on petitioner,7private respondent sued the LSC and thePetroparcelcaptain, Edgardo Doruelo, before the then Court of First Instance of Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two pesos (P1,252.00) and the legal research fee of two pesos (P2.00).8In particular, private respondent prayed for an award of P692,680.00, allegedly representing the value of the fishing nets, boat equipment and cargoes ofM/V Maria Efigenia XV,with interest at the legal rate plus 25% thereof as attorney's fees. Meanwhile, during the pendency of the case, petitioner PNOC Shipping and Transport Corporation sought to be substituted in place of LSC as it had already acquired ownership of thePetroparcel.9For its part, private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead for the recovery of the lost value of the hull ofM/V Maria Efigenia XV.10Accordingly, in the amended complaint, private respondent averred thatM/V Maria Efigenia XVhad an actual value of P800,000.00 and that, after deducting the insurance payment of P200,000.00, the amount of P600,000.00 should likewise be claimed. The amended complaint also alleged that inflation resulting from the devaluation of the Philippine peso had affected the replacement value of the hull of the vessel, its equipment and its lost cargoes, such that there should be a reasonable determination thereof. Furthermore, on account of the sinking of the vessel, private respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven.11Subsequently, the complaint was further amended to include petitioner as a defendant12which the lower court granted in its order of September 16,1985.13After petitioner had filed its answer to the second amended complaint, on February 5, 1987, the lower court issued a pre-trial order14containing, among other things, a stipulations of facts, to wit:1. On 21 September 1977, while the fishing boat "M/V MARIA EFIGENIA" owned by plaintiff was navigating in the vicinity of Fortune Island in Nasugbu, Batangas, on its way to Navotas, Metro Manila, said fishing boat was hit by the LSCO tanker "Petroparcel" causing the former to sink.2. The Board of Marine Inquiry conducted an investigation of this marine accident and on 21 November 1978, the Commandant of the Philippine Coast Guard, the Honorable Simeon N. Alejandro, rendered a decision finding the cause of the accident to be the reckless and imprudent manner in which Edgardo Doruelo navigated the LSCO "Petroparcel" and declared the latter vessel at fault.3. On 2 April 1978, defendant Luzon Stevedoring Corporation (LUSTEVECO), executed in favor of PNOC Shipping and Transport Corporation a Deed of Transfer involving several tankers, tugboats, barges and pumping stations, among which was the LSCO Petroparcel.4. On the same date on 2 April 1979 (sic), defendant PNOC STC again entered into an Agreement of Transfer with co-defendant Lusteveco whereby all the business properties and other assets appertaining to the tanker and bulk oil departments including the motor tanker LSCO Petroparcel of defendant Lusteveco were sold to PNOC STC.5. The aforesaid agreement stipulates, among others, that PNOC-STC assumes, without qualifications, all obligations arising from and by virtue of all rights it obtained over the LSCO "Petroparcel".6. On 6 July 1979, another agreement between defendant LUSTEVECO and PNOC-STC was executed wherein Board of Marine Inquiry Case No. 332 (involving the sea accident of 21 September 1977) was specifically identified and assumed by the latter.7. On 23 June 1979, the decision of Board of Marine Inquiry was affirmed by the Ministry of National Defense, in its decision dismissing the appeal of Capt. Edgardo Doruelo and Chief mate Anthony Estenzo of LSCO "Petroparcel".8. LSCO "Petroparcel" is presently owned and operated by PNOC-STC and likewise Capt. Edgardo Doruelo is still in their employ.9. As a result of the sinking of M/V Maria Efigenia caused by the reckless and imprudent manner in which LSCO Petroparcel was navigated by defendant Doruelo, plaintiff suffered actual damages by the loss of its fishing nets, boat equipments (sic) and cargoes, which went down with the ship when it sank the replacement value of which should be left to the sound discretion of this Honorable Court.After trial, the lower court15rendered on November 18, 1989 its decision disposing of Civil Case No. C-9457 as follows:WHEREFORE, and in view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendant PNOC Shipping & Transport Corporation, to pay the plaintiff:a. The sum of P6,438,048.00 representing the value of the fishing boat with interest from the date of the filing of the complaint at the rate of 6% per annum;b. The sum of P50,000.00 as and for attorney's fees; andc. The costs of suit.The counterclaim is hereby DISMISSED for lack of merit. Likewise, the case against defendant Edgardo Doruelo is hereby DISMISSED, for lack of jurisdiction.SO ORDERED.In arriving at the above disposition, the lower court cited the evidence presented by private respondent consisting of the testimony of its general manager and sole witness, Edilberto del Rosario. Private respondent's witness testified thatM/V Maria Efigenia XVwas owned by private respondent per Exhibit A, a certificate of ownership issued by the Philippine Coast Guard showing thatM/V Maria Efigenia XVwas a wooden motor boat constructed in 1965 with 128.23 gross tonnage. According to him, at the time the vessel sank, it was then carrying 1,060 tubs (baeras) of assorted fish the value of which was never recovered. Also lost with the vessel were two cummins engines (250 horsepower), radar, pathometer and compass. He further added that with the loss of his flagship vessel in his fishing fleet of fourteen (14) vessels, he was constrained to hire the services of counsel whom he paid P10,000 to handle the case at the Board of Marine Inquiry and P50,000.00 for commencing suit for damages in the lower court.As to the award of P6,438,048.00 in actual damages, the lower court took into account the following pieces of documentary evidence that private respondent proffered during trial:(a) Exhibit A certified xerox copy of the certificate of ownership ofM/V Maria Efigenia XV;(b) Exhibit B a document titled "Marine Protest" executed by Delfin Villarosa, Jr. on September 22, 1977 stating that as a result of the collision, theM/V Maria Efigenia XVsustained a hole at its left side that caused it to sink with its cargo of 1,050baerasvalued at P170,000.00;(c) Exhibit C a quotation for the construction of a 95-footer trawler issued by Isidoro A. Magalong of I. A. Magalong Engineering and Construction on January 26, 1987 to Del Rosario showing that construction of such trawler would cost P2,250,000.00;(d) Exhibit D pro formainvoice No. PSPI-05/87-NAV issued by E.D. Daclan of Power Systems, Incorporated on January 20, 1987 to Del Rosario showing that two (2) units of CUMMINS Marine Engine model N855-M, 195 bhp. at 1800 rpm. would cost P1,160,000.00;(e) Exhibit E quotation of prices issued by Scan Marine Inc. on January 20, 1987 to Del Rosario showing that a unit of Furuno Compact Daylight Radar, Model FR-604D, would cost P100,000.00 while a unit of Furuno Color Video Sounder, Model FCV-501 would cost P45,000.00 so that the two units would cost P145,000.00;(f) Exhibit F quotation of prices issued by Seafgear Sales, Inc. on January 21, 1987 to Del Rosario showing that two (2) rolls of nylon rope (5" cir. X 300fl.) would cost P140,000.00; two (2) rolls of nylon rope (3" cir. X 240fl.), P42,750.00; one (1) binocular (7 x 50), P1,400.00, one (1) compass (6"), P4,000.00 and 50 pcs. of floats, P9,000.00 or a total of P197,150.00;(g) Exhibit G retainer agreement between Del Rosario and F. Sumulong Associates Law Offices stipulating an acceptance fee of P5,000.00, per appearance fee of P400.00, monthly retainer of P500.00, contingent fee of 20% of the total amount recovered and that attorney's fee to be awarded by the court should be given to Del Rosario; and(h) Exhibit H price quotation issued by Seafgear Sales, Inc. dated April 10, 1987 to Del Rosario showing the cost of poly nettings as: 50 rolls of 400/18 3kts. 100md x 100mtrs., P70,000.00; 50 rolls of 400/18 5kts. 100md x 100mtrs., P81,500.00; 50 rolls of 400/18 8kts. 100md x 100mtrs., P116,000.00, and 50 rolls of 400/18 10kts. 100md x 100mtrs., P146,500 andbaera(tub) at P65.00 per piece or a total of P414,065.00.The lower court held that the prevailing replacement value of P6,438,048.00 of the fishing boat and all its equipment would regularly increase at 30% every year from the date the quotations were given.On the other hand, the lower court noted that petitioner only presented Lorenzo Lazaro, senior estimator at PNOC Dockyard & Engineering Corporation, as sole witness and it did not bother at all to offer any documentary evidence to support its position. Lazaro testified that the price quotations submitted by private respondent were "excessive" and that as an expert witness, he used the quotations of his suppliers in making his estimates. However, he failed to present such quotations of prices from his suppliers, saying that he could not produce a breakdown of the costs of his estimates as it was "a sort of secret scheme." For this reason, the lower court concluded:Evidently, the quotation of prices submitted by the plaintiff relative to the replacement value of the fishing boat and its equipments in the tune of P6,438,048.00 which were lost due to the recklessness and imprudence of the herein defendants were not rebutted by the latter with sufficient evidence. The defendants through their sole witness Lorenzo Lazaro relied heavily on said witness' bare claim that the amount afore-said is excessive or bloated, but they did not bother at all to present any documentary evidence to substantiate such claim. Evidence to be believed must not only proceed from the mouth of the credible witness, but it must be credible in itself. (Vda. de Bonifacio vs. B. L. T. Bus Co., Inc. L-26810, August 31, 1970).Aggrieved, petitioner filed a motion for the reconsideration of the lower court's decision contending that: (1) the lower court erred in holding it liable for damages; that the lower court did not acquire jurisdiction over the case by paying only P1,252.00 as docket fee; (2) assuming that plaintiff was entitled to damages, the lower court erred in awarding an amount greater than that prayed for in the second amended complaint; and (3) the lower court erred when it failed to resolve the issues it had raised in its memorandum.16Petitioner likewise filed a supplemental motion for reconsideration expounding on whether the lower court acquired jurisdiction over the subject matter of the case despite therein plaintiff's failure to pay the prescribed docket fee.17On January 25, 1990, the lower court declined reconsideration for lack of merit.18Apparently not having received the order denying its motion for reconsideration, petitioner still filed a motion for leave to file a reply to private respondent's opposition to said motion.19Hence, on February 12, 1990, the lower court denied said motion for leave to file a reply on the ground that by the issuance of the order of January 25, 1990, said motion had become moot and academic.20Unsatisfied with the lower court's decision, petitioner elevated the matter to the Court of Appeals which, however, affirmed the samein totoon October 14, 1992.21On petitioner's assertion that the award of P6,438,048.00 was not convincingly proved by competent and admissible evidence, the Court of Appeals ruled that it was not necessary to qualify Del Rosario as an expert witness because as the owner of the lost vessel, "it was well within his knowledge and competency to identify and determine the equipment installed and the cargoes loaded" on the vessel. Considering the documentary evidence presented as in the nature of market reports or quotations, trade journals, trade circulars and price lists, the Court of Appeals held, thus:Consequently, until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of evidence, the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial court. In fact, where the lower court is confronted with evidence which appears to be of doubtful admissibility, the judge should declare in favor of admissibility rather than of non-admissibility (The Collector of Palakadhari, 124 [1899], p. 13, cited in Francisco, Revised Rules of Court, Evidence, Volume VII, Part I, 1990 Edition, p. 18). Trial courts are enjoined to observe the strict enforcement of the rules of evidence which crystallized through constant use and practice and are very useful and effective aids in the search for truth and for the effective administration of justice.But in connection with evidence which may appear to be of doubtful relevancy or incompetency or admissibility, it is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but admitting them unless plainly irrelevant, immaterial or incompetent, for the reason that their rejection places them beyond the consideration of the court. If they are thereafter found relevant or competent, can easily be remedied by completely discarding or ignoring them. (Banaria vs. Banaria,et al., C.A. No. 4142, May 31, 1950;citedin Francisco,Supra). [Emphasis supplied].Stressing that the alleged inadmissible documentary exhibits were never satisfactorily rebutted by appellant's own sole witness in the person of Lorenzo Lazaro, the appellate court found that petitioner ironically situated itself in an "inconsistent posture by the fact that its own witness, admittedly an expert one, heavily relies on the very same pieces of evidence (price quotations) appellant has so vigorously objected to as inadmissible evidence." Hence, it concluded:. . . The amount of P6,438,048.00 was duly established at the trial on the basis of appellee's documentary exhibits (price quotations) which stood uncontroverted, and which already included the amount by way of adjustment as prayed for in the amended complaint. There was therefore no need for appellee to amend the second amended complaint in so far as to the claim for damages is concerned to conform with the evidence presented at the trial. The amount of P6,438,048.00 awarded is clearly within the relief prayed for in appellee's second amended complaint.On the issue of lack of jurisdiction, the respondent court held that following the ruling inSun Insurance Ltd. v. Asuncion,22the additional docket fee that may later on be declared as still owing the court may be enforced as a lien on the judgment.Hence, the instant recourse.In assailing the Court of Appeals' decision, petitioner posits the view that the award of P6,438,048 as actual damages should have been in light of these considerations, namely: (1) the trial court did not base such award on the actual value of the vessel and its equipment at the time of loss in 1977; (2) there was no evidence on extraordinary inflation that would warrant an adjustment of the replacement cost of the lost vessel, equipment and cargo; (3) the value of the lost cargo and the prices quoted in respondent's documentary evidence only amount to P4,336,215.00; (4) private respondent's failure to adduce evidence to support its claim for unrealized profit and business opportunities; and (5) private respondent's failure to prove the extent and actual value of damages sustained as a result of the 1977 collision of the vessels.23Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose a penalty.24In actions based on torts or quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of.25There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses (dao emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante).26Thus:Where goods are destroyed by the wrongful act of the defendant the plaintiff is entitled to theirvalue at the time of destruction, that is, normally, the sum of money which he would have to pay in the market for identical or essentially similar goods, plus in a proper case damages for the loss of use during the period before replacement. In other words, in the case of profit-earning chattels, what has to be assessed is the value of the chattel to its owner as a going concernat the time and place of the loss, and this means, at least in the case of ships, that regard must be had to existing and pending engagements, . . .. . . . If the market value of the ship reflects the fact that it is in any case virtually certain of profitable employment, then nothing can be added to that value in respect of charters actually lost, for to do so would bepro tantoto compensate the plaintiff twice over. On the other hand, if the ship is valued without reference to its actual future engagements and only in the light of its profit-earning potentiality, then it may be necessary to add to the value thus assessed the anticipated profit on a charter or other engagement which it was unable to fulfill. What the court has to ascertain in each case is the "capitalised value of the vessel as a profit-earning machine not in the abstract but in view of the actual circumstances," without, of course, taking into account considerations which were too remote at the time of the loss.27[Emphasis supplied].As stated at the outset, to enable an injured party to recover actual or compensatory damages, he is required to prove the actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available.28The burden of proof is on the party who would be defeated if no evidence would be presented on either side. He must establish his case by a preponderance of evidence which means that the evidence, as a whole, adduced by one side is superior to that of the other.29In other words, damages cannot be presumed and courts, in making an award must point out specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne.30In this case, actual damages were proven through the sole testimony of private respondent's general manager and certain pieces of documentary evidence. Except for Exhibit B where the value of the 1,050baerasof fish were pegged at their September 1977 value when the collision happened, the pieces of documentary evidence proffered by private respondent with respect to items and equipment lost show similar items and equipment with corresponding prices in early 1987 or approximately ten (10) years after the collision. Noticeably, petitioner did not object to the exhibits in terms of the time index for valuation of the lost goods and equipment. In objecting to the same pieces of evidence, petitioner commented that these were not duly authenticated and that the witness (Del Rosario) did not have personal knowledge on the contents of the writings and neither was he an expert on the subjects thereof.31Clearly ignoring petitioner's objections to the exhibits, the lower court admitted these pieces of evidence and gave them due weight to arrive at the award of P6,438,048.00 as actual damages.The exhibits were presented ostensibly in the course of Del Rosario's testimony. Private respondent did not present any other witnesses especially those whose signatures appear in the price quotations that became the bases of the award. We hold, however, that the price quotations are ordinary private writings which under the Revised Rules of Court should have been proffered along with the testimony of the authors thereof. Del Rosario could not have testified on the veracity of the contents of the writings even though he was the seasoned owner of a fishing fleet because he was not the one who issued the price quotations. Section 36, Rule 130 of the Revised Rules of Court provides that a witness can testify only to those facts that he knows of his personal knowledge.For this reason, Del Rosario's claim that private respondent incurred losses in the total amount of P6,438,048.00 should be admitted with extreme caution considering that, because it was a bare assertion, it should be supported by independent evidence. Moreover, because he was the owner of private respondent corporation32whatever testimony he would give with regard to the value of the lost vessel, its equipment and cargoes should be viewed in the light of his self-interest therein. We agree with the Court of Appeals that his testimony as to the equipment installed and the cargoes loaded on the vessel should be given credence33considering his familiarity thereto. However, we do not subscribe to the conclusion that his valuation of such equipment, cargo and the vessel itself should be accepted as gospel truth.34We must, therefore, examine the documentary evidence presented to support Del Rosario's claim as regards the amount of losses.The price quotations presented as exhibits partake of the nature of hearsay evidence considering that the persons who issued them were not presented as witnesses.35Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. Hearsay evidence, whether objected to or not, has no probative value unless the proponent can show that the evidence falls within the exceptions to the hearsay evidence rule.36On this point, we believe that the exhibits do not fall under any of the exceptions provided under Sections 37 to 47 of Rule 130.37It is true that one of the exceptions to the hearsay rule pertains to "commercial lists and the like" under Section 45, Rule 130 of the Revised Rules on Evidence. In this respect, the Court of Appeals considered private respondent's exhibits as "commercial lists." It added, however, that these exhibits should be admitted in evidence "until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of evidence" because "the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial court."38Reference to Section 45, Rule 130, however, would show that the conclusion of the Court of Appeals on the matter was arbitrarily arrived at. This rule states:Commercial lists and the like. Evidence of statements of matters of interest to persons engaged in an occupation contained in a list, register, periodical, or other published compilation is admissible as tending to prove the truth of any relevant matter so stated if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them there.Under Section 45 of the aforesaid Rule, a document is a commercial list if: (1) it is a statement of matters of interest to persons engaged in an occupation; (2) such statement is contained in a list, register, periodical or other published compilation; (3) said compilation is published for the use of persons engaged in that occupation, and (4) it is generally used and relied upon by persons in the same occupation.Based on the above requisites, it is our considered view that Exhibits B, C, D, E, F and H39are not "commercial lists" for these do not belong to the category of "other published compilations" under Section 45 aforequoted. Under the principle ofejusdem generis, "(w)here general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned."40The exhibits mentioned are mere price quotations issued personally to Del Rosario who requested for them from dealers of equipment similar to the ones lost at the collision of the two vessels. These are not published in any list, register, periodical or other compilation on the relevant subject matter. Neither are these "market reports or quotations" within the purview of "commercial lists" as these are not "standard handbooks or periodicals, containing data of everyday professional need and relied upon in the work of the occupation."41These are simply letters responding to the queries of Del Rosario. Thus, take for example Exhibit D which reads:January 20, 1987PROFORMA INVOICE NO. PSPI-05/87-NAVMARIA EFIGINIA FISHING CORPORATIONNavotas, Metro ManilaAttention:MR. EDDIE DEL ROSARIOGentlemen:In accordance to your request, we are pleated to quote our Cummins Marine Engine, to wit.Two (2) units CUMMINS Marine Engine model N855-M, 195 bhp. at 1800 rpm., 6-cylinder in-line, 4-stroke cycle, natural aspirated, 5 1/2 in. x 6 in. bore and stroke, 855 cu. In. displacement, keel-cooled, electric starting coupled with Twin-Disc Marine gearbox model MG-509, 4.5:1 reduction ratio, includes oil cooler, companion flange, manual and standard accessories as per attached sheet.Price FOB Manila P580,000.00/unitTotal FOB Manila P1,160,000.00TERMS : CASHDELIVERY : 60-90 days from date of order.VALIDITY : Subject to our final confirmation.WARRANTY : One (1) full year against factory defect.Very truly yours,POWER SYSTEMS, INC.(Sgd.)E. D. DaclanTo be sure, letters and telegrams are admissible in evidence but these are, however, subject to the general principles of evidence and to various rules relating to documentary evidence.42Hence, in one case, it was held that a letter from an automobile dealer offering an allowance for an automobile upon purchase of a new automobile after repairs had been completed, was not a "price current" or "commercial list" within the statute which made such items presumptive evidence of the value of the article specified therein. The letter was not admissible in evidence as a "commercial list" even though the clerk of the dealer testified that he had written the letter in due course of business upon instructions of the dealer.43But even on the theory that the Court of Appeals correctly ruled on the admissibility of those letters or communications when it held that unless "plainly irrelevant, immaterial or incompetent," evidence should better be admitted rather than rejected on "doubtful or technical grounds,"44the same pieces of evidence, however, should not have been given probative weight. This is a distinction we wish to point out. Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to considered at all.45On the other hand, the probative value of evidence refers to the question of whether or not it proves an issue.46Thus, a letter may be offered in evidence and admitted as such but its evidentiary weight depends upon the observance of the rules on evidence. Accordingly, the author of the letter should be presented as witness to provide the other party to the litigation the opportunity to question him on the contents of the letter. Being mere hearsay evidence, failure to present the author of the letter renders its contents suspect. As earlier stated, hearsay evidence, whether objected to or not, has no probative value. Thus:The courts differ as to the weight to be given to hearsay evidence admitted without objection. Some hold that when hearsay has been admitted without objection, the same may be considered as any other properly admitted testimony. Others maintain that it is entitled to no more consideration than if it had been excluded.The rule prevailing in this jurisdiction is the latter one. Our Supreme Court held that although the question of admissibility of evidence can not be raised for the first time on appeal, yet if the evidence is hearsay it has no probative value and should be disregarded whether objected to or not. "If no objection is made" quoting Jones on Evidence "it (hearsay) becomes evidence by reason of the want of such objection even though its admission does not confer upon it any new attribute in point of weight. Its nature and quality remain the same, so far as its intrinsic weakness and incompetency to satisfy the mind are concerned, and as opposed to direct primary evidence, the latter always prevails.The failure of the defense counsel to object to the presentation of incompetent evidence, like hearsay evidence or evidence that violates the rules ofres inter alios acta, or his failure to ask for the striking out of the same does not give such evidence any probative value. But admissibility of evidence should not be equated with weight of evidence. Hearsay evidence whether objected to or not has no probative value.47Accordingly, as stated at the outset, damages may not be awarded on the basis of hearsay evidence.48Nonetheless, the non-admissibility of said exhibits does not mean that it totally deprives private respondent of any redress for the loss of its vessel. This is because inLufthansa German Airlines v. Court of Appeals, 49 the Court said:In the absence of competent proof on the actual damage suffered, private respondent is "entitled to nominal damageswhich, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered." [Emphasis supplied].Nominal damages are awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law, and quasi-delicts, or in every case where property right has been invaded.50Under Article 2223 of the Civil Code, "(t)he adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit, or their respective heirs and assigns."Actually, nominal damages are damages in name only and not in fact. Where these are allowed, they are not treated as an equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury.51However, the amount to be awarded as nominal damages shall be equal or at least commensurate to the injury sustained by private respondent considering the concept and purpose of such damages.52The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case.53Applying now such principles to the instant case, we have on record the fact that petitioner's vesselPetroparcelwas at fault as well as private respondent's complaint claiming the amount of P692,680.00 representing the fishing nets, boat equipment and cargoes that sunk with theM/V Maria Efigenia XV.In its amended complaint, private respondent alleged that the vessel had an actual value of P800,000.00 but it had been paid insurance in the amount of P200,000.00 and, therefore, it claimed only the amount of P600,000.00. Ordinarily, the receipt of insurance payments should diminish the total value of the vessel quoted by private respondent in his complaint considering that such payment is causally related to the loss for which it claimed compensation. This Court believes that such allegations in the original and amended complaints can be the basis for determination of a fair amount of nominal damages inasmuch as a complaint alleges the ultimate facts constituting the plaintiffs cause ofaction.54Private respondent should be bound by its allegations on the amount of its claims.With respect to petitioner's contention that the lower court did not acquire jurisdiction over the amended complaint increasing the amount of damages claimed to P600,000.00, we agree with the Court of Appeals that the lower court acquired jurisdiction over the case when private respondent paid the docket fee corresponding to its claim in its original complaint. Its failure to pay the docket fee corresponding to its increased claim for damages under the amended complaint should not be considered as having curtailed the lower court's jurisdiction. Pursuant to the ruling inSun Insurance Office, Ltd. (SIOL) v. Asuncion,55the unpaid docket fee should be considered as a lien on the judgment even though private respondent specified the amount of P600,000.00 as its claim for damages in its amended complaint.Moreover, we note that petitioner did not question at all the jurisdiction of the lower court on the ground of insufficient docket fees in its answers to both the amended complaint and the second amended complaint. It did so only in its motion for reconsideration of the decision of the lower court after it had received an adverse decision. As this Court held inPantranco North Express, Inc. v. Court of Appeals,56participation in all stages of the case before the trial court, that included invoking its authority in asking for affirmative relief, effectively barred petitioner by estoppel from challenging the court's jurisdiction. Notably, from the time it filed its answer to the second amended complaint on April 16, 1985,57petitioner did not question the lower court's jurisdiction. It was only on December 29, 198958when it filed its motion for reconsideration of the lower court's decision that petitioner raised the question of the lower court's lack of jurisdiction. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction.WHEREFORE, the challenged decision of the Court of Appeals dated October 14, 1992 in CA-G.R. CV No. 26680 affirming that of the Regional Trial Court of Caloocan City, Branch 121, is hereby MODIFIED insofar as it awarded actual damages to private respondent Maria Efigenia Fishing Corporation in the amount of P6,438,048.00 for lack of evidentiary bases therefor. Considering the fact, however, that: (1) technically petitioner sustained injury but which, unfortunately, was not adequately and properly proved, and (2) this case has dragged on for almost two decades, we believe that an award of Two Million (P2,000,000.00)59in favor of private respondent as and for nominal damages is in order.No pronouncement as to costs.SO ORDERED.

G.R. No. 97412 July 12, 1994EASTERN SHIPPING LINES, INC.,petitioner,vs.HON. COURT OF APPEALS AND MERCANTILE INSURANCE COMPANY, INC.,respondents.Alojada & Garcia and Jimenea, Dala & Zaragoza for petitoner.Zapa Law Office for private respondent.VITUG,J.:The issues,albeitnot completely novel, are: (a) whether or not a claim for damage sustained on a shipment of goods can be a solidary, or joint and several, liability of the common carrier, the arrastre operator and the customs broker; (b) whether the payment of legal interest on an award for loss or damage is to be computed from the time the complaint is filed or from the date the decision appealed from is rendered; and (c) whether the applicable rate of interest, referred to above, is twelve percent (12%) or six percent (6%).The findings of the courta quo, adopted by the Court of Appeals, on the antecedent and undisputed facts that have led to the controversy are hereunder reproduced:This is an action against defendants shipping company, arrastre operator and broker-forwarder for damages sustained by a shipment while in defendants' custody, filed by the insurer-subrogee who paid the consignee the value of such losses/damages.On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel "SS EASTERN COMET" owned by defendant Eastern Shipping Lines under Bill of LadingNo. YMA-8 (Exh. B). The shipment was insured under plaintiff's Marine Insurance Policy No. 81/01177 for P36,382,466.38.Upon arrival of the shipment in Manila on December 12, 1981, it was discharged unto the custody of defendant Metro Port Service, Inc. The latter excepted to one drum, said to be in bad order, which damage was unknown to plaintiff.On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port Service, Inc., one drum opened and without seal (per "Request for Bad Order Survey." Exh. D).On January 8 and 14, 1982, defendant Allied Brokerage Corporation made deliveries of the shipment to the consignee's warehouse. The latter excepted to one drum which contained spillages, while the rest of the contents was adulterated/fake (per "Bad Order Waybill" No. 10649, Exh. E).Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses totaling P19,032.95, due to the fault and negligence of defendants. Claims were presented against defendants who failed and refused to pay the same (Exhs. H, I, J, K, L).As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19,032.95 under the aforestated marine insurance policy, so that it became subrogated to all the rights of action of said consignee against defendants (per "Form of Subrogation", "Release" and Philbanking check, Exhs. M, N, and O). (pp. 85-86,Rollo.)There were, to be sure, other factual issues that confronted both courts. Here, the appellate court said:Defendants filed their respective answers, traversing the material allegations of the complaint contending that: As for defendant Eastern Shipping it alleged that the shipment was discharged in good order from the vessel unto the custody of Metro Port Service so that any damage/losses incurred after the shipment was incurred after the shipment was turned over to the latter, is no longer its liability (p. 17, Record); Metroport averred that although subject shipment was discharged unto its custody, portion of the same was already in bad order (p. 11, Record); Allied Brokerage alleged that plaintiff has no cause of action against it, not having negligent or at fault for the shipment was already in damage and bad order condition when received by it, but nonetheless, it still exercised extra ordinary care and diligence in the handling/delivery of the cargo to consignee in the same condition shipment was received by it.From the evidence the court found the following:The issues are:1. Whether or not the shipment sustained losses/damages;2. Whether or not these losses/damages were sustained while in the custody of defendants (in whose respective custody, if determinable);3. Whether or not defendant(s) should be held liable for the losses/damages (see plaintiff's pre-Trial Brief, Records, p. 34; Allied's pre-Trial Brief, adopting plaintiff's Records, p. 38).As to the first issue, there can be no doubt that the shipment sustained losses/damages. The two drums were shipped in good order and condition, as clearly shown by the Bill of Lading and Commercial Invoice which do not indicate any damages drum that was shipped (Exhs. B and C). But when on December 12, 1981 the shipment was delivered to defendant Metro Port Service, Inc., it excepted to one drum in bad order.Correspondingly,as to the second issue, it follows that the losses/damages were sustained while in the respective and/or successive custody and possession of defendants carrier (Eastern), arrastre operator (Metro Port) and broker (Allied Brokerage). This becomes evident when the Marine Cargo Survey Report (Exh. G), with its "Additional Survey Notes", are considered. In the latter notes, it is stated that when the shipment was "landed on vessel" to dock of Pier # 15, South Harbor, Manila on December 12, 1981, it was observed that "one (1) fiber drum (was) in damaged condition, covered by the vessel's Agent's Bad Order Tally Sheet No.86427." The report further states that when defendant Allied Brokerage withdrew the shipment from defendant arrastre operator's custody on January 7, 1982, one drum was found opened without seal, cello bag partly torn but contents intact. Net unrecovered spillages was15 kgs. The report went on to state that when the drums reached the consignee, one drum was found with adulterated/faked contents. It is obvious, therefore, that these losses/damages occurred before the shipment reached the consignee while under the successive custodies of defendants. Under Art. 1737 of the New Civil Code, the common carrier's duty to observe extraordinary diligence in the vigilance of goods remains in full force and effect even if the goods are temporarily unloaded and stored in transit in the warehouse of the carrier at the place of destination, until the consignee has been advised and has had reasonable opportunity to remove or dispose of the goods (Art. 1738, NCC). Defendant Eastern Shipping's own exhibit, the "Turn-Over Survey of Bad Order Cargoes" (Exhs. 3-Eastern) states that on December 12, 1981 one drum was found "open".and thus held:WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:A. Ordering defendants to pay plaintiff, jointly and severally:1. The amount of P19,032.95, with the present legal interest of 12%per annumfrom October 1, 1982, the date of filing of this complaints, until fully paid (the liability of defendant Eastern Shipping, Inc. shall not exceed US$500 per case or the CIF value of the loss, whichever is lesser, while the liability of defendant Metro Port Service, Inc. shall be to the extent of the actual invoice value of each package, crate box or container in no case to exceed P5,000.00 each, pursuant to Section 6.01 of the Management Contract);2. P3,000.00 as attorney's fees, and3. Costs.B. Dismissing the counterclaims and crossclaim of defendant/cross-claimant Allied Brokerage Corporation.SO ORDERED. (p. 207, Record).Dissatisfied, defendant's recourse to US.The appeal is devoid of merit.After a careful scrutiny of the evidence on record. We find that the conclusion drawn therefrom is correct. As there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants, and therefore they are liable to the appellee, as subrogee for the amount it paid to the consignee. (pp. 87-89,Rollo.)The Court of Appeals thus affirmedin totothe judgment of the courta quo.In this petition, Eastern Shipping Lines, Inc., the common carrier, attributes error and grave abuse of discretion on the part of the appellate court when I. IT HELD PETITIONER CARRIER JOINTLY AND SEVERALLY LIABLE WITH THE ARRASTRE OPERATOR AND CUSTOMS BROKER FOR THE CLAIM OF PRIVATE RESPONDENT AS GRANTED IN THE QUESTIONED DECISION;II. IT HELD THAT THE GRANT OF INTEREST ON THE CLAIM OF PRIVATE RESPONDENT SHOULD COMMENCE FROM THE DATE OF THE FILING OF THE COMPLAINT AT THE RATE OF TWELVE PERCENTPER ANNUMINSTEAD OF FROM THE DATE OF THE DECISION OF THE TRIAL COURT AND ONLY AT THE RATE OF SIX PERCENTPER ANNUM, PRIVATE RESPONDENT'S CLAIM BEING INDISPUTABLY UNLIQUIDATED.The petition is, in part, granted.In this decision, we have begun by saying that the questions raised by petitioner carrier are not all that novel. Indeed, we do have a fairly good number of previous decisions this Court can merely tack to.The common carrier's duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person entitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; Kui Bai vs. Dollar Steamship Lines, 52 Phil. 863). When the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable (Art. 1735, Civil Code; Philippine National Railways vs. Court of Appeals, 139 SCRA 87; Metro Port Service vs. Court of Appeals, 131 SCRA 365). There are, of course, exceptional cases when such presumption of fault is not observed but these cases, enumerated in Article 17341of the Civil Code, are exclusive, not one of which can be applied to this case.The question of charging both the carrier and the arrastre operator with the obligation of properly delivering the goods to the consignee has, too, been passed upon by the Court. InFireman's Fund Insurance vs.Metro Port Services(182 SCRA 455), we have explained, in holding the carrier and the arrastre operator liable insolidum,thus:The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman (Lua Kian v. Manila Railroad Co., 19 SCRA 5 [1967]. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator (Northern Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore charged with the obligation to deliver the goods in good condition to the consignee.We do not, of course, imply by the above pronouncement that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier, orvice-versa,nor that attendant facts in a given case may not vary the rule. The instant petition has been brought solely by Eastern Shipping Lines, which, being the carrier and not having been able to rebut the presumption of fault, is, in any event, to be held liable in this particular case. A factual finding of both the courta quoand the appellate court, we take note, is that "there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants" (the herein petitioner among them). Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the sole petitioner in this case, is inevitable regardless of whether there are others solidarily liable with it.It is over the issue of legal interest adjudged by the appellate court that deserves more than just a passing remark.Let us first see a chronological recitation of the major rulings of this Court:The early case ofMalayan Insurance Co., Inc., vs.Manila PortService,2decided3on 15 May 1969, involved a suit forrecovery of money arising out of short deliveries and pilferage of goods. In this case, appellee Malayan Insurance (the plaintiff in the lower court) averred in its complaint that the total amount of its claim for the value of the undelivered goods amounted to P3,947.20. This demand, however, was neither established in its totality nor definitely ascertained. In the stipulation of facts later entered into by the parties, in lieu of proof, the amount of P1,447.51 was agreed upon. The trial court rendered judgment ordering the appellants (defendants) Manila Port Service and Manila Railroad Company to pay appellee Malayan Insurance the sum of P1,447.51 withlegal interest thereon from the date the complaint was filed on 28 December 1962 until full payment thereof.The appellants then assailed,inter alia, the award of legal interest. In sustaining the appellants, this Court ruled:Interest upon an obligation which calls for the payment of money, absent a stipulation, is the legal rate. Such interest normally is allowable from the date of demand, judicial or extrajudicial. The trial court opted for judicial demand as the starting point.But then upon the provisions of Article 2213 of the Civil Code, interest "cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonable certainty." And as was held by this Court inRivera vs.Perez,4L-6998, February 29, 1956,if the suit were for damages,"unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof (Montilla c.Corporacion de P.P.Agustinos, 25 Phil.447; Lichauco v.Guzman,38 Phil.302),"then, interest"should be from the date of the decision." (Emphasis supplied)The case ofReformina vs.Tomol,5rendered on 11 October 1985, was for "Recovery of Damages for Injury to Person and Loss of Property."After trial, the lower court decreed:WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and third party defendants and against the defendants and third party plaintiffs as follows:Ordering defendants and third party plaintiffs Shell and Michael, Incorporated to pay jointly and severally the following persons:xxx xxx xxx(g) Plaintiffs Pacita F. Reformina and Francisco Reformina the sum of P131,084.00 which is the value of the boat F B Pacita III together with its accessories, fishing gear and equipment minus P80,000.00 which is the value of the insurance recovered and the amount of P10,000.00 a month as the estimated monthly loss suffered by them as a result of the fire of May 6, 1969 up to the time they are actually paid or alreadythe total sum of P370,000.00 as of June 4, 1972 with legal interest from the filing of the complaint until paidand to pay attorney's fees of P5,000.00 with costs against defendants and third party plaintiffs. (Emphasis supplied.)On appeal to the Court of Appeals, the latter modified the amount of damages awarded but sustained the trial court in adjudginglegal interest from the filing of the complaint until fully paid. When the appellate court's decision became final, the case was remanded to the lower court for execution, and this was when the trial court issued its assailed resolution which applied the 6% interestper annumprescribed in Article 2209 of the Civil Code. In their petition for review oncertiorari, the petitioners contended that Central Bank CircularNo. 416, providing thus By virtue of the authority granted to it under Section 1 of Act 2655, as amended, Monetary Board in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan, or forbearance of any money, goods, or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve (12%) percentper annum. This Circular shall take effect immediately. (Emphasis found in the text) should have, instead, been applied. This Court6ruled:The judgments spoken of and referred to are judgments in litigations involving loans or forbearance of any money, goods or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank.xxx xxx xxxComing to the case at bar, the decision herein sought to be executed is one rendered in an Action for Damages for injury to persons and loss of property and does not involve any loan, much less forbearances of any money, goods or credits. As correctly argued by the private respondents, the law applicable to the said case is Article 2209 of the New Civil Code which reads Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest agreed upon, and in the absence of stipulation, the legal interest which is six percentper annum.The above rule was reiterated inPhilippine Rabbit Bus Lines, Inc., v.Cruz,7promulgated on 28 July 1986. The case was for damages occasioned by an injury to person and loss of property. The trial court awarded private respondent Pedro Manabat actual and compensatory damages in the amount of P72,500.00 withlegal interest thereon from the filing of the complaint until fully paid. Relying on theReformina v.Tomolcase, this Court8modified the interest award from 12% to 6% interest per annum but sustained the time computation thereof, i.e., from the filing of the complaint until fully paid.InNakpil and Sons vs.Court of Appeals,9the trial court, in an action for the recovery of damages arising from the collapse of a building, ordered,inter alia, the "defendant United Construction Co., Inc. (one of the petitioners). . . to pay the plaintiff, . . . , the sum of P989,335.68 withinterest at the legal rate from November 29, 1968, the date of the filing of the complaint until full payment. . . ." Save from the modification of the amount granted by the lower court, the Court of Appeals sustained the trial court's decision. When taken to this Court for review, the case, on 03 October 1986, was decided, thus:WHEREFORE, the decision appealed from is hereby MODIFIED and considering the special and environmental circumstances of this case, we deem it reasonable to render a decision imposing, as We do hereby impose, upon the defendant and the third-party defendants (with the exception of Roman Ozaeta) a solidary (Art. 1723, Civil Code,Supra.p. 10) indemnity in favor of the Philippine Bar Association of FIVE MILLION (P5,000,000.00) Pesos to cover all damages (with the exception to attorney's fees) occasioned by the loss of the building (including interest charges and lost rentals) and an additional ONE HUNDRED THOUSAND (P100,000.00) Pesos as and for attorney's fees, the total sum being payable upon the finality of this decision.Upon failure to pay on such finality, twelve (12%) per cent interest per annum shall be imposed upon aforementioned amounts from finality until paid. Solidary costs against the defendant and third-party defendants (Except Roman Ozaeta). (Emphasis supplied)A motion for reconsideration was filed by United Construction, contending that "the interest of twelve (12%) per centper annumimposed on the total amount of the monetary award was in contravention of law." The Court10ruled out the applicability of the Reformina and Philippine Rabbit Bus Lines cases and, in its resolution of 15 April 1988, it explained:There should be no dispute that the imposition of 12% interest pursuant to Central Bank Circular No. 416 . . . is applicable only in the following: (1) loans; (2) forbearance of any money, goods or credit; and(3) rate allowed in judgments (judgments spoken of refer to judgments involving loans or forbearance of any money, goods or credits. (Philippine Rabbit Bus Lines Inc. v. Cruz, 143 SCRA 160-161 [1986]; Reformina v. Tomol, Jr., 139 SCRA 260 [1985]).It is true that in the instant case, there is neither a loan or a forbearance, but then no interest is actually imposed provided the sums referred to in the judgment are paid upon the finality of the judgment.It is delay in the payment of such final judgment, that will cause the imposition of the interest.It will be noted that in the cases already adverted to, the rate of interest is imposed on the total sum, from the filing of the complaint until paid; in other words, aspart of the judgment for damages. Clearly, they are not applicable to the instant case. (Emphasis supplied.)The subsequent case ofAmerican Express International, Inc., vs.Intermediate Appellate Court11was a petition for review oncertiorarifrom the decision, dated 27 February 1985, of the then Intermediate Appellate Court reducing the amount of moral and exemplary damages awarded by the trial court, to P240,000.00 and P100,000.00, respectively, and its resolution, dated 29 April 1985, restoring the amount of damages awarded by the trial court,i.e., P2,000,000.00 as moral damages and P400,000.00 as exemplary damages withinterest thereon at 12% per annum from notice of judgment,plus costs of suit. In a decision of 09 November 1988, this Court, while recognizing the right of the private respondent to recover damages, held the award, however, for moral damages by the trial court, later sustained by the IAC, to be inconceivably large. The Court12thus set aside the decision of the appellate court and rendered a new one, "ordering the petitioner to pay private respondent the sum of One Hundred Thousand (P100,000.00) Pesos as moral damages, withsix (6%) percent interest thereon computed from the finality of this decision until paid. (Emphasis supplied)Reformina came into fore again in the 21 February 1989 case ofFlorendo v.Ruiz13which arose from a breach of employment contract. For having been illegally dismissed, the petitioner was awarded by the trial court moral and exemplary damages without, however, providing any legal interest thereon. When the decision was appealed to the Court of Appeals, the latter held:WHEREFORE, except as modified hereinabove the decision of the CFI of Negros Oriental dated October 31, 1972 is affirmed in all respects, with the modification that defendants-appellants, except defendant-appellant Merton Munn, are ordered to pay, jointly and severally, the amounts stated in the dispositive portion of the decision, including the sum of P1,400.00 in concept of compensatory damages, withinterest at the legal rate from the date of the filing of the complaint until fully paid(Emphasis supplied.)The petition for review to this Court was denied. The records were thereupon transmitted to the trial court, and an entry of judgment was made. The writ of execution issued by the trial court directed that only compensatory damages should earn interest at 6%per annumfrom the date of the filing of the complaint. Ascribing grave abuse of discretion on the part of the trial judge, a petition forcertiorariassailed the said order. This Court said:. . . , it is to be noted that the Court of Appeals ordered the payment of interest "at the legal rate"from the time of the filing of the complaint. . . Said circular [Central Bank Circular No. 416] does not apply to actions based on a breach of employment contract like the case at bar. (Emphasis supplied)The Court reiterated that the 6% interestper annumon the damages should be computed from the time the complaint was filed until the amount is fully paid.Quite recently, the Court had another occasion to rule on the matter.National Power Corporation vs.Angas,14decided on 08 May 1992, involved the expropriation of certain parcels of land. After conducting a hearing on the complaints foreminent domain,the trial court ordered the petitioner to pay the private respondents certain sums of money as just compensation for their lands so expropriated "with legal interest thereon. . .until fully paid." Again, in applying the 6% legal interestper annumunder the Civil Code, the Court15declared:. . . , (T)he transaction involved is clearly not a loan or forbearance of money, goods or credits but expropriation of certain parcels of land for a public purpose, the payment of which is without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity for damages. The legal interest required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof. Therefore, since the kind of interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by way of damages, and not by way of earnings from loans, etc. Art. 2209 of the Civil Code shall apply.Concededly, there have been seeming variances in the above holdings. The cases can perhaps be classified into two groups according to the similarity of the issues involved and the corresponding rulings rendered by the court. The "first group" would consist of the cases ofReformina v.Tomol(1985), Philippine Rabbit Bus Lines v.Cruz(1986), Florendo v.Ruiz(1989)andNational Power Corporation v.Angas(1992). In the "second group" would beMalayan Insurance Company v.Manila Port Service(1969), Nakpil and Sons v.Court of Appeals(1988),andAmerican Express International v.Intermediate Appellate Court(1988).In the "first group", the basic issue focuses on the application of either the 6% (under the Civil Code) or 12% (under the Central Bank Circular) interestper annum. It is easily discernible in these cases that there has been a consistent holding that the Central Bank Circular imposing the 12% interestper annumapplies only to loans or forbearance16of money, goods or credits, as well as to judgments involving such loan or forbearance of money, goods or credits, and that the 6% interest under the Civil Code governs when the transaction involves the payment of indemnities in the concept of damage arising from the breach or a delay in the performance of obligations in general. Observe, too, that in these cases, a common time frame in the computation of the 6% interestper annumhas been applied,i.e., from the time the complaint is filed until the adjudged amount is fully paid.The "second group", did not alter the pronounced rule on the application of the 6% or 12% interestper annum,17depending on whether or not the amount involved is a loan or forbearance, on the one hand, or one of indemnity for damage, on the other hand. Unlike, however, the "first group" which remained consistent in holding that the running of the legal interest should be from the time of the filing of the complaint until fully paid, the "second group" varied on the commencement of the running of the legal interest.Malayan held that the amount awarded shouldbear legal interest from the date of the decision of the court a quo,explaining that "if the suit were for damages, 'unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof,' then, interest 'should be from the date of the decision.'"American Express International v.IAC,introduced a different time frame for reckoning the 6% interest by ordering it to be "computed from the finality of (the) decision until paid." The Nakpil and Sons case ruled that 12% interestper annumshould be imposed from the finality of the decision until the judgment amount is paid.The ostensible discord is not difficult to explain. The factual circumstances may have called for different applications, guided by the rule that the courts are vested with discretion, depending on the equities of each case, on the award of interest. Nonetheless, it may not be unwise, by way of clarification and reconciliation, to suggest the following rules of thumb for future guidance.I. When an obligation, regardless of its source,i.e., law, contracts, quasi-contracts, delicts or quasi-delicts18is breached, the contravenor can be held liable for damages.19The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.20II. 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.21Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded.22In 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 116923of 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 court24at the rate of 6%per annum.25No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty.26Accordingly, 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 certain