Torts Cases.docx

DE GUZMAN vs. TUMOLVA Civil Law; Damages; Actual Damages; In determining actual damages, one cannot rely on mere assertions, speculations, conjectures or guesswork, but must depend on competent proof and on the best evidence obtainable regarding specific facts that could afford some basis for measuring compensatory or actual damages.—CIAC’s award of actual damages, however, is indeed not proper under the circumstances as there is no concrete evidence to support the plea. In determining actual damages, one cannot rely on mere assertions, speculations, conjectures or guesswork, but must depend on competent proof and on the best evidence obtainable regarding specific facts that could afford some basis for measuring compensatory or actual damages. Same; Same; Temperate Damages; Temperate damages may be allowed in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced that the aggrieved party suffered some pecuniary loss.—Nevertheless, De Guzman is indeed entitled to temperate damages as provided under Article 2224 of the Civil Code for the loss she suffered. When pecuniary loss has been suffered but the amount cannot, from the nature of the case, be proven with certainty, temperate damages may be recovered. Temperate damages may be allowed in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced that the aggrieved party suffered some pecuniary loss. Undoubtedly, De Guzman suffered pecuniary loss brought about by the collapse of the perimeter fence by reason of the Contractor’s negligence and failure to comply with the specifications. As she failed to prove the exact amount of damage with certainty as required by law, the CA was correct in awarding temperate damages, in lieu of actual damages. Same; Same; Moral Damages; The award of moral damages must be anchored on a clear showing that she actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings, or similar injury.—The award of moral damages must be anchored on a clear showing that she actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings, or similar injury. There could not have been a better witness to this experience than De Guzman herself. Her testimony, however, did not provide specific details of the suffering she allegedly went through after the fence collapsed while she was miles away in the United States. As the CA aptly observed, “the testimony of the OWNER as to her worry for the safety of the children in the orphanage is insufficient to establish entitlement thereto.” Since an award of moral damages is predicated on a categorical showing by the claimant that she actually experienced emotional and mental sufferings, it must be disallowed absent any evidence thereon.

x----------------------------x ARANETA vs. BANK OF AMERICA Civil Code; Adverse reflection against financial credit is a material loss; Temperate damages are awarded.—The financial credit of a businessman is a prized and valuable asset, it being a significant part of the foundation of his business. Any adverse reflection thereon constitutes some material loss to him. As stated in the case of Atlanta National Bank vs. Davis, 96 Ga 334, 23 SE 190, citing 2 Morse Banks, Sec. 458, “it can hardly be possible that a customer’s check can be wrongfully refused payment without some impeachment of his credit, which must in fact be an actual injury, though he cannot, from the nature of the case, furnish independent, distinct proof thereof.”

Same; Concept of temperate damages.—In some States of the American Union, temperate damages are allowed. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be

offered, although the court is convinced that there has been such loss. For instance, injury to one’s commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant’s wrongful act.

Same; Court may increase amount of attorney’s fees.—Considering the nature and extent of the services rendered by the petitioner’s counsel both in the trial and appellate courts, the amount should be increased to P4,000. This may be done motu proprio by this Court under Article 2208 of the Civil Code, which provides that attorney’s fees may be recovered in the instances therein enumerated and “in any other case where the Court deems it first and equitable that attorney’s fees. . . should be recovered,” provided the amount thereof be reasonable in all cases. x----------------------------x CASIÑO, JR. VS. COURT OF APPEALS Same; Same; Same; Damages; There are two kinds of actual or compensatory damages—one is the loss of what a person already possesses and the other is the failure to receive as a benefit that which would have pertained to him.—Under Articles 2199 and 2200 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of or in recompense for loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done. Citing Producers Bank of the Philippines vs. CA, 365 SCRA 326 (2002) this Court, in the subsequent case of Terminal Facilities and Services Corporation vs. Philippine Ports Authority, 378 SCRA 82 (2002), ruled: There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses, and the other is the failure to receive as a benefit that which would have pertained to him x x x. In the latter instance, the familiar rule is that damages consisting of unrealized profits, frequently referred as ‘ganacias frustradas’ or ‘lucrum cessans,’ are not to be granted on the basis of mere speculation, conjecture, or surmise, but rather by reference to some reasonably definite standard such as market value, established experience, or direct inference from known circumstances.

Same; Same; Same; Same; Absolute certainty is not necessary to establish the amount of “ganacias frustradas” or “lucrum cessans”—when the existence of loss is established, absolute certainty as to its amount is not required.—Absolute certainty, however, is not necessary to establish the amount of “ganacias frustradas” or “lu-crum cessans.” As we have said in Producers Bank of the Philippines: When the existence of a loss is established, absolute certainty as to its amount is not required. The benefit to be derived from a contract which one of the parties has absolutely failed to perform is of necessity to some extent, a matter of speculation, but the injured party is not to be denied for this reason alone. He must produce the best evidence of which his case is susceptible and if that evidence warrants the inference that he has been damaged by the loss of profits which he might with reasonable certainty have anticipated but for the defendant’s wrongful act, he is entitled to recover.

PHILIPPINE HAWK CORPORATION VS. LEE Torts; Damages; Quasi-Delicts; Negligence; Foreseeability is the fundamental test of negligence—to be negligent, a defendant must have acted or failed to act in such a way that an ordinary reasonable man would have realized that certain interests of certain persons were unreasonably subjected to a general but definite class of risks.—A review of the records showed that it was petitioner’s witness, Efren Delantar Ong, who was about 15 meters away from the bus when he saw the vehicular accident. Nevertheless, this fact does not affect the finding of the trial court that petitioner’s bus driver, Margarito Avila, was guilty of simple negligence as affirmed by the appellate court. Foreseeability is the fundamental test of negligence. To be negligent, a defendant must have acted or failed to act in such a way that an ordinary reasonable man would have realized that certain interests of certain persons were unreasonably subjected to a general but definite class of risks. In this case, the bus driver, who was driving on the right side of the road, already saw the motorcycle on the left side of the road before the collision. However, he did not take the necessary precaution to slow down, but drove on and bumped the motorcycle, and also the passenger jeep parked on the left side of the road, showing that the bus was negligent in veering to the left lane, causing it to hit the motorcycle and the passenger jeep.

Same; Same; Same; Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption that the employer failed to exercise the due diligence of a good father of a family in the selection or supervision of its employees.—Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption that the employer failed to exercise the due diligence of a good father of the family in the selection or supervision of its employees. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to respondent, since it failed to exercise the diligence of a good father of the family in the selection and supervision of its bus driver, Margarito Avila, for having failed to sufficiently inculcate in him discipline and correct behavior on the road. Indeed, petitioner’s tests were concentrated on the ability to drive and physical fitness to do so. It also did not know that Avila had been previously involved in sideswiping incidents.

Damages; Loss of Earning Capacity; The indemnity for loss of earning capacity of the deceased is awarded not for loss of earnings, but for loss of capacity to earn money; As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity; Exceptions.—The indemnity for loss of earning capacity of the deceased is provided for by Article 2206 of the Civil Code. Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn money. As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when: (1) the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case, judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws. Same; Same; In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary for the creation of such earnings or income, less living and other incidental expenses.—In the computation of loss of earning capacity, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary for the creation of such earnings or income, less living and other incidental

expenses. In the absence of documentary evidence, it is reasonable to peg necessary expenses for the lease and operation of the gasoline station at 80 percent of the gross income, and peg living expenses at 50 percent of the net income (gross income less necessary expenses). x----------------------------x GRAND UNION SUPERMARKET, INC. VS. ESPINO, JR., Civil Law; Damages; Where petitioners wilfully caused loss or injury to private respondent in a manner contrary to morals, good customs and public policy, they are liable for damages under Arts. 19 and 21 in relation to Art. 2219 of the Civil Code.—Nonetheless, the false accusation charged against the private respondent after detaining and interrogating him by the uniformed guards and the mode and manner in which he was subjected, shouting at him, imposing him a fine, threatening to call the police and in the presence and hearing of many people at the Supermarket which brought and caused him humiliation and embarrassment, sufficiently rendered the petitioners liable for damages under Articles 19 and 21 relation to Article 2219 of the Civil Code. We rule that under the facts of the case at bar, petitioners wilfully caused loss or injury to private respondent in a manner that was contrary to morals, good customs or public policy. It is against morals, good customs and public policy to humiliate, embarrass and degrade the dignity of a person. Everyone must respect the dignity, personality, privacy and peace of mind of his neighbors and other persons (Article 26, Civil Code). And one must act with justice, give everyone his due and observe honesty and good faith (Article 19, Civil Code).

Same; Same; Moral damages; Proof of pecuniary loss necessary for moral, nominal, temperate, liquidated or exemplary damages to be adjudicated; Assessment of such damages left to the discretion of the court.—While no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated, the assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case (Art. 2216, New Civil Code).

Same; Same; Same; Reduction of moral damages to be recovered against petitioners justified due to contributory negligence of respondent; case at bar.—In the case at bar, there is no question that the whole incident that befell respondent had arisen in such a manner that was created unwittingly by his own act of forgetting to pay for the file. It was his forgetfullness in checking out the item and paying for it that started the chain of events which led to his embarrassment and humiliation, thereby causing him mental anguish, wounded feelings and serious anxiety. Yet, private respondent’s act of omission contributed to the occurrence of his injury or loss and such contributory negligence is a factor which may reduce the damages that private respondent may recover (Art. 2214, New Civil Code).

Same; Same; Same; Purpose of moral damages; Award of moral damages must be proportionate to the suffering inflicted.—As succinctly expressed by Mr. Justice J.B. L. Reyes in his concurring and dissenting opinion in Pangasinan Transportation Company, Inc. vs. Legaspi, 12 SCRA 598, the purpose of moral damages is essentially indemnity or reparation, both punishment or correction. Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant; they are awarded only to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant’s culpable action. In other words, the award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante and, it must be proportionate to the suffering inflicted.

Same; Same; Exemplary or corrective damages; Purpose of imposition; Cannot be recovered as a matter of right but left to the discretion of the court; Facts and circumstances of the case do not warrant the grant of exemplary damages in favor of respondent.—The grant of Twenty-Five Thousand Pesos (P25,000.00) as exemplary damages is unjustified. Exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages (Art. 2229, New Civil Code). Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they could be adjucidated (Art. 2223, New Civil Code). Considering that exemplary damages are awarded for wanton acts, that they are penal in character granted not by way of compensation but as a punishment to the offender and a warning to others as a sort of deterrent, We hold that the facts and circumstances of the case at bar do not warrant the grant of exemplary damages.

Same; Same; Same; Exemplary damages not awarded; Defense of property; Where petitioners acted in good faith in trying to protect and recover their property, and they acted upon probable cause in stopping and investigating respondent for taking the file without paying for it, they are considered in lawful exercise of their right of defense of property under Art. 429 of the Civil Code and are exempt from the imposition of exemplary damages against them.—Petitioners acted in good faith in trying to protect and recover their property, a right which the law accords to them. Under Article 429, New Civil Code, the owner or lawful possessor of a thing has right to exclude any person from the enjoyment and disposal thereof and for this purpose, he may use such force as may be reasonably necessary to repeal or prevent an actual or threatened unlawful physical invasion or usurpation of his property. And since a person who acts in the fulfillment of a duty or in the lawful exercise of a right or office exempts him from civil or criminal liability, petitioner may not be punished by imposing exemplary damages against him. We agree that petitioners acted upon probable cause in stopping and investigating private respondent for taking the file without paying for it, hence, the imposition of exemplary damages as a warning to others by way of a deterrent is without legal basis. We, therefore, eliminate the grant of exemplary damages to the private respondent. x----------------------------x GO VS. COURT OF APPEALS Same; Damages; Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.—In this regard, Article 1170 of the Civil Code provides that “those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.” In the instant case, petitioners and private respondents entered into a contract whereby, for a fee, the former undertook to cover the latter’s wedding and deliver to them a video copy of said event. For whatever reason, petitioners failed to provide private respondents with their tape. Clearly, petitioners are guilty of contravening their obligation to s aid private respondents and are thus liable for damages.

Same; Same; Quasi-Delicts; While generally moral damages cannot be recovered in an action for breach of contract, the sam e may be recovered where the breach was palpably wanton, reckless, malicious or in bad faith, oppressive or abusive, such as when a party’s act or omission in recklessly erasing the video coverage of a couple’s wedding was precisely the cause of the suffering the latter had to undergo.— Generally, moral damages cannot be recovered in an action for breach of contract because this case is not among those enumerated in Article 2219 of the Civil Code. However, it is also accepted in this jurisdiction that liability for a quasi-delict may still exis t despite the presence of contractual relations,

that is, the act which violates the contract may also cons titute a quasi-delict. Consequently, moral damages are recoverable for the breach of contract which was palpably wanton, reckless, malicious or in bad faith, oppressive or abusive. Petitioners’ act or omiss ion in recklessly erasing the video coverage of private respondents’ wedding was precisely the cause of the suffering private respondents had to undergo.

Same; Same; The award of exemplary damages is justified where there was an attendant wanton negligence committed by the guilty party.—Considering the attendant wanton negligence committed by petitioners in the case at bar, the award of exemplary damages by the trial court is justified to s erve as a warning to all entities engaged in the same business to obs erve due diligence in the conduct of their affairs. x----------------------------x SEVEN BROTHERS SHIPPING CORPORATION VS. DMC-CONSTRUCTION RESOURCES, INC. Civil Law; Damages; Actual Damages; Jurisprudence has consistently held that “to justify an award of actual damages credence can be given only to claims which are duly supported by receipts.”— Jurisprudence has consistently held that “[t]o justify an award of actual damages x x x credence can be given only to claims which are duly supported by receipts.” We take this to mean by credible evidence. Otherwise, the law mandates that other forms of damages must be awarded, to wit: Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case.

Same; Same; Nominal Damages; Under Article 2221 of the Civil Code, nominal damages may be awarded in order that the plaintiff’s right, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered.— Under Article 2221 of the Civil Code, nominal damages may be awarded in order that the plaintiff’s right, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered. We have laid down the concept of nominal damages in the following wise: Nominal damages are ‘recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown.’

Same; Same; Temperate Damages; Under Article 2224 of the Civil Code, temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty.—In contrast, under Article 2224, temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty. This principle was thoroughly explained in Araneta v. Bank of America, 40 SCRA 144 (1971), which cited the Code Commission, to wit: The Code Commission, in explaining the concept of temperate damages under Article 2224, makes the following comment: In some States of the American Union, temperate damages are allowed. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to one’s commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be denied for that reason? The judge should be

empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant’s wrongful act.

Same; Same; Same; In computing the amount of temperate or moderate damages, it is usually left to the discretion of the courts, but the amount must be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory.—In computing the amount of temperate or moderate damages, it is usually left to the discretion of the courts, but the amount must be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory. x----------------------------x DUEÑAS VS. GUCE-AFRICA Damages; To be recoverable, actual damages must not only be capable of proof, but must actually be proved with reasonable degree of certainty—the Court cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages.—Article 2199 of the Civil Code provides that “one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved.” In Ong v. Court of Appeals, 301 SCRA 387 (1999) we held that “(a)ctual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement.” To be recoverable, actual damages must not only be capable of proof, but must actually be proved with reasonable degree of certainty. We cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages. Thus, it was held that before actual damages can be awarded, there must be competent proof of the actual amount of loss, and credence can be given only to claims which are duly supported by receipts.

Same; Temperate Damages; Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty.— Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. The amount thereof is usually left to the discretion of the courts but the same should be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory. x----------------------------x FILINVEST LAND, INC. VS. COURT OF APPEALS Same; Same; Words and Phrases; A distinction between a penalty clause imposed essentially as penalty in case of breach and a penalty clause imposed as indemnity for damages should be made in cases where there has been neither partial nor irregular compliance with the terms of contract, but where there has been partial or irregular compliance, there will be no substantial difference between a penalty and liquidated damages insofar as legal results are concerned.—Unfortunately for Filinvest, the abovequoted doctrine is inapplicable to herein case. The Supreme Court in Laureano instructed that a distinction between a penalty clause imposed essentially as penalty in case of breach and a penalty clause imposed as indemnity for damages should be made in cases where there has been neither partial nor irregular compliance with the terms of the contract. In cases where there has been partial or irregular compliance, as in this case, there will be no substantial difference between a penalty and liquidated damages insofar as legal results are concerned. The distinction is thus more apparent than real especially in the light of certain provisions of the Civil Code of the Philippines which provides in

Articles 2226 and Article 2227 thereof: Art. 2226. Liquidated damages are those agreed upon by the parties to a contract to be paid in case of breach thereof. Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable. Thus, we lamented in one case that “(t)here is no justification for the Civil Code to make an apparent distinction between a penalty and liquidated damages because the settled rule is that there is no difference between penalty and liquidated damages insofar as legal results are concerned and that either may be recovered without the necessity of proving actual damages and both may be reduced when proper.” x----------------------------x ARCO PULP AND PAPER CO., INC. VS. LIM Same; Damages; Moral Damages; Moral damages are not awarded as a matter of right but only after the party claiming it proved that the breach was due to fraud or bad faith.—Under Article 2220 of the Civil Code, moral damages may be awarded in case of breach of contract where the breach is due to fraud or bad faith: Art. 2220. Willfull injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. (Emphasis supplied) Moral damages are not awarded as a matter of right but only after the party claiming it proved that the breach was due to fraud or bad faith. As this court stated: Moral damages are not recoverable simply because a contract has been breached. They are recoverable only if the party from whom it is claimed acted fraudulently or in bad faith or in wanton disregard of his contractual obligations. The breach must be wanton, reckless, malicious or in bad faith, and oppressive or abusive.

Same; Same; Abuse of Rights; Persons who have the right to enter into contractual relations must exercise that right with honesty and good faith. Failure to do so results in an abuse of that right, which may become the basis of an action for damages.—Breaches of contract done in bad faith, however, are not specified within this enumeration. When a party breaches a contract, he or she goes against Article 19 of the Civil Code, which states: Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Persons who have the right to enter into contractual relations must exercise that right with honesty and good faith. Failure to do so results in an abuse of that right, which may become the basis of an action for damages. Article 19, however, cannot be its sole basis: Article 19 is the general rule which governs the conduct of human relations. By itself, it is not the basis of an actionable tort. Article 19 describes the degree of care required so that an actionable tort may arise when it is alleged together with Article 20 or Article 21.

Same; Same; Exemplary Damages; Exemplary damages may also be awarded in this case to serve as a deterrent to those who use fraudulent means to evade their liabilities.—Business owners must always be forthright in their dealings. They cannot be allowed to renege on their obligations, considering that these obligations were freely entered into by them. Exemplary damages may also be awarded in this case to serve as a deterrent to those who use fraudulent means to evade their liabilities. Since the award of exemplary damages is proper, attorney’s fees and cost of the suit may also be recovered. Article 2208 of the Civil Code states: Article 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded[.]