Republic of the
Supreme Court
FIRST DIVISION
|
PHILTRANCO SERVICE ENTERPRISES, INC., Petitioner, -versus- FELIX PARAS AND INLAND
TRAILWAYS, INC., AND HON. COURT OF APPEALS, Respondents. |
G.R. No. 161909 Present: CORONA, C.J.
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN, DEL
CASTILLO, and VILLARAMA,
JR., JJ. Promulgated: April 25, 2012 |
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN,
J.:
In an
action for breach of contract of carriage commenced by a passenger against his
common carrier, the plaintiff can recover damages from a third-party defendant
brought into the suit by the common carrier upon a claim based on tort or quasi-delict. The liability of the
third-party defendant is independent from the liability of the common carrier to
the passenger.
Philtranco
Service Enterprises, Inc. (Philtranco) appeals the affirmance with
modifications by the Court of Appeals (CA) of the decision of the Regional
Trial Court (RTC) awarding moral, actual and temperate damages, as well as
attorneys fees and costs of suit, to respondent Felix Paras (Paras), and temperate
damages to respondent Inland Trailways, Inc. (Inland), respectively the
plaintiff and the defendant/third-party plaintiff in this action for breach of
contract of carriage, upon a finding that the negligence of the petitioner and
its driver had caused the serious physical injuries Paras sustained and the material
damage Inlands bus suffered in a vehicular accident.
Antecedents
The antecedent
facts, as summarized by the CA, are as follows:
Plaintiff-appellant
[respondent] Felix Paras (Paras for brevity), who hails from Cainta, Rizal is
engaged in the buy and sell of fish products.
Sometime on
At
approximately
Paras
was not spared from the pernicious effects of the accident. After an emergency treatment at the
On
Unable
to obtain sufficient financial assistance from Inland for the costs of his
operations, hospitalization, doctors fees and other miscellaneous expenses, on
In its answer, defendant Inland denied responsibility, by alleging, among others, that its driver Coner had observed an utmost and extraordinary care and diligence to ensure the safety of its passengers. In support of its disclaimer of responsibility, Inland invoked the Police Investigation Report which established the fact that the Philtranco bus driver of [sic] Apolinar Miralles was the one which violently bumped the rear portion of the Inland bus, and therefore, the direct and proximate cause of Paras injuries.
On
After trial, the RTC (Branch 71) in
Antipolo, Rizal rendered its judgment on
WHEREFORE, third-party defendant Philtranco and Apolinar Miralles are hereby ordered to pay plaintiff jointly and severally, the following amounts:
1.P54,000.00 as actual damages;
2.P50,000.00 as moral damages;
3.P20,000.00 as attorneys fees
and costs.
SO ORDERED.
All the parties appealed to the CA on
different grounds.
On his part, Paras ascribed the following
errors to the RTC, to wit:
1. THE TRIAL COURT ERRED IN HOLDING THAT ONLY THIRD-PARTY DEFENDANT-APPELLANT PHILTRANCO IS LIABLE FOR THE DAMAGES SUFFERED BY APPELLANT PARAS.
II. THE TRIAL COURT ERRED IN NOT HOLDING APPELLANT INLAND TRAILWAYS INC. TO BE JOINTLY AND SEVERALLY LIABLE FOR THE DAMAGES SUFFERED BY PARAS.
III. THE TRIAL COURT ERRED IN NOT AWARDING UNEARNED INCOME AS ADDITIONAL ACTUAL DAMAGES SUFFERED BY APPELLANT PARAS AS HIS PHYSICAL DISABILITY IS PERMANENT IN NATURE.
IV. THE TRIAL COURT ERRED IN NOT AWARDING EXEMPLARY DAMAGES IN FAVOR OF APPELLANT PARAS.
On the
other hand, Inland assigned the following errors to the RTC, namely:
THE TRIAL COURT ERRED WHEN IT FAILED TO AWARD DAMAGES UNTO THE THIRD PARTY PLAINTIFF NOTWITHSTANDING CLEAR FINDING THAT:
It is clear from the evidence that
the plaintiff sustained injuries because of the reckless, negligence, and lack
of precaution of third party defendant Apolinar Miralles, an employee of
Philtranco.
AND, COMPLETELY DISREGARDED THE UNCONTROVERTED ORAL AND DOCUMENTARY EVIDENCES ESTABLISHING THE EXTENT AND DEGREE OF DAMAGES SUSTAINED BY THE THIRD PARTY PLAINTIFF.
Lastly, Philtranco stated that the RTC erred thuswise:
I
THE COURT A QUO MISERABLY ERRED IN AWARDING ACTUAL DAMAGES GREATER THAN WHAT WAS ALLEGED IN THE COMPLAINT ITSELF, AND EVEN MUCH MORE GREATER THAN WHAT WERE PROVED DURING THE TRIAL, HENCE, PERPETUATING UNJUST ENRICHMENT.
II
THE COURT A QUO SERIOUSLY ERRED IN AWARDING MORAL DAMAGES TO A CAUSE OF ACTION OF CULPA-CONTRACTUAL EVEN WITHOUT ANY EVIDENCE OF GROSS BAD FAITH; HENCE, CONTRARY TO THE ESTABLISHED DOCTRINE IN THE CASES OF PHIL. RABBIT BUS LINES VS. ESGUERRA; SOBERANO VS. BENGUET AUTO LINE AND FLORES VS. MIRANDA.
III
THE COURT A QUO MISERABLY ERRED IN HOLDING THAT MIRALLES WAS THE ONE AT FAULT MERELY ON THE STRENGHT OF THE TESTIMONY OF THE POLICE INVESTIGATOR WHICH IS IN TURN BASED ON THE STATEMENTS OF ALLEGED WITNESSES WHO WERE NEVER PRESENTED ON THE WITNESS STAND.
IV
THE COURT A QUO COMMITTED A GRIEVOUS ERROR IN DISREGARDING THE TESTIMONY OF APPELLANTS WITNESSES WHO TESTIFIED AS TO THE DEFENSE OF EXERCISE OF DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF EMPLOYEES PURSUANT TO ART. 2180, LAST PARAGRAPH, NEW CIVIL CODE.
On
WHEREFORE, in consideration of the foregoing premises, the assailed decision dated 18 July 19(9)7 is perforce affirmed with the following modifications:
1. Third party defendants-appellants Philtranco and Apolinar Miralles are ordered to pay plaintiff-appellant Felix Paras jointly and severally the following amounts:
a)
P1,397.95 as actual damages;
b)
P50,000.00 as temperate damages;
c)
P50,000.00 as moral damages; and
d)
P20,000.00 as attorneys fees and costs of suit.
2.
On the third party plaintiff-appellant Inlands claims, the third party
defendant-appellants Philtranco and Apolinar Miralles are hereby ordered to pay
the former (Inland) jointly and severally the amount of P250,000.00 as
and by way of temperate damages.
SO ORDERED.
The CA
agreed with the RTCs finding that no trace of negligence at the time of the
accident was attributable to Inlands driver, rendering Inland not guilty of
breach of contract of carriage; that faulty brakes had caused Philtrancos bus to
forcefully bump Inlands bus from behind, making it hit the rear portion of a
parked cargo truck; that the impact had resulted in considerable material damage
to the three vehicles; and that Paras and others had sustained various physical
injuries.
Accordingly,
the CA: (a) sustained the
award of moral damages of P50,000.00 in favor of Paras pursuant to Article
2219 of the Civil Code based on quasi-delict committed by Philtranco and
its driver; (b) reduced the actual
damages to be paid by Philtranco to Paras from P54,000.00 to P1,397.95
because only the latter
amount had been duly supported by receipts; (c) granted temperate damages of P50,000.00 (in lieu of actual damages in view of
the absence of competent proof of actual damages for his hospitalization and therapy) to be paid
by Philtranco to Paras; and (d)
awarded temperate damages of P250,000.00 under the same premise to be
paid by Philtranco to Inland for the material damage caused to Inlands bus.
Philtranco moved
for reconsideration,[3] but the CA
denied its motion for reconsideration on
Issues
Hence, this
appeal, in which the petitioner submits that the CA committed grave abuse of
discretion amounting to lack of jurisdiction in awarding moral damages to Paras
despite the fact that the complaint had been anchored on breach of contract of
carriage; and that the CA committed a reversible error in substituting its own
judgment by motu proprio awarding
temperate damages of P250,000.00 to Inland and P50,000.00 to
Paras despite the clear fact that temperate damages were not raised on appeal
by Paras and Inland.
Ruling
The appeal
lacks merit.
The Court does not disturb the unanimous
findings by the CA and the RTC on the negligence of Philtranco and its driver
being the direct cause of the physical injuries of Paras and the material
damage of Inland.
Nonetheless,
we feel bound to pass upon the disparate results the CA and the RTC reached on
the liabilities of Philtranco and its driver.
1.
Paras can recover moral damages
in this suit based on quasi-delict
Philtranco contends that Paras could
not recover moral damages because his suit was based on breach of contract of
carriage, pursuant to which moral
damages could be recovered only if he had died, or if the common carrier had
been guilty of fraud or bad faith. It argues that Paras had suffered only
physical injuries; that he had not adduced evidence of fraud or bad faith on
the part of the common carrier; and that, consequently, Paras could not recover
moral damages directly from it (Philtranco), considering that it was only being
subrogated for Inland.
The Court cannot uphold the petitioners
contention.
As a general rule, indeed, moral
damages are not recoverable in an action predicated on a breach of contract.
This is because such action is not included in Article 2219 of the Civil Code[5] as one of the
actions in which moral damages may be recovered. By way of exception, moral
damages are recoverable in an action predicated on a breach of contract: (a) where the mishap results in the death
of a passenger, as provided in Article 1764,[6] in relation to Article 2206, (3),[7] of the Civil Code; and (b) where
the common carrier has been guilty of fraud or bad faith,[8] as provided in Article 2220[9] of the Civil Code.
Although this action does not fall
under either of the exceptions, the award of moral damages to Paras was
nonetheless proper and valid. There is no question that Inland filed
its third-party complaint against Philtranco and its driver in order to establish in this action that they,
instead of Inland, should be directly liable to Paras for the physical injuries
he had sustained because of their negligence. To be precise, Philtranco and
its driver were brought into the action on the theory of liability that the
proximate cause of the collision between Inlands bus and Philtrancos bus had
been the negligent, reckless and imprudent manner defendant Apolinar Miralles
drove and operated his driven unit, the Philtranco Bus with Plate No. 259,
owned and operated by third-party defendant Philtranco Service Enterprises,
Inc.[10] The apparent objective of Inland was not to
merely subrogate the third-party defendants for itself, as Philtranco appears
to suggest,[11] but,
rather, to obtain a different relief whereby the third-party defendants would
be held directly, fully and solely liable to Paras and Inland for whatever damages each had suffered from
the negligence committed by Philtranco and its driver. In other words,
Philtranco and its driver were charged here as joint tortfeasors who would be
jointly and severally be liable to Paras and Inland.
Impleading Philtranco and its driver through
the third-party complaint filed on March 2, 1990 was correct. The device of the
third-party action, also
known as impleader, was in accord with Section 12, Rule 6 of the Revised Rules of Court, the rule then applicable, viz:
Section
12. Third-party complaint. A
third-party complaint is a claim that a defending party may, with leave of
court, file against a person not a party to the action, called the third-party
defendant, for contribution, indemnity, subrogation or any other relief, in
respect of his opponents claim.[12]
Explaining the application of Section 12,
Rule 6, supra, the Court said in Balbastro v. Court of Appeals,[13] to wit:
Section 12 of Rule 6 of the Revised Rules of Court
authorizes a defendant to bring into a lawsuit any person not a party to the
action . . . for contribution, indemnity, subrogation or any other relief in
respect of his opponent's claim. From its explicit language it does not compel
the defendant to bring the third-parties into the litigation, rather it simply
permits the inclusion of anyone who meets the standard set forth in the rule.
The secondary or derivative liability of the third-party is central whether
the basis is indemnity, subrogation, contribution, express or implied warranty
or some other theory. The impleader of
new parties under this rule is proper only when a right to relief exists under
the applicable substantive law. This rule is merely a procedural mechanism, and
cannot be utilized unless there is some substantive basis under applicable law.
Apart from
the requirement that the third-party complainant should assert a derivative or
secondary claim for relief from the third-party defendant there are other
limitations on said partys ability to implead. The rule requires that the
third-party defendant is not a party to the action for otherwise the proper
procedure for asserting a claim against one who is already a party to the suit
is by means of counterclaim or cross-claim under sections 6 and 7 of Rule 6. In
addition to the aforecited requirement, the claim against the third-party
defendant must be based upon plaintiff's claim against the original defendant
(third-party claimant). The crucial characteristic of a claim under section 12
of Rule 6, is that the original defendant is attempting to transfer to the third-party
defendant the liability asserted against him by the original plaintiff.
Accordingly, the requisites for a third-party
action are, firstly, that the party
to be impleaded must not yet be a party to the action; secondly, that the claim against the third-party defendant must
belong to the original defendant; thirdly,
the claim of the original defendant against the third-party defendant must be
based upon the plaintiffs claim against the original defendant; and, fourthly, the defendant is attempting to
transfer to the third-party defendant the liability asserted against him by the
original plaintiff.[14]
As the
foregoing indicates, the claim that the third-party complaint asserts against
the third-party defendant must be predicated on substantive law. Here, the
substantive law on which the right of Inland to seek such other relief through
its third-party complaint rested were Article 2176 and Article 2180 of the Civil Code, which read:
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this chapter. (1902a)
Article 2180. The obligation imposed by article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.
xxx
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.
xxx
The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (1903a)
Paras cause of action against Inland
(breach of contract of carriage) did not need to be the same as the cause of
action of Inland against Philtranco and its driver (tort or quasi-delict) in the impleader. It is
settled that a defendant
in a contract action may join as third-party defendants those who may be liable
to him in tort for the plaintiffs claim against him, or even directly to the
plaintiff.[15] Indeed, Prof. Wright, et al., commenting on the provision of
the Federal Rules of Procedure of the
United States from which Section 12, supra,
was derived, observed so, to wit:[16]
The
third-party claim need not be based on the same theory as the main claim. For
example, there are cases in which the third-party claim is based on an express
indemnity contract and the original complaint is framed in terms of negligence.
Similarly, there need not be any legal relationship between the third-party
defendant and any of the other parties to the action. Impleader also is proper
even though the third partys liability is contingent, and technically does not
come into existence until the original defendants liability has been
established. In addition, the words is or may be liable in Rule 14(a) make it
clear that impleader is proper even though the third-party defendants
liability is not automatically established once the third-party plaintiffs
liability to the original plaintiff has been determined.
Nor was it
a pre-requisite for attachment of the liability to Philtranco and its driver that
Inland be first declared and found liable to Paras for the breach of its
contract of carriage with him.[17] As the
Court has cogently discoursed in Samala
v. Judge Victor:[18]
Appellants
argue that since plaintiffs filed a complaint for damages against the
defendants on a breach of contract of carriage, they cannot recover from the
third-party defendants on a cause of action based on quasi-delict. The third
party defendants, they allege, are never parties liable with respect to
plaintiff s claim although they are with respect to the defendants for
indemnification, subrogation, contribution or other reliefs. Consequently, they
are not directly liable to the plaintiffs. Their liability commences only when
the defendants are adjudged liable and not when they are absolved from
liability as in the case at bar.
Quite
apparent from these arguments is the misconception entertained by appellants
with respect to the nature and office of a third party complaint.
Section
16, Rule 6 of the Revised Rules of Court defines a third party complaint as a claim
that a defending party may, with leave of court, file against a person not a
party to the action, called the third-party defendant, for contribution,
indemnification, subrogation, or any other relief, in respect of his opponents
claim. In the case of Viluan vs. Court of Appeals, et al., 16 SCRA 742
[1966], this Court had occasion to elucidate on the subjects covered by this
Rule, thus:
...
As explained in the Atlantic Coast Line R. Co. vs. U.S. Fidelity & Guaranty
Co., 52 F. Supp. 177 (1943:)
From
the sources of Rule 14 and the decisions herein cited, it is clear that this
rule, like the admiralty rule, covers two distinct subjects, the addition of
parties defendant to the main cause of action, and the bringing in of a third
party for a defendants remedy over. xxx
If the third party
complaint alleges facts showing a third partys direct liability to plaintiff
on the claim set out in plaintiffs petition, then third party shall make his
defenses as provided in Rule 12 and his counterclaims against plaintiff as
provided in Rule 13. In the case of alleged direct liability, no amendment (to
the complaint) is necessary or required. The subject-matter of the claim is
contained in plaintiff's complaint, the ground of third partys liability on
that claim is alleged in third party complaint, and third partys defense to
set up in his answer to plaintiff's complaint. At that point and without
amendment, the plaintiff and third party are at issue as to their rights
respecting the claim.
The
provision in the rule that, The third-party defendant may assert any defense
which the third-party plaintiff may assert to the plaintiffs claim, applies to
the other subject, namely, the alleged liability of third party defendant. The
next sentence in the rule, The third-party defendant is bound by the
adjudication of the third party plaintiffs liability to the plaintiff, as well
as of his own to the plaintiff or to the third-party plaintiff applies to both
subjects. If third party is brought in as liable only to defendant and judgment
is rendered adjudicating plaintiff's right to recover against defendant and
defendants rights to recover against third party, he is bound by both
adjudications.That part of the sentence refers to the second subject. If third
party is brought in as liable to plaintiff, then third party is bound by the
adjudication as between him and plaintiff. That refers to the first subject. If
third party is brought in as liable to plaintiff and also over to defendant,
then third party is bound by both adjudications. xxx
Under
this Rule, a person not a party to an action may be impleaded by the defendant
either (a) on an allegation of liability to the latter; (b) on the ground of
direct liability to the plaintiff-; or, (c) both (a) and (b). The situation in
(a) is covered by the phrase for contribution, indemnity or subrogation;
while (b) and (c) are subsumed under the catch all or any other relief, in
respect of his opponents claim.
The case at bar is one
in which the third party defendants are brought into the action as directly
liable to the plaintiffs upon the allegation that the primary and immediate
cause as shown by the police investigation of said vehicular collision between
(sic) the above-mentioned three vehicles was the recklessness and negligence
and lack of imprudence (sic) of the third-party defendant Virgilio (should be
Leonardo) Esguerra y Ledesma then driver of the passenger bus. The effects are
that plaintiff and third party are at issue as to their rights respecting the
claim and the third party is bound by the adjudication as between him and
plaintiff. It is not indispensable in the premises that the defendant be first
adjudged liable to plaintiff before the third-party defendant may be held
liable to the plaintiff, as precisely, the theory of defendant is that it is
the third party defendant, and not he, who is directly liable to
plaintiff. The situation contemplated by appellants would properly pertain to
situation (a) above wherein the third party defendant is being sued for
contribution, indemnity or subrogation, or simply stated, for a defendant's remedy
over.[19]
It is worth adding that allowing the
recovery of damages by Paras based on quasi-delict, despite his complaint being upon contractual
breach, served the judicial policy of avoiding multiplicity of suits and
circuity of actions by disposing of the entire subject matter in a single
litigation.[20]
2.
Award of temperate damages was in order
Philtranco assails the award of temperate damages by the CA
considering that, firstly, Paras and
Inland had not raised the matter in the trial court and in their respective
appeals; secondly, the CA could not
substitute the temperate damages granted to Paras if Paras could not properly
establish his actual damages despite evidence of his actual expenses being
easily available to him; and, thirdly,
the CA gravely abused its discretion in granting motu proprio the temperate damages of P250,000.00
to Inland although Inland had not claimed temperate damages in its pleading or
during trial and even on appeal.
The
Court cannot side with Philtranco.
Actual
damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable
degree of certainty. The reason is that the court cannot simply rely on speculation,
conjecture or guesswork in determining the fact and amount of damages, but
there must be competent proof of the actual amount of loss, credence can be
given only to claims which are duly supported by receipts.[21]
The
receipts formally submitted and offered by Paras were limited to the costs of
medicines purchased on various times in the period from February 1987 to July
1989 (Exhibits E to E-35, inclusive) totaling only P1,397.95.[22] The
receipts by no means included hospital and medical expenses, or the costs of at
least two surgeries as well as rehabilitative therapy. Consequently, the CA
fixed actual damages only at that small sum of P1,397.95. On its part, Inland
offered no definite proof on the repairs done on its vehicle, or the extent of
the material damage except the testimony of its witness, Emerlinda Maravilla, to the effect that the bus had
been damaged beyond economic repair.[23] The CA rejected Inlands showing of unrealized income worth P3,945,858.50
for 30 months (based on alleged average weekly income of P239,143.02 multiplied by its guaranteed revenue amounting to 55%
thereof, then spread over a period of 30 months, the equivalent to the
remaining 40% of the vehicles un-depreciated or net book value), finding such showing arbitrary, uncertain
and speculative.[24] As a result, the CA allowed no compensation to
Inland for unrealized income.
Nonetheless, the CA was convinced that Paras should
not suffer from the lack of definite proof of his actual expenses for the
surgeries and rehabilitative therapy; and that Inland should not be deprived of
recourse to recover its loss of the economic value of its damaged vehicle. As the records indicated, Paras was first
rushed for emergency treatment to the San Pablo Medical Center in San Pablo
City, Laguna, and was later brought to the National Orthopedic Hospital in
Quezon City where he was diagnosed to have suffered a dislocated hip, fracture
of the fibula on the right leg, fracture of the small bone of the right leg,
and closed fracture on the tibial plateau of the left leg. He underwent
surgeries on March 4, 1987 and April 15, 1987 to repair the fractures.[25] Thus, the
CA awarded to him temperate damages of P50,000.00
in the absence of definite proof of his actual expenses towards that end. As to
Inland, Maravillas testimony of the bus having been damaged beyond economic
repair showed a definitely substantial pecuniary loss, for which the CA fixed
temperate damages of P250,000.00. We cannot disturb the CAs
determination, for we are in no position today to judge its reasonableness on
account of the lapse of a long time from when the accident occurred.[26]
In awarding temperate
damages in lieu of actual damages, the CA did not err, because Paras and Inland
were definitely shown to have sustained substantial pecuniary losses. It would really be a travesty of
justice were the CA now to be held bereft of the discretion to calculate
moderate or temperate damages, and thereby leave Paras and Inland without
redress from the wrongful act of Philtranco and its driver.[27] We are satisfied that the CA exerted effort and
practiced great care to ensure that the causal link between the physical
injuries of Paras and the material loss of Inland, on the one hand, and the
negligence of Philtranco and its driver, on the other hand, existed in fact. It
also rejected arbitrary or speculative proof of loss. Clearly, the costs of Paras
surgeries and consequential rehabilitation, as well as the fact that repairing Inlands
vehicle would no longer be economical justly warranted the CA to calculate temperate
damages of P50,000.00 and P250,000.00 respectively for Paras and
Inland.
There is
no question that Article 2224 of the Civil
Code expressly authorizes the courts to award temperate damages despite the
lack of certain proof of actual damages, to wit:
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 cannot, from the nature of the case, be
proved with certainty.
The rationale for Article 2224 has
been stated in Premiere Development Bank v. Court of Appeals[28] in the following manner:
Even if not recoverable as
compensatory damages, Panacor may still be awarded damages in the concept of
temperate or moderate damages. When the court finds that some pecuniary loss
has been suffered but the amount cannot, from the nature of the case, be proved
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.
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 ones
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 defendants
wrongful act.
3.
Paras loss of earning capacity
must be compensated
In the body
of its decision, the CA concluded that considering that Paras had a minimum
monthly income of P8,000.00 as a trader he was entitled to recover
compensation for unearned income during the 3-month period of his hospital
confinement and the 6-month period of his recovery and rehabilitation; and aggregated
his unearned income for those periods to P72,000.00.[29] Yet, the
CA omitted the unearned income from the dispositive portion.
The
omission should be rectified, for there was credible proof of Paras loss of
income during his disability. According to Article 2205, (1), of the Civil Code, damages may be recovered for
loss or impairment of earning capacity in cases of temporary or permanent
personal injury. Indeed,
indemnification for damages comprehends not only the loss suffered (actual
damages or damnum emergens) but also the claimants lost profits
(compensatory damages or lucrum cessans).[30] Even so, the formula that has gained acceptance over time has limited
recovery to net earning capacity; hence, the entire amount
of P72,000.00 is not allowable. The premise is obviously that net earning capacity is the persons capacity
to acquire money, less the necessary expense for his own living.[31] To simplify the determination,
therefore, the net earning capacity of Paras during the 9-month period of
his confinement, surgeries and consequential therapy is pegged at only half of his
unearned monthly gross income of P8,000.00 as a trader, or a
total of P36,000.00 for the 9-month period, the other half being treated
as the necessary expense
for his own living in that period.
It is
relevant to clarify that awarding the temperate damages (for the substantial
pecuniary losses corresponding to Parass surgeries and rehabilitation and for the
irreparability of Inlands damaged bus) and the actual damages to compensate
lost earnings and costs of medicines give rise to no incompatibility. These
damages cover distinct pecuniary losses suffered by Paras and Inland,[32] and do not infringe the statutory
prohibition against recovering damages twice for the same act or omission.[33]
4.
Increase in award of attorneys fees
Although it is a sound policy not to
set a premium on the right to litigate,[34] we consider
the grant to Paras and Inland of reasonable attorneys fees warranted. Their entitlement to attorneys
fees was by virtue of their having been compelled to litigate or to incur
expenses to protect their interests,[35] as well
as by virtue of the Court now further deeming attorneys
fees to be just and equitable.[36]
In view of the lapse of a long time in
the prosecution of the claim,[37] the Court
considers it reasonable and proper to grant attorneys fees to each of Paras and Inland equivalent to 10%
of the total amounts hereby awarded to them, in lieu of only P20,000.00
for that purpose granted to Paras.
5.
Legal interest on the amounts awarded
Pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals,[38] legal
interest at the rate of 6% per annum
accrues on the amounts adjudged reckoned from July 18, 1997, the date when the
RTC rendered its judgment; and legal interest at the rate of 12% per annum shall be imposed from the
finality of the judgment until its full satisfaction, the interim period being
regarded as the equivalent of a forbearance of credit.
WHEREFORE, the Court AFFIRMS WITH
MODIFICATION the decision of the Court of Appeals promulgated on September
25, 2002, by ordering PHILTRANCO SERVICE
ENTERPRISES, INC. and APOLINAR
MIRALLES to pay, jointly and
severally, as follows:
1.
To Felix Paras:
(a) P1,397.95, as reimbursement
for the costs of medicines purchased between February 1987 and July 1989;
(b) P50,000.00 as temperate
damages;
(c) P50,000.00 as moral damages;
(d) P36,000.00 for lost earnings;
(e) 10% of the total of items (a) to (d) hereof as attorneys fees; and
(f) Interest of 6% per annum from July 18, 1997 on the total of items (a) to (d) hereof until finality of this decision, and 12% per annum thereafter until full payment.
2. To Inland Trailways, Inc.:
(a) P250,000.00 as temperate damages;
(b) 10% of
item (a) hereof; and
(c) Interest of 6% per annum on item (a)
hereof from July 18, 1997 until finality of this decision, and 12% per annum thereafter until full payment.
3. The
petitioner shall pay the costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO MARIANO C.
Associate Justice Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1] Rollo, pp. 66-70.
[2] CA rollo, pp.
115-132; penned by Associate Justice Bienvenido L. Reyes (now a Member of the
Court), with Associate Justice Hilarion L. Aquino (retired) and Associate
Justice Mario L. Guaria III (retired) concurring.
[3] CA rollo, pp. 133-143.
[4] Id., pp. 129-131.
[5] Article
2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious
acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26,
27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or
abused, referred to in No. 3 of this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and
sisters may bring the action mentioned in No. 9 of this article, in the order
named.
[6] Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.
[7] 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;
(2) If the deceased was obliged to give support
according to the provisions of article 291, the recipient who is not an heir
called to the decedent's inheritance by the law of testate or intestate
succession, may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.
[8] Japan Airlines v. Simangan, G.R. No. 170141, April 22, 2008, 552 SCRA 341,
361.
[9] Article
2220. Willful 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.
[10] Rollo, p.
57.
[11] Id., p. 13.
[12] The rule, as revised in 1997, presently provides:
Section 11. Third, (fourth, etc.)-party complaint. A third (fourth, etc.)-party complaint is a claim that a defending party may, with leave of court, file against a person not a party to the action, called the third (fourth, etc.)-party defendant, for contribution, indemnity, subrogation or any other relief, in respect of his opponent's claim. (12a)
[13] No. 33255, November 29, 1972, 48 SCRA 231 (bold emphasis supplied)
[14] Id., pp. 236-237.
[15] Viluan v. Court of Appeals, Nos. L-21477-81, April 29, 1966, 16 SCRA 742; Samala v. Judge Victor, G.R. No. L-53969, February 21, 1989,
170 SCRA 453, 460.
[16] Wright,
Miller & Kane, Federal Practice and Procedure,
Vol. 6, 1446, 1990 Edition, pp. 372-373.
[17] Viluan v. Court of Appeals, supra, note 15.
[18] Samala
v. Judge Victor, supra, note 15.
[19] Id., at pp. 458-460 (bold underscoring supplied for emphasis).
[20] Id., at p. 460.
[21] Viron Transportation Co., Inc. v. Delos
Santos, G..R. No. 138296, November 22, 2000, 345 SCRA 509, 519.
[22] Records, pp. 176-185.
[23] Rollo, p. 35.
[24] Id., p. 36.
[25] TSN,
October 18, 1991, pp. 11-12.
[26] The
Civil Code states:
Article
2225. Temperate damages must be reasonable under the circumstances.
[27] Government Service Insurance System v. Labung-Deang, G.R. No. 135644, September 17, 2001, 365 SCRA 341, 350.
[28] G.R.
No. 159352,
[29] Rollo, pp. 34-35.
[30] Titan-Ikeda Construction and Development
Corporation v. Primetown Property Group, Inc., G.R. No. 158768, February
12, 2008, 544 SCRA 466, 491.
[31] Villa Rey Transit, Inc. v. Court of Appeals, 31 SCRA 511, 515-517.
[32] See,
e.g., Ramos v. Court of Appeals, G.R. No. 124354, December 29, 1999, 321
SCRA 584, 624-625.
[33] The
Civil Code provides:
Article.
2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence
under the Penal Code. But the plaintiff cannot recover damages twice for the
same act or omission of the defendant. (n)
[34] Durban
Apartments Corporation v. Pioneer Insurance and Surety Corporation, G.R.
No. 179419, January 12, 2011, 639 SCRA 441, 454; see also Bank of the Philippine Islands v. Casa Montessori International,
G.R. Nos. 149454 & 149507, May 28, 2004, 430 SCRA 261, 296.
[35] Article 2208, par. 2, Civil Code.
[36] Article 2208, par. 11, Civil Code.
[37] New World International Development (Phils.), Inc. v. NYK-FilJapan
Shipping Corp., G.R.
No. 171468/174241, August 24, 2011.
[38] G.R.
No. 97412, July 12, 1994, 234 SCRA 78, 96-97.