Republic
of the Philippines
Supreme
Court
Manila
THIRD DIVISION
LETICIA
TAN, MYRNA G.R.
No. 190521
MEDINA,
MARILOU
SPOONER,
ROSALINDA Present:
TAN,
and MARY JANE TAN,
MARY LYN TAN, CELEDONIO CARPIO MORALES, J., Chairperson,
TAN,
JR., MARY JOY TAN, BRION,
and
MARK ALLAN TAN, BERSAMIN,
represented
herein by their mother, VILLARAMA, JR., and
LETICIA
TAN, SERENO, JJ.
Petitioners,
- versus - Promulgated:
January
12, 20111
OMC CARRIERS, INC. and
BONIFACIO ARAMBALA,
Respondents.
x-----------------------------------------------------------------------------------------x
R E S O L U T I O N
BRION, J.:
We resolve the motion for
reconsideration[1] – filed by Leticia Tan, Myrna Medina,
Marilou Spooner, Rosalinda Tan, Mary Jane Tan, Mary Lyn Tan, Celedonio Tan,
Jr., Mary Joy Tan, and Mark Allan Tan (petitioners),
all heirs of the late Celedonio Tan – asking us to reverse and set aside our Resolution
of February 17, 2010.[2] We denied in this Resolution their petition
for review on certiorari for failing
to show any reversible error in the assailed Court of Appeals (CA) decision of June 22, 2009[3]
sufficient to warrant the exercise of our discretionary appellate jurisdiction.
The CA decision, in turn, affirmed with
modification the decision of the Regional Trial Court (RTC) of Muntinlupa City in Civil Case No. 96-186, finding the
respondents – OMC Carriers, Inc. (OMC)
and Bonifacio Arambala – guilty of gross negligence and awarding damages to the
petitioners.
THE FACTS
On September
27, 1996, the petitioners filed a complaint for damages with the RTC against
OMC and Bonifacio Arambala.[4]
The complaint states that on November
24, 1995, at around 6:15 a.m., Arambala was driving a truck[5]
with a trailer[6]
owned by OMC, along Meralco Road, Sucat, Muntinlupa City. When Arambala noticed that the truck had suddenly
lost its brakes, he told his companion to jump out. Soon thereafter, he also jumped out and
abandoned the truck. Driverless, the
truck rammed into the house and tailoring shop owned by petitioner Leticia Tan
and her husband Celedonio Tan, instantly killing Celedonio who was standing at the
doorway of the house at the time.[7]
The petitioners alleged that the
collision occurred due to OMC’s gross negligence in not properly maintaining
the truck, and to Arambala’s recklessness when he abandoned the moving truck.
Thus, they claimed that the respondents should be held jointly and severally
liable for the actual damages that they suffered, which include the damage to their
properties, the funeral expenses they incurred for Celedonio Tan’s burial, as
well as the loss of his earning capacity. The petitioners also asked for moral and
exemplary damages, and attorney’s fees.[8]
The respondents denied any liability
for the collision, essentially claiming that the damage to the petitioners was
caused by a fortuitous event, since the truck skidded due to the slippery
condition of the road caused by spilled motor oil.[9]
THE RTC DECISION
After
trial, the RTC found OMC and Arambala jointly and severally liable to the
petitioners for damages.[10]
Relying on the doctrine of res ipsa loquitur, the RTC held that it
was unusual for a truck to suddenly lose its brakes; the fact that the truck rammed
into the petitioners’ house raised the presumption of negligence on the part of
the respondents. These, the respondents failed to refute.[11]
The RTC did not agree with the
respondents’ claim of a fortuitous event, pointing out that even with oil on
the road, Arambala did not slow down or take any precautionary measure to
prevent the truck from skidding off the road. The alleged oil on the road did
not also explain why the truck lost its brakes. Had OMC done a more rigid
inspection of the truck before its use, the defective brake could have been
discovered. The RTC, thus, held OMC jointly and severally liable with Arambala for
the damage caused to the petitioners, based on the principle of vicarious
liability embodied in Article 2180[12]
of the Civil Code.[13]
The dispositive portion of the
decision stated:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendants ordering:
1.
The defendants to pay the plaintiffs jointly and
severally the amount of P50,000.00
for the death of Celedonio Tan;
2.
The defendants to pay the plaintiffs jointly and
severally the amount of P500,000.00
for the loss of earning capacity of Celedonio Tan, plus interest thereon from
the date of death of Celedonio Tan;
3.
The defendants to pay the plaintiff Leticia Tan
jointly and severally the amount of P355,895.00
as actual damages;
4.
The defendants to pay the plaintiffs jointly and
severally the amount of P500,000.00
as moral damages;
5.
The defendants to pay the plaintiffs jointly and
severally the amount of P500,000.00
as exemplary damages; and
6.
The defendants to pay the plaintiffs jointly and
solidarily the amount of P500,000.00
as attorney’s fees.
Costs against the defendants.
SO ORDERED.[14]
THE COURT OF APPEALS DECISION
On
appeal, the CA affirmed the RTC’s findings
on the issues of the respondents’ negligence and liability for damages.
However, the CA modified the damages awarded to the petitioners by reducing the
actual damages award from P355,895.00 to P72,295.00. The CA observed that only the latter amount was duly supported
by official receipts.[15]
The CA also
deleted the RTC’s award for loss of earning capacity. The CA explained that the
petitioners failed to
substantiate Celedonio Tan’s claimed earning capacity with reasonable certainty;
no documentary evidence was ever presented on this point. Instead, the RTC
merely relied on Leticia Tan’s testimony regarding Celedonio Tan’s income. The
CA characterized this testimony as self-serving.[16]
The CA further reduced the exemplary
damages from P500,000.00 to P200,000.00, and deleted the award of attorney’s fees because the RTC
merely included the award in the dispositive portion of the decision without
discussing its legal basis.[17]
THE PETITION
In
the petition for review on certiorari before
us,[18]
the petitioners assert that the CA erred when it modified the RTC’s awarded damages.
The petitioners submit the reasons
outlined below.
First, the CA erred when it reduced the
RTC’s award of actual damages from P355,895.00 to P72,295.00. The petitioners claim that they sought
compensation for the damage done to petitioner Leticia Tan’s house, tailoring
shop, sewing machines, as well as other household appliances. Since the damages
primarily refer to the value of their destroyed property, and not the cost of
repairing or replacing them, the value cannot be evidenced by receipts. Accordingly,
the RTC correctly relied on petitioner Leticia Tan’s testimony and the documentary
evidence presented, consisting of pictures of the damaged property, to prove
their right to recover actual damages for the destroyed property.
Second, the
petitioners are entitled to actual damages for the loss of Celedonio Tan’s
earning capacity. While they admit that
they did not submit any documentary evidence to substantiate this claim, the
petitioners point out that Celedonio Tan was undisputably a self-employed
tailor who owned a small tailor shop; in his line of work, no documentary
evidence is available.
Third, the
petitioners maintain that they are entitled to exemplary damages in the amount
of P500,000.00
because the RTC and the CA consistently
found that the collision was caused by the respondents’ gross negligence.
Moreover, the respondents acted with bad faith when they fabricated the “oil
slick on the road” story to avoid paying damages to the petitioners. As observed by the CA, the Traffic Accident
Investigation Report did not mention any motor oil on the road at the time of
the accident. SPO4 Armando Alambro, the Investigation Officer, likewise
testified that there was no oil on the road at the time of the accident. For
the public good and to serve as an example, the respondents should be made to
pay P500,000.00
as exemplary damages.
Lastly, the petitioners are entitled to
attorney’s fees based on Article 2208 of
the Civil Code which provides, among others, that attorney’s fees can be
recovered when exemplary damages are awarded, and when the defendant acted in
gross and evident bad faith in refusing to satisfy the plaintiff’s plainly
valid, just and demandable claim.
We initially denied the petition in
our Resolution of February 17, 2010, for the petitioners’ failure to show any
reversible error in the CA decision sufficient to warrant the exercise of our
discretionary appellate jurisdiction. In
our Resolution of August 11, 2010, we reinstated the petition on the basis of
the petitioners’ motion for reconsideration.
OUR RULING
Finding merit in the petitioners’
arguments, we partly grant the petition.
Procedural Issue
As both the
RTC and the CA found that the respondents’ gross negligence led to the death of
Celedonio Tan, as well as to the destruction of the petitioners’ home and tailoring
shop, we see no reason to disturb this factual finding. We, thus, concentrate on the sole issue of what
damages the petitioners are entitled to.
We are generally
precluded from resolving a Rule 45 petition that solely raises the issue of
damages, an essentially factual question, because Section 1, Rule 45 of the
Rules of Court, expressly states that –
Section 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.
In light, however of the RTC’s and
the CA’s conflicting findings on the kind and amount of damages suffered which
must be compensated, we are compelled to consider the case as one of the
recognized exceptions.[19]
We look into the parties’ presented evidence
to resolve this appeal.
Temperate damages in lieu
of actual damages
We begin by discussing the petitioners’ claim
for actual damages arising from the damage inflicted on petitioner Leticia Tan’s
house and tailoring shop, taking into account the sewing machines and various
household appliances affected. Our basic law tells us that to recover damages
there must be pleading and proof of actual damages suffered.[20]
As we explained in Viron Transportation Co., Inc. v.
Actual
damages, to be recoverable, must not only be capable of proof, but must
actually be proved with a reasonable degree of certainty. Courts cannot simply
rely on speculation, conjecture or guesswork in determining the fact and amount
of damages. To justify an award of actual damages, there must be competent
proof of the actual amount of loss, credence can be given only to claims which
are duly supported by receipts.[22]
The
petitioners do not deny that they did not submit any receipt to support their
claim for actual damages to prove the monetary value of the damage caused to
the house and tailoring shop when the truck rammed into them. Thus, no actual damages for the destruction to
petitioner Leticia Tan’s house and tailoring shop can be awarded.
Nonetheless, absent competent proof
on the actual damages suffered, a party still has the option of claiming
temperate damages, which 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.[23]
As defined in Article 2224 of the Civil Code:
Article 2224. Temperate or moderate damages,
which are more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been suffered but
its amount can not, from the nature of the case, be proved with certainty.
In Canada v. All Commodities Marketing Corporation,[24]
we disallowed the award of actual damages arising from breach of contract,
where the respondent merely alleged that it was entitled to actual damages and
failed to adduce proof to support its plea. In its place, we awarded temperate
damages, in recognition of the pecuniary loss suffered.
The
photographs the petitioners presented as evidence show the extent of the damage
done to the house, the tailoring shop and the petitioners’ appliances and
equipment.[25]
Irrefutably, this damage was directly
attributable to Arambala’s gross negligence in handling OMC’s truck. Unfortunately,
these photographs are not enough to establish the amount of the loss with
certainty. From the attendant circumstances
and given the property destroyed,[26] we find the amount of P200,000.00 as a fair and sufficient
award by way of temperate damages.
Temperate damages in lieu of
loss of earning capacity
Similarly,
the CA was correct in disallowing the award of actual damages for loss of
earning capacity. Damages for loss of earning capacity are awarded pursuant to Article
2206 of the Civil Code, which states that:
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the
earning capacity of the deceased, and the indemnity shall be paid to the heirs
of the latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death[.]
As a rule, documentary evidence
should be presented to substantiate the claim for loss of earning capacity.[27]
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.[28]
According
to the petitioners, prior to his death, Celedonio was a self-employed tailor
who earned approximately P156,000.00
a year, or P13,000.00 a month. At the time of
his death in 1995, the prevailing daily minimum wage was P145.00,[29]
or P3,770.00 per month, provided the
wage earner had only one rest day per week. Even if we take judicial notice of the fact
that a small tailoring shop normally does not issue receipts to its customers, and
would probably not have any documentary evidence of the income it earns, Celedonio’s
alleged monthly income of P13,000.00
greatly exceeded the prevailing monthly minimum wage; thus, the exception set
forth above does not apply.
In the
past, we awarded temperate damages in lieu of actual damages for loss of
earning capacity where earning capacity is plainly established but no evidence
was presented to support the allegation of the injured party’s actual income.
In Pleno v. Court of Appeals,[30] we sustained the award of
temperate damages in the amount of P200,000.00
instead of actual damages for loss of earning capacity because the plaintiff’s
income was not sufficiently proven.
We did the
same in People v. Singh,[31] and People v. Almedilla,[32] granting temperate damages
in place of actual damages for the failure of the prosecution to present
sufficient evidence of the deceased’s income.
Similarly, in
Victory Liner, Inc. v. Gammad,[33] we deleted the award of damages for
loss of earning capacity for lack of evidentiary basis of the actual extent of
the loss. Nevertheless, because the income-earning capacity lost was clearly
established, we awarded the heirs P500,000.00 as temperate damages.
In the
present case, the income-earning capacity of the deceased was never disputed. Petitioners Mary Jane Tan, Mary Lyn Tan,
Celedonio Tan, Jr., Mary Joy Tan and Mark Allan Tan were all minors at the time
the petition was filed on February 4, 2010,[34] and they all relied mainly
on the income earned by their father from his tailoring activities for their
sustenance and support. Under these facts
and taking into account the unrebutted annual earnings of the deceased, we hold
that the petitioners are entitled to temperate damages in the amount of P300,000.00 [or roughly, the gross income for two (2) years] to compensate
for damages for loss of the earning capacity of the deceased.
Reduction of exemplary damages proper
Exemplary or corrective damages are
imposed by way of example or correction for the public good, in addition to
moral, temperate, liquidated or compensatory damages.[35]
In quasi-delicts, exemplary damages
may be granted if the defendant acted with gross negligence.[36]
Celedonio Tan’s death and the
destruction of the petitioners’ home and tailoring shop were unquestionably caused
by the respondents’ gross negligence. The law allows the grant of exemplary damages
in cases such as this to serve as a warning to the pubic and as a deterrent
against the repetition of this kind of deleterious actions.[37] The grant, however, should be tempered, as it
is not intended to enrich one party or to impoverish another. From this
perspective, we find the CA’s reduction of the exemplary damages awarded to the
petitioners from P500,000.00 to P200,000.00 to be proper.
Attorney’s fees in order
In view of the award of exemplary
damages, we find it also proper to award the petitioners attorney's fees, in
consonance with Article 2208(1) of the Civil Code.[38]
We find the award of attorney’s fees,
equivalent to 10% of the total amount adjudged the petitioners, to be just and
reasonable under the circumstances.
Interests due
Finally, we impose legal interest on
the amounts awarded, in keeping with our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals,[39]
which held that:
I. When an obligation, regardless of
its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions
under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims or damages except
when or until the demand can be established with reasonable certainty. Accordingly,
where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially
(Art. 1169, Civil Code) but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be deemed to
have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
Accordingly,
legal interest at the rate of 6% per annum on the amounts awarded starts to run
from May 14, 2003, when the trial court rendered judgment. From the time this
judgment becomes final and executory, the interest rate shall be 12% per annum
on the judgment amount and the interest earned up to that date, until the
judgment is wholly satisfied.
WHEREFORE, premises considered, we PARTIALLY GRANT the petition. The
(1) P50,000.00 as indemnity for the death
of Celedonio Tan;
(2) P72,295.00 as actual damages for
funeral expenses;
(3) P200,000.00 as temperate damages for the damage done to
petitioner Leticia’s house, tailoring shop, household appliances and shop
equipment;
(4) P300,000.00 as damages for the loss of
Celedonio Tan’s earning capacity;
(5) P500,000.00 as moral damages;
(6) P200,000.00 as exemplary damages; and
(7) 10% of the total amount as attorney’s
fees; and costs of suit.
In addition, the total amount
adjudged shall earn interest at the rate of 6% per annum from May 14, 2003, and
at the rate of 12% per annum, from the finality of this Resolution on the
balance and interest due, until fully paid.
SO ORDERED.
ARTURO
D. BRION
Associate
Justice
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice
LUCAS
P. BERSAMIN MARTIN
S. VILLARAMA, JR.
Associate
Justice Associate
Justice
MARIA
LOURDES P.A. SERENO
Associate Justice
ATTESTATION
I attest that the conclusions in the above Resolution
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
CONCHITA CARPIO MORALES
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution,
and the Division Chairperson’s Attestation, it is hereby certified that the
conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief
Justice
[1] Rollo, pp. 251-261.
[2] Id. at 242.
[3] Id. at 43-55; Penned by Associate Justice Pampio Abarintos, with Associate Justices Amelita Tolentino and Antonio Villamor concurring.
[4] Id. at 70-78.
[5] With plate number PRS-885.
[6] With plate number CZA 233.
[7] Rollo, p. 58.
[8] Id. at 70-78.
[9] Id. at 86-87.
[10] Decision dated May 14, 2003.
[11] Rollo, pp. 59-60.
[12] Article 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
x x x x
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.
[13] Rollo, p. 60.
[14] Id. at 60-61.
[15] Id. at 52.
[16] Id. at 53-54.
[17] Id. at 54-55.
[18]
[19] The recognized exceptions to this rule are: (1) when the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) when the inference made is manifestly mistaken; (3) when there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals went beyond the issues of the case and its findings are contrary to the admissions of both appellant and appellee; (7) when the findings of fact of the Court of Appeals are contrary to those of the trial court; (8); when said findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record. (Sarmiento v. Court of Appeals, 353 Phil. 834, 846 [1998]).
[20]
[21] G.R. No. 138296, November 22,
2000, 345 SCRA 509, 519, citing
Marina Properties
Corporation v. Court of Appeals, G.R. No. 125447, August 14, 1998, 294 SCRA 273.
[22]
[23]
Premiere Development Bank v. Court of
Appeals, G.R. No. 159352,
[24] Supra note 20.
[25] Rollo, pp. 203-231.
[26] Consisting of the petitioners’ home, the tailoring shop, sewing machines and appliances.
[27]
Philippine Hawk Corporation v. Lee, G.R. No. 166869,
[28]
Licyayo v. People, G.R. No. 169425,
[29] Based on Wage Order No. NCR-03, series of 1993, and the Rules Implementing Wage Order No. NCR-03.
[30]
G.R. No. L-56505,
[31] 412 Phil. 842, 859 (2001).
[32]
G.R. No. 150590,
[33]
G.R. No. 159636,
[34]
As alleged in their petition for review on certiorari,
an allegation which the respondents did not dispute in their Comment dated
[35] CIVIL CODE, Article 2229.
[36] CIVIL CODE, Article 2231.
[37] Cebu Country Club, Inc. v. Elizagaque, G.R. No. 160273, January 18, 2008, 542 SCRA 65, 75, citing Country Bankers Insurance Corporation v. Lianga Bay and Community Multi-Purpose Cooperative, Inc., G.R. No. 136914, January 25, 2002, 374 SCRA 653.
[38] CIVIL CODE, 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.
[39]
G.R. No. 97412,