torts 92014

Torts09-20-14 G.R. No. 120921 January 29, 1998 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FELIPE BALLESTEROS, CESAR GALO and ALVIN BULUSAN, accused-appellants ROMERO, J.: This is an appeal from the decision of the Regional Trial Court of Bangui, Ilocos Norte, Branch 19, finding the accused guilty beyond reasonable doubt of murder, qualified by treachery, as charged under Article 248 of the Revised Penal Code, as amended, to wit: WHEREFORE, the Court finds the three accused guilty beyond reasonable doubt of murder, qualified by treachery, as charged, defined and penalized under Article 248 of the Revised Penal Code, as amended, and applying Article 248 of the Revised Penal Code hereby sentences them to reclusion perpetua, with all the accessory penalties provided by law, and further sentencing them to pay jointly and solidarily — 1. The heirs of Jerry Agliam compensatory damages in the amount of FIFTY THOUSAND PESOS (P50,000.00), moral damages in the amount of TWENTY THOUSAND PESOS (P20,000.00), and actual damages in the amount of THIRTY FIVE THOUSAND SEVEN HUNDRED FIFTY-FIVE PESOS (P35,755.00), with interest; 2. The heirs of the late Eduardo Tolentino, Sr., compensatory damages in the amount of FIFTY THOUSAND PESOS (P50,000.00), moral damages in the amount of TWENTY THOUSAND PESOS (P20,000.00), and actual damages in the total amount of SIXTY-ONE THOUSAND SEVEN HUNDRED EIGHTY-FIVE PESOS (P61,785.00), with interest; 3. Carmelo Agliam, actual damages in the amount of TWO THOUSAND AND THREE PESOS AND FORTY CENTAVOS (P2,003.40), and moral damages in the amount of TEN THOUSAND PESOS (P10,000.00), with interest; 4. Vidal Agliam Jr., Robert Cacal and Ronnel Tolentino, moral damages in the amount of FIVE THOUSAND PESOS (P5,000.00) each, with interest. 5. The costs. The accused shall be credited in the service of their sentence the full time during which they had undergone preventive imprisonment, if they agreed voluntarily in writing to abide by the same disciplinary rules imposed upon convicted prisoners, otherwise, they shall be credited in the service thereof with only four-fifths of the time during which they had undergone preventive imprisonment. 1 In the warm summer evening of May 28, 1991, Carmelo Agliam, his half-brother Eduardo Tolentino, Ronnel Tolentino, Vidal Agliam, his brother Jerry Agliam, Robert Cacal, Raymundo Bangi and Marcial Barid converged at acarinderia owned by Ronnel Tolentino at Ganayao, Pasuquin, Ilocos Norte. They proceeded to the barangay hall at Carusipan to attend a dance. The group did not tarry for long at the dance because they sensed some hostility from Cesar Galo and his companions who were giving them dagger looks. In order to avoid trouble, especially during the festivity, they decided to head for home instead of reacting to the perceived provocation of Galo and his companions. The group had barely left when, within fifty meters from the dance hall, their owner jeep was fired upon from the rear. Vidal Agliam was able to jump out from the eastern side of the "topdown" jeep and landed just beside it. He scurried to the side of the road and hid in the ricefield. His younger brother Jerry also managed to jump out, but was shot in the stomach and died. 2 Carmelo Agliam, Robert Cacal and Ronnel Tolentino sustained injuries in the right foot, back of the right thigh, and legs and thighs, respectively. 3 The stunned Eduardo Tolentino was not even able to move from his seat and was hit with a bullet which punctured his right kidney. 4 He did not survive. The precipitate attack upon the jeep left two people dead and four others injured. Based upon the affidavits of Carmelo and Vidal Agliam, warrants for the arrest of Ballesteros, Galo and Bulusan were issued. Charged with the crime of double murder with multiple frustrated murder, an information was filed as follows: That on or about (sic) May 28, 1991, in the Municipality of Pasuquin, Ilocos Norte, Philippines and within the jurisdiction of the Honorable Court, the abovenamed accused, nighttime purposely sought, with evident premeditation and treachery, confederating and mutually helping one anotlner, did then and there, with intent to kill, willfully, unlawfully and feloniously attack and shot Eduardo Tolentino Sr., Jerry Agliam, Vidal Agliam, Carmelo Agliam, Robert Cacal and Ronnel Tolentino, with the use of firearms which caused the death of Eduardo Tolentino Sr. and Jerry Agliam and thereby inflicting gunshot wounds to Vidal Agliam, Carmelo Agliam, Robert Cacal and Ronnel Tolentino having performed all the acts which would have produced the crime of Murder, but which did not by reason of causes independent of the will of the defendant, namely the able and timely medical assistance given to said Vidal Agliam, Carmelo Agliam, Robert Cacal and Ronnel Tolentino which prevented their death. All pleaded not guilty. Paraffin tests conducted on Galo and Ballesteros produced positive results. Bulusan was not tested for nitrates. In his testimony, Galo claimed that he did not even talk to Bulusan or any of his companions at the basketball court, as alleged by the complainants. Having been found with gunpowder residue in his hands, Galo attempted to exculpate himself from the results by confessing that he had been a cigarette smoker for the past ten years and had, in fact, just consumed eight cigarette sticks prior to the test. He further asserted that paraffin tests are not infallible, and that his hand may have been contaminated by a nitrogenous compound, the source of which is urine. 1 Torts Lastly, he said that he was not even present at the crime scene when the firing incident took place; hence, he could not have been one of those who strafed the jeep. 5 For his part, Ballesteros interposed the defense of alibi, narrating to the court that, on May 28, 1991, at around 7:00 o'clock in the evening, he went to a nearby store to purchase some cigarettes. He returned home within thirty minutes and cleaned his garlic bulbs before retiring at 9:00 o'clock. The next morning, he busied himself with some chores, which included fertilizing his pepper plants with sulfate. He handled the fertilizers without gloves. To counter the finding of traces of nitrates on his left hand, Ballesteros maintained that he uses his left hand in lighting cigarettes, as it was very painful for him to use his right hand. He likewise informed the trial court that he had no motive to kill the victims. 6 Bulusan echoed the defense of alibi of Galo and Ballesteros, stating that he saw only Galo on the evening of the dance but did not talk to him. He denied joining the two later that night because after the dance, he went straight to the house of Michael Viloria, where he spent the night he went to work at 7:00 o'clock in the morning of the following day. 7 The trial court found the three accused guilty beyond reasonable doubt of murder, qualified by treachery, as charged, defined and penalized under Article 248 of the Revised Penal Code. The accused now come to the High Court on appeal, praying that the decision of the trial court be reversed and that a new one be entered acquitting them of the charges. The principal question to be resolved has to do with the merits of the decision of the lower court. Was it correct in finding accused-appellants guilty beyond reasonable doubt? We answer in the affirmative. Accused-appellants insist that the trial court erred in finding that Carmelo and Vidal Agliam recognized them as the assailants. This claim is unmeritorious. In their testimonies, Carmelo and Vidal Agliam both described the area to be well illumined by the moon. The shooting took place on a small road in the mountainous terrains of Ilocos Norte, where the air is free from darkening elements and turbidity. It being a summer evening, there could not have been any fog to becloud the atmosphere and hamper the vision of the victims, which would have prevented them from clearly seeing their assailants. They pinpointed the location of the malefactors to be approximately three meters from where they stood. 8 Considering the luminescence of the moon and the proximity between them, the victims could distinctly identify their assailants. It must be noted that Carmelo was acquainted with Galo and his brother, a butcher, since he used to deal with them in his business of buying and selling cattle. 9 Bulusan was a classmate of Vidal at Cadaratan School. Generally, people in rural communities know each other both by face and name. 10 Bulusan and Agliam were, not only townmates, but former classmates as well. The constant interaction between them through the years would necessarily lead to familiarity with each other such that, at the very least, one would have been able to recognize the other easily. 09-20-14 That accused-appellants had no motive in perpetrating the offense is irrelevant. A distinction is herein timely made between motive and intent. Motive is the moving power which impels one to action for a definite result. Intent, on the other hand, is the purpose to use a particular means to effect such result. 11 Motive alone is not proof of a crime. 12 In order to tip the scales in its favor, intent and not motive must be established by the prosecution. Motive is hardly ever an essential element of a crime. A man driven by extreme moral perversion may be led to commit a crime, without a real motive but a just for the sake of committing it. 13 Along the same line, a man who commits a crime with an apparent motive may produce different results, for which he is punished. As held in a line of cases, the rule is well-settled that the prosecution need not prove motive on the part of the accused when the latter has been positively identified as the author of the crime. 14 Lack or absence of motive for committing the crime does not preclude conviction thereof where there were reliable witnesses who fully and satisfactorily identified the accused as the perpetrator of the felony. 15 Accused-appellant's attempt to offer wild excuses regarding the source of the gunpowder traces found on their hands is futile. Experts confirm the possibility that cigarettes, fertilizers and urine may leave traces of nitrates, but these are minimal and, unlike those found in gunpowder, may be washed off with tap water. The hackneyed defense of alibi interposed by accused-appellants must likewise fail. As consistently enunciated by this Court, the established doctrine is that, for the defense of alibi to prosper, the accused must prove, not only that he was at some other place at the time of the commission of the crime, but also that it was physically impossible for him to be at the locus delicti or within its immediate vicinity. 16 This accused-appellants failed to satisfactorily prove. On the night of May 28, 1991, Galo and Bulusan attended the dance at the barangay hall. After the dance, they went their separate ways but remained within the barangay. Galo lingered in the premises. Bulusan slept over at the house of Michael Viloria, which was within walking distance from the dance hall. The defense of alibi must be established by positive, clear and satisfactorily evidence, the reason being that it is easily manufactured and usually so unreliable that it can rarely be given credence. 17 This is especially true in case of positive identification of the culprit by reliable witnesses, 18 which renders their alibis worthless. 19 Positive identification prevails over denials and alibis. 20 Accused-appellants are under the common misconception that proof beyond reasonable doubt requires total freedom from any quantum of doubt. This is not so. Under Section 2, Rule 133 of the Rules of Court, (p)roof beyond reasonable doubt does not mean such a degree of proof as, excluding possibility of error, produces absolute certainty. Moral certainty only is required, or that degree of proof which produces conviction in an unprejudiced mind. Absolute certainty of guilt is not demanded by law to convict a person of a criminal charge. The doubt to the benefit of which an accused is entitled in a criminal trial is a reasonable doubt, not a whimsical or fanciful doubt based on imagined but wholly 2 Torts improbable possibilities and unsupported by evidence. 21 Reasonable doubt is that engendered by an investigation of the whole proof and inability, after such investigation, to let the mind rest easy upon the certainty of guilt. 22 A precise example would be the uncorroborated alibi of accused in the case at bar where accused-appellants individually interposed the wavering defense of alibi. Galo failed to elucidate on his whereabouts after the dance, whereas Bulusan claimed to have slept in the house of one Michael Viloria. Ballesteros attested that he was not at the dance hall at all. None of them, however, attempted to corroborate their alibi through the testimony of witnesses. In fact, they never attempted to present as witnesses those who would have testified to having seen them elsewhere on the night in question. Had they done so, the presentation of corroborative testimony would have reenforced their defense of alibi. As held in People vs. Ligotan, 23an alibi must be supported by credible corroboration from disinterested witnesses, and where such defense is not corroborated, it is fatal to the accused. 09-20-14 the policy of this Court, the amount of fifty thousand pesos (P50,000.00) is given to the heirs of the victims by way of indemnity, and not as compensatory damages. 33 As regards moral damages, the amount of psychological pain, damage and injury caused to the heirs of the victims, although inestimable, 34 may be determined by the trial court in its discretion. Hence, we see no reason to disturb its findings as to this matter. WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED WITH MODIFICATION. No pronouncement as to costs. SO ORDERED. The Court correctly ruled in finding that the offense was qualified by treachery. Under Paragraph 16, Article 14 of the Revised Penal Code, "(t)here is treachery when the offender commits any of the crimes against the person employing means, methods or forms in the execution thereof which tend directly and specially to insure its execution without risk to himself arising from the defense which the offended party might make." The requisites of treachery are twofold: (1) (t)hat at the time of the attack, the victim was not in a position to defend himself ; and (2) that the offender consciously adopted the particular means, method or form of attack employed by him. 24 As regards the second requisite, the accused must make some preparation to kill his victim in such a manner at to insure the execution of the crime or to make it impossible or hard for the person attacked to defend himself or retaliate. 25 There must be evidence that such form of attack was purposely adopted by the accused. 26 Here, it is obvious that the accusedappellants had sufficient opportunity to reflect on their heinous plan. The facts show that the attack was well-planned and not merely a result of the impulsiveness of the offenders. Manifestations of their evil designs were already apparent as early as the time of the dance. They were well-armed and approached the homebound victims, totally unaware of their presence, from behind. There was no opportunity for the latter to defend themselves, the attack being so sudden and Eduardo Tolentino was shot right where he sat. The trial court was also correct in the award of damages to the heirs of the victims. Damages may be defined as the pecuniary compensation, recompense, or satisfaction for an injury sustained, or as otherwise expressed, the pecuniary consequences which the law imposes for the breach of some duty or the violation of some right. 27 Actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained, 28 whereas moral damages may be invoked when the complainant has experienced mental anguish, serious anxiety, physical suffering, moral shock and so forth, and had furthermore shown that these were the proximate result of the offender's wrongful act or omission. 29 In granting actual or compensatory damages, the party making a claim for such must present the best evidence available, viz., receipts, vouchers, and the like, 30 as corroborated by his testimony. 31 Here, the claim for actual damages by the heirs of the victims is not controverted, the same having been fully substantiated by receipts accumulated by them and presented to the court. 32 Therefore, the award of actual damages is proper. However, the order granting compensatory damages to the heirs of Jerry Agliam and Eduardo Tolentino Sr. must be amended. Consistent with 3 Santos before the Regional Trial Court of Pasig and assigned to Branch 22 thereof. . REGALADO. G. a less than a meter wide path through the septic tank and with 5-6 meters in length. Said property may be described to be surrounded by other immovables pertaining to defendants herein. Palingon. as synthesized by the trial court and adopted by the Court of Appeals. "1-C". "D" for plaintiff. Exh. Burgos Street as the point of reference. Defendant Ma. In passing thru said passageway. Some of their footwear were even lost. "1-D" and "1-E") And it was then that the remaining tenants of said apartment vacated the area. with this dispositive part: Accordingly. As an access to P. 47466 for the grant of an easement of right of way was filed by Pacifico Mabasa against Cristino Custodio. Metro Manila. The first passageway is approximately one meter wide and is about 20 meters distan(t) from Mabasa's residence to P. Taking P. Burgos Street from plaintiff's property. However. Tipas. the row of houses will be as follows: That of defendants Cristino and Brigido Custodio. Such path is passing in between the previously mentioned row of houses. Burgos St. (Exhibit "1-Santoses and Custodios. has to be traversed. there were tenants occupying the remises and who were acknowledged by plaintiff Mabasa as tenants. vs. . Custodio. Morato. Exhs. one of said tenants vacated the apartment and when plaintiff Mabasa went to see the premises. this Court finds that the original plaintiff Pacifico Mabasa died during the pendency of this case and was substituted by Ofelia Mabasa.petitioners. 1996 SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA SANTOS. Brigida R. his surviving spouse [and children].R.. Tagig. 3 (Emphasis in original text. Civil Case No. Rosalina R. corrections in parentheses supplied) On February 27. it is about 26 meters. 116100 February 9. which affirmed with modification the decision of the trial court. On the right side (is) that of defendant Rosalina Morato and then a Septic Tank (Exhibit "D"). No. are as follows: When said property was purchased by Mabasa. a decision was rendered by the trial court. on the left side.1 On August 26. METRO MANILA. as well as its resolution dated July 8. Burgos Street. going to plaintiff's property. The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P. MABASA and REGIONAL TRIAL COURT OF PASIG. BRANCH 181. Lito Santos and Maria Cristina C. promulgated on November 10. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed. sometime in February. 1990. Burgos Street.: This petition for review on certiorari assails the decision of respondent Court of Appeals in CA-G. She also mentioned some other inconveniences of having (at) the front of her house a pathway such as when some of the tenants were drunk and would bang their doors and windows. then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa.Torts 09-20-14 Perusing the record.R. The plaintiff was able to acquire said property through a contract of sale with spouses Mamerto Rayos and Teodora Quintero as vendors last September 1981. The second passageway is about 3 meters in width and length from plaintiff Mabasa's residence to P. 1993. Cristina Santos testified that she constructed said fence because there was an incident when her daughter was dragged by a bicycle pedalled by a son of one of the tenants in said apartment along the first passageway. HEIRS OF PACIFICO C. 1982. respondents. judgment is hereby rendered as follows: 4 . . 1982. J. there are two possible passageways. CV No.2 The generative facts of the case. Said adobe fence was first constructed by defendants Santoses along their property which is also along the first passageway. COURT OF APPEALS. he saw that there had been built an adobe fence in the first passageway making it narrower in width. 29115. 1994 denying petitioner's motion for reconsideration. petitioners cannot obtain any affirmative relief other than those granted in the decision of the trial court. we agree with petitioners that the Court of Appeals erred in awarding damages in favor of private respondents. the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only insofar as the herein grant of damages to plaintiffs-appellants. The award of damages has no substantial legal basis. The Court hereby orders defendants-appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65. However. The appellee can only advance any argument that he may deem necessary to defeat the appellant's claim or to uphold the decision that is being disputed. With respect to the first issue.6 Petitioners then took the present recourse to us. a person sustains actual damage.14 5 . That decision of the court below has become final as against them and can no longer be reviewed.000) Pesos as Moral Damages. These situations are often called damnum absque injuria. the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. namely.7 2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos (P8. or harm which results from the injury. or damage without wrong. The rest of the appealed decision is affirmed to all respects. The rule in this jurisdiction is that whenever an appeal is taken in a civil case. much less reversed. but not However. the damage is regarded as damnum absque injuria. Petitioners did not appeal from the decision of the court a quo granting private respondents the right of way. does not constitute a cause of action.5 On July 8. Wrong without damage. whether or not the grant of right of way to herein private respondents is proper. in order that the law will give redress for an act causing damage. With the finality of the judgment of the trial court as to petitioners. and damages are the recompense or compensation awarded for the damage suffered. that act must be not only hurtful. and consequently create no cause of action in his favor. in turn. but wrongful. there must be both a right of action for a legal wrong inflicted by the defendant. by this Court. and damage resulting to the plaintiff therefrom. raising two issues. Thus. it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering.Torts 09-20-14 1) Ordering defendants Custodios and Santoses to give plaintiff permanent access ingress and egress. he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. 1994. and whether or not the award of damages is in order. There must be damnum et injuria. A reading of the decision of the Court of Appeals will show that the award of damages was based solely on the fact that the original plaintiff. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. the issue of propriety of the grant of right of way has already been laid to rest. without sustaining any legal injury. to the public street. an appellee who has not himself appealed may not obtain from the appellate court any affirmative relief other than what was granted in the decision of the lower court. For failure to appeal the decision of the trial court to the Court of Appeals. harm or loss to his person or property. the Court of Appeals denied petitioner's motion for reconsideration. as earlier stated. 1993. went to the Court of Appeals raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. Injury is the illegal invasion of a legal right. To warrant the recovery of damages. These assigned errors.8 There is a material distinction between damages and injury.13 If. the decretal portion of which disposes as follows: WHEREFORE.11 Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person. The parties to shoulder their respective litigation expenses. Thirty Thousand (P30. damage is the loss.12 In other words. hurt. as may happen in many cases. may be considered by the appellate court solely to maintain the appealed decision on other grounds. the consequences must be borne by the injured person alone. there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded.000) Pesos as Actual Damages. therein plaintiff represented by his heirs.000) Pesos as Exemplary Damages. the Court of Appeals rendered its decision affirming the judgment of the trial court with modification. Pacifico Mabasa. with respect to the second issue. that is. since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.000) as indemnity for the permanent use of the passageway. and he can assign errors in his brief if such is required to strengthen the views expressed by the court a quo. herein private respondents. Thus. an act or omission which the law does not deem an injury. 10 The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. herein petitioners are already barred from raising the same. In such cases. On November 10. and Ten Thousand (P10. 4 Not satisfied therewith.9 In order that a plaintiff may maintain an action for the injuries of which he complains. hence they are presumed to be satisfied with the adjudication therein. that is. for the purpose of reversing or modifying the judgment in the appellee's favor and giving him other affirmative reliefs. incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway. (2) The acts should be willful. J. Metro Manila when it collided with the vessel Petroparcel which at the time was owned by the Luzon Stevedoring Corporation (LSC). for all the purposes to which such property is usually applied. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful means. according to his pleasure. there is no cause of action for acts done by one person upon his own property in a lawful and proper manner. 20 although the act may result in damage to another. 3 A court cannot merely rely on speculations. Alejandro rendered a decision finding the Petroparcel at fault. Hence. 9 For its part. as owners. The law recognizes in the owner the right to enjoy and dispose of a thing. the 6 .680. hence not contrary to morals. allegedly representing the value of the fishing nets. private respondent averred that M/V Maria Efigenia XV had an actual value of P800. prior to said decision. the lot was not subject to any servitudes. Batangas on its way to Navotas. The records disclose that in the early morning of September 21. It was only that decision which gave private respondents the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. 16 It is within the right of petitioners. petitioner. although there was damage. paying thereto the docket fee of one thousand two hundred fifty-two pesos (P1.17 A person has a right to the natural use and enjoyment of his own property. 2 The claimant is duty-bound to point out specific facts that afford a basis for measuring whatever compensatory damages are borne. There was no easement of way existing in favor of private respondents. An injury or damage occasioned thereby is damnum absque injuria. 107518 October 8. was navigating the waters near Fortune Island in Nasugbu. petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right.R. respondents. The fact that private respondents had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied. HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING CORPORATION. 6 Such are the jurisprudential precepts that the Court now applies in resolving the instant petition.Torts In the case at bar. As a general rule. therefore. G. without other limitations than those established by law. such as fencing or enclosing the same as in this case. premised upon competent proof or best evidence obtainable of the actual amount thereof. nobody can complain of having been injured. To repeat. no cause of action arises in the latter's favor. private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead for the recovery of the lost value of the hull of M/V Maria Efigenia XV. 22 09-20-14 WHEREFORE. Philippine Coast Guard Commandant Simeon N.00 and that. 7 private respondent sued the LSC and the Petroparcel captain. Based on this finding by the Board and after unsuccessful demands on petitioner.with interest at the legal rate plus 25% thereof as attorney's fees. in the amended complaint. 8 In particular. owned by private respondent Maria Efigenia Fishing Corporation. the appealed decision of respondent Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is correspondingly REINSTATED. under the compulsion of the foregoing premises. 18 When the owner of property makes use thereof in the general and ordinary manner in which the property is used. Edgardo Doruelo. petitioner PNOC Shipping and Transport Corporation sought to be substituted in place of LSC as it had already acquired ownership of the Petroparcel.00). basic is the rule that to recover actual damages. good customs or public policy. After investigation was conducted by the Board of Marine Inquiry.: A party is entitled to adequate compensation only for such pecuniary loss actually suffered and duly proved. as such damage or loss is damnum absque injuria." At the time of the construction of the fence. because the incovenience arising from said use can be considered as a mere consequence of community life. Contrary to the claim of private respondents. whatever injury or damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria. vs. or by any other means without detriment to servitudes constituted thereon. No. or guesswork as to the fact and amount of damages 4 as well as hearsay 5 or uncorroborated testimony whose truth is suspect. ditches. good customs or public policy. 15 The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners. after deducting the insurance payment of P200. Meanwhile. to enclose and fence their property.000. for no legal right has been invaded. 1Indeed. 21 One may use any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to another. conjectures. the amount of loss must not only be capable of proof but must actually be proven with a reasonable degree of certainty.00) and the legal research fee of two pesos (P2.00. private respondent prayed for an award of P692. either by law or by contract.252.000.00. the M/V Maria Efigenia XV. before the then Court of First Instance of Caloocan City. live or dead hedges. it is essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals. 19 The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie. Article 430 of the Civil Code provides that "(e)very owner may enclose or fence his land or tenements by means of walls. during the pendency of the case. boat equipment and cargoes of M/V Maria Efigenia XV. petitioners could not be said to have violated the principle of abuse of right. ROMERO. 1977. there was no legal injury. and (3) There was damage or injury to the plaintiff. 10 Accordingly. 1998 PNOC SHIPPING AND TRANSPORT CORPORATION. although such acts incidentally cause damage or an unavoidable loss to another. 5. 11 Subsequently. 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. 1985. Edgardo Doruelo is still in their employ. He further added that with the loss of his flagship vessel in his fishing fleet of fourteen (14) vessels. barges and pumping stations. The Board of Marine Inquiry conducted an investigation of this marine accident and on 21 November 1978. for lack of jurisdiction. on its way to Navotas. 332 (involving the sea accident of 21 September 1977) was specifically identified and assumed by the latter. to wit: 1. On 21 September 1977. the Honorable Simeon N. Also lost with the vessel were two cummins engines (250 horsepower). 1987. Edilberto del Rosario.048. boat equipments (sic) and cargoes. the lower court cited the evidence presented by private respondent consisting of the testimony of its general manager and sole witness. a certificate of ownership issued by the Philippine Coast Guard showing that M/V Maria Efigenia XV was a wooden motor boat constructed in 1965 with 128. 7. a stipulations of facts. 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.000 to handle the case at the Board of Marine Inquiry and P50. 13 After petitioner had filed its answer to the second amended complaint. 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. and c. the lower court 15 rendered on November 18. on account of the sinking of the vessel. In arriving at the above disposition. its equipment and its lost cargoes. 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. SO ORDERED. The counterclaim is hereby DISMISSED for lack of merit. it was then carrying 1.Torts 09-20-14 amount of P600. According to him. he was constrained to hire the services of counsel whom he paid P10. C-9457 as follows: WHEREFORE. that PNOC-STC assumes. b. plaintiff suffered actual damages by the loss of its fishing nets.00 for commencing suit for damages in the lower court. all obligations arising from and by virtue of all rights it obtained over the LSCO "Petroparcel". On 2 April 1978. in its decision dismissing the appeal of Capt. 9.000. said fishing boat was hit by the LSCO tanker "Petroparcel" causing the former to sink. 1989 its decision disposing of Civil Case No. After trial. among which was the LSCO Petroparcel. to pay the plaintiff: a. among others. 4. Private respondent's witness testified that M/V Maria Efigenia XV was owned by private respondent per Exhibit A. The costs of suit. 2. Furthermore.23 gross tonnage. the decision of Board of Marine Inquiry was affirmed by the Ministry of National Defense. such that there should be a reasonable determination thereof. tugboats. 8. On the same date on 2 April 1979 (sic). On 6 July 1979. the complaint was further amended to include petitioner as a defendant 12 which the lower court granted in its order of September 16. defendant Luzon Stevedoring Corporation (LUSTEVECO). another agreement between defendant LUSTEVECO and PNOC-STC was executed wherein Board of Marine Inquiry Case No. 3. while the fishing boat "M/V MARIA EFIGENIA" owned by plaintiff was navigating in the vicinity of Fortune Island in Nasugbu. the Commandant of the Philippine Coast Guard. On 23 June 1979. Alejandro. on February 5. without qualifications.438. 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. Metro Manila. the lower court issued a pre-trial order 14 containing. judgment is hereby rendered in favor of the plaintiff and against the defendant PNOC Shipping & Transport Corporation.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. Batangas. The sum of P6. The aforesaid agreement stipulates. LSCO "Petroparcel" is presently owned and operated by PNOC-STC and likewise Capt. 6. radar. Likewise. executed in favor of PNOC Shipping and Transport Corporation a Deed of Transfer involving several tankers. The sum of P50.060 tubs (bañeras) of assorted fish the value of which was never recovered. 7 .00 as and for attorney's fees. private respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven. Edgardo Doruelo and Chief mate Anthony Estenzo of LSCO "Petroparcel". the case against defendant Edgardo Doruelo is hereby DISMISSED. and in view of the foregoing.000.000.00 should likewise be claimed. at the time the vessel sank. among other things. pathometer and compass. B. 19 Hence.00. 1990. 17 On January 25. (g) Exhibit G — retainer agreement between Del Rosario and F.00 was not convincingly proved by competent and admissible evidence. P146. 1990.).048. P81. (e) Exhibit E — quotation of prices issued by Scan Marine Inc. 195 bhp. 100md x 100mtrs. the lower court took into account the following pieces of documentary evidence that private respondent proffered during trial: The lower court held that the prevailing replacement value of P6.00 and 50 pcs. the lower court noted that petitioner only presented Lorenzo Lazaro. 50 rolls of 400/18 5kts.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. Aggrieved. 1987 to Del Rosario showing that a unit of Furuno Compact Daylight Radar. T. 100md x 100mtrs. as sole witness and it did not bother at all to offer any documentary evidence to support its position..00. two (2) rolls of nylon rope (3" cir. X 240fl.000. monthly retainer of P500. On the other hand. P1. senior estimator at PNOC Dockyard & Engineering Corporation. however. 50 rolls of 400/18 8kts.438.438. of floats. the quotation of prices submitted by the plaintiff relative to the replacement value of the fishing boat and its equipments in the tune of P6.048. 16 Petitioner 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.050 bañeras valued at P170. L.000. 1970). saying that he could not produce a breakdown of the costs of his estimates as it was "a sort of secret scheme.00 or a total of P197. at 1800 rpm. Lazaro testified that the price quotations submitted by private respondent were "excessive" and that as an expert witness. (d) Exhibit D — pro forma invoice No. petitioner still filed a motion for leave to file a reply to private respondent's opposition to said motion.065. PSPI-05/87-NAV issued by E. 100md x 100mtrs.500. Bus Co.00 while a unit of Furuno Color Video Sounder.00 per piece or a total of P414.252. de Bonifacio vs. (a) Exhibit A — certified xerox copy of the certificate of ownership of M/V Maria Efigenia XV.500 and bañera (tub) at P65. Inc.000.00 which were lost due to the recklessness and imprudence of the herein defendants were not rebutted by the latter with sufficient evidence. Daclan of Power Systems.048. per appearance fee of P400.00 in actual damages. 1987 to Del Rosario showing that two (2) rolls of nylon rope (5" cir. 1977 stating that as a result of the collision.00 so that the two units would cost P145. and (h) Exhibit H — price quotation issued by Seafgear Sales. 1987 to Del Rosario showing that two (2) units of CUMMINS Marine Engine model N855-M. petitioner elevated the matter to the Court of Appeals which. (f) Exhibit F — quotation of prices issued by Seafgear Sales. one (1) binocular (7 x 50). 1990. P4.048..000. the lower court erred in awarding an amount greater than that prayed for in the second amended complaint. he used the quotations of his suppliers in making his estimates. would cost P100. 21 On petitioner's assertion that the award of P6. and (3) the lower court erred when it failed to resolve the issues it had raised in its memorandum." For this reason.D. P116.00. August 31. dated April 10. Model FR-604D.Torts 09-20-14 As to the award of P6. Jr.00. (c) Exhibit C — a quotation for the construction of a 95-footer trawler issued by Isidoro A. Evidence to be believed must not only proceed from the mouth of the credible witness.000.00. L-26810.750.. the lower court concluded: (b) Exhibit B — a document titled "Marine Protest" executed by Delfin Villarosa. However. Inc. X 300fl. 20 Unsatisfied with the lower court's decision. on January 21. Inc.00.000.000.400. Model FCV-501 would cost P45. P9. Magalong Engineering and Construction on January 26.000. but they did not bother at all to present any documentary evidence to substantiate such claim.. but it must be credible in itself.00.160.000. 100md x 100mtrs.) would cost P140.438. 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. 18 Apparently not having received the order denying its motion for reconsideration.00.00. Evidently. one (1) compass (6").00 of the fishing boat and all its equipment would regularly increase at 30% every year from the date the quotations were given. (Vda. A. said motion had become moot and academic. P70. on February 12. he failed to present such quotations of prices from his suppliers. "it was well within his knowledge and competency 8 . Sumulong Associates Law Offices stipulating an acceptance fee of P5. affirmed the same in toto on October 14.00. Incorporated on January 20. 1987 to Del Rosario showing the cost of poly nettings as: 50 rolls of 400/18 3kts. The defendants through their sole witness Lorenzo Lazaro relied heavily on said witness' bare claim that the amount afore-said is excessive or bloated. (2) assuming that plaintiff was entitled to damages. 1987 to Del Rosario showing that construction of such trawler would cost P2.000.000.00 as docket fee.000.. that the lower court did not acquire jurisdiction over the case by paying only P1. the M/V Maria Efigenia XVsustained a hole at its left side that caused it to sink with its cargo of 1. 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. on September 22. 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.250. would cost P1. and 50 rolls of 400/18 10kts.00.00. the lower court declined reconsideration for lack of merit. Magalong of I. P42. on January 20.438. 1992.150.00.00. 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.048. for the reason that their rejection places them beyond the consideration of the court. then nothing can be added to that value in respect of charters actually lost. the respondent court held that following the ruling in Sun Insurance Ltd. Supra). . where the lower court is confronted with evidence which appears to be of doubtful admissibility. May 31. actual damages include all the natural and probable consequences of the act or omission complained of. 26 Thus: Where goods are destroyed by the wrongful act of the defendant the plaintiff is entitled to their value at the time of destruction. 13. 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.438. p. equipment and cargo. 1990 Edition. Stressing that the alleged inadmissible documentary exhibits were never satisfactorily rebutted by appellant's own sole witness in the person of Lorenzo Lazaro. and which already included the amount by way of adjustment as prayed for in the amended complaint. In fact. in the case of profitearning chattels. C. 124 [1899]. 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 judge should declare in favor of admissibility rather than of nonadmissibility (The Collector of Palakadhari.00. heavily relies on the very same pieces of evidence (price quotations) appellant has so vigorously objected to as inadmissible evidence. trade circulars and price lists. that regard must be had to existing and pending engagements. Revised Rules of Court. Considering the documentary evidence presented as in the nature of market reports or quotations. and this means. 22 the additional docket fee that may later on be declared as still owing the court may be enforced as a lien on the judgment. Volume VII. and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante). (Banaria vs. not rejecting them on doubtful or technical grounds." without. at least in the case of ships. cited in Francisco. 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.048. if the ship is valued without reference to its actual future engagements and only in the light of its profit-earning potentiality. plus in a proper case damages for the loss of use during the period before replacement. as a whole. 24 In actions based on torts or quasi-delicts.00 awarded is clearly within the relief prayed for in appellee's second amended complaint. in making an award must point out specific facts that could 9 . admittedly an expert one.438. the sum of money which he would have to pay in the market for identical or essentially similar goods. of course. . .00 was duly established at the trial on the basis of appellee's documentary exhibits (price quotations) which stood uncontroverted. et al. Evidence. In assailing the Court of Appeals' decision. the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial court." Hence.048 as actual damages should have been in light of these considerations. 23 Under Article 2199 of the Civil Code. cited in Francisco. can easily be remedied by completely discarding or ignoring them. . for to do so would be pro tanto to compensate the plaintiff twice over.336. . the Court of Appeals held. to enable an injured party to recover actual or compensatory damages. In other words. to compensate for the injury inflicted and not to impose a penalty. loss or injury sustained. If the market value of the ship reflects the fact that it is in any case virtually certain of profitable employment. what has to be assessed is the value of the chattel to its owner as a going concern at the time and place of the loss. that is. it is the safest policy to be liberal.A. (3) the value of the lost cargo and the prices quoted in respondent's documentary evidence only amount to P4. On the issue of lack of jurisdiction. The amount of P6. immaterial or incompetent. . The amount of P6. He must establish his case by a preponderance of evidence which means that the evidence. . Asuncion.215. but admitting them unless plainly irrelevant. 25 There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses (daño emergente). 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. damages cannot be presumed and courts. p. 28 The burden of proof is on the party who would be defeated if no evidence would be presented on either side.438. 4142. v. the appellate court found that petitioner ironically situated itself in an "inconsistent posture by the fact that its own witness. 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. Hence. They proceed from a sense of natural justice and are designed to repair the wrong that has been done. As stated at the outset. But in connection with evidence which may appear to be of doubtful relevancy or incompetency or admissibility. or in recompense for. On the other hand. 29 In other words. petitioner posits the view that the award of P6. adduced by one side is superior to that of the other. . 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. . actual or compensatory damages are those awarded in satisfaction of. 18). taking into account considerations which were too remote at the time of the loss. normally. 27 [Emphasis supplied]. (4) private respondent's failure to adduce evidence to support its claim for unrealized profit and business opportunities. No. it concluded: .Torts 09-20-14 to identify and determine the equipment installed and the cargoes loaded" on the vessel. Banaria. [Emphasis supplied]. Part I. 1950. the instant recourse. thus: Consequently. until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of evidence. If they are thereafter found relevant or competent. (2) there was no evidence on extraordinary inflation that would warrant an adjustment of the replacement cost of the lost vessel.. trade journals. Neither are these "market reports or quotations" within the purview of "commercial lists" as these are not "standard handbooks or periodicals. Moreover. C. 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. The exhibits were presented ostensibly in the course of Del Rosario's testimony.048.050 bañeras of fish were pegged at their September 1977 value when the collision happened. For this reason. periodical. 1987 PROFORMA INVOICE NO." 40 The exhibits mentioned are mere price quotations issued personally to Del Rosario who requested for them from dealers of equipment similar to the ones lost at the collision of the two vessels.00 should be admitted with extreme caution considering that. 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. Except for Exhibit B where the value of the 1. periodical or other published compilation. whether objected to or not. — Evidence of statements of matters of interest to persons engaged in an occupation contained in a list. We hold. F and H 39 are not "commercial lists" for these do not belong to the category of "other published compilations" under Section 45 aforequoted.438. therefore. Under Section 45 of the aforesaid Rule. petitioner commented that these were not duly authenticated and that the witness (Del Rosario) did not have personal knowledge on the contents of the writings and neither was he an expert on the subjects thereof. 31 Clearly ignoring petitioner's objections to the exhibits. Hearsay evidence. PSPI-05/87-NAV 10 . However. cargo and the vessel itself should be accepted as gospel truth. register. Under the principle of ejusdem generis. 34 We must. 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. Rule 130 of the Revised Rules on Evidence. however. "(w)here general words follow an enumeration of persons or things. and (4) it is generally used and relied upon by persons in the same occupation. because it was a bare assertion. such general words are not to be construed in their widest extent. D. the Court of Appeals considered private respondent's exhibits as "commercial lists. by words of a particular and specific meaning. has no probative value unless the proponent can show that the evidence falls within the exceptions to the hearsay evidence rule. we believe that the exhibits do not fall under any of the exceptions provided under Sections 37 to 47 of Rule 130." It added. 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. would show that the conclusion of the Court of Appeals on the matter was arbitrarily arrived at.048. These are not published in any list. petitioner did not object to the exhibits in terms of the time index for valuation of the lost goods and equipment. This rule states: Commercial lists and the like. Section 36. 37 09-20-14 It is true that one of the exceptions to the hearsay rule pertains to "commercial lists and the like" under Section 45." 41These are simply letters responding to the queries of Del Rosario. (3) said compilation is published for the use of persons engaged in that occupation. register. 30 In this case. 36 On this point." 38 Reference to Section 45. a document is a commercial list if: (1) it is a statement of matters of interest to persons engaged in an occupation. 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. we do not subscribe to the conclusion that his valuation of such equipment. In this respect. Noticeably. it is our considered view that Exhibits B. (2) such statement is contained in a list. Private respondent did not present any other witnesses especially those whose signatures appear in the price quotations that became the bases of the award. examine the documentary evidence presented to support Del Rosario's claim as regards the amount of losses. its equipment and cargoes should be viewed in the light of his self-interest therein. In objecting to the same pieces of evidence. Del Rosario's claim that private respondent incurred losses in the total amount of P6. 35 Any evidence. take for example Exhibit D which reads: January 20.00 as actual damages. containing data of everyday professional need and relied upon in the work of the occupation. whether oral or documentary. because he was the owner of private respondent corporation 32 whatever testimony he would give with regard to the value of the lost vessel. 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. the lower court admitted these pieces of evidence and gave them due weight to arrive at the award of P6. Based on the above requisites. E. register. however. it should be supported by independent evidence. but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned. We agree with the Court of Appeals that his testimony as to the equipment installed and the cargoes loaded on the vessel should be given credence 33 considering his familiarity thereto.438. 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. however. actual damages were proven through the sole testimony of private respondent's general manager and certain pieces of documentary evidence. Thus. 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.Torts afford a basis for measuring whatever compensatory or actual damages are borne. Rule 130. periodical or other compilation on the relevant subject matter. 000." evidence should better be admitted rather than rejected on "doubtful or technical grounds. we are pleated to quote our Cummins Marine Engine. Very truly yours. 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. should not have been given probative weight. electric starting coupled with Twin-Disc Marine gearbox model MG-509. 5 1/2 in. Two (2) units CUMMINS Marine Engine model N855-M. 48 11 . hearsay evidence. the probative value of evidence refers to the question of whether or not it proves an issue. 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. Our Supreme Court held that although the question of admissibility of evidence can not be raised for the first time on appeal. But admissibility of evidence should not be equated with weight of evidence.Torts 09-20-14 MARIA EFIGINIA FISHING CORPORATION automobile dealer offering an allowance for an automobile upon purchase of a new automobile after repairs had been completed. to wit. Hearsay evidence whether objected to or not has no probative value. subject to the general principles of evidence and to various rules relating to documentary evidence. INC. bore and stroke. Some hold that when hearsay has been admitted without objection. companion flange. 43 Navotas. ( To be sure. letters and telegrams are admissible in evidence but these are. however. 195 bhp. 46 Thus. like hearsay evidence or evidence that violates the rules of res inter alios acta. 4. Others maintain that it is entitled to no more consideration than if it had been excluded. the same may be considered as any other properly admitted testimony.160.00 But 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. keel-cooled. 47 Accordingly. manual and standard accessories as per attached sheet. in one case. whether objected to or not.000. TERMS : CASH DELIVERY : 60-90 days from date of order. Being mere hearsay evidence. displacement. Thus: The courts differ as to the weight to be given to hearsay evidence admitted without objection. In. 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. "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. natural aspirated. x 6 in. WARRANTY : One (1) full year against factory defect. This is a distinction we wish to point out. POWER SYSTEMS.5:1 reduction ratio. yet if the evidence is hearsay it has no probative value and should be disregarded whether objected to or not. and as opposed to direct primary evidence. The rule prevailing in this jurisdiction is the latter one. it was held that a letter from an The failure of the defense counsel to object to the presentation of incompetent evidence. has no probative value.00/unit Total FOB Manila P1. includes oil cooler. however. 6cylinder in-line. 855 cu. the latter always prevails. Accordingly. VALIDITY : Subject to our final confirmation. as stated at the outset. damages may not be awarded on the basis of hearsay evidence.. Its nature and quality remain the same. 4-stroke cycle. at 1800 rpm. Metro Manila Attention: MR. immaterial or incompetent. or his failure to ask for the striking out of the same does not give such evidence any probative value. 42 Hence. so far as its intrinsic weakness and incompetency to satisfy the mind are concerned. a letter may be offered in evidence and admitted as such but its evidentiary weight depends upon the observance of the rules on evidence. 45 On the other hand. Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to considered at all. Price FOB Manila P580. failure to present the author of the letter renders its contents suspect. EDDIE DEL ROSARIO Gentlemen: In accordance to your request. As earlier stated." 44 the same pieces of evidence. 50 Under Article 2223 of the Civil Code.00 representing the fishing nets. Ltd. or their respective heirs and assigns. it claimed only the amount of P600. v. and quasi-delicts. 1989 58 when it filed its motion for reconsideration of the lower court's decision that petitioner raised the question of the lower court's lack of jurisdiction. quasi-contracts.00) 59 in favor of private respondent as and for nominal damages is in order. we have on record the fact that petitioner's vessel Petroparcel was at fault as well as private respondent's complaint claiming the amount of P692. Branch 121. boat equipment and cargoes that sunk with the M/V Maria Efigenia XV.000.00 for lack of evidentiary bases therefor. 1985.000. as between the parties to the suit. was not adequately and properly proved. we believe that an award of Two Million (P2. SO ORDERED. 54 Private respondent should be bound by its allegations on the amount of its claims. which has been violated or invaded by defendant. contracts. 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. however. 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. that included invoking its authority in asking for affirmative relief. may be vindicated and recognized. therefore. Moreover. 1992 in CA-G. is hereby MODIFIED insofar as it awarded actual damages to private respondent Maria Efigenia Fishing Corporation in the amount of P6. the non-admissibility of said exhibits does not mean that it totally deprives private respondent of any redress for the loss of its vessel.048. In its amended complaint. As this Court held in Pantranco North Express. private respondent is "entitled to nominal damages which.00. 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. WHEREFORE. CV No. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction. This Court believes that such allegations in the original and amended complaints can be the basis for determination of a fair amount of nominal damages inasmuch as a complaint alleges the ultimate facts constituting the plaintiffs cause of action.00 but it had been paid insurance in the amount of P200. unfortunately.00 as its claim for damages in its amended complaint. 26680 affirming that of the Regional Trial Court of Caloocan City. to the ruling in Sun Insurance Office. the challenged decision of the Court of Appeals dated October 14. 52 The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case.00. from the time it filed its answer to the second amended complaint on April 16. (SIOL) v. 51 However. effectively barred petitioner by estoppel from challenging the court's jurisdiction. that: (1) technically petitioner sustained injury but which.680. This is because in Lufthansa German Airlines v. Court of Appeals. Court of Appeals. 49 the Court said: In the absence of competent proof on the actual damage suffered. nominal damages are damages in name only and not in fact. It did so only in its motion for reconsideration of the decision of the lower court after it had received an adverse decision. they are not treated as an equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury. private respondent alleged that the vessel had an actual value of P800. It was only on December 29. "(t)he adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions. acts or omissions punished by law.000. 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. or in every case where property right has been invaded. is adjudicated in order that a right of the plaintiff. and not for the purpose of indemnifying the plaintiff for any loss suffered.000.00 and.438." Actually. Pursuant 12 ." [Emphasis supplied]. 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. Inc. Nominal damages are awarded in every obligation arising from law. No pronouncement as to costs. 55 the unpaid docket fee should be considered as a lien on the judgment even though private respondent specified the amount of P600.000.R. Considering the fact. as the law says.000. 57 petitioner did not question the lower court's jurisdiction. Asuncion. and (2) this case has dragged on for almost two decades. 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. 53 Applying now such principles to the instant case.000.Torts 09-20-14 Nonetheless. Where these are allowed. Ordinarily. Notably. 56 participation in all stages of the case before the trial court. for being violative of Article 2088 of the Civil Code. plaintiff Lydia P. and P98. The said complaint sought (1) the declaration of nullity of DBP's appropriation of CUBA's rights.respondents. Plaintiff Lydia P. JR. and April 4.Torts 09-20-14 G. (4) the restoration of her rights.00. vs. Pangasinan. and interests over a 44-hectares fishpond located in Bolinao.. 3. J. attorney's fees. No. Cuba obtained loans from the Development Bank of the Philippines in the amounts of P109.000. P109.R. (2) the annulment of the Deed of Conditional Sale executed in her favor by DBP. (3) the annulment of DBP's sale of the subject fishpond to Caperal. As security for said loans. 1998 DEVELOPMENT BANK OF THE PHILIPPINES. Plaintiff Lydia P. 118367 January 5. title. petitioner. which were embodied in the pre-trial order: 2 1. 118342 January 5.R.00 under the terms stated in the Promissory Notes dated September 6. and expenses of litigation. 1975. title. and interests over the fishpond. the trial court conducted a pre-trial where CUBA and DBP agreed on the following facts. August 11. DAVIDE. APPEALS and LYDIA CUBA.: These two consolidated cases stemmed from a complaint 1 filed against the Development Bank of the Philippines (hereafter DBP) and Agripina Caperal filed by Lydia Cuba (hereafter CUBA) on 21 May 1985 with the Regional Trial Court of Pangasinan. COURT OF G. Cuba executed two Deeds of Assignment of her Leasehold Rights. respondents. CUBA. 13 .00. COURT OF APPEALS. 4. 1977. No. 2083 (new) dated May 13. petitioner. After the joinder of issues following the filing by the parties of their respective pleadings.000. 1974. 1974 from the Government. CAPERAL. Cuba is a grantee of a Fishpond Lease Agreement No.700. Branch 54. 2. DEVELOPMENT BANK OF THE PHILIPPINES and AGRIPINA P. 1998 LYDIA P. vs. and (5) the recovery of damages. Plaintiff failed to pay her loan on the scheduled dates thereof in accordance with the terms of the Promissory Notes. After the Notice of Rescission.Torts 09-20-14 5. The trial court also declared invalid condition no. 9. whether judicial or extra-judicial. Defendant Caperal sided with DBP. The missing items were valued at about P550. upon CUBA's default. 1982. DBP stressed that it merely exercised its contractual right under the Assignments of Leasehold Rights. plaintiff Lydia Cuba addressed two letters to the Manager DBP. they found the said house unoccupied and destroyed and CUBA's personal belongings. 1980 was issued by the Ministry of Agriculture and Food in favor of plaintiff Lydia Cuba only. CUBA insisted on an affirmative resolution. 7. as well as the Assignment of Leasehold Rights executed by Caperal in favor of DBP. CUBA's leasehold rights and interest thereon are alienable rights which can be the proper subject of a mortgage. 12. equipment. It disagreed with DBP's stand that the Assignments of Leasehold Rights were not contracts of mortgage because (1) they were given as security for loans. were also void and ineffective. It further found that when CUBA and her men were ejected by DBP for the first time in 1979. After the Deed of Conditional Sale was executed in favor of plaintiff Lydia Cuba. 13. DBP's only right was to foreclose the Assignment in accordance with law. 2088.000 pieces of bangus fish (milkfish). As to damages. and that when CUBA's son and caretaker went there on 15 September 1985. all acts of ownership and possession by the said bank were void. 14. defendant DBP took possession of the Leasehold Rights of the fishpond in question. 1982. The trial court resolved the issue in favor of CUBA by declaring that DBP's taking possession and ownership of the property without foreclosure was plainly violative of Article 2088 of the Civil Code which provides as follows: Art. That after defendant DBP took possession of the Leasehold Rights over the fishpond in question. Any stipulation to the contrary is null and void. she entered with the DBP a temporary arrangement whereby in consideration for the deferment of the Notarial Rescission of Deed of Conditional Sale. Thereafter. 12 of the Assignment of Leasehold Rights for being a clear case ofpactum commissorium expressly prohibited and declared null and void by Article 2088 of the Civil Code. The principal issue presented was whether the act of DBP in appropriating to itself CUBA's leasehold rights over the fishpond in question without foreclosure proceedings was contrary to Article 2088 of the Civil Code and. 1979. Defendant Caperal admitted only the facts stated in paragraphs 14 and 15 of the pre-trial order. DBP advertised in the SUNDAY PUNCH the public bidding dated June 24. CUBA had stocked the fishpond with 250. and the Deed of Conditional Sale in favor of defendant Caperal. In the negotiation for repurchase. It then concluded that since DBP never acquired lawful ownership of CUBA's leasehold rights. 3 Trial was thereafter had on other matters. plaintiff Lydia Cuba promised to make certain payments as stated in temporary Arrangement dated February 23. Dagupan City dated November 6. hence. 1984. and other articles used in fishpond operation which were kept in the house were missing. DBP thereafter accepted the offer to repurchase in a letter addressed to plaintiff dated February 1. all of which died because the DBP representatives prevented CUBA's men from feeding the fish. and (3) the intention of the contracting parties to treat the Assignment of Leasehold Rights as a mortgage was obvious and unmistakable. tools. invalid. executed a Deed of Conditional Sale of the Leasehold Rights in favor of plaintiff Lydia Cuba over the same fishpond in question. defendant DBP. 8. a new Fishpond Lease Agreement No. 11. in turn. 6. That the DBP thereafter executed a Deed of Conditional Sale in favor of defendant Agripina Caperal on August 16. defendant Caperal was awarded Fishpond Lease Agreement No. 1979 and December 20. Accordingly. Defendant DBP thereafter sent a Notice of Rescission thru Notarial Act dated March 13. After plaintiff Lydia Cuba failed to pay the amortization as stated in Deed of Conditional Sale.000. the notarial rescission of such sale. defendant DBP appropriated the Leasehold Rights of plaintiff Lydia Cuba over the fishpond in question. the trial court found "ample evidence on record" that in 1984 the representatives of DBP ejected CUBA and her caretakers not only from the fishpond area but also from the adjoining big house. 2083-A dated March 24. 15. therefore. Plaintiff Lydia Cuba failed to pay the amortizations stipulated in the Deed of Conditional Sale. After defendant DBP has appropriated the Leasehold Rights of plaintiff Lydia Cuba over the fishpond in question. and which was received by plaintiff Lydia Cuba. 1984. or dispose of them. the Deed of Conditional Sale in favor of CUBA. 1984 by the Ministry of Agriculture and Food. 10. excluding her husband. The creditor cannot appropriate the things given by way of pledge or mortgage. (2) although the "fishpond land" in question is still a public land. machineries. to dispose of the property. 1984. At 14 . Without foreclosure proceedings. 2083-A on December 28. which was not a contract of mortgage. 532. F and Exh. while the latter questioned the findings of fact and law of the lower court.500. DECLARING null and void and without any legal effect the act of defendant Development Bank of the Philippines in appropriating for its own interest. It then set the aggregate of the actual damages sustained by CUBA at P1. 1980 by and between the defendant Development Bank of the Philippines and plaintiff (Exh. the assignment was not a cession under Article 1255 of the Civil Code because DBP appeared to be the sole creditor to CUBA — cession presupposes plurality of debts and creditors.067. 23) and the Assignment of Leasehold Rights dated February 12. CUBA "suffered moral shock. and serious anxieties for which she became sick and had to be hospitalized" the trial court found her entitled to moral and exemplary damages. however. from P100. DECLARING the Deed of Conditional Sale dated August 16. The Court of Appeals thus declared as valid the following: (1) the act of DBP in appropriating Cuba's leasehold rights and interest under Fishpond Lease Agreement No.067. 2083. 16 and 26) as void and ineffective.000 to P50.00). The trial court further found that DBP was guilty of gross bad faith in falsely representing to the Bureau of Fisheries that it had foreclosed its mortgage on CUBA's leasehold rights. 21). (3) the deeds of assignment represented the voluntary act of CUBA in assigning her property rights in payment of her debts. It. the Court of Appeals ruled that (1) the trial court erred in declaring that the deed of assignment was null and void and that defendant Caperal could not validly acquire the leasehold rights from DBP. 1984 by and between the Development Bank of the Philippines and defendant Agripina Caperal (Exh. (2) the deeds of assignment executed by Cuba in favor of DBP. The former sought an increase in the amount of damages. which amounted to a novation of the promissory notes executed by CUBA in favor of DBP.75) representing the amounts paid by defendant Agripina Caperal to defendant Development Bank of the Philippines under their Deed of Conditional Sale. 12 of the deed of assignment was an express authority from CUBA for DBP to sell whatever right she had over the fishpond.000.00) PESOS as moral damages. In its decision 5 of 25 May 1994. 2083-A dated December 28. b) The sum of ONE HUNDRED THOUSAND (P100. (3) the deed of conditional sale between CUBA and DBP. and (5) condition no. judgment is hereby rendered in favor of plaintiff: 1. 4 the trial court disposed as follows: WHEREFORE. DECLARING the Deed of Conditional Sale dated February 21. the Fishpond Lease Agreement No.500. 5. 4. E and Exh. as and for exemplary damages.610.000. and (4) the deed of conditional 15 .00) PESOS. deleted the amount of exemplary damages and reduced the award of moral damages from P100. ORDERING defendant Development Bank of the Philippines to pay to plaintiff the following amounts: a) The sum of ONE MILLION SIXTY-SEVEN THOUSAND FIVE HUNDRED PESOS (P1. It also ruled that CUBA was not entitled to loss of profits for lack of evidence. the gross value would have been P690. (2) contrary to the claim of DBP.000.067.500. 1984 of defendant Agripina Caperal (Exh. CUBA suffered a loss of P517. Such representation induced the said Bureau to terminate CUBA's leasehold rights and to approve the Deed of Conditional Sale in favor of CUBA.000.000. and after deducting 25% of said value as reasonable allowance for the cost of feeds. degradation.Torts 09-20-14 the conservative price of P3. to restore to plaintiff the latter's leasehold rights and interests and right of possession over the fishpond land in question.00 per fish. 2. The trial court also held that CUBA was entitled to P100.000 to P50. 24) as void ab initio. 6. And considering that by reason of her unlawful ejectment by DBP. as and for attorney's fees. since she agreed to repurchase the said rights under a deed of conditional sale. 1985 executed by defendant Agripina Caperal in favor of the defendant Development Bank of the Philippines (Exh. 2083 (new). (4) CUBA was estopped from questioning the assignment of the leasehold rights. without prejudice to the right of defendant Development Bank of the Philippines to foreclose the securities given by plaintiff. as and for actual damages. d) And the sum of ONE HUNDRED THOUSAND (P100. social humiliation. 1) and the acts of notarial rescission of the Development Bank of the Philippines relative to said sale (Exhs. ORDERING defendant Development Bank of the Philippines and defendant Agripina Caperal. In its decision of 31 January 1990. 3. And ORDERING defendant Development Bank of the Philippines to reimburse and pay to defendant Agripina Caperal the sum of ONE MILLION FIVE HUNDRED THIRTY-TWO THOUSAND SIX HUNDRED TEN PESOS AND SEVENTY-FIVE CENTAVOS (P1. without any judicial or extra-judicial foreclosure.500. CUBA and DBP interposed separate appeals from the decision to the Court of Appeals.00) PESOS. jointly and severally. c) The sum of FIFTY THOUSAND (P50. plaintiff's leasehold rights and interest over the fishpond land in question under her Fishpond Lease Agreement No.000 attorney's fees in view of the considerable expenses she incurred for lawyers' fees and in view of the finding that she was entitled to exemplary damages. but agreed with the trial court as to the actual damages of P1.000 and attorney's fees. DBP assails the award of actual and moral damages and attorney's fees in favor of CUBA. taxes. Odom. to all intent and purposes. whereby property is alienated to the creditor in satisfaction of a debt in money. P50. and P50. Moreover. together with the improvements thereon. CUBA contends that the Court of Appeals erred (1) in not holding that the questioned deed of assignment was a pactum commissorium contrary to Article 2088 of the Civil Code. Cuba executed two Deeds of Assignment of her Leasehold Rights. subject to the approval of the Secretary of Agriculture and Natural Resources. both the deeds of assignment and the promissory notes were executed on the same dates the loans were granted. and conditions stipulated in the promissory note or notes covering the proceeds of this loan.000 as attorney's fees. I/We further bind myself/ourselves. however. if any. As correctly pointed out by CUBA. as mortgage contract.067." And.000. 9 this Court had the occasion to rule that an assignment to guarantee an obligation is in effect a mortgage. No. therefore. We agree with CUBA that the assignment of leasehold rights was a mortgage contract. sale or disposal of said property may be supplied by the Assignee to the payment of repairs. making said promissory note or notes. an integral part hereof. in their stipulation of facts the parties admitted that the assignment was by way of security for the payment of the loans. each of which was covered by a promissory note. and the assignment merely served as security for the loans covered by the promissory notes. the obligation to pay a sum of money remained. both could stand together. plaintiff Lydia P. It then ordered DBP to turn over possession of the property to Caperal as lawful holder of the leasehold rights and to pay CUBA the following amounts: (a) P1. Contrary to DBP's submission. the DBP. Article 1255 contemplates the existence of two or more creditors and involves the assignment of all the debtor's property. as mortgaged properties. As security for said loans. and the assignment of leasehold rights executed by Caperal in favor of DBP.000 as moral damages. to sell or otherwise dispose of whatever rights the Assignor has or might have over said property and/or its improvements and perform any other act which the Assignee may deem convenient to protect its interest. to lease the same or any portion thereof and collect rentals. improvements." There is. Upon the other hand. 118342).R. assessments and other incidental expenses and obligations and the balance. and in not increasing the amount of damages. As pointed out by CUBA. 6 DBP and CUBA filed separate petitions for review.500 as actual damages." Neither did the assignment amount to payment by cession under Article 1255 of the Civil Code for the plain and simple reason that there was only one creditor. administration. (b) in holding that the deed of assignment effected a novation of the promissory notes.Torts 09-20-14 sale between DBP and Caperal. jointly and severally. the usual 10% attorney's fees and 10% liquidated damages of the total obligation shall be imposed. no shred of doubt that a mortgage was intended. being in its essence a mortgage. In its petition (G. which reads: "Dation in payment. to the payment of interest and then on the capital of the indebtedness secured hereby. 12 of the deed of assignment constituted pactum commissorium. condition no. the said assignment merely complemented or supplemented the notes." It bears stressing that the assignment.R. it was provided that "failure to comply with the terms and condition of any of the loans shall cause all other loans to become due and demandable and all mortgages shall be foreclosed. Nor did the assignment constitute dation in payment under Article 1245 of the civil Code. All expenses advanced by the Assignee in connection with purpose above indicated which shall bear the same rate of interest aforementioned are also guaranteed by this Assignment. in her petition (G. (c) in holding that CUBA was estopped from questioning the validity of the deed of assignment when she agreed to repurchase her leasehold rights under a deed of conditional sale. If after disposal or sale of said property and upon application of total amounts received there shall remain a deficiency. Besides. 10 We do not. and (d) in reducing the amounts of moral damages and attorney's fees. under condition no. and the instrument itself. was but a security and not a satisfaction of indebtedness. 33 provided that if "foreclosure is actually accomplished. Said condition reads: 12. the last paragraph of the assignment stated: "The assignor further reiterates and states all terms. the deeds of assignment constantly referred to the assignor (CUBA) as "borrower". together with all improvements thereon. covenants. The former was only an accessory to the latter. In all of these notes. the assigned rights. 118367). there was a provision that: "In the event of foreclosure of the mortgagesecuring this notes. We find no merit in DBP's contention that the assignment novated the promissory notes in that the obligation to pay a sum of money the loans (under the promissory notes) was substituted by the assignment of the rights over the fishpond (under the deed of assignment). shall be governed by the law on sales. Significantly. 22 of the deed. said Assignor hereby binds himself to pay the same to the Assignee upon 16 . buy CUBA's argument that condition no. It is undisputed that CUBA obtained from DBP three separate loans totalling P335." 7 Simultaneous with the execution of the notes was the execution of "Assignments of Leasehold Rights" 8 where CUBA assigned her leasehold rights and interest on a 44hectare fishpond. Any amount received from rents. No. the Assignor hereby appoints the Assignee his Attorney-in-fact with full power and authority to take actual possession of the property above-described. to make repairs or improvements thereon and pay the same. Since their motions for reconsideration were denied. if any. in deleting the award of exemplary damages. to pay the deficiency. vs. That effective upon the breach of any condition of this assignment. the Fishpond Lease Agreement in favor of Caperal. Also. thus: 3. In People's Bank & Trust Co. 12 of the deed of assignment. assessment. xxx xxx xxx The title to the real estate property [sic] and all improvements thereon shall remain in the name of the Vendor until after the purchase price. Article 2199 provides: Except as provided by law or by stipulation. DBP's act of appropriating CUBA's leasehold rights was violative of Article 2088 of the Civil Code.Torts 09-20-14 demand. DBP should render an accounting of the income derived from the operation of the fishpond in question and apply the said income in accordance with condition no. As admitted by it during the pre-trial. (Emphasis supplied). . DBP should have foreclosed the mortgage. 12 At any rate. Besides. as amended. whether judicial or extrajudicial. 12 of the deed of assignment to justify its act of appropriating the leasehold rights. if any. 3135. however. such as Act No. Yet. an assignment to guarantee an obligation. Estoppel is unavailing in this case. and issued a new permit in favor of CUBA. . To validate these acts would open the floodgates to circumvention of Article 2088 of the Civil Code. the Bureau of Fisheries cancelled CUBA's original lease permit. which forbids a credit or from appropriating. the appropriation of the leasehold rights. Said acts which were predicated on such false representation. and other incidental expenses and obligations and the balance. in its letter dated 26 October 1979. It is obvious from the above-quoted paragraphs that DBP had appropriated and taken ownership of CUBA's leasehold rights merely on the strength of the deed of assignment. and to apply the proceeds to the payment of the loan. Even in cases where foreclosure proceedings were had. 13estoppel cannot give validity to an act that is prohibited by law or against public policy. advances and interest shall have been fully paid. as admitted by DBP." Its contention that it limited itself to mere administration by posting caretakers is further belied by the deed of conditional sale it executed in favor of CUBA. 22 of the deed of assignment. 15With more reason that the sale of property given as security for the payment of a debt be set aside if there was no prior fore closure proceeding. It merely provided for the appointment of DBP as attorney-in-fact with authority. In view of the false representation of DBP that it had already foreclosed the mortgage. . The deed stated: WHEREAS. improvements. to sell or otherwise dispose of the said real rights. 12 of the deed of assignment which provided: "Any amount received from rents. to the payment of interest and then on the capital of the indebtedness. exceeded the authority vested by condition no. or disposing of. . addressed to the Minister of Agriculture and Natural Resources and coursed through the Director of the Bureau of Fisheries and Aquatic Resources. as in the present case. condition no. ." We shall now take up the issue of damages. 12 did not provide that the ownership over the leasehold rights would automatically pass to DBP upon CUBA's failure to pay the loan on time. Hence. which authorizes the mortgagee to foreclose the mortgage and alienate the mortgaged property for the payment of the principal obligation. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly 17 . and (2) there should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation within the stipulated period. Instead of taking ownership of the questioned real rights upon default by CUBA. among other things. . cannot be deemed validated by estoppel. being contrary to Article 2088 of the Civil Code and to public policy. the thing given as security for the payment of a debt. As stated earlier. The power herein granted shall not be revoked as long as the Assignor is indebted to the Assignee and all acts that may be executed by the Assignee by virtue of said power are hereby ratified. appropriated the [l]easehold [r]ights of plaintiff Lydia Cuba over the fishpond in question. together with all interest thereon until fully paid. DBP cannot take refuge in condition no. DBP. approved the deed of conditional sale. . is virtually a mortgage and not an absolute conveyance of title which confers ownership on the assignee. DBP declared that it "had foreclosed the mortgage and enforced the assignment of leasehold rights on March 21. the Vendor [DBP] by virtue of a deed of assignment executed in its favor by the herein vendees [Cuba spouses] the former acquired all the right and interest of the latter over the above-described property. 12 did not provide that CUBA's default would operate to vest in DBP ownership of the said rights. may be applied to the payment of repairs. administration. As held by this Court in some cases. it had "[w]ithout foreclosure proceedings. The fact that CUBA offered and agreed to repurchase her leasehold rights from DBP did not estop her from questioning DBP's act of appropriation. Hence. The elements of pactum commissorium are as follows: (1) there should be a property mortgaged by way of security for the payment of the principal obligation. . as has been stipulated in condition no. 11 Condition no. as well as the subsequent acts emanating from DBP's appropriation of the leasehold rights. taxes. there was no such foreclosure. This provision is a standard condition in mortgage contracts and is in conformity with Article 2087 of the Civil Code. 1979 for failure of said spouses [Cuba spouces] to pay their loan amortizations." 14 This only goes to show that DBP was aware of the necessity of foreclosure proceedings. in case of default by CUBA. But. this Court had not hesitated to nullify the consequent auction sale for failure to comply with the requirements laid down by law. should therefore be set aside. Nowhere in the said letter.000 pieces of bangus. With regard to the award of P517. Actual or compensatory damages cannot be presumed. Yet. In fact. This award was affirmed by the Court of Appeals. A-1574 is MODIFIED setting aside the finding that condition no. which is hereby sustained. 17 It must point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne.R. Let this case be REMANDED to the trial court for the reception of the income statement of DBP. 19 she declared: 1. of the Civil Code. as well as the statement of the account of Lydia P. CUBA did not bring to the attention of DBP the alleged loss. 26535 is hereby REVERSED. 12 of the deed of assignment constituted pactum commissorium and the award of actual damages. 20 There being an award of exemplary damages." an award of moral damages in the amount of P50. in relation to Article 21. Such compensation is referred to as actual or compensatory damages. The award of actual damages should. We find that the alleged loss of personal belongings and equipment was not proved by clear evidence. there was not "inventory of the alleged lost items before the loss which is normal in a project which sometimes. Such claim for "losses of property. 16A court cannot rely on speculations. I was then seriously ill in Manila and within the same period I neglected the management and supervision of the cultivation and harvest of the produce of the aforesaid fishpond thereby resulting to the irreparable loss in the produce of the same in the amount of about P500.000 should likewise be awarded by way of example or correction for the public good. in Civil Case No.000 pieces of bangus which died when DBP took possession of the fishpond in March 1979. in her complaint dated 17 May 1985. as well as its false representation to the then Ministry of Agriculture and Natural Resources that it had "foreclosed the mortgage. besides.500 as actual damages consisting of P550.000. in her letter dated 24 October 1979. and for the determination of each party's financial obligation to one another. the 25 May 1994 Decision of the Court of Appeals in CA-G. The Development Bank of the Philippines is hereby ordered to render an accounting of the income derived from the operation of the fishpond in question. was therefore speculative.000 to P20. and by reducing the amounts of moral damages from P100. From 1979 until after the filing of her complaint in court in May 1985.000 as moral damages. Branch 54. be struck down for lack of sufficient basis. however. and the attorney's fees.000 representing the value of the alleged 230. but all of which died because of DBP's representatives prevented her men from feeding the fish. but must depend upon competent proof that they have been suffered by the injured party and on the best obtainable evidence of the actual amount thereof. That from February to May 1978. which was written seven months after DBP took possession of the fishpond. As pointed out by DBP.000.500 which represented the value of the 230. there was no proof as to the existence of those items before DBP took over the fishpond in question. conjectures. or guesswork as to the fact and amount of damages. In view. SO ORDERED. except as to the award of P50.000 is in order conformably with Article 2219(10). Exemplary or corrective damages in the amount of P25. CV No.Torts 09-20-14 proved.00 to my great damage and prejudice due to fraudulent acts of some of my fishpond workers. is left to the care of other persons. the claim therefor was delayed unreasonably.067. of DBP's act of appropriating CUBA's leasehold rights which was contrary to law and public policy. CUBA included "losses of property" as among the damages resulting from DBP's take-over of the fishpond.000. 18 In the present case. it was only in September 1985 when her son and a caretaker went to the fishpond and the adjoining house that she came to know of the alleged loss of several articles. Curiously.000 pieces of bangus allegedly stocked in 1979 when DBP first ejected CUBA from the fishpond and the adjoining house. Such loss was not duly proved.000 to P50. The 31 January 1990 Decision of the Regional Trial Court of Pangasinan." having been made before knowledge of the alleged actual loss.000 to P25. Cuba. but must be proved with reasonable degree of certainty. from P50.000. 21 WHEREFORE. the trial court awarded in favor of CUBA P1.000 which represented the value of the alleged lost articles of CUBA and P517. from P100. if not most often." Neither was a single receipt or record of acquisition presented. the same was not called for. the exemplary damages. did CUBA intimate that upon DBP's take-over there was a total of 230. 18 . therefore. attorney's fees are also recoverable. The alleged loss could have been a mere afterthought or subterfuge to justify her claim for actual damages. Other than the testimony of CUBA and her caretaker. : The Hippocratic Oath mandates physicians to give primordial consideration to the health and welfare of their patients. asked Dr. ROY RODERICK RAMOS and RON RAYMOND RAMOS. 124354 December 29. 1 In the case at bar. 1990. through gross negligence or incompetence or plain human error. she and her husband Rogelio met for the first time Dr. may spell the difference between life and death. finding private respondents liable for damages arising from negligence in the performance of their professional duties towards petitioner Erlinda Ramos resulting in her comatose condition.. dated 29 May 1995. 1985 at 9:00 A.000. she sought professional advice. he is made accountable for his acts. "A" and "C") which indicated she was fit for surgery. one of the defendants in this case. PERFECTA GUTIERREZ. Ramos. RAMOS and ERLINDA RAMOS.Torts 09-20-14 COURT OF APPEALS. KAPUNAN. 2 Petitioners seek the reversal of the decision 3 of the Court of Appeals. October 19. DR. p. 1988. Buenviaje (TSN. vs. 1989. dated 30 January 1992. January 13. ROMMEL RAMOS. Dr. p. Dr.00. Orlino Hozaka (should be Hosaka. January 13. Ramos. DELOS SANTOS MEDICAL CENTER. 4-5). She underwent a series of examinations which included blood and urine tests (Exhs. If a doctor fails to live up to this precept. pp. she was as normal as any other woman. Hosaka decided that she should undergo a "cholecystectomy" operation after examining the documents (findings from the Capitol Medical Center. respondents. pp. 1988. Dr. Hosaka to look for a good anesthesiologist. FEU Hospital and DLSMC) presented to him. In this sense. February 20. assured Rogelio that he will get a good anesthesiologist. J. would be on June 17. Because the discomforts somehow interfered with her normal ways. p. however. Dr. p. Hosaka charged a fee of P16. Except for occasional complaints of discomfort due to pains allegedly caused by the presence of a stone in her gall bladder (TSN. Rogelio E. 10). No. which was 19 . in their own behalf and as natural guardians of the minors. petitioners.R. She was advised to undergo an operation for the removal of a stone in her gall bladder (TSN. the Court is called upon to rule whether a surgeon. G. 5-6). "A") robust woman (TSN. 1985. she has three children whose names are Rommel Ramos. October 19. Married to Rogelio E. 1989. a 47-year old (Exh. in turn. Roy Roderick Ramos and Ron Raymond Ramos (TSN. January 13. on June 10. ORLINO HOSAKA and DRA. 1985. 1988. They agreed that their date at the operating table at the DLSMC (another defendant). which overturned the decision4 of the Regional Trial Court. an executive of Philippine Long Distance Telephone Company. Through the intercession of a mutual friend. see TSN. the doctor plays God on his patient's fate. 1999 ROGELIO E. 5). A mistake. 7). an anesthesiologist and a hospital should be made liable for the unfortunate comatose condition of a patient scheduled for cholecystectomy. The antecedent facts as summarized by the trial court are reproduced hereunder: Plaintiff Erlinda Ramos was.M. 3). Hosaka. until the afternoon of June 17. 13). pp. mali yata ang pagkakapasok. Herminda Cruz. happening" (Ibid. 21). Hosaka) looked for a good anesthesiologist (TSN. p. July 25. Gutierrez intubating the hapless patient. January 13. 1985. Reacting to what was told to him. p.542. 1985 and while still in her room. Garcia) was also tired of waiting for Dr. Rodriguez Avenue. A day before the scheduled date of operation. 1988. 1990. Ramos in favor of DLSMC. Thereafter. January 13. he came to know that Dr. he met Dr. 1989.Torts 09-20-14 to include the anesthesiologist's fee and which was to be paid after the operation (TSN. During the whole period of her confinement. pp. p. He also thought of the feeling of his wife. p.M. January 13. another anesthesiologist (id.). p. 10. to them.). "Mindy. She thereafter noticed bluish discoloration of the nailbeds of the left hand of the hapless Erlinda even as Dr. 13. p. heard somebody say that "Dr. located along E. Herminda introduced herself as Dean of the College of Nursing at the Capitol Medical Center who was to provide moral support to the patient. p. 15). was also with her (TSN. 1989. January 13. Hosaka who was not yet in (TSN. Herminda then went back to the patient who asked..M.." She then saw people inside the operating room "moving. He also saw several doctors rushing towards the operating room. the patient told her. As she held the hand of Erlinda Ramos. 14-15. October 19. Erlinda Ramos stayed at the ICU for a month. Rogelio. she focused her attention on what Dr. The patient's nailbed became bluish and the patient was placed in a trendelenburg position — a position where the head of the patient is placed in a position lower than her feet which is an indication that there is a decrease of blood supply to the patient's brain (Id. 20). Ramos "that something wrong was . . Herminda went out of the operating room and informed the patient's husband. About four months thereafter or on November 15. Rogelio reminded the doctor that the condition of his wife would not have happened.M. pp. she was admitted at one of the rooms of the DLSMC. ikuha mo ako ng ibang Doctor. At around 7:30 A. Gutierrez was doing.. While talking to Dr. she was prepared for the operation by the hospital staff. who was inside the operating room with the patient. was also there for moral support. the other defendant. Hosaka to arrive (id. who was the Dean of the College of Nursing at the Capitol Medical Center. 19-20)." So." Upon hearing those words. At the operating room. Garcia at around 12:10 P. At around 9:30 A. pp. Dr. 25-28).M. Immediately thereafter. Ramos was "already dying [and] waiting for the arrival of the doctor" even as he did his best to find somebody who will allow him to pull out his wife from the operating room (TSN. Herminda saw about two or three nurses and Dr. 19-20). she incurred hospital bills amounting to P93. and she told Rogelio E. Doctors Gutierrez and Hosaka were also asked by the hospital to explain what happened to the patient. that the doctor was not yet around (id. Garcia who remarked that he (Dr. pp. Hosaka arrived as a nurse remarked. After praying. 11-12). Gutierrez thereafter informed Herminda Cruz about the prospect of a delay in the arrival of Dr. Hosaka. Gutierrez. pp. of that fateful day. and saw that the patient was still in trendelenburg position (TSN. he told her (Herminda) to be back with the patient inside the operating room (TSN. Rogelio. After Dr. She thereafter heard Dr. Her husband. 1988. 26-27). 31-33. Hosaka approached her. "ang hirap ma-intubate nito. Herminda Cruz. she went out again and told Rogelio about what the patient said (id. 17). who was inside the operating room waiting for the doctor to arrive (ibid. 20 . Thereafter. She reiterated her previous request for Herminda to be with her even during the operation. 3-4. darating na iyon" (Ibid. who was outside the operating room. November 9.. 1989. At almost 3:00 P. Hosaka issue an order for someone to call Dr. October 19.. 1989. Her hands were held by Herminda as they went down from her room to the operating room (TSN. 1989. Calderon. TSN. Gutierrez say. 17). Calderon arrived at the operating room. pp. Hosaka. . she went out of the operating room. Rogelio E. doing this and that. had he (Dr. she then saw Dr. 1988. she saw this anesthesiologist trying to intubate the patient. she returned to the operating room. Hosaka is already here. Herminda was allowed to stay inside the operating room. she saw the patient taken to the Intensive Care Unit (ICU). At around 10:00 A. 11). 31). February 27. Dr. She then heard Dr. At about 12:15 P. who was to administer anesthesia. When informed by Herminda Cruz that something wrong was happening. Gutierrez reached a nearby phone to look for Dr.M. pp. she was given injections. Calderon was then able to intubate the patient (TSN. The latter informed the former that something went wrong during the intubation. November 15. he went down to the lobby and waited for the operation to be completed (id.25 which is the subject of a promissory note and affidavit of undertaking executed by Rogelio E. wala pa ba ang Doctor"? The former replied. and TSN. 22-23.M. inip na inip na ako. At almost 12:00 noon. October 19. October 19. About two days thereafter.. 1990. 1988. 9).. Rogelio E.. 29-30).. Perfecta Gutierrez. p.). Hosaka. October 19. 9-11). October 19. "Nandiyan na si Dr. p. p. Quezon City (TSN. p. 18). O lumalaki ang tiyan" (id. pp. 19). dumating na raw. "Huwag kang mag-alaala. Meanwhile. Herminda Cruz immediately rushed back. of June 17.1989.. 16. 16). "Mindy. Because of the remarks of Dra. the patient was released from the hospital. Rogelio. Her sister-in-law. Although not a member of the hospital staff. Dr. p. Ramos was able to talk to Dr. The doctors explained that the patient had bronchospasm (TSN. saw a respiratory machine being rushed towards the door of the operating room.. 1991. 1989. [and] preparing the patient for the operation" (TSN. When she returned to the operating room. October 19. Thiopental Sodium (Pentothal). they should have done. this Court finds that he is liable for the acts of Dr. and for arriving for the scheduled operation almost three (3) hours late.see also TSN. p. judgment is rendered in favor of the plaintiffs and against the defendants. She suffered brain damage as a result of the absence of oxygen in her brain for four to five minutes (TSN. 3) the sum of P800. On the part of Dr. During the trial.000. The evidence further shows that the hapless patient suffered brain damage because of the absence of oxygen in her (patient's) brain for approximately four to five minutes which. a pulmonologist. dated 29 May 1995. She is living on mechanical means. "G". The appellate court rendered a Decision. because of the decrease of blood supply to the patient's brain. Furthermore. Perfecta Gutierrez whom he had chosen to administer anesthesia on the patient as part of his obligation to provide the patient a good anesthesiologist'. petitioners filed a civil case 6 for damages with the Regional Trial Court of Quezon City against herein private respondents alleging negligence in the management and care of Erlinda Ramos. December 21.000. at the very least. she has been in a comatose condition. and applying the aforecited provisions of law and jurisprudence to the case at bar. After being discharged from the hospital.Torts 09-20-14 Since that fateful afternoon of June 17.00 as reasonable attorney's fees. 6). 5-10). subject to its being updated. She cannot see or hear. and. caused the patient to become comatose. both parties presented evidence as to the possible cause of Erlinda's injury. The decretal portion of the decision of the appellate court reads: WHEREFORE. 1985 or in the total sum of P632. 5 Thus. On the part of DLSMC (the hospital). November 9. the latter are ordered to pay. thereafter. the former the following sums of money. the patient's nailbed became bluish and the patient. to cancel the scheduled operation after Dr. The defendants were guilty of. the defendants should have rescheduled the operation to a later date. to the effect that the cause of brain damage was Erlinda's allergic reaction to the anesthetic agent. 1989.000. 1985. for the foregoing premises the appealed decision is hereby REVERSED. negligence in the performance of their duty to plaintiff-patient Erlinda Ramos. For after she committed a mistake in intubating [the] patient. 2) the sum of P100. and the complaint below against the appellants is hereby ordered DISMISSED. 32-34). she has been staying in their residence. without due regard to the fact that the patient was inside the operating room for almost three (3) hours. 1989. Moreover. 1991. She cannot do anything. reversing the findings of the trial court.00 by way of moral damages and the further sum of P200. 4) the costs of the suit. Hosaka inexcusably failed to arrive on time. still needing constant medical attention. but also in not repeating the administration of atropine (TSN.00 as of April 15. not an emergency case. pp. the patient would not have become comatose.00 by way of exemplary damages. And. The counterclaim of appellant De Los Santos Medical 21 . She was also diagnosed to be suffering from "diffuse cerebral parenchymal damage" (Exh. pp.000. For if the patient was properly intubated as claimed by them. Perfecta Gutierrez. on 8 January 1986.00 to P10. She cannot move any part of her body. On the part of Dr.00 (TSN. was placed in trendelenburg position. xxx xxx xxx WHEREFORE. This. if defendants acted with due care and prudence as the patient's case was an elective. this Court rejects the defense raised by defendants that they have acted with due care and prudence in rendering medical services to plaintiff-patient. and in view of the foregoing. to wit: After evaluating the evidence as shown in the finding of facts set forth earlier. the hospital is liable for failing through its responsible officials. pp. Mariano Gavino to prove that the sustained by Erlinda was due to lack of oxygen in her brain caused by the faulty management of her airway by private respondents during the anesthesia phase. Orlino Hosaka. 1992. August 20. In having held thus.000.000.000. 7 Private respondents seasonably interposed an appeal to the Court of Appeals. 21-22). belie their claim. with her husband Rogelio incurring a monthly expense ranging from P8. this Court finds and so holds that defendants are liable to plaintiffs for damages. Eduardo Jamora. the fact that another anesthesiologist was called to try to intubate the patient after her (the patient's) nailbed turned bluish. this Court finds that she omitted to exercise reasonable care in not only intubating the patient. Plaintiff presented the testimonies of Dean Herminda Cruz and Dr.00 as actual monthly expenses for the plaintiff Erlinda Ramos reckoned from November 15. to wit: 1) the sum of P8. On the other hand. the Regional Trial Court rendered judgment in favor of petitioners. in turn. private respondents primarily relied on the expert testimony of Dr. this Court finds that it is liable for the acts of negligence of the doctors in their "practice of medicine" in the operating room. After considering the evidence from both sides. SO ORDERED. Accordingly. jointly and severally. 1989. the Motion for Extension (Rollo. filed with the appellate court a motion for extension of time to file a motion for reconsideration. Ligsay. the appellate court denied the motion for extension of time in its Resolution dated 25 July 1995. 12) was denied. In their Comment. With a few exceptions. JAMORA. For that alone. Despite this explanation. and denied the motion for reconsideration of petitioner. The next day. It is. The petition was filed on 9 May 1996. is hereby DENIED. then counsel on record of petitioners. petitioners engaged the services of another counsel. Sillano on 11 April 1996. to wit: We said in our Resolution on July 25. Thus. dated 29 March 1996.Torts 09-20-14 Center is GRANTED but only insofar as appellees are hereby ordered to pay the unpaid hospital bills amounting to P93.25. notice to a litigant without notice to his counsel on record is no notice at all. SO ORDERED. there can be no sufficient notice to speak of." No copy of the decision. The Motion for Reconsideration. We do not agree. The motion for reconsideration was submitted on 4 July 1995. referred the same to a legal counsel only on 20 June 1995. Sillano filed before this Court a motion for extension of time to file the present petition for certiorari under Rule 45. that the filing of a Motion for Reconsideration cannot be extended. the Coronel Law Office. Ligsay. which superseded the earlier resolution issued on 25 July 1995. II IN FINDING THAT THE NEGLIGENCE OF THE RESPONDENTS DID NOT CAUSE THE UNFORTUNATE COMATOSE CONDITION OF PETITIONER ERLINDA RAMOS. Ligsay. Petitioner. however. but after considering the Comment/Opposition. Atty. DRA. 8 I IN PUTTING MUCH RELIANCE ON THE TESTIMONIES OF RESPONDENTS DRA. only on 20 June 1995. The due date fell on 27 May 1996. the petition before us was submitted on time. all notices should be sent to the party's lawyer at his given address. the latter should be denied. The decision of the Court of Appeals was received on 9 June 1995 by petitioner Rogelio Ramos who was mistakenly addressed as "Atty. for lack of merit. 1995. 22 . admitted in the latter Motion that plaintiffs/appellees received a copy of the decision as early as June 9. Sillano filed on 7 August 1995 a motion to admit the motion for reconsideration contending that the period to file the appropriate pleading on the assailed decision had not yet commenced to run as the Division Clerk of Court of the Court of Appeals had not yet served a copy thereof to the counsel on record. SO ORDERED. In the present case. a copy of the decision of the appellate court was instead sent to and received by petitioner Rogelio Ramos on 9 June 1995 wherein he was mistakenly addressed as Atty. since the Court of Appeals already issued a second Resolution. dated 29 March 1996. was received by the Court of Appeals already on July 4. Based on this. In fact. to replace Atty. primarily on the ground that the fifteen-day (15) period for filing a motion for reconsideration had already expired. precisely. the former. on the other hand. necessarily. the delay in the filing of the motion for reconsideration cannot be taken against petitioner. plus legal interest for justice must be tempered with mercy. p. in turn. Atty. On the same day.542. GUTIERREZ. 1995. was sent nor received by the Coronel Law Office. Sillano. Even assuming admissibility of the Motion for the Reconsideration. Hence. Atty. CALDERON AND DR. Rogelio Ramos. not being a lawyer and unaware of the prescriptive period for filing a motion for reconsideration. we shall first dispose of the procedural issue on the timeliness of the petition in relation to the motion for reconsideration filed by petitioners with the Court of Appeals. Atty. The Court granted the motion for extension of time and gave petitioners additional thirty (30) days after the expiration of the fifteen-day (15) period counted from the receipt of the resolution of the Court of Appeals within which to submit the petition. Based on the other communications received by petitioner Rogelio Ramos. Moreover. the appellate court still denied the motion to admit the motion for reconsideration of petitioners in its Resolution. no copy of the decision of the counsel on record. well within the extended period given by the Court. the 15-day period already passed. or four (4) days before the expiration of the reglementary period for filing a motion for reconsideration. or on 12 April 1996. A careful review of the records reveals that the reason behind the delay in filing the motion for reconsideration is attributable to the fact that the decision of the Court of Appeals was not sent to then counsel on record of petitioners. Computation wise. 9Meanwhile. 11 Before we discuss the merits of the case. the appellate court apparently mistook him for the counsel on record. Rogelio Ramos. Atty. Rogelio referred the decision of the appellate court to a new lawyer. since a copy of the decision of the appellate court was not sent to the counsel on record of petitioner. the period to file a Motion for Reconsideration expired on June 24. It is elementary that when a party is represented by counsel. However. 12 private respondents contend that the petition should not be given due course since the motion for reconsideration of the petitioners on the decision of the Court of Appeals was validly dismissed by the appellate court for having been filed beyond the reglementary period. III IN NOT APPLYING THE DOCTRINE OF RES IPSA LOQUITUR. Petitioners assail the decision of the Court of Appeals on the following grounds: 10 A copy of the above resolution was received by Atty. we believed that the receipt of the former should be considered in determining the timeliness of the filing of the present petition. Torts 09-20-14 After resolving the foregoing procedural issue, we shall now look into the merits of the case. For a more logical presentation of the discussion we shall first consider the issue on the applicability of the doctrine of res ipsa loquiturto the instant case. Thereafter, the first two assigned errors shall be tackled in relation to the res ipsa loquiturdoctrine. Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff's prima faciecase, and present a question of fact for defendant to meet with an explanation. 13 Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants and the accident is such as in ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from or was caused by the defendant's want of care. 14 The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a matter of common knowledge and experience, the very nature of certain types of occurrences may justify an inference of negligence on the part of the person who controls the instrumentality causing the injury in the absence of some explanation by the defendant who is charged with negligence. 15 It is grounded in the superior logic of ordinary human experience and on the basis of such experience or common knowledge, negligence may be deduced from the mere occurrence of the accident itself. 16 Hence,res ipsa loquitur is applied in conjunction with the doctrine of common knowledge. However, much has been said that res ipsa loquitur is not a rule of substantive law and, as such, does not create or constitute an independent or separate ground of liability. 17 Instead, it is considered as merely evidentiary or in the nature of a procedural rule. 18 It is regarded as a mode of proof, or a mere procedural of convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing specific proof of negligence. 19 In other words, mere invocation and application of the doctrine does not dispense with the requirement of proof of negligence. It is simply a step in the process of such proof, permitting the plaintiff to present along with the proof of the accident, enough of the attending circumstances to invoke the doctrine, creating an inference or presumption of negligence, and to thereby place on the defendant the burden of going forward with the proof. 20 Still, before resort to the doctrine may be allowed, the following requisites must be satisfactorily shown: 1. The accident is of a kind which ordinarily does not occur in the absence of someone's negligence; 2. It is caused by an instrumentality within the exclusive control of the defendant or defendants; and 3. The possibility of contributing conduct which would make the plaintiff responsible is eliminated. 21 In the above requisites, the fundamental element is the "control of instrumentality" which caused the damage. 22Such element of control must be shown to be within the dominion of the defendant. In order to have the benefit of the rule, a plaintiff, in addition to proving injury or damage, must show a situation where it is applicable, and must establish that the essential elements of the doctrine were present in a particular incident. 23 Medical malpractice 24 cases do not escape the application of this doctrine. Thus, res ipsa loquitur has been applied when the circumstances attendant upon the harm are themselves of such a character as to justify an inference of negligence as the cause of that harm. 25 The application of res ipsa loquitur in medical negligence cases presents a question of law since it is a judicial function to determine whether a certain set of circumstances does, as a matter of law, permit a given inference. 26 Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the proof of negligence. 27 The reason is that the general rule on the necessity of expert testimony applies only to such matters clearly within the domain of medical science, and not to matters that are within the common knowledge of mankind which may be testified to by anyone familiar with the facts. 28 Ordinarily, only physicians and surgeons of skill and experience are competent to testify as to whether a patient has been treated or operated upon with a reasonable degree of skill and care. However, testimony as to the statements and acts of physicians and surgeons, external appearances, and manifest conditions which are observable by any one may be given by non-expert witnesses. 29 Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge can determine the proper standard of care. 30Where common knowledge and experience teach that a resulting injury would not have occurred to the patient if due care had been exercised, an inference of negligence may be drawn giving rise to an application of the doctrine of res ipsa loquiturwithout medical evidence, which is ordinarily required to show not only what occurred but how and why it occurred. 31 When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitur is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him. Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a foreign object in the body of the patient after an operation, 32 injuries sustained on a healthy part of the body which was not under, or in the area, of treatment, 33 removal of the wrong part of the body when another part was intended, 34 knocking out a tooth while a patient's jaw was under anesthetic for the removal of his tonsils, 35 and loss of an eye while the patient plaintiff was under the influence of anesthetic, during or following an operation for appendicitis, 36 among others. 23 Torts 09-20-14 Nevertheless, despite the fact that the scope of res ipsa loquitur has been measurably enlarged, it does not automatically apply to all cases of medical negligence as to mechanically shift the burden of proof to the defendant to show that he is not guilty of the ascribed negligence. Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is able to say, as a matter of common knowledge and observation, that the consequences of professional care were not as such as would ordinarily have followed if due care had been exercised. 37 A distinction must be made between the failure to secure results, and the occurrence of something more unusual and not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in that particular practice. It must be conceded that the doctrine of res ipsa loquitur can have no application in a suit against a physician or surgeon which involves the merits of a diagnosis or of a scientific treatment. 38 The physician or surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any particular scientific treatment did not produce the desired result. 39 Thus, res ipsa loquitur is not available in a malpractice suit if the only showing is that the desired result of an operation or treatment was not accomplished. 40 The real question, therefore, is whether or not in the process of the operation any extraordinary incident or unusual event outside of the routine performance occurred which is beyond the regular scope of customary professional activity in such operations, which, if unexplained would themselves reasonably speak to the average man as the negligent cause or causes of the untoward consequence. 41 If there was such extraneous interventions, the doctrine of res ipsa loquitur may be utilized and the defendant is called upon to explain the matter, by evidence of exculpation, if he could. 42 We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will hereinafter be explained, the damage sustained by Erlinda in her brain prior to a scheduled gall bladder operation presents a case for the application ofres ipsa loquitur. A case strikingly similar to the one before us is Voss vs. Bridwell, Kansas Supreme Court in applying theres ipsa loquitur stated: 43 where the The plaintiff herein submitted himself for a mastoid operation and delivered his person over to the care, custody and control of his physician who had complete and exclusive control over him, but the operation was never performed. At the time of submission he was neurologically sound and physically fit in mind and body, but he suffered irreparable damage and injury rendering him decerebrate and totally incapacitated. The injury was one which does not ordinarily occur in the process of a mastoid operation or in the absence of negligence in the administration of an anesthetic, and in the use and employment of an endoctracheal tube. Ordinarily a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia in the absence of negligence. Upon these facts and under these circumstances a layman would be able to say, as a matter of common knowledge and observation, that the consequences of professional treatment were not as such as would ordinarily have followed if due care had been exercised. Here the plaintiff could not have been guilty of contributory negligence because he was under the influence of anesthetics and unconscious, and the circumstances are such that the true explanation of event is more accessible to the defendants than to the plaintiff for they had the exclusive control of the instrumentalities of anesthesia. Upon all the facts, conditions and circumstances alleged in Count II it is held that a cause of action is stated under the doctrine of res ipsa loquitur. 44 Indeed, the principles enunciated in the aforequoted case apply with equal force here. In the present case, Erlinda submitted herself for cholecystectomy and expected a routine general surgery to be performed on her gall bladder. On that fateful day she delivered her person over to the care, custody and control of private respondents who exercised complete and exclusive control over her. At the time of submission, Erlinda was neurologically sound and, except for a few minor discomforts, was likewise physically fit in mind and body. However, during the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated. Obviously, brain damage, which Erlinda sustained, is an injury which does not normally occur in the process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube. Normally, a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia if the proper procedure was followed. Furthermore, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious. Considering that a sound and unaffected member of the body (the brain) is injured or destroyed while the patient is unconscious and under the immediate and exclusive control of the physicians, we hold that a practical administration of justice dictates the application of res ipsa loquitur. Upon these facts and under these circumstances the Court would be able to say, as a matter of common knowledge and observation, if negligence attended the management and care of the patient. Moreover, the liability of the physicians and the hospital in this case is not predicated upon an alleged failure to secure the desired results of an operation nor on an alleged lack of skill in the diagnosis or treatment as in fact no operation or treatment was ever performed on Erlinda. Thus, upon all these initial determination a case is made out for the application of the doctrine of res ipsa loquitur. Nonetheless, in holding that res ipsa loquitur is available to the present case we are not saying that the doctrine is applicable in any and all cases where injury occurs to a patient while under anesthesia, or to any and all anesthesia cases. Each case must be viewed in its own light and scrutinized in order to be within the res ipsa loquitur coverage. 24 Torts Having in mind the applicability of the res ipsa loquitur doctrine and the presumption of negligence allowed therein, the Court now comes to the issue of whether the Court of Appeals erred in finding that private respondents were not negligent in the care of Erlinda during the anesthesia phase of the operation and, if in the affirmative, whether the alleged negligence was the proximate cause of Erlinda's comatose condition. Corollary thereto, we shall also determine if the Court of Appeals erred in relying on the testimonies of the witnesses for the private respondents. 09-20-14 Q: Do you know what happened to that intubation process administered by Dra. Gutierrez? ATTY. ALCERA: She will be incompetent Your Honor. COURT: In sustaining the position of private respondents, the Court of Appeals relied on the testimonies of Dra. Gutierrez, Dra. Calderon and Dr. Jamora. In giving weight to the testimony of Dra. Gutierrez, the Court of Appeals rationalized that she was candid enough to admit that she experienced some difficulty in the endotracheal intubation 45 of the patient and thus, cannot be said to be covering her negligence with falsehood. The appellate court likewise opined that private respondents were able to show that the brain damage sustained by Erlinda was not caused by the alleged faulty intubation but was due to the allergic reaction of the patient to the drug Thiopental Sodium (Pentothal), a short-acting barbiturate, as testified on by their expert witness, Dr. Jamora. On the other hand, the appellate court rejected the testimony of Dean Herminda Cruz offered in favor of petitioners that the cause of the brain injury was traceable to the wrongful insertion of the tube since the latter, being a nurse, was allegedly not knowledgeable in the process of intubation. In so holding, the appellate court returned a verdict in favor of respondents physicians and hospital and absolved them of any liability towards Erlinda and her family. We disagree with the findings of the Court of Appeals. We hold that private respondents were unable to disprove the presumption of negligence on their part in the care of Erlinda and their negligence was the proximate cause of her piteous condition. In the instant case, the records are helpful in furnishing not only the logical scientific evidence of the pathogenesis of the injury but also in providing the Court the legal nexus upon which liability is based. As will be shown hereinafter, private respondents' own testimonies which are reflected in the transcript of stenographic notes are replete of signposts indicative of their negligence in the care and management of Erlinda. With regard to Dra. Gutierrez, we find her negligent in the care of Erlinda during the anesthesia phase. As borne by the records, respondent Dra. Gutierrez failed to properly intubate the patient. This fact was attested to by Prof. Herminda Cruz, Dean of the Capitol Medical Center School of Nursing and petitioner's sister-in-law, who was in the operating room right beside the patient when the tragic event occurred. Witness Cruz testified to this effect: ATTY. PAJARES: Q: In particular, what did Dra. Perfecta Gutierrez do, if any on the patient? A: In particular, I could see that she was intubating the patient. Witness may answer if she knows. A: As have said, I was with the patient, I was beside the stretcher holding the left hand of the patient and all of a sudden heard some remarks coming from Dra. Perfecta Gutierrez herself. She was saying "Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan. xxx xxx xxx ATTY. PAJARES: Q: From whom did you hear those words "lumalaki ang tiyan"? A: From Dra. Perfecta Gutierrez. xxx xxx xxx Q: After hearing the phrase "lumalaki ang tiyan," what did you notice on the person of the patient? A: I notice (sic) some bluish discoloration on the nailbeds of the left hand where I was at. Q: Where was Dr. Orlino Ho[s]aka then at that particular time? A: I saw him approaching the patient during that time. Q: When he approached the patient, what did he do, if any? A: He made an order to call on the anesthesiologist in the person of Dr. Calderon. Q: Did Dr. Calderon, upon being called, arrive inside the operating room? A: Yes sir. 25 when a patient is in that position." what were you referring to? A: "Mahirap yata itong i-intubate. witness Herminda Cruz. if any? A: [S]he tried to intubate the patient. Dean of the Laguna College of Nursing in San Pablo City.Torts 09-20-14 Q: What did [s]he do. her testimony was affirmed by no less than respondent Dra. petitioner's witness. staff nurse and clinical instructor in a teaching hospital. More importantly. Indeed. was fully capable of determining whether or not the intubation was a success. We do not agree with the above reasoning of the appellate court. while you were intubating at your first attempt (sic). GUTIERREZ: A: Yes sir. It is the accepted rule that expert testimony is not necessary for the proof of negligence in non-technical matters or those of which an ordinary person may be expected to have knowledge. Most of all. 47 In other words. it would not be too difficult to tell if the tube was properly inserted. . and to determine the condition of the heart. 1991. Even on the assumption that she is fully capable of determining whether or not a patient is properly intubated. external appearances. and then Dean of the Capitol Medical Center School of Nursing. 50Reviewing witness Cruz' statements. As such. July 25. the statements and acts of the physician and surgeon. At any rate. With her clinical background as a nurse. LIGSAY: Q: In this particular case. there is a decrease of blood supply to the brain. and cannot. with the kind of detail. and considered a layman in the process of intubation. (TSN. and other organs. 48 This is precisely allowed under the doctrine of res ipsa loquitur where the testimony of expert witnesses is not required. that even an ordinary person can tell if it was administered properly. we believe. we take judicial notice of the fact that nurses do not. there is no evidence that she ever auscultated the patient or that she conducted any type of examination to check if the endotracheal tube was in its proper place. did not peep into the throat of the patient. Q: When you said "mahirap yata ito. you did not immediately see the trachea? DRA. 26 . she can very well testify upon matters on which she is capable of observing such as. She had extensive clinical experience starting as a staff nurse in Chicago. we find that the same were delivered in a straightforward manner. Gutierrez who admitted that she experienced difficulty in inserting the tube into Erlinda's trachea. what the Court of Appeals is trying to impress is that being a nurse. the FEU-NRMF. Illinois. witness Cruz is not competent to testify on whether or not the intubation was a success. after a while the patient's nailbed became bluish and I saw the patient was placed in trendelenburg position. admittedly. however. consistency and spontaneity which would have been difficult to fabricate. . Doctora. Q: Did you pull away the tube immediately? A: You do not pull the . lungs. and manifest conditions which are observable by any one." that was the patient. p. without doubt. an experienced clinical nurse whose long experience and scholarship led to her appointment as Dean of the Capitol Medical Center School at Nursing. disbelieved Dean Cruz's testimony in the trial court by declaring that: A perusal of the standard nursing curriculum in our country will show that intubation is not taught as part of nursing procedures and techniques. Calderon try (sic) to intubate the patient. 13). xxx xxx xxx Q: Do you know the reason why the patient was placed in that trendelenburg position? A: As far as I know. witness Cruz's categorical statements that appellant Dra. This kind of observation. to wit: ATTY. intubate. Calderon who succeeded in doing so clearly suffer from lack of sufficient factual bases. Thus. does not require a medical degree to be acceptable. the Court is satisfied that she was able to demonstrate through her testimony what truly transpired on that fateful day. or where the lack of skill or want of care is so obvious as to render expert testimony unnecessary. Gutierrez failed to intubate the appellee Erlinda Ramos and that it was Dra. Q: What happened to the patient? A: When Dr. Q: Did you or did you not? A: I did not pull the tube. 46 xxx xxx xxx The appellate court. clarity. 49 We take judicial notice of the fact that anesthesia procedures have become so common. Although witness Cruz is not an anesthesiologist. attempts to gloss over this omission by playing around with the trial court's ignorance of clinical procedure. The pre-operative evaluation of a patient prior to the administration of anesthesia is universally observed to lessen the possibility of anesthetic accidents. 53 It includes taking the patient's medical history. traditionally. Her failure to follow this medical procedure is. GUTIERREZ: A: As I said in my previous statement. From their testimonies. she never saw the patient at the bedside. review of current drug therapy. 58 However. The argument does not convince us. Gutierrez was unaware of the physiological make-up and needs of Erlinda. as a means of defense. and only on the actual date of the cholecystectomy. As such. In her testimony she asserted: ATTY. 55 A thorough analysis of the patient's airway normally involves investigating the following: cervical spine mobility. a clear indicia of her negligence. We find the theory of private respondents unacceptable. However. Elective procedures. 60 was due to an unpredictable drug reaction to the short-acting barbiturate. physical examination and interpretation of laboratory data. the anesthesiologist possesses the luxury of time to be at the patient's beside to do a proper interview and clinical evaluation. Until the day of the operation. because of (sic) my first attempt. There is ample time to explain the method of anesthesia. 57 Where the need arises. Towards this end. The measures cautioning prudence and vigilance in dealing with human lives lie at the core of the physician's centuries-old Hippocratic Oath. In the case at bar. Respondent Dra. She was likewise not properly informed of the possible difficulties she would face during the administration of anesthesia to Erlinda. Gutierrez failed to perform pre-operative evaluation of the patient which. you found some difficulty in inserting the tube? A: Yes. She negligently failed to take advantage of this important opportunity. If this was indeed observed. private respondents adduced no evidence demonstrating that they proceeded to make a thorough assessment of Erlinda's airway. respondent Dra. there is hardly enough time available for the fastidious demands of pre-operative procedure so that an anesthesiologist is able to see the patient only a few minutes before surgery. who advanced private respondents' theory that the oxygen deprivation which led to anoxic encephalopathy. diseased or artificial teeth. ability to visualize uvula and the thyromental distance. Gutierrez' act of seeing her patient for the first time only an hour before the scheduled operative procedure was. on the other hand. are operative procedures that can wait for days. LIGSAY: Q: Would you agree. 51 Curiously in the case at bar. lungs and upper airway. cardiovascular system. Gutierrez. 54 The physical examination performed by the anesthesiologist is directed primarily toward the central nervous system. 27 . even if this would mean postponing the procedure. she had all the time to make a thorough evaluation of Erlinda's case prior to the operation and prepare her for anesthesia. the pre-operative assessment is conducted at least one day before the intended surgery. In an emergency procedure. Pre-operative evaluation and preparation for anesthesia begins when the anesthesiologist reviews the patient's medical records and visits with the patient. Thiopental Sodium. Hence. Jamora. the drugs to be used. since Erlinda is obese and has a short neck and protruding teeth. it depends on the operative procedure of the anesthesiologist and in my case. prior to the induction of anesthesia. I did not see right away. Gutierrez tried to muddle the difference between an elective surgery and an emergency surgery just so her failure to perform the required pre-operative evaluation would escape unnoticed. Thus. the day before elective surgery. Erlinda's case was elective and this was known to respondent Dra. therefore. they presented Dr. I usually don't do it except on emergency and on cases that have an abnormalities (sic). and their possible hazards for purposes of informed consent. Before this date. physical characteristics of the patient's upper airway that could make tracheal intubation difficult should be studied. Private respondents repeatedly hammered the view that the cerebral anoxia which led to Erlinda's coma was due to bronchospasm 59 mediated by her allergic response to the drug. an act of exceptional negligence and professional irresponsibility. no prior consultations with. her attempt to exculpate herself must fail. if at all. respondent Dra. Gutierrez admitted that she saw Erlinda for the first time on the day of the operation itself. 56 Thus. therefore. or pre-operative evaluation of Erlinda was done by her. weeks or even months. temporomandibular mobility. on 17 June 1985. Gutierrez. Usually. Respondent Dra. when the patient is relaxed and cooperative. in these cases. it made intubation even more difficult. we now determine if the faulty intubation is truly the proximate cause of Erlinda's comatose condition. resulted to a wrongful intubation. Respondent Dra. a Fellow of the Philippine College of Physicians and Diplomate of the Philippine Specialty Board of Internal Medicine. She herself admitted that she had seen petitioner only in the operating room. with elective cases and normal cardio-pulmonary clearance like that.Torts 09-20-14 Q: So. Having established that respondent Dra. the exact opposite is true. Doctor. that it is good medical practice to see the patient a day before so you can introduce yourself to establish good doctor-patient relationship and gain the trust and confidence of the patient? DRA. respondent Dra. however. it appears that the observation was made only as an afterthought. introduced into her system. prominent central incisors. as when initial assessment indicates possible problems (such as the alleged short neck and protruding teeth of Erlinda) a thorough examination of the patient's airway would go a long way towards decreasing patient morbidity and mortality. Gutierrez made the haphazard defense that she encountered hardship in the insertion of the tube in the trachea of Erlinda because it was positioned more anteriorly (slightly deviated from the normal anatomy of a person) 52 making it harder to locate and. hoping that she could get away with it. in turn. it is clear that the appellate court erred in giving weight to Dr. apart from submitting testimony from a specialist in the wrong field. In any case. allergic mediated bronchospasm alleged in this case is within the disciplines of anesthesiology. I went into bronchospasm during my appendectomy. many bronchospastic-mediated pulmonary diseases are within the expertise of pulmonary medicine. either by the study of recognized authorities on the subject or by practical experience. Jamora's field. skill. Moreover. allergic-mediated bronchospasm happens only very rarely. skill. No laboratory data were ever presented to the court. Q: In other words. Q: How many times have you used pentothal? A: They used it on me. — The opinion of a witness on a matter requiring special knowledge. 64 An injury or damage is 28 . 49. he is not a pharmacologist and. Proximate cause has been defined as that which. then every anesthetic accident would be an act of God. Jamora's testimony as an expert in the administration of Thiopental Sodium. the anesthetic drug-induced. 63 Clearly. the Thiopental-allergy theory vigorously asserted by private respondents was a mere afterthought. produces injury. we are inclined to believe petitioners' stand that it was the faulty intubation which was the proximate cause of Erlinda's comatose condition. Jamora is a pulmonologist. Oddly. On the basis of the foregoing transcript. and clinical pharmacology. Jamora is likewise not an allergologist and could not therefore properly advance expert opinion on allergic-mediated processes. and without which the result would not have occurred. Jamora does not qualify as an expert witness based on the above standard since he lacks the necessary knowledge. did you have any occasion to use pentothal as a method of management? DR. Q: But not in particular when you practice pulmonology? A: No. Moreover. Dr. Since Dr. The provision in the rules of evidence 62 regarding expert witnesses states: Sec. The inappropriateness and absurdity of accepting Dr. unbroken by any efficient intervening cause. to qualify as an expert witness. private respondents' intentionally avoided providing testimony by competent and independent experts in the proper areas. Jamora's testimony as an expert witness in the anesthetic practice of Pentothal administration is further supported by his own admission that he formulated his opinions on the drug not from the practical experience gained by a specialist or expert in the administration and use of Sodium Pentothal on patients. That is why I used references to support my claims. allergology and pharmacology. in which the pulmonologist himself admitted that he could not testify about the drug with medical authority. private respondents themselves admit that Thiopental induced. or wheezing — some of the more common accompanying signs of an allergic reaction — appears on record. your knowledge about pentothal is based only on what you have read from books and not by your own personal application of the medicine pentothal? A: Based on my personal experience also on pentothal. he could not have been capable of properly enlightening the court about anesthesia practice and procedure and their complications. Q: And because they have used it on you and on account of your own personal experience you feel that you can testify on pentothal here with medical authority? A: No. JAMORA: A: We do it in conjunction with the anesthesiologist when they have to intubate our patient. to wit: ATTY. If courts were to accept private respondents' hypothesis without supporting medical proof. Thiopental Sodium (Pentothal). as an expert would. in natural and continuous sequence. Dr. as such. Evidently. Dr. and against the weight of available evidence. Dr. may be received in evidence. No evidence of stridor. one must have acquired special knowledge of the subject matter about which he or she is to testify. that Thiopental Sodium may have produced Erlinda's coma by triggering an allergic mediated response. experience or training which he is shown to possess. LIGSAY: Q: In your line of expertise on pulmonology. has no support in evidence. Jamora cannot be considered an authority in the field of anesthesiology simply because he is not an anesthesiologist. The resulting anoxic encephalopathy belongs to the field of neurology. could not have been capable. and training in the field of anesthesiology. Generally. internal medicine-allergy. 61 09-20-14 An anesthetic accident caused by a rare drug-induced bronchospasm properly falls within the fields of anesthesia. but only from reading certain references. While admittedly. Such an explanation was advanced in order to advanced in order to absolve them of any and all responsibility for the patient's condition. In view of the evidence at hand. Opinion of expert witness. of explaining to the court the pharmacologic and toxic effects of the supposed culprit.Torts First of all. skin reactions. private respondents' theory. the lack of oxygen became apparent only after he noticed that the nailbeds of Erlinda were already blue. 71 In other words. In the first place. 66 As stated in the testimony of Dr. 65 It is the dominant. Hosaka had scheduled another procedure in a different hospital at the same time as Erlinda's cholecystectomy. interns and residents. Due to the delay in the delivery of oxygen in her lungs Erlinda showed signs of cyanosis. would have had little difficulty going around the short neck and protruding teeth. moderate grand rounds and patient audits and perform other tasks and responsibilities. whenever it appears from the evidence in the case. mali yata ang pagkakapasok. it does not escape us that respondent Dr. Hosaka. visiting or attending. and/or for the privilege of admitting patients into the hospital." 74 who are allegedly not hospital employees. Erlinda already suffered brain damage as a result of the inadequate oxygenation of her brain for about four to five minutes. Private respondents themselves admitted in their testimony that the first intubation was a failure. Gutierrez failed to observe the proper pre-operative protocol which could have prevented this unfortunate incident. 67 However. 69 Nevertheless. an experienced anesthesiologist. In fact. Thus. he shares equal responsibility for the events which resulted in Erlinda's condition. presents problems in apportioning responsibility for negligence in medical malpractice cases. which supports the contention that the second intubation was successful. Assuming that the endotracheal tube finally found its way into the proper orifice of the trachea. respondent physician could have been much more prepared to meet the contingency brought about by the perceived anatomic variations in the patient's 09-20-14 neck and oral area. 68 The above conclusion is not without basis. The unique practice (among private hospitals) of filling up specialist staff with attending and visiting "consultants. their educational qualifications. As aptly explained by the trial court. This indicates that he was remiss in his professional duties towards his patient. We now discuss the responsibility of the hospital in this particular incident. instead of the intended endotracheal intubation what actually took place was an esophageal intubation. beyond private respondents' bare claims.Torts proximately caused by an act or a failure to act. This fact was likewise observed by witness Cruz when she heard respondent Dra. that the second intubation was accomplished. Gutierrez remarked. it was obviously too late. such distention indicates that air has entered the gastrointestinal tract through the esophagus instead of the lungs through the trachea. nurses. is normally politely terminated. and feedback from patients. Entry into the esophagus would certainly cause some delay in oxygen delivery into the lungs as the tube which carries oxygen is in the wrong place. interns and residents. that the act or omission played a substantial part in bringing about or actually causing the injury or damage. Orlino Hosaka as the head of the surgical team. Respondent Dr. Hosaka's negligence can be found in his failure to exercise the proper authority (as the "captain" of the operative team) in not determining if his anesthesiologist observed proper anesthesia protocols. as private respondents insist. After a physician is accepted. Furthermore. Because of this. the physician's performance as a specialist is generally evaluated by a peer review committee on the basis of mortality and morbidity statistics. and was in fact over three hours late for the latter's operation. he is normally required to attend clinico-pathological conferences. As the so-called "captain of the ship. no evidence on record exists to show that respondent Dr. the hallmark of a successful intubation. During intubation. Hosaka verified if respondent Dra. Applying the above definition in relation to the evidence at hand. the same gave no guarantee of oxygen delivery. evidence of accreditation by the appropriate board (diplomate). moving or producing cause. or a consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer review committee. Had appropriate diligence and reasonable care been used in the pre-operative evaluation. 70 As stated beforehand. "Ang hirap ma-intubate nito. No evidence exists on record. Even granting that the tube was successfully inserted during the second attempt. In fact. 72 Having failed to observe common medical standards in preoperative management and intubation." 73 it is the surgeon's responsibility to see to it that those under him perform their task in the proper manner. defects which would have been easily overcome by a prior knowledge of those variations together with a change in technique. Gutierrez' negligence resulted in cerebral anoxia and eventual coma of Erlinda. conduct bedside rounds for clerks. he had little or no time to confer with his anesthesiologist regarding the anesthesia delivery. These requirements are carefully scrutinized by members of the hospital administration or by a review committee set up by the hospital who either accept or reject the application. witness Cruz noticed abdominal distention on the body of Erlinda. Doctors who apply for "consultant" slots. her comatosed condition. Proceeding from this event (cyanosis). 29 . and references. ultimately. either as a visiting or attending consultant." Thereafter. respondent Dra. However. 75 This is particularly true with respondent hospital. it could not be claimed. O lumalaki ang tiyan. together with respiratory embarrassment indicates that the endotracheal tube entered the esophagus instead of the respiratory tree. for the privilege of being able to maintain a clinic in the hospital. evidence of fellowship in most cases. hospitals exercise significant control in the hiring and firing of consultants and in the conduct of their work within the hospital premises. cyanosis was again observed immediately after the second intubation. Scientific studies point out that intubation problems are responsible for one-third (1/3) of deaths and serious injuries associated with anesthesia. adequately alerted by a thorough preoperative evaluation. That abdominal distention had been observed during the first intubation suggests that the length of time utilized in inserting the endotracheal tube (up to the time the tube was withdrawn for the second attempt) was fairly significant. private respondents contend that a second intubation was executed on Erlinda and this one was successfully done. respondent Dra. In addition to these. The development of abdominal distention. A consultant remiss in his duties. In other words. and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission. We do not think so. are required to submit proof of completion of residency. We now determine the responsibility of respondent Dr. the difficulty is only more apparent than real. generally. ninety-eight percent (98%) or the vast majority of difficult intubations may be anticipated by performing a thorough evaluation of the patient's airway prior to the operation. faulty intubation is undeniably the proximate cause which triggered the chain of events leading to Erlinda's brain damage and. Gutierrez properly intubated the patient. And yet ideally. and by a pulmonary therapist to prevent the accumulation of secretions which can lead to respiratory complications. The calculated amount was not even arrived at by looking at the actual cost of proper hospice care for the patient. the P8000/monthly amount established by the trial court at the time of its decision would be grossly inadequate to cover the actual costs of homebased care for a comatose individual. not the cost of the care the family is usually compelled to undertake at home to avoid bankruptcy.00. or proof of a similar nature. "subject to its being updated" covering the period from 15 November 1985 up to 15 April 1992. However.00 pesos (should be P616. be made with certainty. 77 Such responsibility ceases when the persons or entity concerned prove that they have observed the diligence of a good father of the family to prevent damage. Having failed to do this. 2199. Food preparation should be normally made by a dietitian to provide her with the correct daily caloric requirements and vitamin supplements. fire and exercise real control over their attending and visiting "consultant" staff. Upon these disquisitions we hold that private respondents are solidarily liable for damages under Article 2176 79 of the Civil Code. hire. a comatose patient should remain in a hospital or be transferred to a hospice specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to meet minimum standards of care. 76 The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria potestas. we hold that the Court of Appeals erred in accepting and relying on the testimonies of the witnesses for the private respondents. apart from a general denial of its responsibility over respondent physicians. if they are to adequately and correctly respond to the injury caused. the amount of actual damages recoverable in suits arising from negligence should at least reflect the correct minimum cost of proper care. failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. up to the time of trial. At current levels. the control test is determining. the question now arises as to whether or not respondent hospital is solidarily liable with respondent doctors for petitioner's condition. she has to be seen on a regular basis by a physical therapist to avoid muscle atrophy. should be one which compensates for pecuniary loss incurred and proved. In the instant case for instance. This being the case. and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship.and one which would meet pecuniary loss certain to be suffered but which could not. And because of the unique nature of such cases. guardian.000. Furthermore.00) in compensatory damages to the plaintiff. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. we rule that for the purpose of allocating responsibility in medical negligence cases. In these cases. What it 09-20-14 reflected were the actual expenses incurred and proved by the petitioners after they were forced to bring home the patient to avoid mounting hospital bills. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. no incompatibility arises when both actual and temperate damages are provided for. respondent hospital. on the basis of the foregoing. respondent hospital thereby failed to discharge its burden under the last paragraph of Article 2180.Torts In other words. where the resulting injury might be continuing and possible future complications directly arising from the injury. the burden shifts to the respondents (parent. the hiring. The trial court awarded a total of P632. are difficult to predict. a point which respondent hospital asserts in denying all responsibility for the patient's condition. from the nature of the case. temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing. respondent hospital is consequently solidarily responsible with its physicians for Erlinda's condition. As it would not be equitable — and certainly not in the best interests of the administration of justice — for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the compensatory 30 . an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians.000. these provisions neglect to take into account those situations. Erlinda has to be constantly turned from side to side to prevent bedsores and hypostatic pneumonia. Well-settled is the rule that actual damages which may be claimed by the plaintiff are those suffered by him as he has duly proved. — Except as provided by law or by stipulation. as shown by the above discussions. Our rules on actual or compensatory damages generally assume that at the time of litigation. while certain to occur. based on monthly expenses for the care of the patient estimated at P8. private hospitals. technically employees. Accordingly. 78 In other words. once negligence is shown. the amount of damages which should be awarded. Based on the foregoing. In neglecting to offer such proof. the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. Given these considerations. However. In assessing whether such a relationship in fact exists. the provisions of the Civil Code on actual or compensatory damages present us with some difficulties. with the exception of the payment of wages. while the burden of proving negligence rests on the plaintiffs. While "consultants" are not. 80 In other words. as in this case. We now come to the amount of damages due petitioners. In the instant case. Feeding is done by nasogastric tube. The reason is that these damages cover two distinct phases. The Civil Code provides: Art. teacher or employer) who should prove that they observed the diligence of a good father of a family to prevent damage.000. the control exercised. private respondents were unable to rebut the presumption of negligence. Such compensation is referred to as actual or compensatory damages. Indeed. though to a certain extent speculative. Because of this. menopause and aging. 84 The husband and the children. will only allow a reasonable amount of functional restoration of the motor functions of the lower limb.00 in moral damages in that case. should take into account the cost of proper care. and adjustments will require corresponding adjustive physical and occupational therapy. the Court therein stated: As a result of the accident. and were certain to be incurred by the plaintiff. are charged with the moral responsibility of the care of the victim. Court of Appeals. for example. The replacements. she will be required to undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the process of healing. A physician's experience with his patients would sometimes tempt him to deviate from established community practices. The sensory functions are forever lost. sleeplessness. xxx xxx xxx A prosthetic devise. they rarely set out to intentionally cause injury or death to their patients. mental and physical pain are inestimable. However. all petitioners in this case. Well beyond the period of hospitalization (which was paid for by Li).00 in moral damages would be appropriate. will have to live with the day to day uncertainty of the patient's illness. They have fashioned their daily lives around the nursing care of petitioner. Considering the length and nature of the instant suit we are of the opinion that attorney's fees valued at P100. it would also be permanently changing and adjusting to the physiologic changes which her body would normally undergo through the years.000. emotional and financial cost of the care of petitioner would be virtually impossible to quantify.000.00 are likewise proper. Even the temperate damages herein awarded would be inadequate if petitioner's condition remains unchanged for the next ten years. During the lifetime. We awarded P1. and he may end a distinguished career using unorthodox methods without incident. 81 In Valenzuela vs. an award of P2. who. Describing the nature of the injury. not the respondents. Our courts face unique difficulty in adjudicating medical negligence cases because physicians are not insurers of life and. petitioners were able to provide only home-based nursing care for a comatose patient who has remained in that condition for over a decade. 82 this Court was confronted with a situation where the injury suffered by the plaintiff would have led to expenses which were difficult to estimate because while they would have been a direct result of the injury (amputation). knowing any hope of recovery is close to nil. The resultant anxiety. In other words. psychological injury. by way of example. the same automatically gives the injured a right to reparation for the damage caused. Lourdes Valenzuela underwent a traumatic amputation of her left lower extremity at the distal left thigh just above the knee. though in constant flux are devised for the purpose of preventing complications. They should not be compelled by dire circumstances to provide substandard care at home without the aid of professionals. Ma. in Valenzuela that a discussion of the victim's actual injury would not even scratch the surface of the resulting moral damage because it would be highly speculative to estimate the amount of emotional and moral pain. for anything less would be grossly inadequate. Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. the prosthetic devise will have to be replaced and readjusted to changes in the size of her lower limb effected by the biological changes of middle-age. however technologically advanced.Torts 09-20-14 damages previously awarded — temperate damages are appropriate. the damage done to her would not only be permanent and lasting.000. These adjustments entail costs. She has been in a comatose state for over fourteen years now. it has been documented. The amount given as temperate damages. In the instant case. even with the use of state of the art prosthetic technology. exemplary damages in the amount of P100. are painful. Finally. Under the circumstances. an award of P1. the physician would 31 . intent is immaterial in negligence cases because where negligence exists and is proven.000. Established medical procedures and practices. We recognized. they were likely to arise only in the future. prosthetic replacements and months of physical and occupational rehabilitation and therapy. psychological damage and injury suffered by the victim or those actually affected by the victim's condition. the prosthetic will have to be adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels observed in the bones of all post-menopausal women. when failure to follow established procedure results in the evil precisely sought to be averted by observance of the procedure and a nexus is made between the deviation and the injury or damage.00 in temperate damages would therefore be reasonable.500. the actual physical. it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. They. The family's moral injury and suffering in this case is clearly a real one. altering their long term goals to take into account their life with a comatose patient. Meanwhile. All of these adjustments. Assuming she reaches menopause. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation. However. in the intervening years have been deprived of the love of a wife and a mother.000. The burden of care has so far been heroically shouldered by her husband and children.000. For the foregoing reasons. changes.000. Valenzuela will forever be deprived of the full ambulatory functions of her left extremity. 83 The injury suffered by Erlinda as a consequence of private respondents' negligence is certainly much more serious than the amputation in the Valenzuela case.00 are hereby awarded. 00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8.00 as temperate damages. ORLINO HOSAKA and DR. who agreed to perform the operation on her.500. Orlino Hosaka and Dr. the decision and resolution of the appellate court appealed from are hereby modified so as to award in favor of petitioners. a surgeon. She was referred to Dr. In the case at bar. petitioners. dated December 29.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives.000. we will briefly restate the facts of the case as follows: Sometime in 1985. and RON RAYMOND RAMOS. petitioner Erlinda was already being prepared for operation. Upon the request of petitioner Erlinda. petitioner Erlinda Ramos. RAMOS and ERLINDA RAMOS. 1999. Petitioner Erlinda was admitted to the DLSMC the day before the scheduled operation.000. after seeking professional medical help. petitioner Rogelio. Dr.R. Dr. For better understanding of the issues raised in private respondents’ respective motions. J. respondents. of this Court holding them civilly liable for petitioner Erlinda Ramos’ comatose condition after she delivered herself to them for their professional care and management. who was then Dean of the College of Nursing at the Capitol Medical Center. Hosaka. 3) P1. 2002 ROGELIO E. 2) P2. G.352. COURT OF APPEALS. 32 . SO ORDERED.Torts 09-20-14 necessarily be called to account for it.00 each as exemplary damages and attorney's fees. ROMMEL RAMOS. 5) the costs of the suit.00 as moral damages. was allowed to accompany her inside the operating room.000. was advised to undergo an operation for the removal of a stone in her gall bladder (cholecystectomy). and solidarily against private respondents the following: 1) P1.: Private respondents De Los Santos Medical Center. 4) P100. By 7:30 in the morning of the following day. ROY RODERICK RAMOS. her sister-in-law. 1985 at 9:00 in the morning at private respondent De Los Santos Medical Center (DLSMC). and. 124354 April 11. Since neither petitioner Erlinda nor her husband. vs.000.000. No. knew of any anesthesiologist.000. DR. DE LOS SANTOS MEDICAL CENTER. Herminda Cruz. WHEREFORE. Hosaka recommended to them the services of Dr. PERFECTA GUTIERREZ. RESOLUTION KAPUNAN. Perfecta Gutierrez move for a reconsideration of the Decision. Gutierrez. The operation was scheduled for June 17. the failure to observe preoperative assessment protocol which would have influenced the intubation in a salutary way was fatal to private respondents' case. in their own behalf and as natural guardians of the minors. Gutierrez trying to intubate the patient. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY OVERLOOKED THE FACT THAT THE COURT OF APPEAL’S DECISION DATED 29 MAY 1995 HAD ALREADY BECOME FINAL AND EXECUTORY AS OF 25 JUNE 1995. Dr. THEREBY DEPRIVING THIS HONORABLE COURT OF JURISDICTION OVER THE INSTANT PETITION. B.000. The dispositive portion of said Decision states: WHEREFORE. Gutierrez informed Cruz that the operation might be delayed due to the late arrival of Dr. She was released from the hospital only four months later or on November 15.2 RESPONDENT DOCTOR PERFECTA GUTIERREZ HAS SUFFICIENTLY DISCHARGED THE BURDEN OF EVIDENCE BY SUBSTANTIAL PROOF OF HER HAVING SUCCESSFULLY INTUBATED PATIENT ERLINDA RAMOS 33 . "Mindy. Garcia. On appeal by private respondents. the Court of Appeals reversed the trial court’s decision and directed petitioners to pay their "unpaid medical bills" to private respondents. IF PROPERLY CONSIDERED." Cruz noticed a bluish discoloration of Erlinda’s nailbeds on her left hand. Cruz saw Dr. 1999. B. Hosaka submits the following as grounds therefor: I THE HONORABLE SUPREME COURT COMMITTED REVERSIBLE ERROR WHEN IT HELD RESPONDENT DR. II THE HONORABLE SUPREME COURT ERRED IN HOLDING RESPONDENT DR. for her part.500. who remarked that he was also tired of waiting for Dr. HOSAKA LIABLE ON THE BASIS OF THE "CAPTAIN-OF-THE-SHIP" DOCTRINE. Cruz heard Dr.000. thus. III ASSUMING WITHOUT ADMITTING THAT RESPONDENT DR. At this point. Cruz.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8. Calderon attempted to intubate the patient.000. mali yata ang pagkakapasok. she was placed in a trendelenburg position – a position where the head of the patient is placed in a position lower than her feet. Since the ill-fated operation.000. While she held the hand of Erlinda. 3) P1. At almost 3:00 in the afternoon. petitioner Rogelio already wanted to pull out his wife from the operating room. another anesthesiologist. Dr. Cruz went out of the operating room to express her concern to petitioner Rogelio that Erlinda’s operation was not going well. Hosaka had not yet arrived so Dr. Erlinda remained in comatose condition until she died on August 3. Hosaka finally arrived at the hospital at around 12:10 in the afternoon. He met Dr. when Dr. Erlinda stayed in the ICU for a month.00 as temperate damages. Calderon. THE HONORABLE SUPREME COURT ERRED IN AWARDING DAMAGES THAT WERE CLEARLY EXCESSIVE AND WITHOUT LEGAL BASIS. or more than three (3) hours after the scheduled operation.1 RESPONDENT DOCTOR PERFECTA GUTIERREZ HAS SUFFICIENTLY DISCHARGED THE BURDEN OF EVIDENCE BY SUBSTANTIAL PROOF OF HER COMPLIANCE WITH THE STANDARDS OF DUE CARE EXPECTED IN HER RESPECTIVE FIELD OF MEDICAL SPECIALIZATION. petitioner Erlinda said to Cruz. inip na inip na ako. Dr. Hosaka instruct someone to call Dr.3 Private respondent Dr." By 10:00 in the morning. and 5) the costs of the suit. HOSAKA LIABLE DESPITE THE FACT THAT NO NEGLIGENCE CAN BE ATTRIBUTABLE TO HIM. 1999. The nailbeds of the patient remained bluish.Torts 09-20-14 At around 9:30 in the morning. 4) P100. Dr. the trial court found that private respondents were negligent in the performance of their duties to Erlinda. heard about Dr. The doctors explained to petitioner Rogelio that his wife had bronchospasm. Hosaka was still not around.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives. Thereafter. Petitioners filed with this Court a petition for review on certiorari. Gutierrez. HOSAKA IS LIABLE.352. Hosaka. the decision and resolution of the appellate court appealed from are hereby modified so as to award in favor of petitioners. ikuha mo ako ng ibang Doctor. O lumalaki ang tiyan. After due trial. private respondent Dr. Gutierrez tried to get in touch with him by phone. 2 In his Motion for Reconsideration. When he arrived. She (Cruz) then heard Dr. Cruz quickly rushed back to the operating room and saw that the patient was still in trendelenburg position. Hosaka. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY OVERLOOKED SEVERAL MATERIAL FACTUAL CIRCUMSTANCES WHICH.000. avers that: A. Hosaka’s arrival. In the meantime. the court a quo rendered judgment in favor of petitioners. Essentially. B. The private respondents were then required to submit their respective comments thereon.000. she saw Erlinda being wheeled to the Intensive Care Unit (ICU). WOULD INDUBITABLY LEAD TO NO OTHER CONCLUSION BUT THAT PRIVATE RESPONDENT DOCTORS WERE NOT GUILTY OF ANY NEGLIGENCE IN RESPECT OF THE INSTANT CASE.00 each exemplary damages and attorney’s fees. and solidarily against private respondents the following: 1) P1. Gutierrez utter: "ang hirap ma-intubate nito. who was then still inside the operating room. 1985. 2) P2. this Court promulgated the decision which private respondents now seek to be reconsidered.1 Petitioners filed with the Regional Trial Court of Quezon City a civil case for damages against private respondents. the patient. On December 29.00 as moral damages. 2001. They then filed their respective second motions for reconsideration. JAMORA AND DRA. contrary to the finding of this Court. 2000. 2) That the patient had a cardiac arrest. including the intervenor.4 Private respondent De Los Santos Medical reconsideration on the following grounds: Center likewise moves for I THE HONORABLE COURT ERRED IN GIVING DUE COURSE TO THE INSTANT PETITION AS THE DECISION OF THE HONORABLE COURT OF APPEALS HAD ALREADY BECOME FINAL AND EXECUTORY II THE HONORABLE SUPREME COURT ERRED IN FINDING THAT AN EMPLOYEREMPLOYEE [RELATIONSHIP] EXISTS BETWEEN RESPONDENT DE LOS SANTOS MEDICAL CENTER AND DRS. University of the Philippines. Consultant of the Philippine Charity Sweepstakes. Jr. once this has been agreed upon by all parties concerned the ordering of pre- 34 . said doctrine had long been abandoned in the United States in recognition of the developments in modern medical and hospital practice. CALDERON E. Dr. It also makes us have an opportunity to alleviate anxiety. President of the Philippine Society of Anesthesiologists. University of the Philippines. The Court enumerated the issues to be resolved in this case as follows: 1. and Dr. Egay. Estrella. ORLINO HOSAKA AND PERFECTA GUTIERREZ III THE HONORABLE SUPREME COURT ERRED IN FINDING THAT RESPONDENT DE LOS SANTOS MEDICAL CENTER IS SOLIDARILY LIABLE WITH RESPONDENT DOCTORS IV THE HONORABLE SUPREME COURT ERRED IN INCREASING THE AWARD OF DAMAGES IN FAVOR OF PETITIONERS. AND 3. Hosaka liable under the captain of the ship doctrine.5 In the Resolution of February 21. PERFECTA GUTIERREZ (ANESTHESIOLOGIST) IS LIABLE FOR NEGLIGENCE. DESPITE THE EXISTENCE OF SEVERAL FACTUAL CIRCUMSTANCES WHICH RENDERS DOUBT ON HER CREDIBILITY D. Felipe A.6 The Court noted these pleadings in the Resolution of July 17. Dr. Department of Anesthesiology. Department of Anesthesiology. ORLINO HOSAKA (SURGEON) IS LIABLE FOR NEGLIGENCE. who may have some mental handicaps of the proposed plans. And lastly. former Director of the Philippine General Hospital and former Secretary of Health. WHETHER OR NOT THE HOSPITAL (DELOS SANTOS MEDICAL CENTER) IS LIABLE FOR ANY ACT OF NEGLIGENCE COMMITTED BY THEIR VISITING CONSULTANT SURGEON AND ANESTHESIOLOGIST. Gutierrez’ claim of lack of negligence on her part is belied by the records of the case. Unfortunately. Lydia M.9 In effect. According to the intervenor. WHETHER OR NOT DR. Professor and Vice-Chair for Academics. The Philippine College of Surgeons filed its Petition-in-Intervention contending in the main that this Court erred in holding private respondent Dr. Also present during the hearing were the amicii curiae: Dr. Egay enlightened the Court on what these standards are: x x x What are the standards of care that an anesthesiologist should do before we administer anesthesia? The initial step is the preparation of the patient for surgery and this is a pre-operative evaluation because the anesthesiologist is responsible for determining the medical status of the patient. Gutierrez. Hosaka and Gutierrez. 2000. Iluminada T. this Court denied the motions for reconsideration of private respondents Drs. The following objective facts allegedly negate a finding of negligence on her part: 1) That the outcome of the procedure was a comatose patient and not a dead one. Inc. given the patient the choice and establishing consent to proceed with the plan. Dr.7 On March 19. developing the anesthesia plan and acquainting the patient or the responsible adult particularly if we are referring with the patient or to adult patient who may not have. 2. WHETHER OR NOT DR. explain techniques and risks to the patient. THE SUPREME COURT MAY HAVE INADVERTENTLY PLACED TOO MUCH RELIANCE ON THE TESTIMONY OF PETITIONER’S WITNESS HERMINDA CRUZ. College of MedicinePhilippine General Hospital. She maintains that the Court erred in finding her negligent and in holding that it was the faulty intubation which was the proximate cause of Erlinda’s comatose condition. College of Medicine-Philippine General Hospital. THE SUPREME COURT MAY HAVE INADVERTENTLY DISREGARDED THE EXPERT TESTIMONY OF DR. and 3) That the patient was revived from that cardiac arrest..8 We shall first resolve the issue pertaining to private respondent Dr.Torts 09-20-14 C. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY AWARDED DAMAGES TO PETITIONERS DESPITE THE FACT THAT THERE WAS NO NEGLIGENCE ON THE PART OF RESPONDENT DOCTOR. the Court heard the oral arguments of the parties. Camagay. the intubation she performed on Erlinda was successful. Gutierrez insists that. Dr. It has been sufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient. and Professor and Vice-Chair for Research. We do pre-operative evaluation because this provides for an opportunity for us to establish identification and personal acquaintance with the patient. the patient became comatose after some intervention. therefore. In the case at bar. She was likewise not properly informed of the possible difficulties she would face during the administration of anesthesia to Erlinda. Gutierrez admitted to this fact during the oral arguments: CHIEF JUSTICE: Mr. GANA: Yes. 15 However. professional acts have been done by Dr. 11 Such evaluation is necessary for the formulation of a plan of anesthesia care suited to the needs of the patient concerned. Had she been able to check petitioner Erlinda’s airway prior to the operation. well. a comatose after any other acts were done by Dr. deceased or artificial teeth. cardiovascular system and lungs but also the upper airway. she saw Erlinda for the first time on the day of the operation itself. And following this line at the end of the evaluation we usually come up on writing. Pre-evaluation for anesthesia involves taking the patient’s medical history. organize as a problem list. we meant comatose as a final outcome of the procedure. As she herself admitted. plan. reviewing his current drug therapy. Even the counsel of Dr. and thus the resultant injury could have been avoided. 12 Physical examination of the patient entails not only evaluating the patient’s central nervous system. Your Honor. whether elective or emergency.Torts 09-20-14 operative medications. the plan anesthesia technique. Respondent Dra.16 Further. CHIEF JUSTICE: Meaning to say.13 Nonetheless. Gutierrez or comatose before any act was done by her? ATTY. conducting physical examination. therefore. respondent Dra. Gutierrez admitted that she saw Erlinda for the first time on the day of the operation itself. And it entails having brief summary of patient history and physical findings pertinent to anesthesia.10 The conduct of a preanesthetic/preoperative evaluation prior to an operation. there is no cogent reason for the Court to reverse its finding that it was the faulty intubation on Erlinda that caused her comatose condition. Gutierrez omitted to perform a thorough preoperative evaluation on Erlinda. respondent Dra. one hour before the scheduled operation. She auscultated 14 the patient’s heart and lungs and checked the latter’s blood pressure to determine if Erlinda was indeed fit for operation. And the request for medical evaluation if there is an indication. the decision to give anesthesia rests on the anesthesiologist. on 17 June 1985. special issues for this particular patient. Counsel. documentation is very important as far as when we train an anesthesiologist we always emphasize this because we need records for our protection. Her failure to follow this medical procedure is. ability to visualize uvula and the thyromental distance. the plan post operative. Gutierrez’ act of seeing her patient for the first time only an hour before the scheduled operative procedure was. she did not proceed to examine the patient’s airway. a clear indicia of her negligence. or pre-operative evaluation of Erlinda was done by her. Before this date. Dr. There are needs for special care after surgery and if it so it must be written down there and a request must be made known to proper authorities that such and such care is necessary. As we have stated in our Decision: was unaware of the physiological make-up and needs of Erlinda. When we ask for a cardiopulmonary clearance it is not in fact to tell them if this patient is going to be fit for anesthesia. a comatose. Until the day of the operation. Examination of the upper airway would in turn include an analysis of the patient’s cervical spine mobility. temporomandibular mobility. an act of exceptional negligence and professional irresponsibility. interpreting laboratory data. Gutierrez? ATTY. cannot be dispensed with. and determining the appropriate prescription of preoperative medications as necessary to the conduct of anesthesia. CHIEF JUSTICE: How do you mean by that. GANA: Yes. There is no question that Erlinda became comatose after Dr. The measures cautioning prudence and vigilance in dealing with human lives lie at the core of the physician’s centuries-old Hippocratic Oath. GANA: No. What we ask them is actually to give us the functional capacity of certain systems which maybe affected by the anesthetic agent or the technique that we are going to use. no prior consultations with. Gutierrez performed a medical procedure on her. pain management if appropriate. records. prominent central incisors. But the burden of responsibility in terms of selection of agent and how to administer it rest on the anesthesiologist. Gutierrez CHIEF JUSTICE: 35 . Your Honor. you started your argument saying that this involves a comatose patient? ATTY. Gutierrez would most probably not have experienced difficulty in intubating the former. Dr. one of the effects as you will see you will have redness.5 m in diameter was done with slight difficulty (short neck & slightly prominent upper teeth) chest was examined for breath sounds & checked if equal on both sides. The tube was then anchored to the mouth by plaster & cuff inflated. Sodium bicarbonate & another dose of solu cortef was given by IV. very crucial swelling sometimes of the larynges which is your voice box main airway. the witness who was presented to support her (Dr. GANA: It was a consequence of the well. In a way it is some form of response to take away that which is not mine.Torts 09-20-14 In other words. Gutierrez? ATTY. There was cardiac arrest. the comatose status was a consequence of some acts performed by D. there was no evidence on record to support the theory that Erlinda developed an allergic reaction to pentothal. and the mass cell secretes this histamine. 12:30 p. After 10 minutes patient was cyanotic. Laboratory exams done (see results in chart). As we held in our Decision. D_5%_H20 & 1 ampule of aminophyline by fast drip was started. CAMAGAY: All right.m. the effects of histamine also on blood vessels are different. Dr. CHIEF JUSTICE: Thank you. Gutierrez faults the Court for giving credence to the testimony of Cruz on the matter of the administration of anesthesia when she (Cruz). being a nurse. The difference is that these tubes have also in their walls muscles and this particular kind of muscles is smooth muscle so. So. And then you have the smaller airways. was a pulmonologist. In the first place. Ethrane 2% with 02 4 liters was given. is that not correct? ATTY. GANA: Yes. he could not be considered an authority on anesthesia practice and procedure and their complications. No laboratory data were ever presented to the court. you may have people who have this. Patient was connected to a cardiac monitor. (interrupted) CHIEF JUSTICE: An acts performed by her. which is not part of the body. After 2 minutes 02 was given by positive pressure for about one minute. Blood pressure was checked 120/80 & heart rate regular and normal 90/min.20 These symptoms of an allergic reaction were not shown to have been extant in Erlinda’s case. Blood pressure and heart beats stable. Gutierrez while she (Erlinda) was under the latter’s care. In medical terminology an allergic reaction is something which is not usual response and it is further qualified by the release of a hormone called histamine and histamine has an effect on all the organs of the body generally release because the substance that entered the body reacts with the particular cell. Thus. constriction of the smaller airways beyond the trachea." 21 Dr. when histamine is released they close up like this and that phenomenon is known as bronco spasm.m. Dr. Gutierrez maintains that the bronchospasm and cardiac arrest resulting in the patient’s comatose condition was brought about by the anaphylactic reaction of the patient to Thiopental Sodium (pentothal). we explained why we found Dr. After pentothal injection this was followed by IV injection of Norcuron 4mg. or wheezing – some of the more common accompanying signs of an allergic reaction – appears on record.5% (250 mg) given by slow IV. Cyanosis again reappeared this time with sibilant and sonorous rales all over the chest. skin reactions. was allegedly not qualified to testify thereon. Dr. if you have an allergy you will have tearing of the eyes. Gutierrez invites the Court’s attention to her synopsis on what transpired during Erlinda’s intubation: 12:15 p. 18 In the Decision. that swelling may be enough to obstruct the entry of air to the trachea and you could also have contraction. Gutierrez) theory. 36 . histamine has multiple effects on the body. Camagay enlightened the Court as to the manifestations of an allergic reaction in this wise: DR. Eduardo Jamora. 02 was started by mask. Intubation with endotracheal tube 7. Gutierrez’ theory unacceptable. Cyanosis disappeared. 12:25 p. you see you have the trachea this way. Rather. However. "no evidence of stridor. insists that she successfully intubated Erlinda as evidenced by the fact that she was revived after suffering from cardiac arrest. 19 Secondly. you will have swelling. Dr. Another ampule of of [sic] aminophyline was given and solu cortef was given. Ethrane was discontinued & 02 given alone. Dr. 17 What is left to be determined therefore is whether Erlinda’s hapless condition was due to any fault or negligence on the part of Dr.m. Cyanosis slowly disappeared & 02 continuously given & assisted positive pressure. Gutierrez. let us qualify an allergic reaction. we brought some visual aids but unfortunately we do not have a projector. They dilate blood vessel open up and the patient or whoever has this histamine release has hypertension or low blood pressure to a point that the patient may have decrease blood supply to the brain and may collapse so. 12:40 p. Your Honor.m. Patient was inducted with sodium pentothal 2. Extra cardiac massage and intercardiac injection of adrenalin was given & heart beat reappeared in less than one minute. the bronchi and then eventually into the mass of the lungs you have the bronchus. however. the mass cell. Still the cyanosis was persistent. So. that is about 12:13 no. Gutierrez was made only after Erlinda was taken out of the operating room. 12:15. Now. 22 From the foregoing. which was inserted? A A Yes. is that right? A Yes. Q Yes. if the record will show you started induction at 12:15? A Yes. In Dr. GUTIERREZ A I was not able to record everything I did not have time anymore because I did that after the. After that relaxant (interrupted) Q After that relaxant. Q Q There were two attempts. The standard practice in anesthesia is that every single act that the anesthesiologist performs must be recorded. there was no insertion of the tube during that first attempt. no. Q So. more or less? A I think it was 12:15 or 12:16. if our estimate of the time is accurate we are now more or less 12:19. one of the amicii curiae. and then. Estrella. 12:17? A Yes. ESTRELLA Q You mentioned that there were two (2) attempts in the intubation period? DR. so. When there was second cyanosis already that was the (interrupted) Q When was the first cyanosis? A The first cyanosis when I was (interrupted) Q What time. And so if you never withdrew the tube then there was no. in your recording when did the cyanosis occur? A Yes. But if I remember right somewhere in the re-direct. and Dr. after one minute another oxygenation was given and after (interrupted) Q 12:18? A Yes. the other thing that we have to settle here is – when cyanosis occurred. Gutierrez’ case. you were asked that you did a first attempt and the question was – did you withdraw the tube? And you said – you never withdrew the tube. it can be allegedly seen that there was no withdrawal (extubation) of the tube. I asked the resident physician to start giving the pentothal very slowly and that was around one minute. and then after giving the oxygen we start the menorcure which is a relaxant. Q Well. when the patient was about to leave the operating room. Your Honor. All the laryngoscope. she could not account for at least ten (10) minutes of what happened during the administration of anesthesia on Erlinda.Torts 09-20-14 Patient was transferred to ICU for further management. and then. Q Q All the laryngoscope. how long do you wait before you do any manipulation? A Usually you wait for two minutes or three minutes. It is significant to note that the said record prepared by Dr. that is about 12:13? (sic) Q Is it a standard practice of anesthesia that whatever you do during that period or from the time of induction to the time that you probably get the patient out of the operating room that every single action that you do is so recorded in your anesthesia record? So. Gutierrez’ synopsis. a certain lawyer. And the fact that the cyanosis allegedly disappeared after pure oxygen was supplied through the tube proved that it was properly placed. Gutierrez is instructive: DR. The following exchange between Dr. is that right? A Maybe. is it recorded in the anesthesia record when the cyanosis. In the first attempt was the tube inserted or was the laryngoscope only inserted. The Court has reservations on giving evidentiary weight to the entries purportedly contained in Dr. 37 . first the patient was oxygenated for around one to two minutes. Yes. Q And the first medication you gave was what? A The first medication. So. what would have been done to this patient? Q The "mahirap intubate ito" assuming that you (interrupted) A After that time you examine the. you cannot intubate the patient or insert the laryngoscope if it is not keeping him relax. but it seems to me it is there. And can we presume that at this stage there was already some problems in handling the patient? A Not yet. at what point did you make the comment "na mahirap ata to intubate. Sir. just for the information of the group here the remarks I am making is based on the documents that were forwarded to me by the Supreme Court. Q Ah. what I did ask "mahirap ata ito ah. Q But in one of the recordings somewhere at the. So. somewhere in the transcript of records that when the lawyer of the other party try to inquire from you during the first attempt that was the time when "mayroon ba kayong hinugot sa tube. you did not have time. So. for purposes of discussion without accepting it. 38 . Q And at that point. assuming that this was done at 12:21 and looking at the anesthesia records from 12:20 to 12:30 there was no recording of the vital signs. what remark did you make? A I said "mahirap ata ito" when the first attempt I did not see the trachea right away. Q What about the second attempt? A On the second attempt I was able to intubate right away within two to three seconds. at what point did you ever make that comment? A Which one. if there is relaxation of the jaw which you push it downwards and when I saw that the patient was relax because that monorcure is a relaxant.Torts Q 09-20-14 12:19. Q So. Q At what point. A Iyon lang. I removed the laryngoscope and oxygenated again the patient. I do not remember the page now. more or less you attempted to do an intubation after the first attempt as you claimed that it was only the laryngoscope that was inserted. I really (at this juncture the witness is laughing) Q No." So. I am just asking. Sir. Q Okay. A Yes. that it was on the second attempt that (interrupted) A I was able to intubate. when you claim that at the first attempt you inserted the laryngoscope. Q right? A A Yes. Q But why are there no recordings in the anesthesia record? A I did not have time. That was when I (interrupted) Q That was the first attempt? A Yes. I cannot remember the time. Remember I am not here not to pin point on anybody I am here just to more or less clarify certainty more ore less on the record. Q Well. That is why for purposes of discussion I am trying to clarify this for the sake of enlightenment. sir? So. why did you not have time? A Because it was so fast. that is what I only said "mahirap intubate (interrupted) Q At what point? A When the first attempt when I inserted the laryngoscope for the first time. Q And this is more or less about what time 12:21? A Maybe. Q And in the second attempt you inserted the laryngoscope and now possible intubation? A Yes. So. mali ata ang pinasukan" A I did not say "mali ata ang pinasukan" I never said that. And at that time. my first attempt when I put the laryngoscope on I saw the trachea was deeply interiorly. you made a remark. Yes. ganoon po ano. the statements and acts of the physician and surgeon. This indicates that there was a decrease of blood supply to the patient’s brain. The brain was thus temporarily deprived of oxygen supply causing Erlinda to go into coma. 25Cruz further averred that she noticed that the abdomen of Erlinda became distended. the Kansas Supreme Court applied the doctrine of res ipsa loquitur.e. as found by the trial court. including the endotracheal tube. Hosaka cites the case of Thomas v. Upon these facts and under these circumstances. O lumalaki ang tiyan. Dr. Dr. considering that the surgeon did not have a hand in the intubation of the patient. 39 . external appearances and manifest conditions which are observable by any one.33 Dr. she is competent to testify on matters which she is capable of observing such as. after the first cyanosis. Gutierrez’ synopsis. it was the absence of oxygen supply for four (4) to five (5) minutes that caused Erlinda’s comatose condition. Q And that the 12:25 is after the 12:20? A We cannot (interrupted) Q Huwag ho kayong makuwan." citing the fact that the field of medicine has become specialized such that surgeons can no longer be deemed as having control over the other personnel in the operating room.23 We cannot thus give full credence to Dr. as a matter of common knowledge and observation. and even before the scheduled mastoid operation could be performed. It held that "[a]n assignment of liability based on actual control more realistically reflects the actual relationship which exists in a modern operating room. Moreover. The court went on to say that "[o]rdinarily a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia in the absence of negligence. kung mali ito kuwan eh di ano. The injury incurred by petitioner Erlinda does not normally happen absent any negligence in the administration of anesthesia and in the use of an endotracheal tube.34 which involved a suit filed by a patient who lost his voice due to the wrongful insertion of the endotracheal tube preparatory to the administration of anesthesia in connection with the laparotomy to be conducted on him. the first cyanosis (interrupted).28 which involved a patient who suffered brain damage due to the wrongful administration of anesthesia. From 12:20 to 12:30. Estrella. oxygen was delivered not to the lungs but to the gastrointestinal tract. The Supreme Court of Appeals of West Virginia held that the surgeon could not be held liable for the loss of the patient’s voice. Hosaka argues that the trend in United States jurisprudence has been to reject said doctrine in light of the developments in medical practice. 26 The cyanosis (bluish discoloration of the skin or mucous membranes caused by lack of oxygen or abnormal hemoglobin in the blood) and enlargement of the stomach of Erlinda indicate that the endotracheal tube was improperly inserted into the esophagus instead of the trachea.32 especially a fellow specialist. Hosaka mainly contends that the Court erred in finding him negligent as a surgeon by applying the Captain-of-the-Ship doctrine. i. Gutierrez’ synopsis in light of her admission that it does not fully reflect the events that transpired during the administration of anesthesia on Erlinda. Hosaka came in? A No. As we stated in the Decision. As pointed out by Dr. and in the use and employment of an endotracheal tube." She observed that the nailbeds of Erlinda became bluish and thereafter Erlinda was placed in trendelenburg position. As anesthesiologist. the vital signs of Erlinda were not recorded during that time."29 Considering the application of the doctrine ofres ipsa loquitur. the instruments used in the administration of anesthesia. were all under the exclusive control of private respondents Dr. does not possess. was with her inside the operating room. 27 In Voss vs. The patient sued both the anesthesiologist and the surgeon for the injury suffered by him. so. The court rejected the application of the "Captain-of-theShip Doctrine. On the other hand. that it seems to me that there is no recording from 12:20 to 12:30. he is not deemed to have control over the acts of Dr. being a nurse and Dean of the Capitol Medical Center School of Nursing at that. it seems to me that the cyanosis appeared ten (10) minutes after induction. 30 Dr. I am just wondering why there were no recordings during the period and then of course the second cyanosis. Hosaka. Bridwell. As was noted in our Decision. This conclusion is supported by the fact that Erlinda was placed in trendelenburg position. as a surgeon. 31 He states further that current American jurisprudence on the matter recognizes that the trend towards specialization in medicine has created situations where surgeons do not always have the right to control all personnel within the operating room. Gutierrez is a specialist in her field and has acquired skills and knowledge in the course of her training which Dr. The absence of these data is particularly significant because. "Ang hirap ma-intubate nito.Torts 09-20-14 Q And so it seems that there were no recording during that span of ten (10) minutes. the Court has no reason to disbelieve the testimony of Cruz.24 Cruz. Hosaka. Gutierrez remark. only the anesthesiologist who inserted the endotracheal tube into the patient’s throat was held liable for the injury suffered by the latter. Consequently. Q And that is after induction 12:15 that is 12:25 that was the first cyanosis? A Yes. I am just going over the record ano. He points out that anesthesiology and surgery are two distinct and specialized fields in medicine and as a surgeon. For his part.. she is not entirely ignorant of anesthetic procedure. I think that was the time Dr. there was a ten-minute gap in Dr. Gutierrez and Dr. Erlinda’s sister-in-law. Raleigh General Hospital. a layman would be able to say. is that right? A Yes. reasoning that the injury to the patient therein was one which does not ordinarily take place in the absence of negligence in the administration of an anesthetic. mali yata ang pagkakapasok. Gutierrez. and going over your narration. the testimony of Cruz was properly given credence in the case at bar. that the consequences of professional treatment were not as such as would ordinarily have followed if due care had been exercised. we are just trying to enlighten. Cruz narrated that she heard Dr. So."35 Hence. and that one does not exercise control over the other. to the risk of acidosis. Camagay. Erlinda was kept in a state of uncertainty at the DLSMC. 38 While the professional services of Dr. at the very least. he observed that the patient’s nails had become dusky and had to call Dr. CAMAGAY: x x x Pre-operative medication has three main functions: One is to alleviate anxiety. His conduct clearly constituted a breach of his professional duties to Erlinda: CHIEF JUSTICE: Two other points. it was Dr. Drs. Due regard for the peculiar factual circumstances obtaining in this case justify the application of the Captain-of-the-Ship doctrine. supervision over the procedure then being performed on Erlinda.37 Third. Hosaka who gave instructions to call for another anesthesiologist and cardiologist to help resuscitate Erlinda. Hosaka cannot now claim that he was entirely blameless of what happened to Erlinda. Gutierrez’s attention thereto. Hosaka was keeping an eye on the intubation of the patient by Dr. and visual disturbances. Hosaka was remiss in his duty of attending to petitioner Erlinda promptly. It could be safely said that her anxiety adversely affected the administration of anesthesia on her. First. they were certainly not completely independent of each other so as to absolve one from the negligent acts of the other physician. In effect. just thirty minutes apart from each other. would you consider a patient's stay on the operating table for three hours sufficient enough to aggravate or magnify his or her anxiety? DR. a knife is going to open up his body. CAMAGAY: Yes. Gutierrez were secured primarily for their performance of acts within their respective fields of expertise for the treatment of petitioner Erlinda. Now. Hosaka performed a surgery. when Erlinda showed signs of cyanosis. I understand that in this particular case that was the case. when the first 09-20-14 procedure (protoscopy) at the Sta. CHIEF JUSTICE: In other words. headache. Doctor. you were talking about anxiety. 36 Second. Their work cannot be placed in separate watertight compartments because their duties intersect with each other. Drs. When a patient is anxious there is an outpouring of adrenalin which would have adverse effect on the patient. the other is that he opens himself to disturbances in the heart rhythm. x x x42 Dr. it is very important to alleviate anxiety because anxiety is associated with the outpouring of certain substances formed in the body called adrenalin. Hosaka admitted that in practice. the anesthesiologist would also have to observe the surgeon’s acts during the surgical process and calls the attention of the surgeon whenever necessary39 in the course of the treatment. Hosaka scheduled two procedures on the same day.. Hosaka who recommended to petitioners the services of Dr. So. As explained by Dr. he represented to petitioners that Dr. Gutierrez in the treatment of petitioner Erlinda are therefore not as clear-cut as respondents claim them to be. but he arrived at DLSMC only at around 12:10 p. nausea and vomiting. Whenever Dr. Hosaka made Erlinda wait for him certainly aggravated the anxiety that she must have been feeling at the time. 41 The long period that Dr. 1985 at 9:00 a. Gutierrez. One of it is high blood pressure. The first. Hosaka himself admitted that he was the attending physician of Erlinda. Hosaka exercised a certain degree of. Hosaka and Gutierrez worked as a team. Hosaka and Gutierrez had worked together since 1977. Dr. he would always engage the services of Dr.m. The cholecystectomy was set for June 17. In reckless disregard for his patient’s well being. we would like to alleviate patient’s anxiety mainly because he will not be in control of his body there could be adverse results to surgery and he will be opened up. From the facts on record it can be logically inferred that Dr. The duties of Dr. Second is to dry up the secretions and Third is to relieve pain. Thus. it is quite apparent that they have a common responsibility to treat the patient. Gutierrez to administer the anesthesia on his patient. Hosaka and Dr. and while doing so. it was Dr. which would have adverse implications. That they were working as a medical team is evident from the fact that Dr. Thus. Dr. The Court also notes that the counsel for Dr. On the contrary. three hours waiting and the patient was already on the operating table (interrupted) 40 . Gutierrez. marked by sickly sweet breath. It is equally important to point out that Dr. That there is a trend in American jurisprudence to do away with the Captain-of-theShip doctrine does not mean that this Court will ipso facto follow said trend. for he arrived more than three (3) hours late for the scheduled operation.m. it is conceded that in performing their responsibilities to the patient. Teresita Hospital did not proceed on time. The unreasonable delay in petitioner Erlinda’s scheduled operation subjected her to continued starvation and consequently. the patient’s anxiety usually causes the outpouring of adrenaline which in turn results in high blood pressure or disturbances in the heart rhythm: DR. 40 or the condition of decreased alkalinity of the blood and tissues. Gutierrez possessed the necessary competence and skills. at different hospitals. which responsibility necessitates that they call each other’s attention to the condition of the patient while the other physician is performing the necessary medical procedures. Hosaka and those of Dr.Torts This contention fails to persuade. as well as the services of the hospital staff who perform the ministerial tasks of ensuring that the doctor’s orders are carried out strictly. Yes. never left alone in the operating room by themselves specially if they are already pre-medicated because they may not be aware of some of their movement that they make which would contribute to their injury. 43 After a careful consideration of the arguments raised by DLSMC. CHIEF JUSTICE: Would you therefore conclude that the surgeon contributed to the aggravation of the anxiety of the patient? DR. the nutritional diet and medications prescribed by the doctor. such as accreditation by the appropriate board (diplomate). CAMAGAY: Dr. CAMAGAY: And care.50 Lastly. CAMAGAY: I think it is not even due diligence it is courtesy. CHIEF JUSTICE: Duty as a matter of fact? Anent private respondent DLSMC’s liability for the resulting injury to petitioner Erlinda. x x x the control exercised. Your Honor. Gutierrez and Hosaka which would 41 . the equipment and facilities necessary for the treatment of the patient. In assessing whether such a relationship in fact exists. CAMAGAY: Yes. giving them always his best talent and skill. in the performance of his duties. DLSMC argues that when a doctor refers a patient for admission in a hospital. the latter may lose his or her accreditation or privileges granted by the hospital. hire. There is no employeremployee relationship between DLSMC and Drs. not only of his duty as a physician "to serve the interest of his patients with the greatest solicitude. CHIEF JUSTICE: In other words due diligence would require a surgeon to come on time? DR. (2) payment of wages. CHIEF JUSTICE: Courtesy. the control test is determining. Gutierrez and Hosaka: In other words. While "consultants" are not. but rather. the following elements must be present: (1) selection and engagement of services. instead. technically employees. Hosaka's irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative. (3) the power to hire and fire. fire and exercise real control over their attending and visiting "consultant" staff.Torts 09-20-14 DR. DR. The hospital’s obligation is limited to providing the patient with the preferred room accommodation. we held that respondent hospital is solidarily liable with respondent doctors therefor under Article 2180 of the Civil Code45 since there exists an employeremployee relationship between private respondent DLSMC and Drs. the hiring and the right to terminate consultants all fulfill the important hallmarks of an employeremployee relationship. it is the doctor who prescribes the treatment to be given to said patient. the Court finds that respondent hospital’s position on this issue is meritorious.48 Second. the inescapable conclusion is that DLSMC cannot be considered an employer of the respondent doctors. a hospital does not dismiss a consultant. x x x46 DLSMC however contends that applying the four-fold test in determining whether such a relationship exists between it and the respondent doctors. to act with justice and give everyone his due. evidence of fellowship and references. 49 Third. private hospitals. 51 DR. it is not the hospital but the patient who pays the consultant’s fee for services rendered by the latter. accredits the latter and grants him or her the privilege of maintaining a clinic and/or admitting patients in the hospital upon a showing by the consultant that he or she possesses the necessary qualifications. but the means to be used in reaching such an end. a hospital does not hire or engage the services of a consultant. with the exception of the payment of wages.47 DLSMC maintains that first. and (4) the power to control not only the end to be achieved. CAMAGAY: That this operation did not take place as scheduled is already a source of anxiety and most operating tables are very narrow and that patients are usually at risk of falling on the floor so there are restraints that are placed on them and they are never. It has been consistently held that in determining whether an employer-employee relationship exists between the parties."44 but also of Article 19 of the Civil Code which requires a person. these provisions neglect to take into account those situations.00) to cover the expenses for petitioner Erlinda’s treatment and care from the date of promulgation of the Decision up to the time the patient expires or survives. as in this case. no incompatibility arises when both actual and temperate damages are provided for. In the instant case. 1999. be made with certainty. Finally.00) in view of the chronic and continuing nature of petitioner Erlinda’s injury and the certainty of further pecuniary loss by petitioners as a result of said injury. In the assailed Decision. attorney’s fees and costs of suit should be awarded to petitioners. However. petitioners were able to provide only home-based nursing care for a comatose patient who has remained in that condition for over a decade. temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing.000. should take into account the cost of proper care. while the second concerns the provision by the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the patient. the assailed Decision is hereby modified as follows: (1) Private respondent De Los Santos Medical Center is hereby absolved from liability arising from the injury suffered by petitioner Erlinda Ramos on June 17. though to a certain extent speculative. Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter to their respective patients. For these reasons.500. should be one which compensates for pecuniary loss incurred and proved. the award of temperate damages in addition to the actual or compensatory damages would no longer be justified since the actual damages awarded in the Decision are sufficient to cover the medical expenses incurred by petitioners for the patient. 1985. Hence. And because of the unique nature of such cases. if they are to adequately and correctly respond to the injury caused. we reverse the finding of liability on the part of DLSMC for the injury suffered by petitioner Erlinda.52 Similarly.Torts 09-20-14 hold DLSMC solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil Code.000. which is composed of the heads of the various specialty departments such as the Department of Obstetrics and Gynecology. As explained by respondent hospital. the Court also deems it necessary to modify the award of damages to petitioners in view of the supervening event of petitioner Erlinda’s death.000. Pediatrics. no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment. the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. Moreover. that the admission of a physician to membership in DLSMC’s medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof. the Court awarded actual damages of One Million Three Hundred Fifty Two Thousand Pesos (P1. The reason is that these damages cover two distinct phases.54 However.500. are difficult to predict. Further. the Court awarded temperate damages of One Million Five Hundred Thousand Pesos (P1.53 In addition thereto. WHEREFORE. Surgery with the department head of the particular specialty applied for as chairman. and one which would meet pecuniary loss certain to be suffered but which could not. the amount of which. In other words.352. the contract between the consultant in respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient. The Court justified such award in this manner: Our rules on actual or compensatory damages generally assume that at the time of litigation. The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician. 42 . The medical director/hospital administrator merely acts as ex-officio member of said committee. the same is initiated by the department to whom the consultant concerned belongs and filed with the Ethics Committee consisting of the department specialty heads. subsequent to the promulgation of the Decision. They should not be compelled by dire circumstances to provide substandard care at home without the aid of professionals. an award of P1. could not be made with certainty at the time of the promulgation of the decision. for anything less would be grossly inadequate. The first has for its object the rendition of medical services by the consultant to the patient. Under the circumstances. In these cases. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation. the Court was informed by petitioner Rogelio that petitioner Erlinda died on August 3. where the resulting injury might be continuing and possible As it would not be equitable—and certainly not in the best interests of the administration of justice—for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the compensatory damages previously awarded—temperate damages are appropriate. future complications directly arising from the injury. moral and exemplary damages. The amount given as temperate damages. and said director or administrator validates the committee's recommendation. up to the time of trial.00 in temperate damages would therefore be reasonable. from the nature of the case. the amount of damages which should be awarded. in cases where a disciplinary action is lodged against a consultant. while certain to occur. only the amounts representing actual. however. 55 In view of this supervening event. M/V David.6 SO ORDERED. G. The voyage was initially uneventful until around seven o’clock in the evening of 27 March 1996 when the vessel encountered rough seas and strong The award for actual damages amounting to P988. (d) P100. Surigao del Sur. an action seeking indemnity for the death of her husband against Candano Shipping before the RTC of Manila.2 The factual and procedural antecedents of this instant petition are as follows: Such refusal prompted Florentina to institute on 31 January 1997. the appealed decision is AFFIRMED. Jr. Jr. and. v.3On 7 March 1994.00 as actual damages. Inc.000. The RTC resolved the controversy in favor of Florentina and ratiocinated that the provision of Article 391 of the New Civil Code on presumptive death had become operative since the period of four years had already elapsed since Melquiades was reported missing upon the sinking incident which occurred on 27 March 1996.00. In a Decision11promulgated on 15 February 2001.: This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court.400.000. in the following amounts: Candano Shipping is a domestic corporation engaged in the business of coastwise trading within the Philippines. Accordingly. INC. prepared by Candano Shipping. Jr. Melquiades Sugata-on was employed by Candano Shipping as Third Marine Engineer on board its cargo vessel. Jr. (Florentina) as shown in the List of Surviving Crew of the Ill-Fated David. twelve survived. which imposes upon the employer liability for the death of his employee in the course of employment. rendering the vessel beyond control. (2) the award of moral and exemplary damages as well as attorney’s fees is deleted.000.00 as moral damages. judgment is hereby rendered ordering defendant Candano Shipping Lines. Petitioner. Inc. vs. It was at this point when the ship captain ordered the crew members to abandon the vessel. One of those who were missing was Melquiades Sugata-on (Melquiades). Despite the efforts exerted by the crew members to save the vessel.00 as exemplary damages. seeking to reverse and set aside the Court of Appeals Decision 1 dated 23 May 2003 and its Resolution dated 1 April 2004. She grounded her case on the provision of Article 1711 7 of the New Civil Code. J.00 as actual damages. The filing of the case before the RTC therefore was premature for she should have waited until the body of Melquiades could be recovered or until the lapse of time which would render the provision of Article 391 of the New Civil Code 10 on presumptive death operative. the husband of herein respondent.R.5 (e) the costs of the suit. Upon learning of Melquiades’ fate. moral and exemplary damages including attorney’s fees.352. The dispositive portion of the assailed decision of the appellate court reads: IN VIEW OF ALL THE FOREGOING.400.000. left the port of Davao City with its cargo and 20 crew members. In an effort to salvage the vessel. sank together with her cargo at around eleven o’clock in the evening at Bakulin Point. Among the 20 crew members. 1985 and are ordered to pay petitioners— (a) P1. (b) P2. Florentina prayed that actual. Florentina immediately went to the office of Candano Shipping in Manila to claim the death benefits of her husband but it refused to pay. 2007 CANDANO SHIPPING LINES. (Candano Shipping) liable for the death of Melquiades Sugataon. the RTC ordered Candano Shipping to indemnify Florentina for the death of her husband. Branch 20.800. the seawaters slowly swallowed up the main deck causing the tilting to worsen up to 30 degrees.Torts 09-20-14 (2) Private respondents Dr. and winds while traversing the waters of Lianga Bay. Respondent. the ship captain changed its course from the north to the south but the tilting continued to grow to a dangerously high level.8 In its Answer. (c) P100.000. causing her to tilt at three degrees on its starboard side.. No.000.00 as moral damages P50.00 as exemplary damages and 10% of the amount due as and for attorney’s fees plus the cost of suit.400. Lianga Bay. No pronouncement as to costs.9 Candano Shipping countered that Florentina had no cause of action against it because the death of Melquiades was not yet an established fact since he was merely reported missing upon the sinking of M/V David. SUGATAON.00 was computed by the lower court by adopting the formula in the computation of loss of earning capacity enunciated in the case of Villa Rey Transit.00 as attorney’s fees.4 WHEREFORE. Inc. CHICO-NAZARIO. On 25 March 1996. Branch 20. FLORENTINA J. finding Candano Shipping Lines. one died and seven were missing. Jr. P100. Orlino Hosaka and Dr. Sugata-on the amount of P988.00. with the monthly salary of P7. even if the death is caused by a fortuitous event. 12wherein the 43 . Court of Appeals. to indemnify plaintiff Forentina J. premises considered. M/V David. M/V David. Florentina Sugata-on. be awarded in her favor. Surigao del Sur.000.. affirming with modification the Decision of the Regional Trial Court (RTC) of Manila. Perfecta Gutierrez are hereby declared to be solidarily liable for the injury suffered by petitioner Erlinda on June 17. with the MODIFICATION that: (1) the awarded compensation for the death of Melquiades Sugata-on is reduced to P608. 163212 March 13. Due to the violent waves which continuously hammered the tilting vessel.. 15 In arriving at the sum of P608. we find no compelling reason to disturb the same.19 Stated differently. and considering that these findings were not controverted by the parties in this instant petition. the System shall pay to his secondary beneficiaries the monthly income benefit not to exceed sixty months.400. to which proposition Florentina concedes. Recovery under the Act is not based on any theory of actionable wrong on the part of the employer (99 D. subject to the consequence that the choice of one remedy will exclude the other and that the acceptance of the compensation under the remedy chosen will exclude the other remedy. thus: The rationale in awarding compensation under the Workmen’s Compensation Act differs from that in giving damages under the Civil Code. In its Petition. 44 . Hence.13 The Motion for Reconsideration interposed by Candano Shipping was denied by the RTC for lack of cogent reason to disturb or reconsider its decision. The exception is where the claimant who had already been paid under the Workmen’s Compensation Act may still sue for damages under the Civil Code on the basis of supervening facts or developments occurring after he opted for the first remedy.00. IS RESPONDENT ENTITLED TO RECOVER DEATH COMPENSATION FROM PETITIONER IN ACCORDANCE WITH HER THEORY OF THE CASE AS ALLEGED. Candano Shipping argues that the application of the measure stipulated under Article 194 of the Labor Code is erroneous since it applies only to death compensation to be paid by the Social Security System to the beneficiaries of a deceased member. 36). 53). In the case of Floresca v. In a Resolution16 issued on 1 April 2004. As we have explained in Floresca.S.400. payments under the acts being made as compensation and not as damages (99 C. Henceforth.18 we declared that the employees may invoke either the Workmen’s Compensation Act or the provisions of the Civil Code. while the awards for moral and exemplary damages including attorney’s fees were deleted for lack of sufficient basis for their allowance. finally. The remedy availed by Sugata-on in filing the claim under the New Civil Code has been validly recognized by the prevailing jurisprudence on the matter. Provided. as amended. save for the recognized exception. the appellate court applied the standard prescribed by Article 194 of the Labor Code of the Philippines. ON ORDINARY APPEAL.400. That the minimum monthly death benefit shall not be less that fifteen thousand pesos. That if he has no primary beneficiary. INCLUDING THE COURT OF APPEALS OF JURISDICTION OVER THE CASE? IN THE EVENT THAT THE SUPREME COURT RULES THAT THE COURT OF APPEALS APPLICATION OF ARTICLE 194 OF THE LABOR CODE IN THIS CASE SHOULD BE SET ASIDE. to wit: ART. but not exceeding five.J. reverse or reconsider the questioned decision. – (a) Under such regulations as the Commission may approve. 194. this instant Petition for Review on Certiorari filed by Candano Shipping raising the following issues: WHETHER OR NOT THE FORMULA FOR FIXING THE AMOUNT OF DEATH COMPENSATION IN ARTICLE 194 OF THE LABOR CODE APPLIES IN DETERMINING THE COMPENSATION CLAIMED BY THE HEIR OF THE DECEASED EMPLOYEE AGAINST THE EMPLOYER UNDER ARTICLE 1711? WHETHER OR NOT IT IS PERMITTED FOR THE COURT OF APPEALS. beginning with the youngest and without substitution. 194 OF THE LABOR CODE ON A CLAIM FOR DEATH COMPENSATION OF AN EMPLOYEE AGAINST THE EMPLOYER FILED AND TRIED BEFORE THE REGULAR COURTS ON THE BASIS OF ARTICLE 1711 OF THE CIVIL CODE AND THE DOCTRINE ENUNCIATED IN THE VILLA REY TRANSIT CASE? WHETHER OR NOT APPLICATION OF ARTICLE 194 OF THE LABOR CODE ON THE CLAIM FOR DEATH COMPENSATION OF RESPONDENT OUSTS THE REGULAR COURTS. except as provided for in paragraph (j) of Article 167 hereof.17 Since the factual findings of the RTC and the Court of Appeals that the non-recovery of Melquiades’ body for the period of four (4) years from 27 March 1996 creates a presumption that he is already dead and that his death was caused by a fortuitous event.Torts 09-20-14 annual expenses of the deceased are deducted from his gross annual income and multiplied by life expectancy (gross annual income – annual expense x life expectancy). plus ten percent thereof for each dependent child. the System shall pay to the primary beneficiaries upon the death of the covered employee under this Title an amount equivalent to his monthly income benefit. Compensation is given to mitigate harshness and insecurity of industrial life for the workman and his family. further.S.J. ARGUED AND TRIED BEFORE THE TRIAL COURT. The award for actual damages was reduced from P998. Philex Mining Company.00 toP608. were already settled. an employee cannot pursue both remedies simultaneously but has the option to proceed by interposing one remedy and waiving his right over the other. TO APPLY ART. That the monthly income benefit shall be guaranteed for five years: Provided. Candano Shipping elevated the adverse RTC decision to the Court of Appeals. the Court of Appeals denied the Motion for Reconsideration filed by Candano Shipping for failure to offer any justifiable ground to modify. We agree. The compensation acts are based on a theory of compensation distinct from the existing theories of damages. DEATH. affirmed with modification the judgment of the lower court. Provided. however. this doctrinal rule is rooted on the theory that the basis of the compensation under the Workmen’s Compensation Act is separate and distinct from the award of damages under the Civil Code. an employer is liable whether negligence exists or not since liability is created by law. which in turn.00. we will limit our discussion to the computation of the amount of indemnification. Hence. 14 Aggrieved. It is the indemnity recoverable by a person who has sustained injury either in his person. if the death or personal injury arose out of and in the course of employment. Inc. 689). but also that of the profits which the obligee failed to obtain. headache and general debility produced from said injuries. going to Manila 45 . Mendoza. We find the abovequoted provision to be applicable and controlling in this case. as long as the death. even if the death or injury is not due to the fault of the employer (Murillo v. We deem it best to adopt the formula for loss of earning capacity enunciated in the case of Villa Rey v. Delfin Bustamante to fly the plane to Daet on January 8. Court of Appeals. Justice J. even though the event may have been purely accidental or entirely due to a fortuitous cause. Florentina was forced to institute a civil suit for indemnity under the New Civil Code. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. mechanics or other employees. Except as provided by law or by stipulation. The pertinent provision on damages under the New Civil Code provides: Art. damages are awarded to one as a vindication of the wrongful invasion of his rights. Reyes. 23 in computing the amount of actual damages to be awarded to the claimant under Article 1711 of the New Civil Code. As early as the case of Valencia v.. this Court validated the strength of the aforementioned provision and made the employer liable for the injury suffered by its employee in the course of employment. speaking through the renowned civilist. or voluntary act. a sense of fair play would demand that if a person entitled to a choice of remedies made a first election and accepted the benefits thereof. the provisions of the same code on damages shall govern the extent of the employer’s liability. We thus ruled: Having affirmed the gross negligence of PAL in allowing Capt. 66 Phil. at least until the prior claim is rejected by the Compensation Commission. As eloquently laid down by Chief Justice Marcelo Fernan: It is therefore clear that respondents had not only opted to recover under the Act but they had also been duly paid. At the very least. after Candano Shipping refused to compensate her husband’s death. his employee imposed by Article 1711 of the Civil Code. Owners of enterprises and other employers are obliged to pay compensation for the death of or injuries to their laborers. property or relative rights. Manila Yacht Club. In Villa Rey. he is barred from proceeding with an alternative remedy. the compensation shall be equitably reduced. which reads: Article 1711. (he) is precluded from pursuing the alternate course. The principle underscored in the case of Floresca was further affirmed in the later case of Ysmael Maritime Corporation v. On the other hand.J. or drunkenness. 1711 and Art. he should no longer be allowed to exercise the second option. Such compensation is referred to as actual or compensatory damages. through the act or default of another (25 C. x x x. and thus articulated: >Appellant’s demand for compensation is predicated on employer’s liability for the sickness of. 20 wherein we emphasized that once the claimant had already exercised his choice to pursue his right under one remedy. necessarily. Given that the right of the claimant arose from the contract of employment and the corresponding obligation imposed by the New Civil Code upon the employer to indemnify the former for death and injury of the employee circumstanced by his employment. The pertinent provision of the New Civil Code reads: Article 1711. 22 this Court. The matter of the amount of compensation and allowable medical expenses should be properly determined by the Municipal Court after the parties are heard accordingly. In order to give breath to the aforestated provisions on damages of the New Civil Code. workmen. The employer is also liable for compensation if the employee contracts any illness or diseases caused by such employment or as the result of the nature of employment.B.S. Article 2200. Court of Appeals. they must be transformed into a more tangible and practical mathematical form. the employer is liable to pay compensation benefits for loss of income. under compensation acts. Indemnification for damages shall comprehend not only the value of the loss suffered. Mr. 21 In the case of Philippine Air Lines. 1712 of the New Civil Code. the employer shall not be liable for compensation. Inc. made a pronouncement that Article 1711 of the Civil Code imposes upon the employer the obligation to compensate the employee for injury or sickness occasioned by his employment. We must necessarily affirm likewise the award of damages or compensation under the provisions of Art. 452). as envisioned by the Article 1711 of the same code may be realized. v. sickness or injury is work-connected or work-aggravated." In the case at bar. 1951 whose slow reaction and poor judgment was the cause of the crash-landing of the plane which resulted in private respondent Samson hitting his head against the windshield and causing him injuries for which reason PAL terminated his services and employment as pilot after refusing to provide him with the necessary medical treatment of respondent’s periodic spells. When the employee’s lack of due care contributed to his death or injury. the common carrier was made liable for the death of its passenger on board a passenger bus owned and operated by Villa Rey Transit. so that the purpose of the law to indemnify the employee or his heirs for his death or injury occasioned by his employment.Torts 09-20-14 In other words. or injury to. 2199. "Having staked his fortunes on a particular remedy. Avelino.L. If the mishap was due to the employee’s own notorious negligence. Inc. Owners of enterprises and other employers are obliged to pay compensation for the death x x x. 24 The obligation of the common carrier to indemnify its passenger or his heirs for injury or death arose from the contract of carriage entered into by the common carrier and the passenger. i. 32 The Court explained in Villa Rey:1avvphi1 [(The award of damages for loss of earning capacity is)] concerned with the determination of losses or damages sustained by the private respondents. Borja. v.00 – P 46.34 We held in Smith Bell Dodwell Shipping Agency Corp. In fixing the amount of that support.00.800. it has been consistently held that earning capacity.. when the employee died or was injured in the occasion of employment.31 The loss is not equivalent to the entire earnings of the Life expectancy = 2 / 3 x [80 – age of deceased at the time of death] 2 /3 x [80 – 56] 2 / 3 x [24] Life expectancy = 16 With 16 more years of life expectancy and a monthly income of P7. only the award of actual damages. specifically the award for unearned income is warranted by the circumstances since it has been duly proven that the cause of death of Melquiades is a fortuitous event for which Candano Shipping cannot be faulted. but of the support they received or would have received from him had he not died in consequence of negligence of petitioner’s agent. Melquiades’ earning capacity is computed as follows: Net Earning Capacity = life expectancy x (gross annual income . the employer shall be liable for the death or personal injury of its employees in the course of employment as sanctioned by Article 1711 of the New Civil Code. thus: The formula for the computation of unearned income is: Net Earning Capacity = life expectancy x (gross annual income . about eight feet long.e. the amount recoverable is not the loss of entire earning. only net earnings. it is computed by multiplying the life expectancy by the net earnings of the deceased. The liability of the employer for death or personal injury of his employees arose from the contract of employment entered into between the employer and his employee which is likewise imbued with public interest. as dependents and intestate heirs of the deceased. Domingo. as the case may be depending on the factual milieu of the case and considering the criterion for the award of these damages as outlined by our jurisprudence. nominal. we must reckon with the ‘necessary expenses of his own living’. we now proceed to determining Melquiades’ life expectancy. 09-20-14 deceased. temperate. Thus. causing his death. Jr. a survey of more recent jurisprudence shows that this Court consistently pegged the amount at 50% of the gross annual income. 33 In computing the third factor. moral. who was then sitting at the front row. the total of the earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. as an element of damages to one’s estate for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire money. = 16 x ( P93. Applying the aforestated jurisprudential guidelines in the computation of the amount of award for damages set out inVilla Rey. The indemnity may partake of the form of actual.00) 46 .29 In the case at bar.28 Accordingly. Life expectancy is determined in accordance with the formula: 2 / 3 x [80 – age of deceased at the time of death] Jurisprudence provides that the first factor. liquidated or exemplary damages. automatically attaches. penetrated through the glass windshield of the bus and hit the face of Policarpio Quintos.35 that when there is no showing that the living expenses constituted the smaller percentage of the gross income.age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality.. which should be deducted from his earnings.27 In the same breadth.Torts from Lingayen. shall be computed by applying the formula (2/3 x [80 . it frontally hit the rear side of bull cart filled with hay and bamboo poles. Pangasinan.600. Pampanga.30 In the computation of the second factor.’ Stated otherwise.reasonable and necessary living expenses). life expectancy.26 in contract of carriage the carrier assumes the express obligation to transport its passenger to his destination safely and to observe extraordinary diligence with due regard to all the circumstances.. and not gross earnings are to be considered that is. The protruding end of one bamboo pole. the obligation of the employer for indemnity.25 By the very nature of the obligation which is imbued with public interest. but only such portion that he would have used to support his dependents or heirs. we fix the living expenses at half of the gross income. ‘less necessary expense for his own living. not of the full amount of his earnings. the total earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. as evidenced by the pay slips duly presented before the RTC. we deduct from his gross earnings the necessary expenses supposed to be used by the deceased for his own needs. i. and that said damages consist. but rather the loss of that portion of the earnings which the beneficiary would have received. the necessary living expense. Hence. and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier and thus gives rise to the right of the passenger or his heirs for indemnity. Minalin.800. While the bus was nearing Sadsaran Bridge in Barrio Sto.e.reasonable and necessary living expenses). In other words. 39 Failing to prove. respondent Nestor N.00 The argument raised by Candano Shipping that the formula for determining the life expectancy under Villa Reycannot be automatically applied without proof of the basis for the expected length of life of a Filipino does not merit our consideration.000.). Inc. Plaintiffappellee is ordered to pay defendant-appellant the amount of P306. that any of these circumstances is attendant in the case at bar. Candano Shipping cannot validly assert that the standard life expectancy factor laid down in Villa Rey cannot be applied in this case.40 WHEREFORE.R. NESTOR BARRETTO. the award of costs of litigation and attorney’s fees are proper. Branch 255.00 ) Net Earning Capacity = P 748. G. 2 The Facts Doing business under the name and style of N. 6 Brokered by freelance ship broker Manuel Velasco. are hereby PARTIALLY AFFIRMED in so far as it finds petitioner liable to respondent for damages. Barretto and petitioner Oceaneering Contractors (Phils. Accordingly. CV No.R. PEREZ.00 as actual damages for the death of her husband. However.00 as actual damages and P30. INC. however. petitioner Candano Shipping Lines. Negros Oriental. for the contract price of P306.4 On 27 November 1997.00. 2011 OCEANEERING CONTRACTORS (PHILS). SO ORDERED. Florentina is entitled to recover the amount of P748. City. premises considered.00 as attorney’s fees.. 184215 February 9. No.R. Respondents. Inc. primarily assailing the Decision dated 12 December 2007 rendered by the then Special Third Division of the Court of Appeals (CA) in CA-G. is ORDERED to pay the amount of P748. doing business as N. N. backache or occasional feeling of tiredness 38 and the fact that the deceased has been consistently engaged in a dangerous and risky activity tending to shorten his life.Torts 09-20-14 = 16 x ( P 46. for the purpose of transporting construction materials from Manila to Ayungon. this Court reduced the life expectancy multiplier considering the medical history such as when the deceased previously underwent a major surgery37 or when it was shown that he was treated for chest pains.7 the agreement included Oceaneering’s acknowledgment of the seaworthiness of the barge as well as the following stipulations. Petitioner.800. This was adopted from the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality which was used by insurers in determining the capital sum to be charged for annuity. 87168.N.36 Admittedly. plus 10% of the amount awarded as attorney’s fee plus cost of the suit. are hereby reversed and set aside. 70410. rendered by the Court of Appeals in CA-G.N. The formula for life expectancy has been repeatedly adopted in our jurisprudence in fixing the amount of indemnity for the death of a party.: The requirements for an award of actual damages are central to this petition for review filed under Rule 45 of the 1997 Rules of Civil Procedure..00. as actual damages. in view of the foregoing.800. in several cases. 1 the dispositive portion of which states: WHEREFORE. the instant appeal is PARTIALLY GRANTED. LIGHTERAGE. to wit: 47 . SO ORDERED. CV No. Lighterage. J.000. The awards of moral and exemplary damages are deleted.800. to the extent that it dismissed the counterclaims of defendant-appellant. vs.800. B.B. The decision dated 27 December 2005 and order dated 28 April 2006 of the Regional Trial Court of Las Piñas. Barretto (Barretto) is the owner of the Barge "Antonieta" 3 which was last licensed and permitted to engage in coastwise trading for a period of one year expiring on 21 August 1998.5the latter hired the aforesaid barge for a renewable period of thirty calendar days. Pursuant to the appropriate provisions of the New Civil Code and the prevailing jurisprudence on the matter. (Oceaneering) entered into a Time Charter Agreement whereby.000. the instant petition is DENIED and the Decision dated 23 May 2003 as well as the Resolution dated 1 April 2004. Oceaneering caused its counsel to serve Barretto a letter dated 12 March 1998.251avvphi1 48 . 1997 encountered rough sea at the vicinity of Cape Santiago. Vice President for Operations of N. to prove its claim for attorney’s fees and litigation expenses.00 he expended in salvaging.00 it purportedly incurred in salvaging its construction materials.750.B. salvaging expenses in the sum ofP125. xxxx (i) [Barreto] reserves the right to stop. exemplary damages. Under such conditions. averred that the accident was caused by the negligence of Barretto’s employees and the dilapidated hull of the barge which rendered it unseaworthy. Lighterage. fines and forfeiture for any violation that may be imposed in relation to the operation of the barge. Batangas and ma(d)e the barge x x x roll and pitch which caused the steel pipes and various construction materials to shift on the starboardside causing the breakdown of the steel stanch(i)ons welded on the deck of the barge leaving holes on the deck that cause(d) water to enter the hold. Inc. to prove.Torts 09-20-14 "a) [Barreto] shall be responsible for the salaries. cement and other construction materials in the presence of and under the direct supervision of the broker Manuel Velasco and Barretto’s Bargemen.19 The issues thus joined and the mandatory pre-trial conference subsequently terminated upon the agreement of the parties. concrete mixers. Contending that the accident was attributable to the incompetence and negligence which attended the loading of the cargo by Oceaneering’s hired employees. insurance of all equipments. for said purpose. Eddie La Chica. 16 Oceaneering reiterated its demand for the return of the unused charter payment and the reimbursement of its salvaging expenses as aforesaid. medical. refloating and repair of the barge.11 On 5 December 1997. 23 By way of defense evidence. (g) Damage to deck barge caused by carelessness or negligence of stevedores hired by [Oceaneering] will be [Oceaneering’s] liability.00 as well as the expenses in the sum of P125. 12 reporting the following circumstances under which the barge reportedly capsized in the vicinity of Cape Santiago.00. such damage/s shall be repaired first before loading and leaving port. viz. subsistence. 1997. its Operation’s Manager. executed a Marine Protest. 15 In response to Barretto’s 29 June 1998 formal demand for the payment of the same expenses. SSS premium. the barge eventually left Manila for Negros Oriental. In support of his complaint. 199[7]. Upon clear findings by owners or barge patron of any damages to the barge that will endanger its seaworth(i)ness and stability. (b) Manuel Velasco. abort and deviate any voyage in case of imminent danger to the crew and/or vessel that may be occasioned by any storm. LP-98-0244 before Branch 255 of the Regional Trial Court (RTC) of Las Piñas City. demanding the return of the unused portion of the charter payment amounting to P224. 9 In addition to the polythene ropes with which they were lashed. however. Oceaneering. steel bollards.B.000. (b) Maria Flores Escaño. While underway on or about 0245 December 4. As a consequence.400. Barretto apprised Oceaneering of the supposed fact that the mishap was caused by the incompetence and negligence of the latter’s personnel in loading the cargo and that it was going to proceed with the salvage. 20 the RTC proceeded to try the case on the merits. who primarily testified on the effort exerted to salvage the barge.792. gravel.13 In turn contending that the barge tilted because of the water which seeped through a hole in its hull." 8 In accordance with the agreement. sand. Accounting Staff at Castillo Laman Tan Pantaleon and San Jose Law Offices. xxxx (f) Delivery and re-delivery be made in Pasig River. typhoon. Pasig River and towed by Tug-Boat ‘Ayalit’ bound for Ayungon.50 and attorney’s fees equivalent to 25% of said sum. Wenifredo Oracion.000.18 Specifically denying the material allegations of the foregoing complaint in its 26 January 1999 answer.17 On 6 October 1998. b) [Oceaneering] shall be responsible for all port charges. Negros Oriental with cargo onboard steel pipes and various construction materials. Barretto sought indemnities for expenses incurred and lost income in the aggregate sum of P2.24 and. the Barge Patron has the right to refuse loading and/or leaving port. was likewise chartered by Oceaneering from Lea Mer Industries. attorney’s fees and litigation expenses. on the other hand. workmen’s compensation contribution and other legal expenses of the crew. On 9 December 1997. the value of the cargo and the salvage operation it conducted in the premises. Metro Manila. who testified on his participation in the execution of the Time Charter Agreement as well as the circumstances before and after the sinking of the barge. Barge ‘Antonieta’ departed Pico de Loro.10 On 3 December 1997. Barretto’s counsel informed Oceaneering that its unused charter payment was withheld by his client who was likewise seeking reimbursement for the P836. Barretto commenced the instant suit with the filing of his complaint for damages against Oceaneering. refloating and repairing the barge.14 In a letter dated 25 March 1998. among other matters. however.055.425. which was docketed as Civil Case No. or theft. the barge totally capsized touch(ed) bottom. security and stevedoring during loading and unloading operations and all other expenses pertinent to the assessment. 22 and.700. Oceaneering prayed for the grant of its counterclaims for the value of its cargo in the sum of P4.21 Barretto also presented the following witnesses: (a) Toribio Barretto II. with the continuous entrance of sea water on the hold. Oceaneering in turn presented the testimonies of the following witnesses: (a) Engr.: That on or about 1635 December 3. the cargoes were secured by steel stanchions which Oceaneering caused to be welded on the port and starboard sides of the barge. Barretto took the witness stand to prove the seaworthiness of the barge as well as the alleged negligent loading of the cargo by Oceaneering’s employees. Oceaneering’s hired stevedores who loaded the barge with pipe piles.00. Barretto’s Bargeman. Batangas. towed by the tug-boat "Ayalit" which. cargo loaded to the above mentioned deck barge against all risks (Total or Partial). tidal wave or any similar events. That on or about 1529 December 5. order slips.000. 49 .000. Alongside its claim for reimbursement of the sums expended for the salvage operation it conducted which was denied for lack of evidence to prove the same.00 REPRESENTING THE VALUE OF THE MATERIALS IT LOST DUE TO THE SINKING OF [BARRETO’S] BARGE. having determined Barretto’s liability for presumed negligence as a common carrier.28 Recalled as a rebuttal witness.700. In finding Oceaneering’s petition impressed with partial merit.40 Pertaining as they do to such injuries or losses that are actually sustained and susceptible of measurement.00 ONLY. Oceaneering insists that it should be indemnified the sum of P3. that the latter is. that the agreement executed by the parties. as provided in the parties’ agreement. IN DENYING OCEANEERING’S COUNTERCLAIMS FOR ACTUAL DAMAGES AMOUNTING TO (A)P3.00 it paid as consideration for the Time Charter Agreement and to pay the P125. accordingly. Oceaneering maintains that Barretto should be held liable to refund the P306. Toribio Barretto II. Considering that it was able to salvage only nine steel pipes amounting to P351. however. Carlos Gigante. Oceaneering’s claim for the value of its cargo was likewise denied on the ground. 34 Dissatisfied. that the same was not included in the demand letters it served Barretto. 35 the appeal was partially granted in the herein assailed 12 December 2007 decision upon the finding. uppermost in our mind is the fact that actual or compensatory damages are those damages which the injured party is entitled to recover for the wrong done and injuries received when none were intended.704. II.31 On 27 December 2005.700.00.38 hence.703. Geophysical and Astronomical Services Administration (PAGASA). IN HOLDING THAT THERE WERE NO VALID DOCUMENTS SHOWING THE REAL VALUE OF THE MATERIALS LOST AND THOSE ACTUALLY RECOVERED.000. by its express terms. Engr.29 Upon the formal offer respectively made by the parties.000. Applying the rule. 41 they are intended to put the injured party in the position in which he was before he was injured.00 REPRESENTING THE EXPENSES IT INCURRED FOR SALVAGING ITS CARGO. a common carrier legally charged with extraordinary diligence in the vigilance over the goods transported by him. Oceaneering calls attention to the same witness’ inventory which pegged the value of said construction materials at P4.26 (b) Cmdr.00.27 and.36 09-20-14 The Issues Oceaneering urges the reversal of the assailed 12 December 2007 decision and 11 August 2008 resolution on the ground that the CA erred in the following wise: I. AND (b) P125. from the date of demand until fully paid. Oceaneering argues that. Herbert Catapang. Oceaneering further adduced the testimonies of the following witnesses: (a) Rosa Barba. Alongside the testimony elicited from its Operation’s Manager. the pieces of documentary evidence identified and marked in the course of the testimonies of the above named witnesses30were. this petition. III. In addition. therefore.00 for the value of the lost cargo. with indemnity for attorney’s fees in the sum of P30. that the sinking of the vessel created a presumption of negligence and/or unseaworthiness which Barretto failed to overcome and gave rise to his liability for Oceaneering’s lost cargo despite the latter’s failure to insure the same. in turn. as well as the various sales receipts.055. the motion for reconsideration of the foregoing decision filed by Oceaneering’s 37 was denied for lack of merit in the CA’s resolution dated 11 August 2008. a freelance marine surveyor and licensed naval architect. the RTC nevertheless brushed aside the latter’s claim that the barge was not seaworthy as acknowledged in the Time Charter Agreement. Docketed before the CA as CA-G. (c) Engr. the CA erred in disallowing its counterclaims for the value of the construction materials which were lost as a consequence of the sinking of the barge.Torts To disprove the rough sea supposedly encountered by the barge as well as the negligence imputed against its employees.000. and. the CA denied Oceaneering’s claim for the value of its lost cargo and merely ordered the refund of theP306. admitted by the RTC. that actual damages should be proved with a reasonable degree of certainty. IN AWARDING OCEANEERING’S COUNTERCLAIM FOR ATTORNEY’S FEES IN THE REDUCED AMOUNT OF P30. With its claims for exemplary damages and attorney’s fees further denied for lack of showing of bad faith on the part of Barretto. and. asserted that the hull of the barge was not damaged and that the sinking of said vessel was attributable to the improper loading of Oceaneering’s construction materials.00 it incurred by way of salvaging expenses as well as its claim for attorney’s fees in the sum of P750.39 The Court’s Ruling We find the modification of the assailed decision in order. a Senior Weather Specialist at the Philippine Atmospheric. 42 Insofar as actual or compensatory damages are concerned. dismissing both Barretto’s complaint and Oceaneering’s counterclaims for lack of merit. While finding that Barretto failed to adduce sufficient and convincing evidence to prove that the accident was due to the negligence of Oceaneering’s employees. cash vouchers and invoices which were formally offered before and admitted in evidence by the RTC. among others.700. 87168.000. the RTC rendered a decision.00 it paid for the time charter.R. Oceaneering perfected its appeal from the aforesaid 27 December 2005 decision on the ground that the RTC reversibly erred in not finding that the accident was caused by the unseaworthy condition of the barge and in denying its counterclaims for actual and exemplary damages as well as attorney’s fees and litigation expenses. Officer-in-Charge of the Hydrographic Division at the National Mapping Resource Information Authority (NAMRIA).000. CV No. 32 Oceaneering filed the motion for partial reconsideration of the foregoing decision 33 which was denied for lack of merit in the RTC’s 28 April 2006 order. was a time charter where the possession and control of the barge was retained by Barretto. Winifredo Oracion. among other matters.000. with legal interest at 12% per annum. that it has no one but itself to blame for failing to insure its cargo against all risks.00. Article 2199 of the Civil Code of the Philippines provides as follows: Alongside that interposed by Barretto. it must also be actually proven with a reasonable degree of certainty. 55 (c) P155.Torts "Art. cash and check vouchers and other pieces of documentary evidence of the same nature. where the demand is established with reasonable certainty. 47 courts are.00 worth of various stainless steel materials procured on 27 November 1997. 51 Rather than the entire P4. 1169.65 to wit: "2. consequently. not constituting a loan or forbearance of money. said sums shall earn a further interest of 12% per annum until full payment in accordance with the following pronouncements handed down in Eastern Shipping Lines.700.00 cannot. imposed on the party claiming the same45 who should adduce the best evidence available in support thereof.00 representing the value of the nine steel pipes salvaged by Oceaneering.720. vs. Oracion claims to have prepared on 29 November 1997.66 Being the exception rather than the rule. 48 Applying the just discussed principles to the case at bench. Court of Appeals. be granted for lack of credible evidence to support the same. to wit: (a) P1. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty.00 were distinctly pleaded and prayed for in the 26 January 1999 answer it filed a quo. When the judgment of the court awarding a sum of money becomes final and executory.00 worth of bollard procured on 16 December 1997. albeit in the much reduced sum of P30.640. on account of the dates of their procurement. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. While concededly not included in the demand letters dated 12 March 199849and 13 July 199850 Oceaneering served Barretto.500.46 Corollary to the principle that a claim for actual damages cannot be predicated on flimsy. erred in granting Oceaneering’s claim for attorney’s fees.59 and.750. one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved.00 worth of anchor bolt procured on 27 November 1997. should be the correct measure of the award. after all.0063 which.64 Upon the finality of this decision.577.640. Oceaneering’s claim for salvaging expenses in the sum 09-20-14 of P125. the interest shall begin to run only from the date of the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained).000.880. viz. Oracion. (e)P4.00 worth of construction materials reflected in the inventory52 which Engr. Barretto can only be held liable for interest at the rate of 6% per annum on said amount as well as the P2.60 Likewise excluded are the anchor bolt with nut Oceaneering claims to have procured for an unspecified amount on 3 November 1997 61 and the P109.129. Although the lost cargo was not included in the demand letters the latter served the former. Although included in its demand letters as aforesaid and pleaded in its answer. no sufficient showing of 50 . likewise.850.018. 2199. we find that Oceaneering correctly fault the CA for not granting its claim for actual damages or.56 (d) P66. however.000. said refund was claimed in Oceaneering’s demand letters only to the extent of the unused charter payment in the reduced sum of P224. however.226. the portions thereof which were duly pleaded and adequately proved before the RTC.400.000.00 worth of spiral welded steel pipes procured on 28 October 1997.055.000.00 in favor of Oceaneering. is breached. this interim period being deemed to be by then an equivalent to a forbearance of credit. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. as here. said interest rate of 6% per annum shall be imposed from the time of the filing of the complaint which is equivalent to a judicial demand. and insubstantial proof.00 value of the lost cargo instead of the 12% urged by Oceaneering. finally.700.620. we find that the CA also erred in awarding the full amount of P306. in any case. Excluded from the computation are the following items which.620." Conformably with the foregoing provision. could not have possibly been included in the 29 November 1997 inventory prepared by Engr. required to state the factual bases of the award.620. moreover. 68 in view of the policy that no premium should be placed on the right to litigate.00 in actual damages representing the value of the latter’s lost cargo. the rule is settled that there can be no recovery of attorney’s fees and expenses of litigation other than judicial costs except in the instances enumerated under Article 2208 of the Civil Code. above. 67 attorney’s fees are not awarded every time a party prevails in a suit. it has been held that self-serving statements of account are not sufficient basis for an award of actual damages.000. Accordingly.00 worth of WO#1995 and PO#OCPI-060-97 procured on 9 December 1997.: (a) P1. (b) P128.50 worth of Petron oil it procured on 28 November 1997 62 which does not fit into the categories of lost cargo and/or salvaging expenses for which it interposed counterclaims a quo. based on the delivery and official receipts from Oceaneering’s suppliers. still attorney’s fees may not be awarded where. more specifically. likewise. or a total of P2. the rule is long and well settled that there must be pleading and proof of actual damages suffered for the same to be recovered. on the other hand. 54 (b) P629. 44 The burden of proof of the damage suffered is. Having breached an obligation which did not constitute a loan or forbearance of money. we find that the CA.000. 3. Tested alongside the twin requirements of pleading and proof for the grant of actual damages. 53 we are.055. In the absence of stipulation.00 worth of spiral welded pipes with coal tar epoxy procured on 22 November 1997. No interest. When an obligation. 69 Even when a claimant is compelled to litigate with third persons or to incur expenses to protect his rights. Except as provided by law or by stipulation. Inc.00 worth of gaskets and shackles procured on 20 November 1997. inclined to grant only the following items which were duly proved by the vouchers and receipts on record. whether the case falls under paragraph 1 or paragraph 2. Aside from not being clearly pleaded in the answer it filed a quo. speculative. In the absence of corroborative evidence.00 from which should be deducted the sum of P351.00. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. The actual base for the computation of legal interest shall." For lack of sufficient showing of bad faith on the part of Barretto.226. like sales and delivery receipts. the former’s counterclaims for the value of its lost cargo in the sum of P4. be on the amount of finally adjudged. premised upon competent proof or the best evidence obtainable.43 In addition to the fact that the amount of loss must be capable of proof. shall be 12% per annum from such finality until its satisfaction. Such compensation is referred to as actual or compensatory damages. remote.58 The foregoing sums all add up to of P2.00 and salvaging expenses in the sum of P125. as and by way of refund of the consideration it paid Barretto for the Time Charter Agreement. to our mind. the rate of legal interest.57 and. 620.Torts 09-20-14 bad faith can be reflected in the party’s persistence in a case other than an erroneous conviction of the righteousness of his cause. with 6% interest per annum computed from 12 March 1998. The rest is AFFIRMED in toto. the petition is PARTIALLY GRANTED and the assailed 12 December 2007 Decision is. likewise to earn further interest at the rate of 12% per annum from finality of this decision. MODIFIED: (a) to GRANT Oceaneering’s claim for the value of its lost cargo in the sum ofP2. accordingly. No. 2007 51 .00 to P224.70 WHEREFORE.00 with 6% interest per annum computed from the filing of the complaint and to earn further interest at the rate of 12% per annum from finality of the decision until full payment. premises considered. (b) to REDUCE the refund of the consideration for the Time Charter Agreement from P306. (c) to DELETE the CA’s award of salvaging expenses and attorney’s fees.400. SO ORDERED. 123498 November 23. and.226.R. for lack of factual and legal basis.000. G.00. 000.54 representing Tevesteco’s total withdrawals from its account.00. 1990. 1989. Inc. Franco opened three accounts.Torts BPI FAMILY BANK.00 debited from its account.00 paid to Franco. the dishonored checks were issued by Franco and presented for payment at BPI-FB prior to Franco’s receipt of notice that his accounts were under garnishment. a current.5 and time deposit.00 check was part of the P80. that Franco was impleaded in the Makati case. On May 17. Severino Coronacion. and in BPI Family Savings Bank. 1990. had already been debited because of FMIC’s forgery claim.00 each. through the service of a copy of the Second Amended Complaint in Civil Case No.6with BPI-FB. impelled by the need to protect its interests in light of FMIC’s forgery claim. it appears that Franco agreed to an arrangement. The total amount of P2. It was only on May 15.54.. with Franco demanding the release to him of the funds in his savings and current accounts.8 On September 4.000.000. 1990. some of which we had already resolved. (Tevesteco) opened a savings and current account with BPI-FB.12 In the meantime. which had been filed by BPIFB against Franco et al. 1989.18 we upheld the finding of the courts below that BPI-FB failed to exercise the degree of diligence required by the nature of its obligation to treat the accounts of its depositors with meticulous care. As part of the arrangement. Tevesteco Arrastre-Stevedoring Co. personally declared his signature therein to be a forgery.000.000. as previously stated.17The case eventually reached this Court. The current and savings accounts were respectively funded with an initial deposit of P500. Notably. 1989. thru its Senior Vice-President. 1989 was served on BPI-FB. BPI-FB deducted the amount of P63. Franco filed a Motion to Discharge Attachment which the Makati RTC granted on May 16. subject to its immediate return upon issuance of a certificate of deposit which Quiaoit needed in connection with his visa application at the Taiwan Embassy.410. at the time the Notice of Garnishment dated September 27. in a series of transactions.00 used to open these accounts is traceable to a check issued by Tevesteco allegedly in consideration of Franco’s introduction of Eladio Teves. BPI-FB was found liable to FMIC for the debited amount in its time deposit. Tevesteco had already effected several withdrawals from its current account (to which had been credited the P80. These transactions spawned a number of cases. BPI-FB’s new manager. 89-4996.16 Immediately. who was then BPI-FB SFDM’s Branch Manager..R. AMADO FRANCO and COURT OF NACHURA. On August 15. while the time deposit account had P1. in Civil Case No. Inc. The Order Lifting the Order of Attachment was served on BPI-FB on even date. Sebastian retained custody of Quiaoit’s savings account passbook to ensure that no withdrawal would be effected therefrom. We reiterate this exhortation in the case at bench.4 savings.7 who was looking for a conduit bank to facilitate Tevesteco’s business transactions.9 upon being shown the Authority to Debit. Franco had yet to be impleaded in the Makati case where the writ of attachment was issued.00 debited by BPI-FB from FMIC’s time deposit account and credited to Tevesteco’s current account pursuant to an Authority to Debit purportedly signed by FMIC’s officers. APPEALS.000. Subsequently. the funding for the P2. 1989 until 52 .410. Antonio Ong. BPI-FB. This case has its genesis in an ostensible fraud perpetrated on the petitioner BPI Family Bank (BPI-FB) allegedly by respondent Amado Franco (Franco) in conspiracy with other individuals. and stamped with a notation "account under garnishment.000. v.00 with a maturity date of August 31.000.00 covered by the forged Authority to Debit) amounting to P37.000. and to preserve Franco’s deposits. Before us is a Petition for Review on Certiorari seeking the reversal of the Court of Appeals (CA) Decision1 in CA-G." Apparently. Jesus Arangorin. As such. On September 8. Soon thereafter. 14 to recover the P37.3 some of whom opened and maintained separate accounts with BPI-FB. or on August 25. It appears. two checks 13 drawn by Franco against his BPI-FB current account were dishonored upon presentment for payment.000.000. could not forthwith comply with the demand as the funds. First Metro Investment Corporation.99 plus interest at 17% per annum from August 29.000. Branch 55.000. Petitioner. including the P2. Thus. to mature one year thence.189. as a favor to Sebastian. whereby P400. on August 31. upon receipt of such copy. namely. It was ordered to pay P65. Respondents. First Metro Investment Corporation (FMIC) also opened a time deposit account with the same branch of BPI-FB with a deposit of P100. Franco pre-terminated his time deposit account.000. Manila (Manila RTC).000. instructed Jesus Arangorin10 to debit Franco’s savings and current accounts for the amounts remaining therein.000.000.332. to Jaime Sebastian." With respect to Franco’s savings account.: Banks are exhorted to treat the accounts of their depositors with meticulous care and utmost fidelity. however. 89-4996 (Makati Case). CV No. 1989. 1990. BPI-FB’s computer at the SFDM Branch indicated that the current account record was "not on file.321. FMIC filed a complaint against BPI-FB for the recovery of the amount of P80. Franco’s time deposit account could not be debited due to the capacity limitations of BPI-FB’s computer.11 However. In turn.455.00 from the remaining balance of the time deposit account representing advance interest paid to him. Unfortunately. 09-20-14 vs. 1989. San Francisco del Monte (SFDM) branch. J.15 In fact. Franco’s current account was garnished by virtue of an Order of Attachment issued by the Regional Trial Court of Makati (Makati RTC) in Civil Case No. that the signatures of FMIC’s officers on the Authority to Debit were forged.000. 43424 which affirmed with modification the judgment2 of the Regional Trial Court.00 from his savings account was temporarily transferred to Domingo Quiaoit’s savings account.455. 90-53295. Caloocan City Branch. Franco confined his appeal to the Manila RTC’s denial of his claim for moral and exemplary damages. Myrna Lizardo and Yolanda Tica (Buenaventura. Meanwhile. and for moral and exemplary damages.000.000. the Manila RTC rendered judgment.P200. insisting that it was correct in freezing the accounts of Franco and refusing to release his deposits. Cost against [BPI-FB]. contrary to the appellate court’s ruling.23 representing the balance on [Franco’s] savings account as of May 18. P498. the 17% shall itself earn interest at 12% from October 4. P10.000. Bonifacio Market. par. 53 . and 4.00 representing the interest deducted from the time deposit of plaintiff-appellant. Edgardo Buenaventura. the dispositive portion of which reads as follows: WHEREFORE. We are in full accord with the common ruling of the lower courts that BPI-FB cannot unilaterally freeze Franco’s accounts and preclude him from withdrawing his deposits. together with the interest thereon in accordance with the bank’s guidelines on the payment therefor.). 1991. Consequently. (4) the dishonor of Franco’s checks was not legally in order.000.000. we hold that Franco is not entitled to unearned interest on the time deposit as well as to moral and exemplary damages.000. the civil case24 remains under litigation and the respective rights and liabilities of the parties have yet to be adjudicated. BPI-FB asseverated that the claimed consideration of P2. likewise filed suit. in light of BPI-FB’s refusal to heed Franco’s demands to unfreeze his accounts and release his deposits therein. deleting the award of nominal damages (in view of the award of moral and exemplary damages) and increasing the award of attorney’s fees fromP30.00 by way of attorney’s fees. Edsa.23 However. and Jaime Sebastian.00 as exemplary damages. 1993. Buenaventura et al. In turn.29 In this recourse. on the one hand. However. Franco prayed for the following reliefs: (1) the interest on the remaining balance 25 of his current account which was eventually released to him on October 31.000. as in the case of Franco. moral and exemplary damages.00 as moral damages and P100.000. Franco. (5) BPI-FB is liable for interest on Franco’s time deposit.00 deposit in Quiaoit’s savings account.500. the appealed decision is hereby AFFIRMED with modification ordering [BPI-FB] to pay [Franco] P63.’s accounts and adjudged BPI-FB liable therefor. spoke volumes of Franco’s participation in the fraudulent transaction.00 from May 18.973. judgment is hereby rendered in favor of [Franco] and against [BPI-FB].19 recipients of aP500. 1989 until fully paid. as well as attorney’s fees.. the appellate court decreed. 3. 1990.000. In a related case. claiming that it had a better right to the amounts which consisted of part of the money allegedly fraudulently withdrawn from it by Tevesteco and ending up in Franco’s accounts. Likewise. Buenaventura. (3) the advance interest 27 paid to him which had been deducted when he pre-terminated his time deposit account. 2(a) of the Revised Penal Code.00 to P75.Torts 09-20-14 fully restored. Costs against [BPI-FB]. to wit: WHEREFORE. The petition is partly meritorious. and (6) BPI-FB’s counter-claim has no factual and legal anchor. foregoing considered.000. BPI-FB traversed this complaint. along with the other accused. In affirming with modification the lower court’s decision. and (4) the payment of actual. BPI-FB ascribes error to the CA when it ruled that: (1) Franco had a better right to the deposits in the subject accounts which are part of the proceeds of a forged Authority to Debit. both parties filed their respective appeals before the CA.00 representing the legal rate of interest on the amount of P450. 21 we ruled that BPI-FB had no right to freeze Buenaventura. the latter filed on June 4.00 as nominal damages. SO ORDERED. SO ORDERED. (2) the balance 26 on his savings account. (3) Franco can recover the P400.28 Unsatisfied with the decision. In his complaint. et al. 2.189. when the case was elevated to this Court docketed as BPI Family Bank v.000. 1991. P76.000. et al.00.00 check proceeding from the P80. were acquitted of the crime of Estafa as defined and penalized under Article 351. P30. and the diminutive award of attorney’s fees. ordering the latter to pay to the former the following sums: 1.00 for the introduction facilitated by Franco between George Daantos and Eladio Teves. in view of all the foregoing. (2) Franco is entitled to interest on his current account. 1990 to October 31. plus interest thereon. On August 4. 1990 with the Manila RTC the subject suit. 22 In the criminal case.00 mistakenly credited to Tevesteco. BPI-FB filed separate civil and criminal cases against those believed to be the perpetrators of the multi-million peso scam. The counterclaim of the defendant is DISMISSED for lack of factual and legal anchor.000. except for Manuel Bienvenida who was still at large. on the other. were also prevented from effecting withdrawals20 from their current account with BPI-FB. in addition to damages. which it had mistakenly debited from FMIC’s account and credited to Tevesteco’s. or asking for the release of the funds in his savings account. and where Z unwittingly entrusts possession of the TV set to X. confident that the bank will deliver it as and to whomever directs. can cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation. Court of The banking system is an indispensable institution in the modern world and plays a vital role in the economic life of every civilized nation. he had every right as creditor to expect that those checks would be honored by BPI-FB as debtor. More importantly. Our pronouncement in Simex International Appeals38 continues to resonate. is inapplicable to the instant case. because of its nature or the will of the parties. It bears emphasizing that money bears no earmarks of peculiar ownership. the owner cannot obtain its return without reimbursing the price paid therefor. In fact. the right to take whatever action it pleases on deposits which it supposes are derived from shady transactions. BPI-FB ultimately acquired ownership of Franco’s deposits. et al. which provides: Article 559. The ordinary person. this is what BPI-FB did in filing the Makati Case against Franco. BPI-FB’s illustrative example.31 In this case. To grant BPI-FB. To begin with. the value thereof. x x x. BPI-FB does not have a unilateral right to freeze the accounts of Franco based on its mere suspicion that the funds therein were proceeds of the multi-million peso scam Franco was allegedly involved in. but such ownership is coupled with a corresponding obligation to pay him an equal amount on demand. 09-20-14 Thus. is no exception. and to illustrate this point. 30 A determinate or specific thing is one that is individualized and can be identified or distinguished from others of the same kind. 36 As there is a debtor-creditor relationship between a bank and its depositor. most of all. On the issue of who has a better right to the deposits in Franco’s accounts. The possession of movable property acquired in good faith is equivalent to a title.33 Significantly. such as the dishonor of the check without good reason. being substituted by others of the same kind. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit. The point is that as a business affected with public interest and because of the nature of its functions. even the humble wage-earner has not hesitated to entrust his life’s savings to the bank of his choice. banks have become an ubiquitous presence among the people. the deposit in Franco’s accounts consists of money which. albeit characterized as a movable. The bank must record every single transaction accurately. or any bank for that matter. who have come to regard them with respect and even gratitude and. BPI-FB urges us that the legal consequence of FMIC’s forgery claim is that the money transferred by BPI-FB to Tevesteco is its own. the movable property mentioned in Article 559 of the Civil Code pertains to a specific or determinate thing. BPI-FB contends that its position is not unlike that of an owner of personal property who regains possession after it is stolen. In every case. To bolster its position. 35 Money. Whether as mere passive entities for the safekeeping and saving of money or as active instruments of business and commerce. the latter would have the right to keep possession of the property and preclude Z from recovering possession thereof. BPI-FB’s argument is unsound. 37Although BPI-FB owns the deposits in Franco’s accounts. knowing that they will be safe in its custody and will even earn some interest for him. which had passed through various transactions in the general course of banking business. Its primary function is to pass from hand to hand as a medium of exchange. has acquired it in good faith at a public sale. BPI-FB cites Article 559 of the Civil Code. It staked its claim on the money itself which passed from one account to another. Nevertheless. not having a distinct individuality. A blunder on the part of the bank. v. and as promptly as possible. If the possessor of a movable lost or of which the owner has been unlawfully deprived. thus: (Manila). 34 and this characteristic is all the more manifest in the instant case which involves money in a banking transaction gone awry. is generic and fungible. down to the last centavo. but not as a legal consequence of its unauthorized transfer of FMIC’s deposits to Tevesteco’s account. BPI-FB simply claims ownership of the equivalent amount of money. would open the floodgates of public distrust in the banking industry. whether such account consists only of a few hundred pesos or of millions. i. Inc. may recover it from the person in possession of the same. and considering that it was able to recover possession of the same when the money was redeposited by Franco. commencing with the forged Authority to Debit. when Franco issued checks drawn against his current account. while Article 559 permits an owner who has lost or has been unlawfully deprived of a movable to recover the exact same thing from the current possessor. it cannot prevent him from demanding payment of BPI-FB’s obligation by drawing checks against his current account. the bank is under obligation to treat the accounts of its 54 . 32 The quality of being fungible depends upon the possibility of the property. confidence. and subsequently traced to Franco’s account. even if of traceable origin. ostensibly based on Article 559. usually maintains a modest checking account for security and convenience in the settling of his monthly bills and the payment of ordinary expenses. it had the right to set up its ownership thereon and freeze Franco’s accounts. with equal faith. There is no doubt that BPI-FB owns the deposited monies in the accounts of Franco. inasmuch as what is involved is not a specific or determinate personal property.. the depositor expects the bank to treat his account with the utmost fidelity.e. BPI-FB gives the following example: where X’s television set is stolen by Y who thereafter sells it to Z.Torts First. one who has lost any movable or has been unlawfully deprived thereof. without other evidence of its title. Thus. Thus. BPI-FB conveniently forgets that the deposit of money in banks is governed by the Civil Code provisions on simple loan or mutuum. However. It should be noted that the strict requirement on service of court papers upon the parties affected is designed to comply with the elementary requisites of due process. the latter. Section 5. together with a copy of the complaint. interest at the rate of 12% began to accrue thereon. as the trustee in the fiduciary relationship. With respect to its liability for interest on Franco’s current account. Third. but failure to amend does not affect the result of the trial of these issues.000. even without delving into the authenticity of the signature in the Authority to Debit. Having failed to detect the forgery in the Authority to Debit and in the process inadvertently facilitate the FMIC-Tevesteco transfer. Franco’s action for the recovery of his deposits appropriately covers the deposits in Quiaoit’s account. BPI-FB’s argument that this case is not the right forum for Franco to recover the P400. from May 17. always having in mind the fiduciary nature of their relationship. Further. BPI-FB argues that its non-compliance with the Makati RTC’s Order Lifting the Order of Attachment and the legal consequences thereof. The Manila RTC’s order to pay interests on Franco’s current account arose from BPI-FB’s unjustified refusal to comply with its obligation to pay Franco pursuant to their contract of mutuum. as a matter of right. In other words. to notice. In this argument. Noteworthy is the fact that Quiaoit himself testified that the deposits in his account are actually owned by Franco who simply accommodated Jaime Sebastian’s request to temporarily transfer P400. the Makati RTC is vested with the authority to determine the legal consequences of BPI-FB’s non-compliance with the Order Lifting the Order of Attachment.Torts depositors with meticulous care. or contemporaneously accompanied. Second. several days after the two checks he issued were dishonored by BPI-FB on September 20 and 21. 1990. is duty bound to know the signatures of its customers.40 His testimony cannot be characterized as hearsay as the records reveal that he had personal knowledge of the arrangement made between Franco. testifying during the trial. Considering that there is as yet no indubitable evidence establishing Franco’s participation in the forgery. BPI-FB cannot now shift liability thereon to Franco and the other payees of checks issued by Tevesteco.— When issues not raised by the pleadings are tried with the express or implied consent of the parties. it should be remembered that the enforcement of a writ of attachment cannot be made without including in the main suit the owner of the property attached by virtue thereof. 1989. such authority does not preclude the Manila RTC from ruling on BPI-FB’s liability to Franco for payment of interest based on its continued and unjustified refusal to perform a contractual obligation upon demand. Additionally. they shall be treated in all respects as if they had been raised in the pleadings. Rule 10 of the Rules of Court provides: Section 5. Franco was entitled. is a matter that ought to be taken up in that court. the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby.000. (Emphasis supplied) In all. which made possible the present predicament. After all. it was premature for BPI-FB to freeze Franco’s accounts without even awaiting service of the Makati RTC’s Notice of Garnishment on Franco. if the requirements of due process are to be observed.00 from Franco’s savings account to Quiaoit’s account. 42 Rule 13 of the Rules of Court. 39 Undeniably. on the defendant within the Philippines. effected the transfer of P80. unequivocally disclaimed ownership of the funds in his account. it appears that BPI-FB had impliedly consented to the trial of this issue given its extensive cross-examination of Quiaoit. specifically. Yet. 1989. the application for attachment. As between him and BPI-FB. by service of summons. Section 5. he received a copy of the Notice of Garnishment only on September 27. BPI-FB. when FMIC’s account was a time deposit and it had already paid advance interest to FMIC. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time. must bear the resulting loss or inconvenience. The argument is specious. As to the award to Franco of the deposits in Quiaoit’s account.000. Quiaoit. x x x. or prevent withdrawals from their respective accounts without the appropriate court writ or a favorable final judgment. We agree with the succinct holding of the appellate court in this respect. this was the core issue raised by Franco in his complaint before the Manila RTC. Notwithstanding all the foregoing. The court may grant a continuance to enable the amendment to be made. It posits that as the party that applied for the writ of attachment before the Makati RTC. Amendment to conform to or authorize presentation of evidence." 55 .00 from FMIC’s to Tevesteco’s account.000. 1989. The argument is tenuous. BPI-FB continues to insist that the dishonor of Franco’s checks respectively dated September 11 and 18. It insists that the transaction with Quiaoit was not specifically alleged 09-20-14 in Franco’s complaint before the Manila RTC. it need not be served with the Notice of Garnishment before it could place Franco’s accounts under garnishment. Sebastian and himself. Ineluctably. from the time BPI-FB refused Franco’s demand for the release of the deposits in his current account.41 BPI-FB makes capital of Franco’s belated allegation relative to this particular arrangement. If evidence is objected to at the trial on the ground that it is now within the issues made by the pleadings. Fourth. even after judgment. we perceive BPI-FB’s clever but transparent ploy to circumvent Section 4. we find no reason to depart from the factual findings of both the Manila RTC and the CA. Clearly. he remains an innocent party. However. Verily. Rule 13 of the Rules of Court specifically provides that "no levy or attachment pursuant to the writ issued x x x shall be enforced unless it is preceded. and pointed to Franco as the actual owner thereof.00 begs the issue. it boggles the mind why BPI-FB. 1989 was legally in order in view of the Makati RTC’s supplemental writ of attachment issued on September 14. To reiterate. 46 and with no other goal but to ensure the integrity of the accounts. or identify any particular circumstance in Article 2219 of the Civil Code. In this regard. This refusal constrained Franco to incur expenses and litigate for almost two (2) decades in order to protect his interests and recover his deposits. Franco should show that he is entitled to moral. However. Attorney’s fees may be awarded when a party is compelled to litigate or incur expenses to protect his interest. we cannot attribute to BPI-FB fraud or even a motive of self-enrichment. as the trial court did. 49 Franco could not point to. (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant. While it is a sound policy not to set a premium on the right to litigate. and allow only the recovery of nominal damages in the amount of P10. it imports a dishonest purpose or some moral obliquity and conscious doing of wrong. neither can exemplary damages be granted. Therefore. The remedy of freezing the account. and (4) refused to return the P400. BPI-FB’s alleged loss of profit as a result of Franco’s suit is. Thus. and (4) the award for damages is predicated on any of the cases stated in Article 2219 of the Civil Code. BPI-FB was not in the corrupt state of mind contemplated in Article 2201 and should not be held liable for all damages now being imputed to it for its breach of obligation. therefore.000. 44 We have held that it is a breach of a known duty through some motive of interest or ill will.43 Effectively. we retain the CA’s award of P75. and which the parties have foreseen or could have reasonable foreseen at the time the obligation was constituted. 51 We also deny the claim for exemplary damages. and for moral as well as exemplary damages.56 Sixth. The Court of Appeals Decision dated November 29. however. of its own making. or even the outright refusal to honor any transaction thereon was resorted to solely for the purpose of holding on to the funds as a security for its intended court action.800.1âwphi1 Thus.000.000. 53 we. and consequently. The award is reasonable in view of the complexity of the issues and the time it has taken for this case to be resolved. mental or psychological.00 as attorney’s fees. malice or wanton attitude. As the trial court found. (2) misleadingly claimed that Franco’s deposits were under garnishment. find that Franco is entitled to reasonable attorney’s fees for having been compelled to go to court in order to assert his right. we find it proper to reinstate the ruling of the trial court.00 was part of Franco’s savings account.55 In the case at bench. The Makati RTC had yet to acquire jurisdiction over the person of Franco when BPI-FB garnished his accounts.000. or compensatory damages before the court may even consider the question of whether exemplary damages should be awarded to him. we are guided by Article 2201 of the Civil Code which provides: Article 2201.000. not having acted in bad faith. or the garnishment. In granting Franco’s prayer for interest on his time deposit account and for moral and exemplary damages.000. the CA attributed bad faith to BPI-FB because it (1) completely disregarded its obligation to Franco. and that the adverse result of an action does not per se make the action wrongful. In case of fraud.50 upon which to base his claim for moral damages.52 As there is no basis for the award of moral damages. (Emphasis supplied. wanted the amount returned to Franco.00 as actual damages.45 In the instant case. BPI-FB refused to unfreeze the deposits of Franco despite the Makati RTC’s Order Lifting the Order of Attachment and Quiaoit’s unwavering assertion that theP400. 1990. One may err. that BPI-FB acted out of the impetus of self-protection and not out of malevolence or ill will. bad faith. there was no legal basis for BPI-FB to dishonor the checks issued by Franco. Anent the CA’s finding that BPI-FB was in bad faith and as such liable for the advance interest it deducted from Franco’s time deposit account.00 despite the fact that the ostensible owner. BPI-FB cannot be held liable for moral damages under Article 2220 of the Civil Code for breach of contract. the Makati RTC had no authority yet to bind the deposits of Franco through the writ of attachment. The computer-generated document which indicated that the current account was "not on file" resulted from the prior debit by BPI-FB of the deposits. we uphold the Manila RTC’s ruling. the denial of its counter-claim is in order. the obligor shall be responsible for all damages which may be reasonably attributed to the nonperformance of the obligation. (3) misrepresented that Franco’s current account was not on file.000. temperate. there was no denial whatsoever by BPI-FB of the existence of the accounts. 09-20-14 We have had occasion to hold that in the absence of fraud or bad faith.) We find. Fifth.00.Torts Franco was impleaded as party-defendant only on May 15. it is not liable for the unearned interest on the time deposit. 47 moral damages cannot be awarded.00 as attorney’s fees.54 or when the court deems it just and equitable. whether physical. For the same reason. we affirm the CA’s grant of P75. it partakes of the nature of fraud. In contracts and quasi-contracts. As for the dismissal of BPI-FB’s counter-claim. 1995 is AFFIRMED with the MODIFICATION that the award of 56 . as already pointed out. (2) there must be a culpable act or omission factually established. the petition is PARTIALLY GRANTED. the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation. or the party liable for it. as affirmed by the CA.00 as attorney’s fees. WHEREFORE. Quiaoit. that BPI-FB is not entitled to recover P3. but error alone is not a ground for granting such damages. Accordingly. Bad faith does not simply connote bad judgment or negligence.48 An award of moral damages contemplates the existence of the following requisites: (1) there must be an injury clearly sustained by the claimant. this Court deems it just and equitable to grant Franco P75. The car. petitioner Del Rosario only had a Traffic Violation Receipt (TVR).: On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.058 kg. del Rosario as driver. SPOUSES RICHARD HUANG and CARMEN HUANG. At the time of the accident. respectively which affirmed with modification the Decision 3 of the Regional Trial Court (RTC) of Makati City.J. 2004. the facts: Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a sixwheeler 1990 Mitsubishi Truck with plate number PRE 641 (truck). His driver’s license had been confiscated because he had been previously apprehended for reckless driving. 2006 and March 30.R. weighing 1. spun around and landed on the opposite lane. The collision hurled the car over the island where it hit a lamppost. and finally stopped in front of Buellah Land Church. dated September 29. dated February 16. petitioners.Torts 09-20-14 unearned interest on the time deposit and of moral and exemplary damages is DELETED.. respondent Stephen Huang is paralyzed for life from his chest down and requires continuous medical and rehabilitation treatment. Respondent Stephen Huang was driving the car. Both were traversing the C-5 Highway. PUNO. weighing 14. Despite a series of operations.m. when the truck suddenly swerved to its left and slammed into the front right side of the car. Respondent Stephen Huang sustained massive injuries to his spinal cord. 1996 at around 10:30 p. valued at P300. and lung. respondents. coming from the general direction of Alabang going to Pasig City. 2007 MERCURY DRUG CORPORATION and ROLANDO J. within the municipality of Taguig. was a total wreck. C. Metro Manila.000. G. SO ORDERED. son of respondent spouses Richard and Carmen Huang. ran over the car and zigzagged towards. 57 . First. 83981. while petitioner Del Rosario was driving the truck. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla GLI Sedan with plate number PTT 775 (car). The trial court found petitioners jointly and severally liable to pay respondents damages for the injuries sustained by respondent Stephen Huang. The car was on the left innermost lane while the truck was on the next lane to its right. face.450 kg. vs. and STEPHEN HUANG. It has in its employ petitioner Rolando J. No. DEL ROSARIO. CV No.00. 172122 June 22.R. No pronouncement as to costs. These two vehicles figured in a road accident on December 20. north bound. 2006. head. The truck also hit a lamppost. 000. moral and exemplary damages. which dismissed outright the Motion for Reconsideration must be set aside because the Honorable Court of Appeals committed reversible error: A. he was driving on the left innermost lane when the car bumped the truck’s front right tire. Two Million Pesos (P2.062. Hence. and Stephen Huang the following amounts: 1. Makati City.00) as exemplary damages.000. this appeal. IN PRESENTING ONLY IN THE DECISION TESTIMONIES FAVORABLE TO THE RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE EVIDENCES PRESENTED BY THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS WELL AS DOCUMENTARY EVIDENCES. the Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages to P1. Further. In contrast.00) as moral damages. but would have been thrown to the right side of the C-5 Highway. in that the award of moral damages was reduced toP1.000.000. The trial court. 2006.5 We affirm the findings of the trial court and the appellate court that petitioner Del Rosario was negligent. B. He said that "the car did not pass in front of him after it hit him or under him or over him or behind him. Ten Million Pesos (P10. smashed into an electric post. and stopped on the other side of the highway. G.00) as attorneys fees and litigation expense. 4. and Rolando del Rosario. Firstly. found petitioners Mercury Drug and Del Rosario jointly and severally liable to pay respondents actual. Petitioner Del Rosario could not also explain why the car landed on the opposite lane of C-5 which was on its left side. Four Million Pesos (P4. Huang and Carmen G. The appellate court also denied the motion for reconsideration filed by petitioners. the car would not have landed on the opposite side. in its Decision dated September 29.461. As compensatory damages: a. IN AWARDING DAMAGES IN FAVOR OF RESPONDENTS HEREIN. and 5. Noteworthy on this issue is the 58 ." 7 If the truck were really at the left lane and the car were at its right. The evidence does not support petitioners’ claim that at the time of the accident. C. Petitioners cite the following grounds for their appeal: 1. That the subject Decision which dismissed the appeal of petitioners herein but AFFIRMED WITH MODIFICATION the decision of the Regional Trial Court. Inc.00) for life care cost of Stephen. petitioners allege that the immediate and proximate cause of the accident was respondent Stephen Huang’s recklessness. attorney’s fees. 3.4 On February 16.00 and its Resolution dated March 30.000. 2006.000. F. Branch 64. IN DISREGARDING COMPLETELY ALL EVIDENCES PRESENTED BY THE PETITIONERS HEREIN AND PROCEEDED TO RENDER ITS DECISION BASED ON PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO ARE NOT WITNESSES TO THE ACCIDENT.000. and petitioner Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and supervision of its driver.000. compensatory. and the car hit the truck at its front right side. b. D. According to petitioner Del Rosario. petitioner Mercury Drug claims that it exercised due diligence of a good father of a family in the selection and supervision of all its employees.Torts 09-20-14 Respondents fault petitioner Del Rosario for committing gross negligence and reckless imprudence while driving. jointly and severally liable to pay plaintiffs Spouses Richard Y. IN DENYING OUTRIGHTLY THE MOTION FOR RECONSIDERATION ON ALLEGEDLY BEING FILED OUT OF TIME FOR ONE DAY.000. One Million Pesos (P1.00) actual damages. IN FINDING THAT MERCURY DRUG CORPORATION FAILED TO EXERCISE THE DILIGENCE REQUIRED IN SUPERVISING ITS EMPLOYEES DESPITE OVERWHELMING EVIDENCE PRESENTED BY PETITIONER COMPANY. The car likewise crossed over the center island and landed on the same portion of C-5. crossed the center island. IN ACCORDING GREATER WEIGHT TO THE EVIDENCE ADDUCED BY THE RESPONDENTS HEREIN AND COMPLETELY DISREGARDING THE DEFENSE INTERPOSED BY THE PETITIONERS HEREIN. Two Million Nine Hundred Seventy Three Thousand Pesos (P2.000.00) as and for lost or impaired earning capacity of Stephen. which bumped the right front side of the truck. The truck then swerved to the left.00.6 despite the fact that the truck was snub-nosed and a lot higher than the car. The dispositive portion reads: WHEREFORE. the truck was at the left inner lane and that it was respondent Stephen Huang’s car. judgment is rendered finding defendants Mercury Drug Corporation. Twenty Three Million Four Hundred Sixty One Thousand. and litigation expenses.000. Huang.973. at its right.000. 2. and SixtyTwo Pesos (P23. IN FINDING THAT PETITIONER ROLANDO DEL ROSARIO WAS NEGLIGENT IN DRIVING THE TRUCK AT THE TIME OF ACCIDENT AND TOTALLY DISREGARDING THE EVIDENCES PRESENTED DURING THE TRIAL OF THE CASE. petitioner Del Rosario could not precisely tell which part of the truck was hit by the car. E. 2004.000. 2180. The attempt does not impress. which would move to the right of. petitioners tried to show the damages that the truck sustained at its front right side. Both vehicles were moving in the same direction and at the same speed of about 85 to 90 kilometers per hour. Dr. there being fault or negligence. is called a quasidelict and is governed by the provisions of this Chapter.. and away from the truck. there is very little chance that the car will move towards the opposite side. Daza testified that given the foregoing assumptions. In this situation. 3. he lost control of the truck and failed to apply his brakes. as follows: ATTY. the lighter vehicle. It is the car. before running over it.Torts 09-20-14 testimony of Dr. in accordance with the testimony of respondent Stephen Huang. ATTY. WITNESS: Yes. Your Honor. Daza. sir. sir from the time your truck was hit according to you up to the time you rested on the shoulder. he opined. The truck. not the other way around. Thus. sir. and Rogelio Pantua. is that what you want to impress upon this court? WITNESS: Yes. but also for those of persons for whom one is responsible. petitioner Del Rosario further admitted that after the impact. DIAZ: Because as you said you lost control. The heavier vehicle was driving at the innermost left lane. One vehicle is ten times heavier. Such fault or negligence. DIAZ: And this was despite the fact that you were only traveling at the speed of seventy five kilometers per hour. the general direction of the light vehicle after the impact would be to the right side of the heavy vehicle. the automechanic who repaired the truck and authenticated the photographs. if there is no pre-existing contractual relation between the parties. sir. The evidence proves petitioner Del Rosario’s negligence as the direct and proximate cause of the injuries suffered by respondent Stephen Huang. DIAZ: May I proceed. DIAZ: In other words. hit the lamppost. 2176. about that distance. and traveled the three lanes of the opposite lane of C-5 highway. is obliged to pay for the damage done. i. You were able to apply the brakes. Whoever by act or omission causes damage to another. Dr.10 We therefore find no cogent reason to disturb the findings of the RTC and the Court of Appeals. jumped over the island. were you sir? WITNESS: ATTY. Daza concluded that the general direction of the car after impact would be to the left of the truck. We now come to the liability of petitioner Mercury Drug as employer of Del Rosario. 4. an expert in the field of physics. Considering that the car was smaller and lighter than the six-wheeler truck. is more difficult to move as it is heavier. Dr. No more.e.9 Worse still. correct sir? 1. the middle island against which the car was pinned would slow down the car.8 To support their thesis. while the lighter vehicle was at its right. sir. The obligation imposed by article 2176 is demandable not only for one’s own acts or omissions. you traveled fifty meters? WITNESS: Yes. The photographs presented were taken a month after the accident. Articles 2176 and 2180 of the Civil Code provide: Art. 2. more massive than the other. the impact allegedly caused by the car when it hit the truck could not possibly be so great to cause petitioner to lose all control that he failed to even step on the brakes. Petitioner Del Rosario failed to do what a reasonable and prudent man would have done under the circumstances. if the lighter vehicle hits the right front portion of the heavier vehicle. and enable the truck to catch up and hit the car again. because I went over the island. He conducted a study based on the following assumptions provided by respondents: ATTY. Art. Daza also gave a further study on the basis of the same assumptions except that the car is on the left side of the truck. 59 . admitted that there were damages also on the left side of the truck. He testified. Marlon Rosendo H. to the left of the truck. Two vehicles collided. Torts xxx The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.973. however. monitor their implementation. The trial court awarded the following amounts: 1. 2199 of the Civil Code provides that "[E]xcept as provided by law or by stipulation one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved x x x.00) as and for lost or impaired earning capacity of Stephen. No NBI and police clearances were also presented.00) as attorney’s fees and litigation expense. Thus. Ten Million Pesos (P10. It is also joint and solidary with the employee. To establish compliance with these requirements. or a prior showing of insolvency of such employee. 1996. We now consider the damages which respondents should recover from the petitioners. He was holding a TVR for reckless driving. employers must submit concrete proof. 14 Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the supervision and discipline over its employees. medical services and supplies. February 5. without any alternate. 12 With respect to the supervision of its employees. petitioner Del Rosario was driving without a license. At the time of the accident. on the day of the accident. osteoporosis and fractures. perceptual speed.000. the employer should formulate standard operating procedures. the only seminar he attended before the accident which occurred in 1996 was held twelve years ago in 1984. 3. renal failure. and 5. including documentary evidence. 1984.461. and 60 . He testified that he reported the incident to his superior. both in the selection of the employee and in the supervision of the performance of his duties. instead of a truck during the driving tests. Mrs. but not when he applied for the position of Truck Man. 2001.000. we uphold the finding that the actual damages claimed by respondents were supported by receipts. sepsis and severe bed sores. 2180 of the Civil Code is direct or immediate.000. no tests were conducted on the motor skills development.000. Mrs. and psychological examination.00) as moral damages. Caamic testified that she does not know of any company policy requiring back-up drivers for long trips.000. In the case of petitioner Del Rosario.00) for life care cost of Stephen. We therefore affirm the finding that petitioner Mercury Drug has failed to discharge its burden of proving that it exercised due diligence in the selection and supervision of its employee.00 represented cost of hospital expenses." In the instant case. in the selection of its prospective employees. and impose disciplinary measures for their breach. eye and hand coordination and steadiness of petitioner Del Rosario. petitioner Mercury Drug should show that it exercised the diligence of a good father of a family. With regard to actual damages.000. the employer is required to examine them as to their qualifications. It also appears that petitioner Mercury Drug does not provide for a back-up driver for long trips. 2000 and July 7.13 In the instant case. Petitioners are also liable for all damages which are the natural and probable consequences of the act or omission complained of. experience.973. Caamic admitted that he took the driving tests and psychological examination when he applied for the position of Delivery Man.000. until December 1998. Further. the day of the accident.00.000.000.000. the Recruitment and Training Manager of petitioner Mercury Drug. Lastly. It is not conditioned on a prior recourse against the negligent employee. petitioner Del Rosario. In fact.000. and service records. For the rest of his life. depth visualization. Four Million Pesos (P4. and nursing care services provided respondent Stephen from December 20. In effect. According to Mrs. 15 No disciplinary 09-20-14 action whatsoever was taken against petitioner Del Rosario. One Million Pesos (P1.00) as exemplary damages. Merlie Caamic. xxx The liability of the employer under Art. and SixtyTwo Pesos (P23. medicines. 16 The doctors who attended to respondent Stephen are one in their prognosis that his chances of walking again and performing basic body functions are nil. applicants are required to take theoretical and actual driving tests. As compensatory damages: a. petitioner Mercury Drug presented testimonial evidence on its hiring procedure. but nothing was done about it. visual attention. petitioner Del Rosario has been out on the road for more than thirteen hours. Art. bladder and rectum infection. b. Twenty-Three Million Four Hundred Sixty One Thousand.11 To be relieved of liability. petitioner Del Rosario attended only three driving seminars – on June 30. Mrs.062. He was not suspended or reprimanded. Two Million Nine Hundred Seventy-Three Thousand Pesos (P2. Caamic also admitted that petitioner Del Rosario used a Galant which is a light vehicle. 2. he will need continuous rehabilitation and therapy to prevent further complications such as pneumonia. 4.00) actual damages. The amount of P2. The Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages toP1.000. Two Million Pesos (P2. With the award of exemplary damages. as Mr. people even as far as United States. social humiliation. they must be proportionate to the suffering inflicted. he had a rosy future ahead of him. But. He was looking forward to his college life. they write small notes. it is highly unlikely for someone like respondent to ever secure a job in a bank. of the spiritual status quo ante.00. nearly six feet tall and weighed 175 pounds. They didn’t care. 83981. he would have enjoyed a successful professional career in banking. The evidence also shows that he failed to step on his brakes immediately after the impact.22 On the matter of exemplary damages. petitioner Del Rosario was driving without a license because he was previously ticketed for reckless driving. Stephen recounted the nightmares and traumas he suffers almost every night when he relives the accident. when they found out. we also affirm the grant of attorney’s fees to respondents. respectively. 2231 of the Civil Code provides that in cases of quasi-delicts. We thus affirm the award ofP23. They know that the chance of full recovery is nil. Moreover. but the accident prevented him from attending the basketball try-outs. CV No. and the conservative amount ofP10. Respondent Carmen Huang’s brother testified on the insensitivity of petitioner Mercury Drug towards the plight of respondent. within the limits of the possible. Without doubt. 61 . probable life expectancy. They live with the day-to-day uncertainty of respondent Stephen Huang’s condition.461. respondent Stephen Huang and respondent spouses Richard and Carmen Huang testified to the intense suffering they continue to experience as a result of the accident. "The award of moral damages is aimed at a restoration. he was an exceptional student. 2006. and his mental and physical condition before the accident. Stephen.062. moral shock. The records show that at the time of the accident. as reduced by the trial court. He wanted to embark on a banking career. exemplary damages may be granted if the defendant acted with gross negligence.21 The amount of the award bears no relation whatsoever with the wealth or means of the offender. that I probably met only once. and employers like petitioner Mercury Drug should be more circumspect in the observance of due diligence in the selection and supervision of their employees. are AFFIRMED. or if there is anything that they can do to help us. but from the defendant. viz. for the loss or impairment of his earning capacity. they sent card. He is intelligent and motivated. business associates.24 Cost against petitioners. The University of Sto. I have many colleagues. the injuries which respondent Stephen sustained could have been greatly reduced. His family. 2006 and March 30.19 We likewise uphold the award of moral and exemplary damages and attorney’s fees." 20 Moral damages are designed to compensate and alleviate in some way the physical suffering.000. They were (sic) on our part. they make a call. He feels frustration and embarrassment in needing to be helped with almost everything and in his inability to do simple things he used to do. He will be completely dependent on the care and support of his family. this is a company that have (sic) all the resources to help us. He had shown very good leadership qualities. serious anxiety. you know. as testified by Francisco Lopez. mental anguish. The award of exemplary damages in favor of the respondents is therefore justified.00 for the life care cost of respondent Stephen Huang. there was none (sic) a single sign of nor offer of help. have to make themselves available for Stephen twenty-four hours a day. I don’t know how someone will really have no sense of decency at all to at least find out what happened to my son. and similar injury unjustly caused a person.: Maybe words cannot describe the anger that we feel towards the defendants. the state of his health. attorney’s fees may be granted when a party is compelled to litigate or incur expenses to protect his interest by reason of an unjustified act of the other party. SO ORDERED. in CA-G. Had petitioner Del Rosario done so. He was only seventeen years old. having just passed the entrance examinations of the University of the Philippines. He excelled both in his academics and extracurricular undertakings. get married and raise children. The Decision and Resolution of the Court of Appeals dated February 16. Taking into account his outstanding abilities. Japan. and worst. respondent Stephen Huang’s paralysis has made him prone to many other illnesses. Wanton acts such as that committed by petitioner Del Rosario need be suppressed. no bank has ever hired a person suffering with the kind of disability as Stephen Huang’s. based on his average monthly expense and the actuarial computation of the remaining years that he is expected to live. It is funny because. respondent spouses and the rest of the family undergo their own private suffering. Although incapable of pecuniary computation. ministering to his daily needs. a go-getter.23 In addition. 09-20-14 him. especially respondent spouses. the petition is DENIED. He was in fourth year high school. and a member of the school varsity basketball team. To his knowledge. and the University of Asia and the Pacific. what is his condition. De La Salle University. it was doubly painful because we have no choice but to go back to them and buy the medicines that we need for Stephen. Similarly. altering the lifestyle to which they had been accustomed. He also gets depression when he thinks of his bleak future. He was also class president and editor-in-chief of the school annual.18 Had the accident not happened. Tomas even offered him a chance to obtain an athletic scholarship. besmirched reputation. respondent Stephen Huang’s godfather and a bank executive. you know. They have patterned their daily life around taking care of IN VIEW THEREOF.Torts other spinal cord injury-related conditions. wounded feelings. Art. fright.R. Lopez stated. In the instant case. So. any consolation or anything whatsoever. All the time that we were going through the crisis.000.17 considering his age. absolute silence. On June 20. Plaintiff Leoncio Ramoy testified that he and his wife are the registered owners of a parcel of land covered by TCT No. one of the plaintiffs in the case at bar. When the Meralco employees were disconnecting plaintiffs' power connection. 3-G). Ofelia Durian (Exh. 1989 after the defendants failed to file an answer in spite of summons duly served. After the 62 . a portion of which was occupied by plaintiffs Rosemarie Ramoy. 3. Quezon City rendered judgment for the plaintiff [MERALCO] and "ordering the defendants to demolish or remove the building and structures they built on the land of the plaintiff and to vacate the premises. 1990 Meralco requested NPC for a joint survey to determine all the establishments which are considered under NPC property in view of the fact that "the houses in the area are very close to each other" (Exh. Panado (Exh. accurately summarized the facts as culled from the records. The Regional Trial Court (RTC) of Quezon City. Rosemarie Ramoy (Exh. as well as a copy of the court decision (Exh. ROMANA RAMOY-RAMOS. plaintiff Leoncio Ramoy objected by informing the Meralco foreman that his property was outside the NPC property and pointing out the monuments showing the boundaries of his property. 1990 NPC wrote Meralco requesting for the "immediate disconnection of electric power supply to all residential and commercial establishments beneath the NPC transmission lines along Baesa. 7. denying petitioner's motion for reconsideration. 2-B. July 2. 2002. p. 3F). Meralco decided to comply with NPC's request (Exhibits 6. 86-87. 158911 March 4. Record). 2-A. 3-H) and Cyrene S. praying that the Decision1 of the Court of Appeals (CA) dated December 16. p. Shortly thereafter. the Court found that he was occupying a portion of Lot No. 6-B) and thereupon issued notices of disconnection to all establishments affected including plaintiffs Leoncio Ramoy (Exhs. Branch 81. October 8. Matilde Ramoy/Matilde Macabagdal (Exhibits 3-D to 3-E). Petitioner. 3-I). a joint survey was conducted and the NPC personnel pointed out the electric meters to be disconnected (Exh. Among the defendants in the ejectment case was Leoncio Ramoy. Record. After deliberating on NPC's letter." In the case of Leoncio Ramoy. Jose Valiza and Cyrene S. BIENVENIDO RAMOY. 6-A. A copy of the decision was furnished Leoncio Ramoy (Exhibits 2. J. 7. No. TSN. 1993. 5). p. G. Jose Valiza (Exh. OFELIA DURIAN and CYRENE PANADO. Attached to the letter was a list of establishments affected which included plaintiffs Leoncio and Matilde Ramoy (Exh. 8). pp. with submarkings. be reversed and set aside. 2-C. ordering petitioner Manila Electric Company (MERALCO) to pay Leoncio Ramoy2 moral and exemplary damages and attorney's fees. p. 3-A to 3-C). 12). On April 28. Ofelia Durian. vs. 143. the MTC Branch 36. July 1994. pp. ROSEMARIE RAMOY. 128-131. AUSTRIA-MARTINEZ. and the CA In a letter dated August 17.R. 2003. 72-B-2-B with the exact location of his apartments indicated and encircled in the location map as No. Respondents. 13. 2). 326346. Record).Torts 09-20-14 Resolution3 dated July 1. Quezon City (Exh. 6-A-1. MATILDE MACABAGDAL RAMOY. 9). 2008 MANILA ELECTRIC COMPANY. TSN. the electric service connection of the plaintiffs [herein respondents] was disconnected (Exhibits D to G. In due time. However. Panado as lessees. 1993. thus: The evidence on record has established that in the year 1987 the National Power Corporation (NPC) filed with the MTC Quezon City a case for ejectment against several persons allegedly illegally occupying its properties in Baesa. Quezon City. TSN. he was threatened and told not to interfere by the armed men who accompanied the Meralco employees.: This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court. 7. respondents' cause of action against MERALCO is anchored on culpa contractual or breach of contract for the latter's discontinuance of its service to respondents under Article 1170 of the Civil Code which provides: Article 1170. Inc." 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. unless they are made the basis for action. The effect of every infraction is to create a new duty. In Radio Communications of the Philippines. 14). 14). the CA held MERALCO liable for moral and exemplary damages and attorney's fees. of the time and of the place. negligence. the RTC ordered MERALCO to restore the electric power supply of respondents.4 The RTC decided in favor of MERALCO by dismissing herein respondents' claim for moral damages. or delay. to excuse him from his ensuing liability. the plaintiffs-lessees left the premises. it was found out that the residence of plaintiffs-spouses Leoncio and Matilde Ramoy was indeed outside the NPC property. MERALCO disconnected its power supply to respondents on the ground that they were illegally occupying the NPC's right of way. The law. or his "restitution interest. MERALCO was justified in cutting off service to respondents. MERALCO has the obligation to discharge its functions with utmost care and diligence. The remedy serves to preserve the interests of the promissee that may include his "expectation interest.9 (Emphasis supplied) Article 1173 also provides that the fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons. exemplary damages and attorney's fees. "[a] customer of electric service must show his right or proper interest over the property in order that he will be provided with and assured a continuous 09-20-14 electric service. To repeat. Respondents then appealed to the CA. and those who in any manner contravene the tenor thereof. that is. only upon finality of said Decision can it be said with conclusiveness that respondents have no 63 . p. During the ocular inspection ordered by the Court and attended by the parties. agreements can accomplish little. 1993. recognizing the obligatory force of contracts. it was not enough for MERALCO to merely rely on the Decision of the MTC without ascertaining whether it had become final and executory. II THE COURT OF APPEALS GRAVELY ERRED WHEN IT AWARDED MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES AGAINST MERALCO UNDER THE CIRCUMSTANCES THAT THE LATTER ACTED IN GOOD FAITH IN THE DISCONNECTION OF THE ELECTRIC SERVICES OF THE RESPONDENTS. In its Decision dated December 16. The record also shows that at the request of NPC." 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.Torts electric power in Ramoy's apartment was cut off. This was confirmed by defendant's witness R. Clearly." which is his interest in having restored to him any benefit that he has conferred on the other party. thus: "In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify. Verchez. Monsale III on cross-examination (TSN. 5 The petition is partly meritorious. will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. like proof of his exercise of due diligence x x x or of the attendance of fortuitous event. are liable for damages."7 MERALCO argues that since there is a Decision of the Metropolitan Trial Court (MTC) of Quezon City ruling that herein respondents were among the illegal occupants of the NPC's right of way. upon request of the NPC. Under the Service Contract. MERALCO's motion for reconsideration of the Decision was denied per Resolution dated July 1.8 the Court expounded on the nature of culpa contractual. or his "reliance interest. MERALCO admits6 that respondents are its customers under a Service Contract whereby it is obliged to supply respondents with electricity. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. MERALCO failed to exercise the utmost degree of care and diligence required of it. 2003. either for their makers or for society. Monsale also admitted that he did not inform his supervisor about this fact nor did he recommend re-connection of plaintiffs' power supply (Ibid. However. October 13. the CA faulted MERALCO for not requiring from National Power Corporation (NPC) a writ of execution or demolition and in not coordinating with the court sheriff or other proper officer before complying with the NPC's request. a corresponding right of relief. 10 and 11). prima facie.. 2002. pp." 11 The Court agrees with the CA that under the factual milieu of the present case. to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances. Those who in the performance of their obligations are guilty of fraud.P. v. The Court emphasized in Ridjo Tape & Chemical Corporation v. Thus. defendant Meralco re-connected the electric service of four customers previously disconnected none of whom was any of the plaintiffs (Exh. Hence. Indeed. herein petition for review on certiorari on the following grounds: I THE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND MERALCO NEGLIGENT WHEN IT DISCONNECTED THE SUBJECT ELECTRIC SERVICE OF RESPONDENTS. Nevertheless. Verily. Court of Appeals10 that "as a public utility. there is no evidence on record to show that this was done by MERALCO. GSIS. Leoncio Ramoy is entitled to moral damages in the amount awarded by the CA. the lessees of his four apartments on subject lot left the premises. Velasquez. it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis of damages and its causal connection to defendant’s acts. Moreover. Indeed. No other person could have proven such damages except the respondent himself as they were extremely personal to him. its customer. is expected to exercise utmost care and diligence in the performance of its obligation. 13 This being so. etc. MERALCO wilfully caused injury to Leoncio Ramoy by withholding from him and his tenants the supply of electricity to which they were entitled under the Service Contract. The utmost care and diligence required of MERALCO necessitates such great degree of prudence on its part. due to the lack of power supply. 17 Clearly. Thus. if it were true that the decision was final and executory. Failure to comply with these regulations will give rise to the presumption of bad faith or abuse of right. v. This is so because moral damages. by analogy. The next question is: Are respondents entitled to moral and exemplary damages and attorney's fees? Article 2220 of the Civil Code provides: Article 2220." x x x The award of moral damages must be anchored to a clear showing that respondent actually experienced mental anguish.Torts right or proper interest over the subject property. that resulted therefrom. fright and the like. MERALCO's failure to exercise utmost care and diligence in the performance of its obligation to Leoncio Ramoy. Court of Appeals.12 the Court explained: [B]eing a public utility vested with vital public interest. the bottom line is that those who do not exercise such prudence in the discharge of their duties shall be made to bear the consequences of such oversight. Inc. In Keirulf vs. Leoncio Ramoy. the lone witness for respondents. wounded feelings or similar injury.. Quijano14 that: Electricity is a basic necessity the generation and distribution of which is imbued with public interest. Rosemarie Ramoy. besmirched reputation. Likewise. The Court emphasized in Samar II Electric Cooperative. there must be pleading and proof of moral suffering. and failure to exercise the diligence required means that MERALCO was at fault and negligent in the performance of its obligation. and itsprovider is a public utility subject to strict regulation by the State in the exercise of police power. It is a hornbook principle that damages may be awarded only if proven. wounded feelings and other emotional and mental suffering he purportedly suffered to sustain his claim for moral damages. as discussed above. Ofelia Durian and Cyrene Panado did not present any evidence of damages they suffered. the Court held that there must be clear testimony on the anguish and other forms of mental suffering.18 the Court held thus: In order that moral damages may be awarded. MERALCO is impressed with certain obligations towards its customers and any omission on its part to perform such duties would be prejudicial to its interest. x x x social humiliation.15 (Emphasis supplied) 09-20-14 Thus. Leoncio Ramoy testified that he suffered wounded feelings because of MERALCO's actions. therefore. His corespondents Matilde Ramoy. these being. mental anguish. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. Jr. serious anxiety. they must be substantiated by clear and convincing proof. In Ridjo Tape. In Francisco vs. In Cocoland Development Corporation vs. is tantamount to bad faith. It was incumbent upon MERALCO to do everything within its power to ensure that the improvements built by respondents are within the NPC’s right of way before disconnecting their power supply. wounded feelings and moral shock. While respondent alleged in his complaint that he suffered mental anguish. under the circumstances.19 (Emphasis supplied) 64 . For in the final analysis. respondent should have taken the witness stand and should have testified on the mental anguish. MERALCO. the amount of indemnity being left to the discretion of the court. if the plaintiff fails to take the witness stand and testify as to his/her social humiliation. There was no better witness to this experience than respondent himself. it never showed any documentary evidence to support this allegation. was the only one who testified regarding the effects on him of MERALCO's electric service disconnection. the Court held that "additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code. the trial court did not have any factual basis to award moral damages to him. Mere allegations do not suffice. In the present case. wounded feelings. 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. thus. wounded feelings and anxiety. though incapable of pecuniary estimation. This is contrary to public policy because. such damages are justly due. we held: "While no proof of pecuniary loss is necessary in order that moral damages may be awarded. serious anxiety. the most prudent thing for MERALCO to have done was to coordinate with the proper court officials in determining which structures are covered by said court order. Willful injury to property may be a legal ground for awarding moral damages if the court should find that. sleepless nights. are not entitled to the services of MERALCO. moral damages cannot be awarded. MERALCO is liable for damages under Article 1170 of the Civil Code. he failed to prove them during the trial. National Labor Relations Commission. Although MERALCO insists that the MTC Decision is final and executory. being a vital public utility. Since respondent failed to testify on the witness stand. grave anxiety. In Mahinay v.16 Furthermore. who testified as to his wounded feelings. i. attorney’s fees and expenses of litigation. JR. G. (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid. except: (1) When exemplary damages are awarded.. 2010 LUCIANO BRIONES and NELLY BRIONES. 48109 which affirmed the September 29.1avvphi1 The Court finds that MERALCO fell short of exercising the due diligence required. (7) In actions for the recovery of wages of household helpers. fraudulent. but its actions cannot be considered wanton. just and demandable claim. In the absence of stipulation. Article 2232 of the Civil Code provides that in contracts and quasi-contracts. The award for exemplary damages and attorney's fees is DELETED. Records show that MERALCO did take some measures. or malevolent manner. in this case. other than judicial costs. then the CA's award for attorney's fees should likewise be deleted. as amended. to wit: (11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered. The Decision of the Court of Appeals is AFFIRMED withMODIFICATION. oppressive. only respondent Leoncio Ramoy. as Article 2208 of the Civil Code states that in the absence of stipulation. SO ORDERED. coordinating with NPC officials and conducting a joint survey of the subject area. 1993 Decision [2] of the Regional Trial Court (RTC) of Makati City. 65 . Branch 135. (8) In actions for indemnity employer’s liability laws. considering the degree of diligence required of it. while Article 2233 of the same Code provides that such damages cannot be recovered as a matter of right and the adjudication of the same is within the discretion of the court. in this case MERALCO. No. (2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. With regard to exemplary damages. reckless. oppressive or malevolent. 150666 August 3. Since the Court does not deem it proper to award exemplary damages in this case. MACABAGDAL and VERGON REALTY INVESTMENTS CORPORATION Respondents. No costs.: (6) In actions for legal support.20 (9) In a separate civil action to recover civil liability arising from a crime. None of the grounds for recovery of attorney's fees are present. JOSE MACABAGDAL. vs. ordering petitioners Luciano and Nelly Briones to remove the improvements they have made on the disputed property or to pay respondent-spouses Jose and Fe Macabagdal the prevailing price of the land as compensation. the petition is PARTLY GRANTED.attorney's fees cannot be recovered except in cases provided for in said Article. cannot be recovered.Torts 09-20-14 Thus. under workmen’s compensation and On appeal under Rule 45 of the 1997 Rules of Civil Procedure. acted in a wanton.R. Petitioners. Thus.R. fraudulent. VILLARAMA. CV No. In all cases. the court may award exemplary damages if the defendant. J. exemplary damages should not be awarded. laborers and skilled workers. may be awarded moral damages. 2000 of the Court of Appeals (CA) in CA-G. is the Decision[1] dated December 11. (3) In criminal cases of malicious prosecution against the plaintiff. reckless. FE D. (10) When at least double judicial costs are awarded. the attorney’s fees and expenses of litigation must be reasonable.. to verify which electric meters should be disconnected although these measures are not sufficient. WHEREFORE.e. (4) In case of a clearly unfounded civil action or proceeding against the plaintiff. Article 2208. Las Piñas. and. [6] There was no basis to presume that the error was Vergon’s fault. Petitioners raise the following assignment of errors: I. the CA affirmed the RTC’s finding that the lot upon which petitioners built their house was not the one (1) which Vergon sold to them. [4] The RTC ruled in favor of respondent-spouses and found that petitioners’ house was undoubtedly built on Lot No.000. by the payment of the prevailing price of the lot involved as Lot No.000. AND II. 10 at Las Piñas City. respondent-spouses filed an action to recover ownership and possession of the said parcel of land with the RTC of Makati City.000. petitioners filed a motion for reconsideration. this petition for review oncertiorari. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE CONTRARY TO LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT IN AFFIRMING THE DECISION OF THE TRIAL COURT ORDERING PETITIONERS TO DEMOLISH THEIR ONLY HOUSE AND VACATE THE LOT AND TO PAY MORAL AND COMPENSATORY DAMAGES AS WELL AS ATTORNEY’S FEE IN THE TOTAL AMOUNT OF PS[P] 110. petitioners’ house was built on the lot of the respondent-spouses. which is also proven by the latter with a mere preponderance of evidence. and the survey report made by the geodetic engineer.000. they were entitled to indemnity from Vergon in case the suit is decided against them. jointly and severally. pay to plaintiffs for moral damages with plaintiffs’ plans and dreams of building their own house on their own lot being severely shattered and frustrated due to defendants’ incursion as interlopers of Lot No. the contracts to sell. 2-R. Defendants. and are hereby ordered to pay the sum of P20. Sometime in 1984. 2-R as above-described to plaintiffs within thirty (30) days from receipt of this decision. 4.[8] Aggrieved. 2-R. 2-R in the sum of P50. a 325-square-meter land located in Vergonville Subdivision No. jointly and severally.000. such as the titles of the two (2) lots. No. 2. 66 . On the other hand. Defendants’ third-party complaint against third-party defendant Vergonville Realty and Investments Corporation is likewise ordered dismissed for lack of cause of action and evidently without merit. 2-S. and attorney’s fees in the sum of P10. jointly and severally. 2-S. to pay plaintiffs in the amount of P30. to pay the costs of the proceedings. which is adjacent to Lot No. That plaintiffs are the owners of Lot No. after obtaining the necessary building permit and the approval of Vergon. Metro Manila and covered by Transfer Certificate of Title No.500. Based on the documentary evidence. 3.[9] Hence.[3] Petitioners insisted that the lot on which they constructed their house was the lot which was consistently pointed to them as theirs by Vergon’s agents over the seven (7)-year period they were paying for the lot. [7] The CA further ruled that petitioners cannot use the defense of allegedly being a purchaser in good faith for wrongful occupation of land. let judgment be rendered declaring. 2-R of subdivision plan (LRC) Psd-147392 at Vergonville Subdivision. to wit: 1. 10. refused to heed their demand. Defendants. jointly and severally. Also the warranty against eviction under Article 1548 of the Civil Code was not applicable as there was no deprivation of property: the lot on which petitioners built their house was not the lot sold to them by Vergon. in consideration of the fact that prices of real estate properties in the area concerned have increased rapidly. 62181 of the Registry of Deeds of Pasay City. On the other hand.00 as attorney’s fees. 2-R with an area of 325 square meters which should not be less than P1. however. are ordered to demolish their house and vacate the premises and return the possession of the portion of Lot No.[5] On appeal. which remained vacant and ready for occupation. 2-R. The dispositive portion of the trial court’s decision reads as follows: PREMISES CONSIDERED. Petitioners. are liable for the litigation expenses incurred by Vergonville Realty by way of counterclaim. 62181 of the Registry of Deeds of Pasay City on which defendants have constructed their house. They interpoed the defense of being buyers in good faith and impleaded Vergon as third-party defendant claiming that because of the warranty against eviction. jointly and severally.00 per square meter. but it was denied by the appellate court. Metro Manilacovered by TCT No. petitioners are the owners of Lot No. or in the alternative.00 as compensatory damage.Torts 09-20-14 The undisputed factual antecedents of the case are as follows: Respondent-spouses purchased from Vergon Realty Investments Corporation (Vergon) Lot No. defendants. 5. petitioners constructed a house on Lot No. respondent-spouses immediately demanded petitioners to demolish the house and vacate the property.00 SO ORDERED. 2-R which they thought was Lot No.00. plaintiffs should be compensated by defendants. Defendants’ counterclaim against plaintiffs is dismissed for lack of merit and with no cause of action. Defendants. After being informed of the mix up by Vergon’s manager. Thus. after having chosen to sell his land. but he may remove the ornaments with which he has embellished the principal thing if it suffers no injury thereby. The owner is entitled to such remotion only when. The Court is not bound to weigh all over again the evidence adduced by the parties. and to determine other matters necessary for the proper application of Article 448. Well settled is the rule that the jurisdiction of this Court in cases brought to it from the CA via a petition for review on certiorari under Rule 45is limited to the review of errors of law. the proper rent. The parties shall agree upon the terms of the lease and in case of disagreement. shall have the right to appropriate as his own the works. fix the terms of the lease if the parties so agree. petitioners are builders in good faith. that the owner may remove the improvements from the land. He must choose one. a rule that accords with the principle of accession. sown or planted in good faith. when properly considered. nevertheless. [13] We note that the CA and RTC did not overlook or fail to appreciate any material circumstance which. the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. even as the option lies with the landowner. would have altered the result of the case. and the one who sowed. However. In such case. Dumlao. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good faith.[11] Also. Indeed. the other party fails to pay for the same. Consequently. as well as the amounts of reasonable rentals and indemnity. Necessary expenses shall be refunded to every possessor. Petitioners insist that they relied with full faith and confidence in the reputation of Vergon’s agents when they pointed the wrong property to them. 2-S. Felix Gonzales.) The above-cited article covers cases in which the builders. which are beyond the scope of a petition for review on certiorari under Rule 45 of theRules. more so where these have been affirmed by the CA. for instance. i. or to oblige the one who built or planted to pay the price of the land. and the builder or planter fails to purchase it where its value is not more than the value of the improvements. ART. as a general rule. particularly where the findings of both the trial court and the appellate court coincide. at least. Even the President of Vergon. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. 548. When a person builds in good faith on the land of another. that the accessory follows the principal and not the other way around. the latter should be presumed to have built the house in good faith. compel the owner of the building to remove the building from the land without first exercising either option. we find that the trial court nonetheless erred in outrightly ordering petitioners to vacate the subject property or to pay respondent spouses the prevailing price of the land as compensation. the respondent-spouses have the option to appropriate the house on the subject land after payment to petitioners of the appropriate indemnity or to oblige petitioners to pay the price of the land. in which case petitioners shall pay reasonable rent. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention. to have a claim of title thereto.. if the owner of the land does not choose to appropriate the building or trees after proper indemnity. Articles 546 and 548 of the Civil Code provide. the conclusiveness of the factual findings notwithstanding. unless its value is considerably more than the value of the structures. it is petitioners’ position that they must not bear the damage alone. The owner of the land on which anything has been built. 2-R which they thought was Lot No. consented to the construction of the house when he signed the building permit. after payment of the indemnity provided for in Articles 546 and 548. of the Civil Code. The resolution of factual issues is a function of the trial court whose findings on these matters are. in relation to Articles 546 and 548. ART.Torts 09-20-14 THE COURT OF APPEALS SANCTIONED THE DEPARTURE OF THE LOWER COURT FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION. However.[17] Moreover. 546.[15] The builder in good faith can compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. he shall pay reasonable rent. sowers or planters believe themselves to be owners of the land or.[10] In the main. ART. The choice belongs to the owner of the land. petitioners have the right to be indemnified for the necessary and useful expenses they may have made on the subject property. the court shall fix the terms thereof. 448. and since no proof exists to show that the mistake was done by petitioners in bad faith. In accordance with Depra v. 67 .[18] this case must be remanded to the RTC which shall conduct the appropriate proceedings to assess the respective values of the improvement and of the land. At the outset. we note that petitioners raise factual issues. and if his successor in the possession does not prefer to refund the amount expended. it is beyond cavil that petitioners mistakenly constructed their house on Lot No. is preclusive. It is only if the owner chooses to sell his land. Said article provides. binding on this Court. the grant to him. sowing or planting.[16] He cannot.e. Article 448 of the Civil Code governs. but only the possessor in good faith may retain the thing until he has been reimbursed therefor. Article 527[14] of the Civil Code presumes good faith. (Emphasis ours. [12] The petition is partly meritorious. However. R. as found by the trial court. petitioners failed to present sufficient evidence to show negligence on Vergon’s part. or upon default by petitioners in the payment of rentals for two (2) consecutive months. Court of Appeals. the trial court. the increase in value (“plus value”) which the said lot may have acquired by reason thereof. Such fault or negligence. 546 and 548 of the Civil Code. Petitioners’ claim is obviously one (1) for tort. WHEREFORE. counted from the finality of the judgment. to recover their land. the Decision dated December 11. The case is REMANDED to the Regional Trial Court of MakatiCity.) Under this provision. After said amounts shall have been determined by competent evidence. The trial court shall further order that if the respondent-spouses exercises the option to oblige petitioners to pay the price of the land but the latter rejects such purchase because. is called a quasi-delict and is governed by the provisions of this Chapter. if there is no preexisting contractual relation between the parties. The period for the forced lease shall not be more than two (2) years. 2176. as follows: a. CV No. The power of the court to award attorney’s fees under Article 2208 of the Civil Code demands factual. In that event. its basis cannot be left to speculation or conjecture. (Emphasis ours. governed by Article 2176 of the Civil Code. or to oblige petitioners to pay the price of said land. The President of Vergon signed the building permit as a precondition for its approval by the local government. 2. and to 68 . not as moral damages nor judicial costs. The award of moral damages in favor of respondent-spouses Jose and Fe Macabagdal and the award of compensatory damages and attorney’s fees to respondent Vergon Realty Investments Corporation are DELETED. Where granted. the value of the land is considerably more than that of the house. the parties shall be given a period of fifteen (15) days from such notice of rejection within which to agree upon the terms of the lease. Under Article 2208[20] of the Civil Code. legal. 2-R. The signature of the President of Vergon on the building permit merely proved that petitioners were authorized to make constructions within the subdivision project of Vergon. shall then fix the terms of the lease. If no agreement is reached by the parties. [22] we reiterated that attorney’s fees are not to be awarded every time a party wins a suit. and (3) the connection of cause and effect between the fault or negligence and the damages incurred. b. v. shall be paid by the obligor within fifteen (15) days from such notice of the option by tendering the amount to the Court in favor of the party entitled to receive it. and not only in the dispositive portion thereof. for further proceedings consistent with the proper application of Articles 448. the present fair price of the respondent-spouses’ lot. it is the plaintiff who has to prove by a preponderance of evidence: (1) the damages suffered by the plaintiff. b. Branch 135. 2000 of the Court of Appeals in CA-G. Whoever by act or omission causes damage to another. Considering that petitioners acted in good faith in building their house on the subject property of the respondent-spouses. but it did not guarantee that petitioners were constructing the structure within the metes and bounds of petitioners’ lot. such must be specifically prayed for—as was not done in this case—and may not be deemed incorporated within a general prayer for “such other relief and remedy as this court may deem just and equitable. The trial court shall grant the respondent-spouses a period of fifteen (15) days within which to exercise their option under Article 448 of theCivil Code. and d. or the increase in value (“plus value”) which the said lot may have acquired by reason thereof. the Court deletes the award to Vergon of compensatory damages and attorney’s fees for the litigation expenses Vergon had incurred as such amounts were not specifically prayed for in its Answer to petitioners’ third-party complaint. in accordance with the option thus exercised by written notice of the other party and to the Court. Inc. The trial court shall determine: a. payable within the first five (5) days of each calendar month. The rental thus fixed shall be increased by ten percent (10%) for the second year of the forced lease. as follows: 1. and equitable justification. there is no basis for the award of moral damages to respondent-spouses. there being fault or negligence. whether the value of said land is considerably more than that of the house built thereon. The amounts to be respectively paid by the respondent-spouses and petitioners. c. the body of the trial court’s decision was devoid of any statement regarding attorney’s fees. One (1) last note on the award of damages. and give the Court formal written notice of such agreement and its provisos. Likewise. whether to appropriate the house as their own by paying to petitioners either the amount of the expenses spent by petitioners for the building of the house. considering the long period of time since petitioners have occupied the subject area. 48109 is AFFIRMED WITH MODIFICATION. within fifteen (15) days from and after the termination of the said period fixed for negotiation. the Regional Trial Court shall render judgment. the court must explicitly state in the body of the decision. (2) the fault or negligence of the defendant or some other person for whose act he must respond.Torts 09-20-14 As to the liability of Vergon. petitioners did not show by what authority the agents or employees of Vergon were acting when they pointed to the lot where the construction was made nor was petitioners’ claim on this matter corroborated by sufficient evidence. the amount of the expenses spent by petitioners for the building of their house. the respondent-spouses shall be entitled to terminate the forced lease.” [21] It must also be noted that aside from the following. the legal reason for the award of attorney’s fees.[19] This the petitioners failed to do. petitioners shall give written notice of such rejection to the respondent-spouses and to the Court within fifteen (15) days from notice of the respondent-spouses’ option to sell the land. Petitioners shall not make any further constructions or improvements on the house. And while petitioners acted in good faith in building their house on Lot No. is obliged to pay for the damage done. Upon expiration of the two (2)-year period. In Scott Consultants & Resource Development Corporation. attorney’s fees and expenses of litigation are recoverable only in the concept of actual damages. Hence. which provides: ART. Pan Pacific’s operational capital was becoming inadequate for the project. BRANCH 59 (RTC) BY ORDERING EQUITABLE PCI BANK[5] (RESPONDENT) TO PAY PETITIONERS P1. and such tender shall constitute evidence of whether or not compliance was made within the period fixed by the Court. entered into a contract of mechanical works (Contract) with respondent for P20. AND RICARDO F.[9] stipulated. However. Pan Pacific refused to pay the loan. SUB-CLAUSE 70.610.67. asked for a reduction in the price adjustment. EQUITABLE PCI BANK (formerly THE PHILIPPINE COMMERCIAL INTERNATIONAL BANK) consideration for the whole project was P23. [10] In 1990. through Del Rosario. On 5 April 1991. Pan Pacific and respondent also agreed on nine change orders for P2. up to the commencement date of the forced lease referred to in the preceding paragraph.622. 2. Pan Pacific.730. the PCIB Tower II extension building in Makati City. Pan Pacific 69 . CV NO.548. d. The P1. 2010 PAN PACIFIC SERVICE CONTRACTORS. and RICARDO F.[6] The Contract among others.1 OF THE GENERAL CONDITIONS OF THE CONTRACT DOCUMENTS. To show goodwill. vs.957. Pan Pacific commenced the mechanical works in the project site. The rentals herein provided shall be tendered by petitioners to the Court for payment to the respondent-spouses. (Pan Pacific) is engaged in contracting mechanical works on airconditioning system. DEL ROSARIO. TCGI Engineers based their evaluation of the price adjustment on the following factors: 1.R.[13] Due to the extraordinary increases in the costs of labor and materials.688. On 24 November 1989.07 WITH INTEREST AT THE LEGAL RATE OF 12% PER ANNUM STARTING 6 MAY 1994 UNTIL THE AMOUNT IS FULLY PAID.311. in case of 70. was constrained to execute a promissory note in the amount of P1. the total with the escalation clause. labor costs and prices of materials escalated.52.945. respondent offered Pan Pacific a loan of P1. Inc. J. TCGI Engineers recommended to respondent that the price adjustment should be pegged at P3. have the house removed by petitioners or at the latter’s expense.30. Pan Pacific claimed a price adjustment of P5. and upon failure of the party obliged to tender to the trial court the amount due to the obligee. SO ORDE G. SHIPPING DOCUMENTS SUBMITTED BY PPSCI.410. The project was completed in June 1992. the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as may be required by the prestation due the obligee. No. Del Rosario (Del Rosario). [12] CARPIO.[14] Instead. In any event.: The Case Pan Pacific contended that with this recommendation. PD 1594 AND ITS IMPLEMENTING RULES AND REGULATIONS AS AMENDED. Respondent accepted the project on 9 July 1992. 63966 AS WELL AS THE RESOLUTION[3] DATED 5 OCTOBER 2005 DENYING THE MOTION FOR RECONSIDERATION. The Facts Pan Pacific Service Contractors.858.R.2[8] of the “General Conditions for the Construction of PCIB Tower II (the escalation clause).8 million was released directly to laborers and suppliers and not a single centavo was given to Pan Pacific. Thus. Pan Pacific insisted that it would not have incurred the loan if respondent released the price adjustment on time.[15] Pan Pacific made several demands for payment on the price adjustment but respondent merely kept on promising to release the same.Torts 09-20-14 c. THE CA MODIFIED THE 12 APRIL 1999 DECISION[4] OF THE REGIONAL TRIAL COURT OF MAKATI CITY. No costs.30.8 million. The periods to be fixed by the trial court in its Decision shall be inextendible. Labor Indices of the Department of Labor and Employment. Pan Pacific.07.957.730. through its President. INC. petitioners shall pay the respondent-spouses reasonable compensation for the occupancy of the respondent-spouses’ land for the period counted from the year petitioners occupied the subject area. 169975 March 18. Against its will and on the strength of respondent’s promise that the price adjustment would be released soon. IN THE ASSAILED DECISION. TCGI Engineers.800. theP1. DEL ROSARIO (PETITIONERS) FILED THIS PETITION FOR REVIEW[1] ASSAILING THE COURT OF APPEALS’ (CA) DECISION[2] DATED 30 JUNE 2005 IN CA-G.516. PRICE INDEX OF THE NATIONAL STATISTICS OFFICE. respondent withheld the payment of the price adjustment under the escalation clause despite Pan Pacific’s repeated demands. Meanwhile. INC. Respondent’s appointed project engineer. respondent was already estopped from disclaiming liability of at least P3. Pan Pacific reduced the price adjustment to P4.07 in accordance PAN PACIFIC SERVICE CONTRACTORS.8 million as a requirement for the loan.8 million loan matured and respondent demanded payment plus interest and penalty. Pan Pacific also posted a surety bond.[11] On 28 April 1992. that Pan Pacific shall be entitled to a price adjustment increase in labor costs and prices of materials under paragraphs 70.1 [7] and Extension” Pursuant to the contract.165. in accordance with the escalation clause. 15 MARCH 1991.015. Ricardo F. representing the loan. INSTEAD OF THE BANK LOAN RATE OF 18% COMPOUNDED ANNUALLY BEGINNING SEPTEMBER 1992. Branch 59. The only remaining issue is the interest rate applicable for respondent’s delay in the payment of the balance of the price adjustment. LACK OF WITH COSTS AGAINST THE DEFENDANT. To unilaterally increase the interest rate of the adjusted price would be violative of the principle of 70 .00 REPRESENTING MORAL DAMAGES. erred in fixing the interest rate at 12% instead of the 18% bank lending rate. The CA denied petitioners’ claim for the application of the bank lending rate of 18% compounded annually reasoning. the dispositive portion of which reads: WHEREFORE. Hence. plaintiffs never informed nor sought the approval of defendant for the imposition of 18% interest on the adjusted price. PREMISES CONSIDERED. penalties and collection charges. the RTC rendered its decision. petitioners filed a Motion for Partial Reconsideration seeking a reconsideration of the CA’s Decision imposing the legal rate of 12%. with respect to the principal amount due to petitioners.00 AS AND FOR ATTORNEY’S FEES.516. Pan Pacific maintained that the P1. Unlike their request for price adjustment on the basic contract price. UNTIL THE AMOUNT IS FULLY PAID. the CA ordered respondent to payP1. Ruling of the Court We grant the petition. THE DATE WHEN THE COMPLAINT WAS FILED. Hence.8 million was to be considered as an advance payment on the price adjustment.01.942 as advance payments.015. to wit: Anent the 18% interest rate compounded annually.07 to petitioners. AND 2. AGGRIEVED BY THE CA’S DECISION. in awarding the unpaid balance of the price adjustment. P100. In sum.[19] On 23 May 1999. and the promissory note charged an interest of 18%. it is null and void from the beginning. with interest at the legal rate of 12% per annum starting 6 May 1994. interests.226.186. and damages against the respondent with the RTC of Makati City. The Issue Petitioners submit this sole issue for our consideration: Whether the CA. In its decision dated 30 June 2005. whether the RTC erred in declaring the promissory note void and in awarding moral and exemplary damages and attorney’s fees in favor of petitioners and in dismissing its counterclaim. Respondent likewise filed a Motion for Reconsideration of the CA’s decision. the CA modified the RTC decision. sum of money. respondent appealed the entire RTC Decision for being contrary to law and evidence. P50.97 FROM THE BALANCE OF THE ADJUSTED PRICE AND IN AWARDING ONLY 12% ANNUAL INTEREST ON THE AMOUNT DUE. ORDERING THE DEFENDANT TO PAY THE PLAINTIFFS THE FOLLOWING AMOUNTS: A. there is no longer any issue as to the principal amount of the unpaid balance on the price adjustment. 2. On 12 April 1999.000. the appeals of the parties with the CA are as follows: 1.07.389. Therefore. WITH RESPECT TO THE PETITIONERS.[17] Pan Pacific refused the offsetting but agreed to receive the reduced amount of P3.000. P1.111. The CA removed the deduction of P126.07 as recommended by the TCGI Engineers for the purpose of extrajudicial settlement. the said proviso does not authorize plaintiffs to unilaterally raise the interest rate without the other party’s consent. WHETHER THE RTC ERRED IN DEDUCTING THE AMOUNT OF P126. In a Resolution dated 5 October 2005.516. [20] On 26 July 2005.10 REPRESENTING UNPAID BALANCE OF THE ADJUSTMENT PRICE.000. less P1. FOR MERIT.957. PETITIONERS ELEVATED THE CASE BEFORE THIS COURT. AND P50.97 because it represented the final payment on the basic contract price. which the CA correctly computed at P1. there was really no consideration for the promissory note.00 REPRESENTING EXEMPLARY DAMAGES. 1994. petitioners partially appealed the RTC Decision to the CA. With respect to respondent.015. On 26 May 1999. This Court notes that respondent did not appeal the decision of the CA. [16] Respondent stood firm that it would not release any amount of the price adjustment to Pan Pacific but it would offset the price adjustment with Pan Pacific’s outstanding balance of P3.Torts 09-20-14 alleged that the promissory note did not express the true agreement of the parties. the CA denied both motions.903.903.[18] On 6 May 1994. while it is true that the contract provides for an interest at the current bank lending rate in case of delay in payment by the Owner.8 million and P414. JUDGMENT IS HEREBY RENDERED IN FAVOR OF THE PLAINTIFFS AND AGAINST THE DEFENDANT AS FOLLOWS: 1. DECLARING THE PROMISSORY NOTE (EXHIBIT “B”) NULL AND VOID. petitioners filed a complaint for declaration of nullity/annulment of the promissory note. WITH INTEREST THEREON AT THE LEGAL RATE OF TWELVE (12%) PERCENT PER ANNUM STARTING MAY 6. SO ORDERED. hence. DISMISSING DEFENDANT’S COUNTERCLAIM.730. Petitioners claimed that the interest rate applicable should be the 18% bank lending rate. [21] In this appeal. when the terms of an agreement have been reduced to writing. Thus. and held respondent liable for the balance of P1. [30] The escalation clause of the contract provides: CHANGES IN COST AND LEGISLATION 70. SUBJECT TO CLAUSE 47.[27] On the other hand. Decree. it was established.[28] A perusal of the assailed decision shows that the CA made a distinction between the consent given by the owner of the project for the liability for the price adjustments. THE OWNER SHALL PAY TO THE CONTRACTOR INTEREST AT THE RATE BASED ON BANKING LOAN RATES PREVAILING AT THE TIME OF THE SIGNING OF THE CONTRACT UPON ALL SUMS UNPAID FROM THE DATE BY WHICH THE SAME SHOULD HAVE BEEN PAID. WITHOUT PREJUDICE TO OWNER’S RECOURSE TO ANY OTHER REMEDY AVAILABLE UNDER EXISTING LAW. which respondent should have paid. it is stipulated that any additional cost shall be determined by the Engineer and shall be added to the contract price after due consultation with the Owner. regulation or bye-law (sic) which causes additional or reduced cost to the contractor. Therefore. nonetheless. while the CA held that petitioners consulted respondent for price adjustment on the basic contract price.10 of the General Conditions as follows: Agreement 2. Although the contract provides for the period when the recommendation of the TCGI Engineers as to the price adjustment would be binding on the parties.1. Petitioners further claim that there is nothing in the contract which requires the consent of the respondent to be given in order that petitioners can charge the bank lending rate. or the introduction of any such State Statute. IN THE EVENT OF THE FAILURE OF THE OWNER TO MAKE PAYMENT WITHIN THE TIMES STATED. after due consultation with the Owner and Contractor.1 and 70.8.10 TIME FOR PAYMENT THE AMOUNT DUE TO THE CONTRACTOR UNDER ANY INTERIM CERTIFICATE ISSUED BY THE ENGINEER PURSUANT TO THIS CLAUSE. It is settled that the agreement or the contract between the parties is the formal expression of the parties’ rights.[24] Specifically. hence. [31] In this case. duties. the Court maintains the legal rate of twelve percent per annum starting from the date of judicial demand. other than under Sub-Clause 70. petitioners allege that the contract between the parties consists of two parts. Ordinance. Hence. Law. be determined by the Engineer and shall be added to or deducted from the Contract Price and the Engineer shall notify the Contractor accordingly. AFTER SUCH FINAL CERTIFICATE HAS BEEN DELIVERED TO THE OWNER.1 Increase or Decrease of Cost There shall be added to or deducted from the Contract Price such sums in respect of rise or fall in the cost of labor and/or materials or any other matters affecting the cost of the execution of the Works as may be determined. Thus. respondent insists that under the provisions of 70.015. and the consent for the imposition of the bank lending rate. SHALL. petitioners invoke Section 2. it is considered as containing all the terms agreed upon and there can be. the CA already settled that petitioners consulted respondent on the imposition of the price adjustment. and obligations. respondent is estopped from contesting such fact. with a copy to the Owner. that part of the adjusted price demanded by plaintiffs was already disbursed as early as 28 February 1992 by defendant bank to their suppliers and laborers for their account. OR TO ANY TERM OF THE CONTRACT. WITHIN 56 DAYS. THE CONTRACTOR MAY CHARGE INTEREST THEREON AT THE CURRENT BANK LENDING RATES.[29] We disagree.[23] both of which provide for interest at the bank lending rate on any unpaid amount due under the contract. there being no prior consultation with the respondent regarding the additional cost to the basic contract price. BE PAID BY THE OWNER TO THE CONTRACTOR WITHIN 28 DAYS AFTER SUCH INTERIM CERTIFICATE HAS BEEN DELIVERED TO THE OWNER. the Agreement [22] and the General Conditions. Respondent did not appeal from the decision of the CA. such additional or reduced cost shall.2 of the General Conditions. Ordinance. between the parties and their successors in interest. as petitioners never informed or sought the approval of respondent for such imposition.5 IF ANY PAYMENT IS DELAYED. 70. petitioners. in the execution of the Contract. as petitioners have already proven their entitlement to the price adjustment. THE PROVISIONS OF THIS SUB-CLAUSE ARE WITHOUT PREJUDICE TO THE CONTRACTOR’S ENTITLEMENT UNDER CLAUSE 69. it necessarily follows that the bank lending interest rate of 18% shall be applied.[26] (EMPHASIS SUPPLIED) Petitioners thus submit that it is automatically entitled to the bank lending rate of interest from the time an amount is determined to be due thereto.516. it naturally follows that respondent was never consulted or informed of the imposition of 18% interest rate compounded annually on the adjusted price. Thus. It is the best evidence of the intention of the parties.Torts 09-20-14 mutuality of contracts. IN THE CASE OF THE FINAL CERTIFICATE REFERRED TO IN SUB-CLAUSE 60.[25] GENERAL CONDITIONS 60.07.2 Subsequent Legislation If.5 of the Agreement and Section 60. Decree or other Law or any regulation or bye-law (sic) of any local or other duly constituted authority. herein respondent. 71 . after the date 28 days prior to the latest date of submission of tenders for the Contract there occur in the country in which the Works are being or are to be executed changes to any National or State Statute. however. no evidence of such terms other than the contents of the written agreement. OR. are not entitled to the imposition of 18% interest on the adjusted price. [34] It is only when the parties to a contract have failed to fix the rate of interest or when such amount is unwarranted that the Court will apply the 12% interest per annum on a loan or forbearance of money. which refers to monetary interest. This is erroneous. which occurs upon any delay in payment. To provide a contrary interpretation.10 of the General Conditions. The concurrence of the two conditions is required for the payment of monetary interest.516. We ORDER respondent to pay petitioners P1. Applicable Interest Rate Under Article 2209 of the Civil Code. is substantial proof that the bank lending rate at the time of default was 18% per annum. [35] When the terms of a contract are clear and leave no doubt as to the intention of the contracting parties. It is only when the contract is vague and ambiguous that courts are permitted to resort to construction of its terms and determine the intention of the parties. In the absence of a stipulation of a particular rate of penalty interest. as one requiring a separate consent for the imposition of the stipulated interest. 12% per annum. Article 1956 of the Civil Code. and gives rise to the liability of respondent to pay the adjusted costs. SO ORDERED.5 of the Agreement and Section 60. and (2) the agreement for the payment of interest was reduced in writing. the literal meaning of its stipulations governs. Once the parties agree on the price adjustment after due consultation in compliance with the provisions of the escalation clause. We SET ASIDE the Decision and Resolution of the Court of Appeals in CA-G. This promissory note. Therefore. would render the intentions of the parties nugatory.10 of the General Conditions which pertain to the time of payment. petitioners presented the promissory note[36] prepared by respondent bank itself. Absent any evidence of fraud. Finally.6 of the Agreement and Section 60. The escalation clause must be read in conjunction with Section 2. CV No.07 with interest at the bank lending rate of 18% per annum starting 6 May 1994 until the amount is fully paid. we GRANT the petition.10 of the General Conditions shows that the consent of the respondent is not needed for the imposition of interest at the current bank lending rate. the appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum of money is the payment of penalty interest at the rate agreed upon in the contract of the parties. [32] The written agreement entered into between petitioners and respondent provides for an interest at the current bank lending rate in case of delay in payment and the promissory note charged an interest of 18%. then it shall be liable to pay the stipulated interest. the respondent shall pay such liability to the petitioner within 28 days from issuance of the interim certificate. the agreement is in effect an amendment to the original contract. This is the logical interpretation of the agreement of the parties on the imposition of interest. In these cases. [37] WHEREFORE. specifically mandates that no interest shall be due unless it has been expressly stipulated in writing. 72 . payment of monetary interest is allowed only if: (1) there was an express stipulation for the payment of interest. if no regular interest had been agreed upon by the contracting parties. 63966. Under Section 60. To prove petitioners’ entitlement to the 18% bank lending rate of interest. undue influence or any vice of consent exercised by petitioners against the respondent. Upon respondent’s failure to pay within the time provided (28 days). although declared void by the lower courts because it did not express the real intention of the parties. payment of additional interest at a rate equal to the regular monetary interest becomes due and payable. the interest rate agreed upon is binding on them. or in the case of loans or forbearances of money. courts have no authority to alter a contract by construction or to make a new contract for the parties. then the damages payable will consist of payment of legal interest which is 6%. the consent of the respondent is not needed in order to impose interest at the current bank lending rate.R.015. the CA went beyond the intent of the parties by requiring respondent to give its consent to the imposition of interest before petitioners can hold respondent liable for interest at the current bank lending rate. A review of Section 2. [33] We agree with petitioners’ interpretation that in case of default. The Court’s duty is confined to the interpretation of the contract which the parties have made for themselves without regard to its wisdom or folly as the court cannot supply material stipulations or read into the contract words which it does not contain.Torts 09-20-14 However. The impact caused severe damage to both the Ferroza and the passenger jeepney and left one (1) passenger dead and many others wounded. he swerved to the left until he reached the center island. hence. compensated the heirs of the deceased passenger.1âwphi1. while the jeepney was running northbound along the North Diversion Road somewhere in Meycauayan. While private respondent Gonzales continued offering the jeepney for public transport services he did not have the registration of the vehicle transferred in his name nor did he secure for himself a certificate of public convenience for its operation.000. he veered farther to the left until he smashed into a Ferroza automobile. J.00. Private respondent however did not accept the offer so Lim offered him P20. as the center island eventually came to an end. private respondent demanded a brand-new jeep or the amount of P236.00 but private respondent was unyielding. 125817 January 16. may the new owner sue for damages against the erring vehicle? Otherwise stated. respondents.000. However. petitioner Lim's proposition was rejected. 73 . vs. Under the circumstances.000.R. and later. explaining that while he was traveling towards Manila the truck suddenly lost its brakes. Petitioner Lim shouldered the costs for hospitalization of the wounded.Torts 09-20-14 G. Lim increased his bid to P40. into private respondent's passenger jeepney driven by one Virgilio Gonzales. instead. He also negotiated with private respondent and offered to have the passenger jeepney repaired at his shop. it collided with a ten-wheelertruck owned by petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. petitioners. Bulacan. APPEALS and DONATO H. the assessment of the damage as estimated by his chief mechanic.00.: When a passenger jeepney covered by a certificate of public convenience is sold to another who continues to operate it under the same certificate of public convenience under the so-called kabit system. holder of a certificate of public convenience for the operation of public utility vehicles plying the MonumentoBulacan route.nêt On 22 July 1990. Again. No. To avoid colliding with another vehicle. and had the Ferroza restored to good condition. COURT OF BELLOSILLO. Gunnaban owned responsibility for the accident. GONZALES. 2002 ABELARDO LIM and ESMADITO GUNNABAN. does the new owner have any legal personality to bring the action. negotiations had to be abandoned. the filing of the complaint for damages by private respondent against petitioners. or is he the real party in interest in the suit. despite the fact that he is not the registered owner under the certificate of public convenience? Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu passenger jeepney from Gomercino Vallarta. Thus Vallarta remained on record as its registered owner and operator. and in the course thereof the vehicle meets an accident through the fault of another vehicle. According to petitioners.7 Hence this petition. the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. Second. Certainly.5 On 1 October 1993 the trial court upheld private respondent's claim and awarded him P236. petitioner Lim's liability for Gunnaban's negligence was premised on his want of diligence in supervising his employees. or misrepresentation.00. the damaged passenger jeepney was left by the roadside to corrode and decay. the kabit system is invariably recognized as being contrary to public policy and therefore void and inexistent under Art.00 to restore his jeepney to its original condition.000. It was admitted during trial that Gunnaban doubled as mechanic of the ill-fated truck despite the fact that he was neither tutored nor trained to handle such task. petitioners appealed to the Court of Appeals which. when he was called to testify.00 as attorney's fees.000. or misrepresentation.3 The main point of contention between the parties related to the amount of damages due private respondent.9 Although the parties to such an agreement are not outrightly penalized by law. Private respondent explained that although he wanted to take his jeepney home he had no capability. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Thus. In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. 1 For his part. 74 . so that liabilities arising from accidents may be duly compensated. Private respondent Gonzales averred that per estimate made by an automobile repair shop he would have to spendP236. as regards the ownership and operation of the passenger jeepney was made and to whom no such representation. In upholding the decision of the court a quo the appeals court concluded that while an operator under thekabit system could not sue without joining the registered owner of the vehicle as his principal. affirmed the decision of the trial court. The policy therefore loses its force if the public at large is not deceived. If a registered owner is allowed to escape liability by proving who the supposed owner of the vehicle is.000. for the safety of passengers and the public who may have been wronged and deceived through the baneful kabit system. Octavio10 the Court explained that one of the primary factors considered in the granting of a certificate of public convenience for the business of public transportation is the financial capacity of the holder of the license. to recognize an operator under the kabit system as the real party in interest and to countenance his claim for damages is utterly subversive of public policy. Gunnaban was found by the trial court to have caused the accident since he panicked in the face of an emergency which was rather palpable from his act of directing his vehicle to a perilous streak down the fast lane of the superhighway then across the island and ultimately to the opposite lane where it collided with the jeepney.000. it would be easy for him to transfer the subject vehicle to another who possesses no property with which to respond financially for the damage done.11 It would seem then that the thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. on 17 July 1996. the case arose from the negligence of another vehicle in using the public road to whom no representation.00 is inconceivably large and would amount to unjust enrichment. 1409 of the Civil Code. may still be availed of by the grantee to escape civil liability caused by a negligent use of a vehicle owned by another and operated under his license. Even Vallarta himself supported private respondent's assertion of interest over the jeepney for.8 09-20-14 Petitioners' attempt to illustrate that an affirmance of the appealed decision could be supportive of the perniciouskabit system does not persuade. Subsequent cases affirm such basic doctrine. it would be the height of inequity to deny him his right. It is petitioners' contention that the Court of Appeals erred in sustaining the decision of the trial court despite their opposition to the well-established doctrine that an operator of a vehicle continues to be its operator as long as he remains the operator of record. it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. the registered owner of the vehicle is not allowed to prove that another person has become the owner so that he may be thereby relieved of responsibility. petitioners insisted that they could have the vehicle repaired for P20. to tow the damaged vehicle. Petitioners further contend that inasmuch as the passenger jeepney was purchased by private respondent for only P30. In support of its decision. sometimes for a fee or percentage of the earnings.Torts In his answer Lim denied liability by contending that he exercised due diligence in the selection and supervision of his employees. worse. was necessary. financial or otherwise. much less involved. neither of the parties to the pernicious kabit system is being held liable for damages. First. Their labored efforts to demonstrate how the questioned rulings of the courts a quoare diametrically opposed to the policy of the law requiring operators of public utility vehicles to secure a certificate of public convenience for their operation is quite unavailing. The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license. Third. equity demanded that the present case be made an exception. petitioner Gunnaban averred that the accident was a fortuitous event which was beyond his control. the trial court ratiocinated that as vendee and current owner of the passenger jeepney private respondent stood for all intents and purposes as the real party in interest.000. 2 Meanwhile. 6 Forthwith. he dispossessed himself of any claim or pretension on the property. In the early case of Dizon v. it was Vallarta and not private respondent who was the real party in interest.000. 4 On the other hand. The kabit system renders illusory such purpose and.00 with legal interest from 22 July 1990 as compensatory damages and P30.00. On the contrary. an award of P236. He further asserted that as the jeepney was registered in Vallarta’s name. On the other hand. Petitioners for their part did not offer any substantive evidence to refute the estimate made by the courts a quo. It is a fundamental principle in the law on damages that a defendant cannot be held liable in damages for more than the actual loss which he has inflicted and that a plaintiff is entitled to no more than the just and adequate compensation for the injury suffered. failing in this regard. except when the demand can be established with reasonable certainty. unliquidated and not known until definitely ascertained. However. it becomes the sole design of the courts to provide for adequate compensation by putting the plaintiff in the same financial position he was in prior to the tort. We have observed that private respondent left his passenger jeepney by the roadside at the mercy of the elements. In fine. interest at the rate of six percent (6%) per annum should be from the date the judgment of the court is made (at which time the quantification of damages may be deemed to be reasonably ascertained).000." One last word. indemnification for damages is not limited to damnum emergens or actual loss but extends to lucrum cessans or the amount of profit lost. The award therefore of P236.00 per day from his passenger jeepney and this earning was included in the award of damages made by the trial court and upheld by the appeals court. in the absence of circumstances giving rise to an allowance of punitive damages. 2213 of the Civil Code. Interest at the rate of six percent (6%) per annum shall be computed from the time the judgment of the lower court is made until the finality of this Decision. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged.e. It is the burden of petitioners to show satisfactorily not only that the injured party could have mitigated his damages but also the amount thereof.00 being refuted by petitioners who argue that they could have the vehicle repaired easily for P20. damage wrought upon his jeepney and the income lost from his transportation business. the amount of damages awarded cannot be proportionately reduced. limited to a fair compensation for the harm done.000.000.13 Had private respondent's jeepney not met an accident it could reasonably be expected that it would have continued earning from the business in which it was engaged. i. 12 In this case. we are constrained to depart from the conclusion of the lower courts that upon the award of compensatory damages legal interest should be imposed beginning 22 July 1990. His recovery is. The law will not put him in a position better than where he should be in had not the wrong happened. Anyway. In the present case. if not repelled. Costs against petitioners 75 . he can recover from the wrongdoer money lost in reasonable efforts to preserve the property injured and for injuries incurred in attempting to prevent damage to it.Torts 09-20-14 In light of the foregoing.00. it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. Article 2203 of the Civil Code exhorts parties suffering from loss or injury to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. the matter was not a liquidated obligation as the assessment of the damage on the vehicle was heavily debated upon by the parties with private respondent's demand for P236.00 with legal interest from 22 July 1990 as compensatory damages and P30. assessed and determined by the courts after proof.000. interest "cannot be recovered upon unliquidated claims or damages. i. the date of the accident. Private respondent avers that he derives an average income ofP300.15 However we sadly note that in the present case petitioners failed to offer in evidence the estimated amount of the damage caused by private respondent's unconcern towards the damaged vehicle. the amount due private respondent was not a liquidated account that was already demandable and payable.000. Upon the provisions of Art. It is axiomatic that if the suit were for damages. petitioners insist that as the passenger jeepney was purchased in 1982 for only P30.00 as attorney's fees is MODIFIED. the questioned Decision awarding private respondent Donato Gonzales P236.e.14 In awarding damages for tortuous injury. In other words. If the adjudged principal and interest remain unpaid thereafter. Petitioners are at best reminded that indemnification for damages comprehends not only the value of the loss suffered but also that of the profits which the obligee failed to obtain. WHEREFORE. the interest shall be twelve percent (12%) per annum computed from the time judgment becomes final and executory until it is fully satisfied.000.00 as compensatory damages is not beyond reason nor speculative as it is based on a reasonable estimate of the total damage suffered by private respondent.00 to award damages considerably greater than this amount would be improper and unjustified. One who is injured then by the wrongful or negligent act of another should exercise reasonable care and diligence to minimize the resulting damage.