Fleabite - Damages Awards in Philippine Jurisdiction

7/28/2019 Fleabite - Damages Awards in Philippine Jurisdiction

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A N N O T A T I O N

FLEABITE: DAMAGES AWARDS IN PHILIPPINE JURISDICTION

By

ROGELIO E. SUBONG*

_____________________________

I. Introduction, p. 552

II. Damages Defined, p. 554

1) In Philippine Jurisdiction, p. 554

2) In American Jurisdiction, p. 555

III. Distinction Among Damages, Damage & Injury, p. 556

IV. Damages in Philippine Law, p. 557

V. Kinds of Damages and their definitions, p. 558

1) Actual or Compensatory, p. 558

2) Moral, p. 559

3) Nominal, p. 559

4) Temperate and Moderate, p. 559

5) Liquidated, p. 560

6) Exemplary or corrective, p. 561

VI. Rationale of Damages, p. 562


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VII. Some Pertinent Cases Showing Amounts of Damages Awarded by the

Courts, p. 563

VIII. The Long and Hard Road to Decent Damages Awards, p. 572

IX. Significance of Negros Navigation Co., Inc. vs. Court of Appeals, et al., p. 574

X. Conclusion, p. 575

______________________________

I. Introduction

Stupidity pays in American courts!!! An elderly woman bought coffee from a

McDonald drive-through in New Mexico, USA. She placed the cup of hot coffeebetween her knees and

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* A.B 62 (UP) & LL.B 66 (UP).

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VOL. 281, NOVEMBER 7, 1997

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Fleabite: Damages Awards in Philippine Jurisdiction


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tried to pull the lid off. The coffee spilled onto her lap and scalded her buttocks,

thighs and labia. She sued McDonalds for gross negligence for selling this hot

unreasonably dangerous coffee. Did the court throw out her case? Think again.

Inspite of the warning on the coffee cup (Caution: Contents Hot!), the jury

rewarded her with that incredible amount of $2.9 million in damages! (Are Lawyers

Burning America?, Newsweek, March 15, 1995, pp. 22-25). The case was settled foran undisclosed amount but still hefty enough to encourage her to buy another cup

of scalding hot coffee from another McDonald chain, and balance the same on top

of her head while drivingfor another rip off. A tenant in Montana, U.S.A., sued the

apartment owner for damages because she slipped over pebbles on the sidewalk of

her rented unit. The lower court granted the motion for summary judgment of the

landlord. But the Montana Supreme Court reversed the ruling and remanded the

case for trial as it held that this failure to maintain the sidewalk was negligence per

se (Tripped Up, ABA Journal, December, 1996, pp. 38-39). And an ex-smoker sued

a cigarette company before a Florida court for damages for allegedly smoke-related

illness. He knew the risk in smoking and received daily warnings labeled on every

pack he buys. Did the court throw out his complaint? In fact he was awarded

$750,000.00 for deliberately causing his own illness (Litigants Talk Tobacco, ABA

Journal, June 1997, pp. 20-21).

What do the plaintiffs in American courts have in common? All three indubitably

possess a luminous traitunmitigated stupidity! But, all these morons may be

laughing all the way to the bank.

In American jurisdiction, awards of damages, especially punitive damages have

been sometimes astronomical. The heirs of airplane crash victims are guaranteed at

least P75,000 for the death of each passenger under an international treaty and a

Federal Act. But the Americans are not happy about this amount and they wanted

more. A couple sued before the US District Court in Charleston, South Carolina, a car

manufacturer for damages for the death of their

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SUPREME COURT REPORTS ANNOTATED


son (Sergio Jimenez III) after being thrown out of a station wagon due to an

allegedly defective latch in the door. The award? A whopping $ 262.5 million in

damages ($12.5 million in compensatory damages and $250 million dollars in

punitive damages)! This is only for the death of one person (a child whose life

expectancy and expected earnings is not yet clearly defined) and perhaps, there

was even contributory negligence on the part of the couple who must have left the

child unattended while inside the vehicle (ABA Journal, December, 1997, p. 16).

Residents of a mostly black neighborhood of New Orleans, Louisiana, who suffered

mostly minor ailments after a railroad chemical fire (no death occurred) were

awarded an eye-popping judgment of $3.4 billion!!! (ABA Journal, November,

1997, p. 38).

These awards present a sharp and pathetic contrast to awards decreed by our

courts for multiple deaths arising from tortious acts and breach of contract of

carriage. The case of Negros Navigation Co., Inc. vs. Court of Appeals, Ramon

Miranda, Sps. Ricardo & Virginia Miranda, G.R. No. 110398, promulgated on

November 7, 1997, highlights the hard and long climb for commensurate damages

in our courts. Before we discuss and analyze the significance of this case, let us first

bring out some pertinent matters in Philippine and American jurisdictions on the

concept of damages.

II. Damages Defined

1) In Philippine jurisdiction

a) From a legal authority

Professor Melquiades J. Gamboa, in his classic work, An Introduction to Philippine

Law, 2nd Ed., p. 362, defined Damages as the indemnity which a person can

recover as compensation for an injury sustained, either in his person, property, or

rights. Under the Civil Law damnum or dao is the detriment, harm, or loss to

person or property which is occasioned by the fault of another (Escriche, Diccionario

de Legislacion y Jurisprudencia, II, p. 579).


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Damages is the recompense or compensation awarded for the loss or damage

suffered; otherwise expressed, it is the pecuniary value of the consequences which

the law imposes for the breach of duty or violation of some right. (Carmelo V.

Sison, Handbook on the Philippine Law on Damages, 1993 ed., p. 1).

b) From decisions of the Supreme Court and Court of Appeals

In legal contemplation, the term damages is the sum of money which the law

awards or imposes as pecuniary compensation, recompense, or satisfaction for an

injury done or wrong sustained as a consequence either of a breach of a contractual

obligation or a tortuous act.Abbas vs. McPherson, 40 O.G. 2122

The generic term damages includes all kinds of damages contemplated in the

Civil Code. Hence, in asking for any kind of damages, a party places himself at the

disposal of the court which, under the law, is given the discretion to assess moral,

nominal, temperate, liquidated or exemplary damages, without proof of pecuniaryloss.Fuentes v. Carmel Corporation, 75 O.G. 1909.

The above definitions of the courts were reproduced from Justice Moreno, Philippine

Law Dictionary, Second Edition, p. 159.


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2) In American jurisdiction

American Jurisprudence defines damages as the sum of money which the law

awards or imposes as pecuniary compensation, recompense, or satisfaction for an

injury done or a wrong sustained as a consequence either of a breach of a

contractual obligation or a tortious act. Expressed in other terms, damages are the

pecuniary consequences which the law imposes for the breach of some duty or the

violation of some right (22 Am Jur 2d 13).

Damages is the word which expresses in dollars and cents the injury sustained

by a plaintiff and includes both the original debt or damage and whatever interest

ought to be

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added to make a just verdict. Fidelity & C. Co. v. Huse & Carleton, 272 Mass 448,

172 NE 590, 72 ALR 1143 (Ibid.). Blacks Law Dictionary defines Damages as a

pecuniary compensation or indemnification, which may be recovered in the courts

by any person who has suffered loss, detriment, or injury, whether to his person,

property or rights, through the unlawful act or omission or negligence of another. A

sum of money awarded to a person injured by the tort of another. Restatement,

Second, Torts, S 12A (Abridged Fifth Edition, p. 204).


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This is the same definition given in Ballentines Law Dictionary citing Aetna Casualty

& Surety Co. vs. Hanna (CA 5 Fla) 224 F2d 499, 53 ALR 2d 1125 (Third Edition, p.

303).

Oxford Reference: A Concise Dictionary of Law defines Damages as a sum of

money awarded by a court as compensation for a tort or a breach of contract.

Damages are awarded as a lump sum. The general principle is that the plaintiff is

entitled to full compensation (restitutio in integrum) for his losses (Second Edition,

p. 113).

III. Distinction Among Damages, Damage and Injury

The terms Damages, Damage and Injury are sometimes used interchangeably, but

each has a distinct technical legal meaning. Damages, as set forth above, pertainsto the monetary payment or the scale or measure of recovery for a person who

suffered loss or injury due to breach of contract or tortious act of another. While

damage, pertains to the resultant loss, hurt or harm upon such person; and finally,

injury pertains to the invasion or violation of legal right or breach of duty or the

legal wrong to be redressed.

Hence, by way of example, let us take the case of a passenger of a common carrier

who dies or loses a leg in a vehicular accident. Damages refers to the amount of

money he may recover for the loss of his leg or which his heirs may recover in caseof his death; damage refers to the fact of his loss of his

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leg or his death which resulted from the accident; and injury refers to the wrongful

loss of his leg or his wrongful death.

IV. Damages in Philippine Law

The modern concept and principles of damages in our jurisdiction have been mostly

adopted from American laws and jurisprudence. Our Civil Law system did not get

much from the Spanish legal system in the area of damages. This is evident from

the old Civil Code which is also known as the Civil Code of Spain in 1889. For half a

century this Code was the source of our Civil Law or that body of legal provisions

that governs the relationship of the members of the national community with each

other. Under the old code, there were only general principles on damages not as

clearly defined as in American jurisprudence. Provisions on Damages therein mainly

pertain to compensatory damages and damages pursuant to a penal clause in a

contract. The old code did not expressly recognize the concept of moral damages

although it has been awarded by the High Court in some cases. What is noteworthy

is that the provision that absolves an obligor for damages due to fortuitous event

had been reproduced from the old code (Art. 1107a) to the new Code in an

amended and rephrased form as Art. 2201. This provision has spawned a wealth of

jurisprudence on breach of contract and culpa aquilana or tortious cases.

The Code Commission specifically created by law to revise and update the old Civil

Code of Spain of 1899 explained the inclusion of more comprehensive provisions on

damages in the new code:

The subject of Damages is introduced in the Project. The present Code has but

few general principles on the measure of damage. Moreover, practically the only

damages in the present code are compensatory ones and those agreed upon in a

penal clause. Moral damages are not expressly recognized as in the present Civil

Code, although in one instanceinjury to reputationsuch damages have been

allowed by the Supreme Court of Spain and some Spanish jurists believed that

moral damages are allowable. The Supreme Court of the Philippines has awarded

moral damages in a few cases.

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The measure of damages is of far-reaching importance in every legal system. Upon

it depends the just compensation for every wrong or breach of contract.

The Commission has, therefore deemed it advisable to include in the project a Title

on Damages which embodies some principles of American law on the subject. The

American courts have developed abundant rules and principles upon the

adjudication of damages (Report of the Code Commission reproduced from

Carmelo V. Sison, Handbook on Philippine Law on Damages, 1993 ed., p. 1).

V. Kinds of Damages and Their Definitions

Thus under the new Civil Code, a body of provisions ondamages as culled from

American jurisprudence was specifically provided. Under the new Civil Code, the

provisions ondamages are set forth in Title XVIIIDamages, Chapter 1,Articles 2195to 2235. In these articles particularly Art. 2197,there are six (6) forms of damages

as specified in the law,namely:

1) Actual or compensatory;

2) Moral;

3) Nominal;

4) Temperate or moderate;

5) Liquidated; or

6) Exemplary or corrective.

As to their specific definitions


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1) Actual or compensatory

This is not directly defined by the pertinent provision of the new Civil Code.

Art. 2199. Except as provided by law or by stipulation, one is entitled to an

adequate compensation only for such pecuniary loss suffered by him as he has duly

proved, such compensation is referred to as actual or compensatory damages.

From the above, actual or compensatory damages are such pecuniary loss suffered

by a person and duly proved by him.

The Supreme Court has defined actual and compensatory damages as those

recoverable because of pecuniary lossin

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business, trade, property, profession, job, or occupation, and the same must be

proved (Perfecto vs. Gonzales, 128 SCRA 635 (1984); Rubio vs. CA, 141 SCRA 488

(1986).

2) Moral


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Under the new Civil Code, the term moral damages is defined by way of

enumerating the things included in this term:

Art. 2217. Moral Damages include physical suffering, mental anguish, fright,

serious anxiety, besmirched reputation, wounded feelings, moral shock, social

humiliation, and similar injury, though capable of pecuniary computation, moral

damages may be recovered if they are the proximate result of the defendants

wrongful act or omission.

Art. 2218. In the adjudication of moral damages, the sentimental value of property,

real or personal, may be considered.

From the above provisions, we can infer that moral damages are monetary

compensation although not capable of pecuniary computation for defendants

wrongful act or omission resulting to physical suffering, mental anguish, fright,

serious anxiety, besmirched reputation, wounded feelings, moral shock, social

humiliation, and similar injury.

3) Nominal

The term nominal damages is not also directly defined in the new Civil Code.However, the pertinent codal provision provides the basic idea of this form of

damages:

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff,

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 by him.

In American jurisdiction, nominal damages are either those damages recoverable

where a legal right is to be vindicated against an invasion that has produced no

actual present loss of any kind or from the nature of the case, some compensable

injury has been shown but the amount of that injury has not been proved (22 Am

Jur 2d 20).


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4) Temperate or moderate

Also the term temperate or moderate damages has not been categorically defined

under the new Civil Code, but it suggests its nature and provides condition when it

may be recovered.

Art. 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.

Art. 2225. Temperate damages must be reasonable under the circumstances.

Temperate or moderate damages are between nominal and compensatory. This is

when the court finds that there was monetary loss suffered but the amount cannot

be exactly quantified owing to the nature of the case. The definition of this term in

American Jurisprudence is about similar to what we have in the new Civil Code for

we borrowed this concept from the Americans. Temperate damages are thoseallowed in certain classes, without proof of actual or special damage, where the

wrong done must in fact have caused actual damage to the plaintiff though from the

nature of the case, he cannot furnish independent, distinct proof thereof. Temperate

damages are more than nominal damages, and, rather, are such as would be a

reasonable compensation for the injury sustained. The amount thus allowed is to be


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fixed by the jury, but the court in its instructions should give the jury some data

from which to determine what would be temperate damages (22 Am Jur 2d 33).

This species of damages is difficult to fix precise monetary equivalent and it

includes loss of goodwill, commercial credit or expected customers/clients for a

particular enterprise.

5) Liquidated

As to liquidated damages, the new Civil Code has defined the term:

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Art. 2226. Liquidated damages are those agreed upon by the parties to a contract,

to be paid in case of breach thereof.

The concept of liquidated damages is clear here. It is simply the amount a

contracting party categorically bound himself to pay upon breaching a writtenagreement or contract. Liquidated damages means a sum stipulated and agreed

upon by the parties at the time of entering into a contract, as being payable as

compensation for injuries in the event of a breach (22 Am Jur 2d 297).

6) Exemplary or corrective


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The term exemplary or corrective damages under the new Civil Code is not directly

defined but its nature is also suggested.

Art. 2229. 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.

From the above the following definition may be elicited: Exemplary or corrective

damages are another species of monetary compensation in favor of a person, as

additional award, who has been adjudged to be entitled to moral, temperate,

liquidated or compensatory damages. In American jurisdiction, exemplary or

corrective damages are called punitive damagesa form of money judgment which

is most feared by defendants in suits for damages in American courts. The reason is

that while other damages may only be limited by the evidence presented, the jury

can award billions of dollars in punitive damages, as it may fancy.

Exemplary, or punitive, damages are generally defined or described as damages

which are given as an enhancement of compensatory damages because of the

wanton, reckless, malicious, or oppressive character of the acts complained of. Such

damages go beyond the compensatory damages suffered in the case; they are

allowed as a punishment of the defendant and as a deterrent to others (22 Am Jur

2d 322).

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VI. Rationale of Damages


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Damages have been devised in the law to fulfill one of its basic goalsto effect a

form of justice to those who have been civilly and criminally wronged. In criminal

law, justice is usually in the form of death or imprisonment of the accused, fine or

damages, or prevention from occupying certain positions (e.g., disqualification fromassuming a public office) or forfeiture of certain benefits. Aside from these

sanctions, there may be also monetary judgments in the form of fines and damages.

In Civil Law, justice may be in the form of judgments granting mandatory or

prohibitory reliefs to the plaintiffs. Then in addition thereto, there may be monetary

awards for amounts due to a collecting party or damages for certain breach of

contract or tortious act.

Damages aim to pecuniarily compensate a person for the wrong done to him to

enable him to pick up the pieces so to speak and as a balm to a wounded feeling.All these six (6) forms of damages have a common denominatorpecuniary

exaction which is expressed in pesos and centavos when awarded by the courts.

The concept of Damages rests upon the need to pay monetary compensation to the

aggrieved party based upon the principle of practicality and acceptance of the

unthinkable and the unchangeable (death or destruction) and the need for the

claimants to move on and go on with their lives after the wrong upon his person or

property or wrong (death) upon his relative. In other words, there is the

unarticulated assumption that a wrong has been done and nothing more can be

done also to resurrect the dead, fully restore the injured limbs or repair or return to

original state a damaged property. Hence, the next best thing is to award

monetarily the wronged party or his heirs for what happened to him or to his

property either as compensation or as punishment to send a strong signal to those

who might commit a similar violation in the future.

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is only justified when there is proof of bad faith on the part of the carrier (Art. 2220).This decision did not exactly follow the concepts of moral and exemplary damages.

b) Alcantara vs. Surro and Meralco, 93 Phil. 472 (1953)

Another case involving breach of contract of carriage was Alcantara vs. Surro &

Meralco, 93 Phil. 471 (1953). Sometime in November, 1945, during the early

months of the Liberation, a bus of Meralco, which was then engaged in public utility,

hit another vehicle also owned by it. The collision pinned to death a passenger. The

minor children of the decedent sued for damages and were awarded the following:

P18,000 expected salary for 4 years (1946 to 1949); P5,000 moral and patrimonial

damages for physical and moral sufferings of his family and P2,155 as pecuniary

expenses. Both parties appealed mainly questioning the award of damages. Held:

Decision affirmed. The High Court held that there was no fixed basis for determining

indemnity for the heirs of a deceased person. Much is left to the discretion of the

court considering the moral and material damages involved. The lower court

considered the following factors: 1) tender ages of the plaintiffs at the time of the

death of their father; 2) age and life expectancy of deceased; 3) health of deceased

at time of death; 4) earning capacity of deceased; 5) actual pecuniary damages; 6)pain and suffering of deceased and plaintiffs; 7) pecuniary situation of the party

liable.

The High Court sustained the award of P18,000 representing the expected salary of

decedent for 4 years had he lived. It cited Com. Act No. 284 setting a ceiling of


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P2,000 for civil liability for death of a person but it pointed out that this amount has

been increased to P6,000 since Liberation in criminal cases as a matter of right and

without necessity of proof. While the lower court noted that under the American

Experience Table of Mortality, the deceased had a life expectancy of 28.90 years (he

died at 39 years old), it did not adopt this basis but fixed the award on the expected

income for 4 years.

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c) Manila Steamship Co., Inc. vs. Insa Abdulhaman, et al., 100 Phil. 33 (1956)

Manila Steamship Co., Inc. vs. Insa Abdulhaman, et al., 100 Phil. 33 (1956) involved

the collision of 2 small motor vessels off the cost San Ramon Beach, Zamboanga

City in 1948. Nine (9) passengers of the smaller vessel, a motor launch died after

the latter capsized. A suit was filed against the 2 owners of the vessels by the heirs.

The lower court found both vessels at fault and rendered judgment against the

owners solidarity. On appeal the Court of Appeals affirmed the finding of joint

liability of the 2 vessel owners but exempted the owner of the motor launch since

this vessel sank and was a total loss. For the death of the 9 passengers the Court of

Appeals affirmed the lower court award of P20,784.00 plus one-half of the cost.

Held: The award of damages was affirmed, but both defendants were declaredsolidarily liable inspite of the sinking of the other vessel because liability extends

beyond the value of the vessel if the owner thereof was at fault for the accident.

d) Villa Rey Transit, Inc. vs. Court of Appeals, 32 SCRA 511 (1970)


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Then in 1970, the High Court came out with a landmark ruling on the computation

of monetary payment for wrongful deaths in Villa Rey Transit, Inc. vs. Court of

Appeals, 32 SCRA 511 (1970). This became a leading guide for the courts in

determining damages for heirs based upon the life expectancy of the deceased.Sometime in March 1970, a young man boarded a bus of a transport company

bound for Manila from Lingayen, Pangasinan. When this bus reached a bridge in

Minalin, Pampanga, it suddenly bumped an animal-driven cart carrying bamboo

poles one of which pierced the bus windshield and hitting a passenger in the head

causing his death. The sisters of the deceased who was 30 years old and single at

the time of death, sued for a total of P63,750.00 in damages for this wrongful death

caused by breach of contract of carriage. The lower court granted the entire claim

which

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decision was sustained by the Court of Appeals. The bus company appealed the

amounts of damages awarded.

Held: Decision affirmed. The High Court held that in determining the amount ofdamages, two (2) factors should be considered: a) life expectancy of the deceased;

and b) fixed loss of beneficiaries. As to life expectancy, the High Court adopted the

formula of the trial court and followed by the Court of Appeals as derived from

American Expectancy Table of Mortality or the actuarial of Combined Experience

Table of Mortality: The formula is as follows: 2/3 x [80 average life span of a person

barring disease, etc., minus 30age of deceased]. In this case, 2/3 x 50 equals

33.33 yearsthe life expectancy of the deceased. And as to the fixed loss of the


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beneficiaries, the High Court ruled that this pertained to net earnings of the

deceased (gross minus necessary expenses) through the years of life expectancy,

plus certain items set forth in the decision. It rejected the ruling in Alcantara vs.

Surro, supra, wherein damages were computed on a fixed four (4)-year basis.

e) Davila vs. PAL, 49 SCRA 497 (1973)

As in other cases decided thereafter, the Supreme Court applied the Villa Rey

computation in Davila vs. PAL, 49 SCRA 497 (1973). In 1960, a young lawyer took a

Phil. Airlines plane from Iloilo City bound for Manila. The plane crashed at Mt. Baco,

a mountain in Mindoro Island killing the victims or a total of 32 persons including

crew. In a suit filed by Davilas parents, the trial court awarded damages for which

both parties appealed.

Held: Decision affirmed with modification as to awards. The High Court found the

airline company at fault as the plane was 32 miles off-course when tragedy struck. It

modified the award by applying the American Expectancy Table of Mortality or the

Actuarial American Expectancy Table of Mortality with adjustment owing to the

health of the deceased. The computed life expectancy of the deceased of about 25

years was multiplied with his net yearly income. Thus the High Court awarded the

following: P195,000 for expected earnings for 25 years, actual losses from the

crash; and

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P10,000 for moral damages; and P10,000 for attorneys fees. P10,000 for exemplary

damages previously awarded was eliminated as there was no wanton, fraudulent,

reckless, oppressive or malevolent actuation on the part of the airline.

f) BLTBCO, et al., vs. CA, et al., 64 SCRA 427 (1975)

However, in BLTBCO, et al. vs. CA, et al., 64 SCRA 427 (1975) the Villa Rey formula

was not applied in computing the benefits for the heirs of a victim of an accident.

Sometime in February, 1963, a passenger bus overtook a vehicle along the South

Superhighway resulting in a head-on collision with an oncoming vehicle. The heirs of

the deceased and a survivor sued for and were awarded damages by the trial court

for this accident. This decision was appealed by the bus company, particularly the

reasonableness of the awards.

Held: Decision affirmed. The award of P4,988.84 for hospitalization, P8,000 for loss

of earnings of the daughter who died (the Villa Rey formula was not applied),

doctors fees of P3,000, reduction of earnings of P3,000; moral damages of P4,000

and attorneys fee of P1,000 were either found reasonable or moderate.

g) Del Castillo vs. Jaymalin, 112 SCRA 637 (1982)

In Del Castillo vs. Jaymalin, 112 SCRA 637 (1982) the High Court increased the

payment for wrongful death pursuant to law but saw no reason to uphold the award

for expected loss of earnings. A father sued a bus company operating in the Bicol

Region for the death of his son, a deaf mute who fell because he was not assisted

while alighting from a bus of latter. A few days thereafter, he died in June, 1960. The

suit for damages dragged for years after the lower court awarded P6,000 for

damages for the death of the son, P35,000 for lost of earning capacity and P5,000

attorneys fees.

Held: Decision affirmed. The case had actually pended for 22 years. The High Court

increased the death payment from P6,000 to P12,000 in line with the prevailing rate

at the time, and attorneys fees of P2,000. The award for loss of earning capacity

was eliminated for lack of proof.


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g) Sweet Lines, Inc. vs. Court of Appeals, et al., 121 SCRA 769 (1983)

Sweet Lines, Inc. vs. Court of Appeals, et al., 121 SCRA 769 (1983) showed how our

courts are somewhat sparing in awarding damages in other forms of breach of

contract of carriage which do not result in death or physical injuries to passengers.

A vessel named M/V Sweet Grace was advertised as bound for Catbalogan, Western

Samar in July 1972. Passengers bound for Catbalogan boarded it. Its departure was

delayed due to engine trouble and when it finally left it decided to skip Catbaloganand proceeded directly to Tacloban City so that it can return to Manila on schedule.

Thus, passengers bound for Catbalogan had no recourse but to alight at Tacloban

City and get a ferry for Catbalogan. Four of the Catbalogan-bound passengers sued

for damages which action was sustained by the trial court and affirmed by the Court

of Appeals. Breach of contract was found and the following awards were decreed by

the courts: P75,000 moral damages for the 4 plaintiffs, P30,000 exemplary damages

and P5,000 attorneys fees. The shipping company appealed.

Held: Decision affirmed with modification. The finding of bad faith was upheld bythe High Court. It cited Art. 614 of the Code of Commerce as to the liability of a

captain who fails to fulfill his undertaking and Art. 2220 of the Civil Code awarding

moral damages in case of bad faith in a breach of contract of carriage. However, it

modified the decision by reducing the award of moral damages to only P3,000 for

each of the four (4) plaintiffs. The award of exemplary damages was eliminated

because it cannot be recovered as a matter of right; the Court decides whether or

not they should be adjudicated.


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h) Dee Hua Long Electrical Equipment Corp. vs. Reyes, 145 SCRA 713 (1986)

The case of Dee Hua Long Electrical Equipment Corp. vs. Reyes, 145 SCRA 713(1986) does not involve breach of contract of carriage but fraudulent sale of

defective products. In American courts, this will bring in a hefty amount of punitive

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damages. An electronic repair shop owner sued for damages an electronic partssupplier for parts sold to the former. Plaintiffs received complaints for inadequate

repairs of TV and stereo sets which they traced to defective capacitors bought from

defendant. Defendant defaulted after the filing of the complaint. The lower court

awarded the following: P50,000 actual damages; P50,000 as moral damages;

P50,000 as exemplary damages; and P10,000 as attorneys fees. After several

attempts of defendant to reinstate its standing in court failed, it appealed to the

High Court.

Held: Order of default affirmed by the Supreme Court. However, the High Courteliminated all damages and merely granted P5,000 by way of nominal damages.

It explained that actual damages cannot be awarded because no proof of actual loss

except the mere sworn declarations of private respondents about the allegedly

defective or low quality capacitors. It must be struck for want of adequate


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foundation. Actual or compensatory damages cannot be presumed, but must be

proved. As to moral damages, to be justified, the claimant must satisfactory prove

the existence of the factual basis of the damages. Then too, exemplary damages

cannot be recovered since plaintiff is not entitled to moral or compensatory

damages, and again because the petitioner is not shown to have acted in wanton,

fraudulent, reckless or oppressive manner. And finally, attorneys fee was notawarded because there was no proof of refusal in gross and evident bad faith to

satisfy the claim of plaintiff.

i) De Lima vs. Laguna Tayabas Bus Co., 160 SCRA 70 (1988)

De Lima vs. Laguna Tayabas Bus Co., 160 SCRA 70 (1988) showed how for 30 years

the wheels of justice grinned ever so slow. Since the case was overtaken by events,

the High Court made liberal adjustments on the award of damages in keeping with

the latest level of awards for damages. A vehicular accident involved a passenger

bus and a delivery truck of a soft drinks company sometime in June, 1958. This

resulted in death of a passenger and serious physical injuries to 2 others.

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The relative of the deceased and the 2 injured passengers brought separate civil

actions for damages which were jointly heard and decided.

The trial court awarded damages which when appealed to the Court of Appeals the

latter fixed the civil indemnity for the death of the passenger to only P3,000. The


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defendant appealed. The heir of the deceased passenger asked for the increase of

the P3,000 to P12,000.

Held: Although the heir of the deceased did not appeal from the lower court the

award on the amount of moral damages, the High Court still increased the amount

not only to the P12,000 asked for but to the prevailing rate under existing

jurisprudence to P30,000 as the case had pending in court for about 30 years from

the date of the accident in 1958. It declared:

x x x this Court is inclined to adopt a liberal stance in this case as We have done in

previous decision where we have held that litigations should as much as possible be

decided on their merits and not on technicality.

x x x x civil indemnity for the death of Petra de la Cruz was properly awarded by

virtue of Art. 1764 in relation to Art. 2206 of the Civil Code of the Philippines which

allows a minimum indemnity of P3,000.00 for the death of a passenger caused by

the breach of contract by a common carrier. In accordance with prevailing

jurisprudence the indemnity of P3,000 should be increased to P30,000.00 and not

P12,000.00 as prayed for by petitioner.

j) Kapalaran Bus Line vs. Coronado, et al., 176 SCRA 792 (1989)

In Kapalaran Bus Line vs. Coronado, et al., 176 SCRA 792 (1989) the High Court

imposed not only the usual damages, but also exemplary damages to warn common

carriers to observe utmost diligence in transporting their passengers. Sometime in

August 1982, a passenger bus overtook vehicles in an intersection in Laguna, for

which it hit a jeepney head-on. After trial in a complaint even initiated by this bus

company, trial court found the bus company at fault and directed it to pay

compensatory damages, exemplary damages and

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attorneys fees. The Court of Appeals affirmed the decision but eliminated the

award of exemplary damages and attorneys fees and cost of litigation.

Held: The High Court restored and increased the exemplary damages (from P10,000

to P25,000). It also restored the award of attorneys fees and litigation expenses.

The Court imposed exemplary damages because it found that the driver of the bus

company was grossly and very probably criminally negligent in his reckless

disregard of the rights of other vehicles and their passengers and of pedestrians as

well. It thus concluded:

x x x The law seeks to stop and prevent the slaughter and maiming of people

(whether passengers or not) and the destruction of property (whether freight or not)

on our highways by buses, the very size and power of which seem often to inflame

the minds of drivers. Article 2231 of the Civil Code explicitly authorizes the

imposition of exemplary damages in cases of quasi-delicts if the defendant acted

with gross negligence. Thus, we believe that the award of exemplary damages by

the trial court was quite proper x x x.

k) People vs. Quilaton, 205 SCRA 279 (1992)

People vs. Quilaton, 205 SCRA 279 (1992) does not pertain to breach of contract ofcarriage, nevertheless it demonstrates the more recent adjustments by the High

Court in the computation of damages arising from wrongful deaths. This is a

criminal prosecution of an accused who stabbed to death his officer-in-charge in a

government office. After trial, he was found guilty and was sentenced to years in

prison with monetary damages for the death of the offended party. Accused

appealed.


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Held: Decision affirmed. What is pertinent is the modified award of damages by the

High Court: P50,000 indemnity for death citing prevailing jurisprudence (People vs.

Bartulay, 192 SCRA 621 (1990); P26,445.00 as actual damages/burial expenses was

not altered; P114,000 by way of loss of earnings after deducting approximateearnings during the years deceased was expected to live and earn income (1980

updated Mortality Table after the 1970 table from the Villa Rey case

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due to advances in medicine life expectancy has become longer); P10,000educational assistance to the heirs; and P20,000 as moral damages. These are

actually empty awards since the accused could not pay them. But these are set

forth as moral gesture and as guide for the courts.

l) People vs. Teehankee, Jr., 249 SCRA 54 (1995)

Finally, the High Court came up with damages awards which are somewhat in tune

with the times in People vs. Teehankee, Jr., 249 SCRA 54 (1995). This is not again abreach of contract of carriage case, but the fairly large amount of damages decreed

by the trial court and upheld by the High Court is worth mentioning. This was a

sensational case that hug the headlines in the early 1990s when the son and

namesake of a former Chief Justice of the Supreme Court shot to death 2 teenagers

and wounded another inside Forbes Park, Makati City, for no apparent reason in the

early morning of July, 1991. The dead were Maureen Hultman, a 17 year old girl and


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a Roland Chapman, a foreigner. The accused was tried for murders and frustrated

murder and found guilty. He was sentenced to 2 Reclusion Perpetua for the 2

murders and prison term for frustrated murder. The lower court awarded

considerable amounts of damages which award was basically upheld by the High

Court: For the death of Roland Chapman, P50,000 as civil indemnity and P1,000,000

for moral damages; for the death of Maureen Hultman, P50,000 as civil indemnityfor her death, P2,350, 461.83 as actual damages, P564,042.57 for loss of earning

capacity of the deceased, P1,000,000 for moral damages, and P2,000,000 for

exemplary damages; For the Frustrated Murder of Jussi Olavi Leino, P30,000 for his

injuries, P118,369.84 for actual damages, P1,000,000 for moral damages and

P2,000,000 for exemplary damages.

VIII. The Long and Hard Road to Decent Damages Awards

It is pathetic that our laws are a little unhurried in giving due recognition to thevalue of human life and limbs as well as human pain and sufferings. Indeed, how

much is the value

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of human life? A legal system that hardly accords appropriate importance to thevalue of human life is misdirected or bereft of noble purpose. After all law pertains

to people and to the protection of human worth and dignity. If law ignores the basic

value of a person it becomes ultimately a sham and a sophisticated pursuit of

emptiness. There is something even lopsided about the emphasis we place upon

safeguards to human rights mainly of the accused in crimes. There are so many of

them which the Constitution sets forth with eloquence and emphatic grace. Many

have asked, how about the rights of the victims? Yes, the rights of the victims of


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crime, breach of contract and tort which are not as well-defined. This lackadaisical

attitude is reflected in the way the courts have placed a value upon human life and

limb.

Let us retrace the long and arduous road to a more decent rate for wrongful death.

Before the war, the courts awarded the measly amount of P1,000 for wrongful

death. Then a ceiling for the value of human life was fixed in a law passed also

before the war, Com. Act No. 284. This law allowed the court to fix civil liability for

the death of a person at a reasonable sum taking into consideration the financial

standing of the person liable and related circumstances but the amount should not

exceed P2,000. Thus courts had followed these guidelines and ceiling until after

Liberation when the new Civil Code came into effect in 1950. The Code increased

somewhat the value of human life in Art. 2206, wherein it provides:

The amount of death caused by a crime or quasi-delict shall be at least Three

Thousand pesos even though there may have been mitigating circumstance.

Then, deaths arising from crime had been increased to P6,000 without necessity of

proof as decided in People vs. Amansec, 80 Phil. 424. (Alcantara vs. Surro &

Meralco, supra) This award of P6,000 for wrongful death was also sustained in M.

Ruiz Highway Transit vs. Court of Appeals, 11 SCRA 98.

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Thereafter, owing to inflation and increase in the standards of living, P6,000 was

doubled to P12,000 in the case of People vs. Pantoja, 25 SCRA 468. Then again this

amount was raised to P30,000 in De Lima vs. Laguna Tayabas Bus Co., supra,

decided in 1988 which should reflect the living standards of the 1980s. And finally,

this amount was increased to P50,000 in People vs. Quilaton, supra and People vs.

Teehankee, supra, cases decided in the 1990s. This award of P50,000 in the form ofcompensatory damages was again upheld in the case under annotation, wherein

heirs of the 3 passengers who died in the sinking of the vessel were awarded a total

of P150,000 or P50,000 for each.

This amount of P50,000 or perhaps more seems never sufficient since we can never

really peg a value to human life.

IX. Significance of Negros Navigation Co., Inc. vs. Court of Appeals, et al.

It would seem that the Negros Navigation Co., Inc. vs. CA, supra is just one of those

uneventful decisions of the High Court. Considering its reliance upon the Mecenas

case in the matter of negligence of the common carrier, the impression is that

nothing new has been added in our jurisprudence by this decision. But then, as

what we learned in law school, very rarely are there two (2) cases that are exactly

on all fours, in a manner of speaking. The Negros Navigation Co., Inc. vs. CA supra,

pertains to one of those suits filed by the heirs of some of the victims of that ill-

fated ship named M/V Don Juan that plied the ManilaBacolod run. After many

years of litigation and appeals, the plaintiffs (Atty. Ramon Mirandawho sued for hiswife and 2 children and his brother-in-law and sisterwho sued for their daughter)

were finally awarded damages for the deaths of their relatives: P23,075 for actual

damages; P109,038.96 as compensatory damages for loss of earning capacity of

wife; P150,000 compensatory damage for wrongful death of the 3 victims;

P300,000, as moral damages; P300,000 as exemplary damages, all in the total

amount of P882,113.96; and P40,000 as attorneys fees. Similar awards were

declared for the other plaintiffs.

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What is noteworthy about the awards is that the High Court sustained moral

damages of P100,000 for each of the victims, compensatory damages of P50,000

for each of the victims, and attorneys fees of P40,000. On the other hand, it

increased exemplary damages to P100,000 for each of the victims. Compared to

what the plaintiffs would be getting for these deaths in American courts, these

amounts as well as previous awards with the exception of the awards in the

Teehankee case, may be considered as measly and fleabite. But this is a marked

improvement from previous years.

There are other significant holdings, but they do not pertain to the field of damages.

There was this holding of the Court about the suggestion from the defense that the

plaintiffs could have concocted the death of their relatives because their bodies

were not found, just to collect damages. It bristled thus: it is improper for petitioner

to even suggest that private respondents relatives did not board the ill-fated vessel

and perish in the accident simply because their bodies were not recovered. Then

there is also this slight deviation from the principle of stare decisis. The common

carrier argued that since the Court of Appeals relied upon the Mecenas case, the

amount awarded in that case of only P43,857.14 for each victim should be followed

in this case. But the High Court was not persuaded. It explained thus:

Here is where the principle of stare decisis does not apply in view of differences in

the personal circumstances of the victims. For that matter, differentiation would be

justified even if private respondents had joined the private respondents in the

Mecenas case. The doctrine of stare decisis works as a bar only against issues

litigated to the court and not passed upon by the court in the previous case, the

decision in the previous case is not stare decisis of the question presently

presented. The decision I the Mecenas case relates to damages for which petitioner

was liable to the claimants in that case.

X. Conclusion

It is hoped that with the Negros Navigation case on deaths from breach of contract

of carriage and the Teehankee case on


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deaths from crime, our courts will reexamine and reassess the value they put upon

human life.

This is not to say that courts can accurately fix the precise amount in pesos and

centavos as price for the life of a human being. There is a sacred assumption that

human life is beyond value. What the law has done is to provide the next best thing

compensation (which is never adequate) for those left behind who are forever

deprived of the moral and physical presence of the deceased, to help him movealong without the latter or as punitive imposition for the public good.

Indeed, it is high time that our courts should be attuned to the present economic

realities. The law to be an effective instrument of justice should be responsive to the

felt necessities of the times, to use the language of Justice Oliver Wendell Holmes,

Jr. Fleabite awards of damages, especially exemplary damages against erring

parties, especially, common carriers and other corporate defendants do not send

the strong signal needed for them to show more concern and respect towards

human lives and limbs. Yes, our courts are light-years behind American courts in thearea of damages awards. Contrast this with a $150 million verdict against Chevrolet

in favor of a certain Alex Hardy and his wife when he was paralyzed after being

thrown out of his Chevrolet Blazer in an accident due also to a defective door latch

(ABA Journal, September, 1996, p. 14). Even a claim which we would probably find

silly is awarded with millions of dollars. A Brooklyn, New York jury awarded the

unbelievable amount of $5.6 million to 3 plaintiffs who sued a computer keyboard

manufacturer (Digital Equipment Corp.) for repetitive stress injuries suffered by


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office workers. It was reported that: The injured women had experienced wrist and

spinal ailments after using the product (ABA Journal, February, 1997, p. 22).

It may be a journey of a thousand miles, but let us begin with the first step.

[Fleabite: Damages Awards in Philippine Jurisdiction, 281 SCRA 552(1997)]

Fleabite - Damages Awards in Philippine Jurisdiction

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