G.R. No. L-11037           December 29, 1960

EDGARDO CARIAGA, ET AL., plaintiffs-appellants, vs.LAGUNA TAYABAS BUS COMPANY, defendant-appellant. MANILA RAILROAD COMPANY, defendant-appellee.

DIZON, J.:

At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus Co. — hereinafter referred to as the LTB — driven by Alfredo Moncada, left its station at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga, a fourth-year medical student of the University of Santo Tomas, as one of its passengers. At about 3:00 p.m., as the bus reached that part of the poblacion of Bay, Laguna, where the national highway crossed a railroad track, it bumped against the engine of a train then passing by with such terrific force that the first six wheels of the latter were derailed, the engine and the front part of the body of the bus was wrecked, the driver of the bus died instantly, while many of its passengers, Edgardo among them, were severely injured. Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m., June 18, 1952, to 8:25 a.m., June 20 of the same year when he was taken to the De los Santos Clinic, Quezon City. He left that clinic on October 14 to be transferred to the University of Santo Tomas Hospital where he stayed up to November 15. On this last date he was taken back to the De los Santos Clinic where he stayed until January 15, 1953. He was unconscious during the first 35 days after the accident; at the De los Santos Clinic Dr. Gustilo removed the fractured bones which lacerated the right frontal lobe of his brain and at the University of Santo Tomas Hospital Dr. Gustilo performed another operation to cover a big hole on the right frontal part of the head with a tantalum plate.

The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses incurred from June 18, 1952 to April, 1953. From January 15, 1953 up to April of the same year Edgardo stayed in a private house in Quezon, City, the LTB having agreed to give him a subsistence allowance of P10.00 daily during his convalescence, having spent in this connection the total sum of P775.30 in addition to the amount already referred to.

On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, from the LTB and the MRR Co., and total sum of P312,000.00 as actual, compensatory, moral and exemplary damages, and

for his parents, the sum of P18,00.00 in the same concepts. The LTB disclaimed liability claiming that the accident was due to the negligence of its co-defendant, the Manila Railroad Company, for not providing a crossing bar at the point where the national highway crossed the railway track, and for this reason filed the corresponding cross-claim against the latter company to recover the total sum of P18,194.75 representing the expenses paid to Edgardo Cariaga. The Manila Railroad Company, in turn, denied liability upon the complaint and cross-claim alleging that it was the reckless negligence of the bus driver that caused the accident.

The lower court held that it was the negligence of the bus driver that caused the accident and, as a result, rendered judgment sentencing the LTB to pay Edgardo Cariaga the sum of P10,490.00 as compensatory damages, with interest at the legal rate from the filing of the complaint, and dismissing the cross-claim against the Manila Railroad Company. From this decision the Cariagas and the LTB appealed.

The Cariagas claim that the trial court erred: in awarding only P10,490.00 as compensatory damages to Edgardo; in not awarding them actual and moral damages, and in not sentencing appellant LTB to pay attorney's fees.

On the other hand, the LTB's principal contention in this appeal is that the trial court should have held that the collision was due to the fault of both the locomotive driver and the bus driver and erred, as a consequence, in not holding the Manila Railroad Company liable upon the cross-claim filed against it.

We shall first dispose of the appeal of the bus company. Its first contention is that the driver of the train locomotive, like the bus driver, violated the law, first, in sounding the whistle only when the collision was about to take place instead of at a distance at least 300 meters from the crossing, and second, in not ringing the locomotive bell at all. Both contentions are without merits.

After considering the evidence presented by both parties the lower court expressly found:

. . . While the train was approximately 300 meters from the crossing, the engineer sounded two long and two short whistles and upon reaching a point about 100 meters from the highway, he sounded a long whistle which lasted up to the time the train was about to cross it. The bus proceeded on its way without slackening its speed and it bumped against

the train engine, causing the first six wheels of the latter to be derailed.

. . . that the train whistle had been sounded several times before it reached the crossing. All witnesses for the plaintiffs and the defendants are uniform in stating that they heard the train whistle sometime before the impact and considering that some of them were in the bus at the time, the driver thereof must have heard it because he was seated on the left front part of the bus and it was his duty and concern to observe such fact in connection with the safe operation of the vehicle. The other L.T.B. bus which arrived ahead at the crossing, heeded the warning by stopping and allowing the train to pass and so nothing happened to said vehicle. On the other hand, the driver of the bus No. 133 totally ignored the whistle and noise produced by the approaching train and instead he tried to make the bus pass the crossing before the train by not stopping a few meters from the railway track and in proceeding ahead.

The above findings of the lower court are predicated mainly upon the testimony of Gregorio Ilusondo, a witness for the Manila Railroad Company. Notwithstanding the efforts exerted by the LTB to assail his credibility, we do not find in the record any fact or circumstance sufficient to discredit his testimony. We have, therefore, no other alternative but to accept the findings of the trial court to the effect, firstly, that the whistle of locomotive was sounded four times — two long and two short — "as the train was approximately 300 meters from the crossing"; secondly, that another LTB bus which arrived at the crossing ahead of the one where Edgardo Cariaga was a passenger, paid heed to the warning and stopped before the "crossing", while — as the LTB itself now admits (Brief p. 5) — the driver of the bus in question totally disregarded the warning.

But to charge the MRR Co. with contributory negligence, the LTB claims that the engineer of the locomotive failed to ring the bell altogether, in violation of the section 91 of Article 1459, incorporated in the charter of the said MRR Co. This contention — as is obvious — is the very foundation of the cross-claim interposed by the LTB against its co-defendant. The former, therefore, had the burden of proving it affirmatively because a violation of law is never presumed. The record discloses that this burden has not been satisfactorily discharged.

The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages to Eduardo is inadequate considering the nature and the after effects of the physical injuries suffered by him. After a careful consideration of the evidence on this point we find their contentions to be well-founded.

From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the injuries suffered by Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical student; that he has become completely misfit for any kind of work; that he can hardly walk around without someone helping him, and has to use a brace on his left leg and feet.

Upon the whole evidence on the matter, the lower court found that the removal of the right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death."

The impression one gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both physically and mentally.

Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the breach and which the parties had forseen or could have reasonably forseen at the time the obligation was constituted, provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and other expenses in the total sum of P17,719.75 are within this category. We are of the opinion, however, that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category because they could have reasonably been foreseen by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he was already a fourth-year student in medicine in a reputable university. While his scholastic may not be first rate (Exhibits 4, 4-A to 4-C), it is, nevertheless, sufficient to justify the

assumption that he could have passed the board test in due time. As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr. Amado Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly income of Edgardo had he finished his studies.

Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so holds, that the compensatory damages awarded to Edgardo Cariaga should be increased to P25,000.00.

Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court, the pertinent portion of its decision reading as follows:

Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the Civil Code enumerates the instances when moral damages may be covered and the case under consideration does not fall under any one of them. The present action cannot come under paragraph 2 of said article because it is not one of the quasi-delict and cannot be considered as such because of the pre-existing contractual relation between the Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant Laguna Tayabas Bus Company be held liable to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code on account of breach of its contract of carriage because said defendant did not act fraudulently or in bad faith in connection therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in connection with the discharge of their duties and so it must be considered an obligor in good faith.

The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees, because this case does not fall under any of the instances enumerated in Article 2208 of the Civil Code.

We agree with the trial court and, to the reason given above, we add those given by this Court in Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil., 523, 530, 533):

A mere perusal of plaintiff's complaint will show that this action against the defendant is predicated on an alleged breach of contract of carriage, i.e., the failure of the defendants to bring him "safely and without mishaps" to his

destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not even made a party defendant to this case.

Considering, therefore, the nature of plaintiff's action in this case, is he entitled to compensation for moral damages? Article 2219 of the Civil Code says the following:

Art. 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.

Of course enumerated in the just quoted Article 2219 only the first two may have any bearing on the case at bar. We find, however, with regard to the first that the defendant herein has not committed in connection with this case any "criminal offense resulting in physical injuries". The one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. Altho (a) owners and managers of an establishment and enterprise are responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions; (b) employers are likewise liable for damages caused by their employees and household

helpers acting within the scope of their assigned task (Article 218 of the Civil Code); and (c) employers and corporations engaged in any kind of industry are subsidiary civilly liable for felonies committed by their employees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff herein does not maintain this action under the provisions of any of the articles of the codes just mentioned and against all the persons who might be liable for the damages caused, but as a result of an admitted breach of contract of carriage and against the defendant employer alone. We, therefore, hold that the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code.

The present complaint is not based either on a "quasi-delict causing physical injuries" (Art. 2219, par. 2 of the Civil Code). From the report of the Code Commission on the new Civil Code. We copy the following:

A question of nomenclature confronted the Commission. After a careful deliberation, it was agreed to use the term "quasi-delict" for those obligations which do not arise from law, contracts, quasi-contracts, or criminal offenses. They are known in Spanish legal treaties as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase "culpa-extra-contractual" or its translation "extra-contractual-fault" was eliminated because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might have been selected, but it was thought inadvisable to refer to so ancient a law as the "Lex Aquilia". So "quasi-delict" was chosen, which more nearly corresponds to the Roman Law classification of the obligations and is in harmony with the nature of this kind of liability.

The Commission also thought of the possibility of adopting the word "tort" from Anglo-American law. But "tort" under that system is much broader than the Spanish-Philippine concept of obligations arising from non-contractual negligence. "Tort" in Anglo-American jurisprudence includes not only negligence, but also intentional criminal act, such as assault and battery, false imprisonment and deceit. In the general plan of the Philippine legal system, intentional and malicious acts are governed by the Penal Code, although certain exceptions are made in the Project. (Report of the Code Commission, pp. 161-162).

In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the distinction between obligation derived from negligence and obligation as a result of a breach of contract. Thus, we said:

It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially in the legal viewpoint from the presumptive responsibility for the negligence of its servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care in their selection of supervision. Article 1903 is not applicable to obligations arising EX CONTRACTU, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to CULPA AQUILIANA' and not to CULPA CONTRACTUAL.lawphil.net

The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others, wherein moral damages were awarded to the plaintiffs, are not applicable to the case at bar because said decision were rendered before the effectivity of the new Civil Code (August 30, 1950) and for the further reason that the complaints filed therein were based on different causes of action.

In view of the foregoing the sum of P2,000 was awarded as moral damages by the trial court has to be eliminated, for under the law it is not a compensation awardable in a case like the one at bar.

What has been said heretofore relative to the moral damages claimed by Edgardo Cariaga obviously applies with greater force to a similar claim (4th assignment of error) made by his parents.

The claim made by said spouses for actual and compensatory damages is likewise without merits. As held by the trial court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were not a party, and neither can they premise their claim upon the negligence or quasi-delictof the LTB for the simple

reason that they were not themselves injured as a result of the collision between the LTB bus and train owned by the Manila Railroad Company.

Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in all other respects, with costs against appellant LTB.

G.R. No. L-25499 February 18, 1970

VILLA REY TRANSIT, INC., petitioner, vs.THE COURT OF APPEALS, TRINIDAD A. QUINTOS, PRIMA A. QUINTOS, AND JULITA A. QUINTOS,respondents.

CONCEPCION, C.J.:

Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision of the Court of Appeals affirming that of the Court of First Instance of Pangasinan. The basic facts are set forth in said decision of the Court of Appeals, from which We quote:

At about 1:30 in the morning of March 17, 1960, an Izuzu First Class passenger bus owned and operated by the defendant, bearing Plate No. TPU-14871-Bulacan and driven by Laureano Casim, left Lingayen, Pangasinan, for Manila. Among its paying passengers was the deceased, Policronio Quintos, Jr. who sat on the first seat, second row, right side of the bus. At about 4:55 o'clock a.m. when the vehicle was nearing the northern approach of the Sadsaran Bridge on the national highway in barrio Sto. Domingo, municipality of Minalin, Pampanga, it frontally hit the rear side of a bullcart filled with hay. As a result the end of a bamboo pole placed on top of the hayload and tied to the cart to hold it in place, hit the right side of the windshield of the bus. The protruding end of the bamboo pole, about 8 feet long from the rear of the bullcart, penetrated through the glass windshield and landed on the face of Policronio Quintos, Jr. who, because of the impact, fell from his seat and was sprawled on the floor. The pole landed on his left eye and the bone of the left side of his face was fractured. He suffered other multiple wounds and

was rendered unconscious due, among other causes to severe cerebral concussion. A La Mallorca passenger bus going in the opposite direction towards San Fernando, Pampanga, reached the scene of the mishap and it was stopped by Patrolman Felino Bacani of the municipal police force of Minalin who, in the meantime, had gone to the scene to investigate. Patrolman Bacani placed Policronio Quintos, Jr. and three other injured men who rode on the bullcart aboard the La Mallorca bus and brought them to the provincial hospital of Pampanga at San Fernando for medical assistance. Notwithstanding such assistance, Policronio Quintos, Jr. died at 3:15 p.m. on the same day, March 17, 1960, due to traumatic shock due to cerebral injuries.

The private respondents, Trinidad, Prima and Julita, all surnamed Quintos, are the sisters and only surviving heirs of Policronio Quintos Jr., who died single, leaving no descendants nor ascendants. Said respondents herein brought this action against herein petitioner, Villa Rey Transit, Inc., as owner and operator of said passenger bus, bearing Plate No. TPU-14871-Bulacan, for breach of the contract of carriage between said petitioner and the deceased Policronio Quintos, Jr., to recover the aggregate sum of P63,750.00 as damages, including attorney's fees. Said petitioner — defendant in the court of first instance — contended that the mishap was due to a fortuitous event, but this pretense was rejected by the trial court and the Court of Appeals, both of which found that the accident and the death of Policronio had been due to the negligence of the bus driver, for whom petitioner was liable under its contract of carriage with the deceased. In the language of His Honor, the trial Judge:

The mishap was not the result of any unforeseeable fortuitous event or emergency but was the direct result of the negligence of the driver of the defendant. The defendant must, therefore, respond for damages resulting from its breach of contract for carriage. As the complaint alleged a total damage of only P63,750.00 although as elsewhere shown in this decision the damages for wake and burial expenses, loss of income, death of the victim, and attorneys fee reach the aggregate of P79,615.95, this Court finds it just that said damages

be assessed at total of only P63,750.00 as prayed for in plaintiffs' amended complaint.

The despositive part of the decision of the trial Court reads:

WHEREFORE, judgment is hereby rendered ordering the defendant to pay to the plaintiffs the amount of P63,750.00 as damages for breach of contract of carriage resulting from the death of Policronio Quintos, Jr.

which, as above indicated, was affirmed by the Court of Appeals. Hence, the present petition for review oncertiorari, filed by Villa Rey Transit, Inc.

The only issue raised in this appeal is the amount of damages recoverable by private respondents herein. The determination of such amount depends, mainly upon two (2) factors, namely: (1) the number of years on the basis of which the damages shall be computed and (2) the rate at which the losses sustained by said respondents should be fixed.

The first factor was based by the trial court — the view of which was concurred in by the Court of Appeals — upon the life expectancy of Policronio Quintos, Jr., which was placed at 33-1/3 years — he being over 29 years of age (or around 30 years for purposes of computation) at the time of his demise — by applying the formula (2/3 x [80-301 = life expectancy) adopted in the American Expectancy Table of Mortality or the actuarial of Combined Experience Table of Mortality. Upon the other hand, petitioner maintains that the lower courts had erred in adopting said formula and in not acting in accordance with Alcantara v. Surro1 in which the damages were computed on a four (4) year basis, despite the fact that the victim therein was 39 years old, at the time of his death, and had a life expectancy of 28.90 years.

The case cited is not, however, controlling in the one at bar. In the Alcantara case, none of the parties had questioned the propriety of the four-year basis adopted by the trial court in making its award of damages. Both parties appealed, but only as regards the amount thereof. The plaintiffs assailed the non-inclusion, in its computation, of the bonus that the corporation, which was the victim's employer, had awarded to deserving officers and employees, based upon the profits earned less than two (2) months before the accident that resulted in his death. The defendants, in turn, objected to the sum awarded for the fourth year, which was treble that of the previous years, based upon the increases given, in that fourth year, to other employees of the same corporation.

Neither this objection nor said claim for inclusion of the bonus was sustained by this Court. Accordingly, the same had not thereby laid down any rule on the length of time to be used in the computation of damages. On the contrary, it declared:

The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. Much is left to the discretion of the court considering the moral and material damages involved, and so it has been said that "(t)here can be no exact or uniform rule for measuring the value of a human life and the measure of damages cannot be arrived at by precise mathematical calculation, but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor.' (25 C.J.S. 1241.) Other factors that are usually considered are: (1) pecuniary loss to plaintiff or beneficiary (25 C.J.S. 1243-1250) ; (2) loss of support (25 C.J.S., 1250-1251); (3) loss of service (25 C.J.S. 1251-1254); (4) loss of society (25 C.J.S. 1254-1255); (5) mental suffering of beneficiaries (25 C.J.S., 1258-1259) ; and (6) medical and funeral expenses (26 C.J.S., 1254-1260)."2

Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount recoverable by private respondents herein. Although it is not the sole element determinative of said amount, no cogent reason has been given to warrant its disregard and the adoption, in the case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of Appeals has not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio Quintos, Jr.

With respect to the rate at which the damages shall be computed, petitioner impugns the decision appealed from upon the ground that the damages awarded therein will have to be paid now, whereas most of those sought to be indemnified will be suffered years later. This argument is basically true, and this is, perhaps, one of the reasons why the Alcantara case points out the absence of a "fixed basis" for the ascertainment of the damages recoverable in litigations like the one at bar. Just the same, the force of the said argument of petitioner herein is offset by the fact that, although payment of the award in the case at bar will have to take place upon the finality of the decision therein, the liability of petitioner herein had been fixed at the rate only of

P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr. at the time of his death, as a young "training assistant" in the Bacnotan Cement Industries, Inc. In other words, unlike the Alcantara case, on which petitioner relies, the lower courts did not consider, in the present case, Policronio's potentiality and capacity to increase his future income. Indeed, upon the conclusion of his training period, he was supposed to have a better job and be promoted from time to time, and, hence, to earn more, if not — considering the growing importance of trade, commerce and industry and the concomitant rise in the income level of officers and employees therein — much more.

At this juncture, it should be noted, also, that We are mainly concerned with the determination of the losses or damages sustained by the private respondents, as dependents and intestate heirs of the deceased, and that said damages consist, not of the full amount of his earnings, but of the support, they received or would have received from him had he not died in consequence of the negligence of petitioner's agent. In fixing the amount of that support, We must reckon with the "necessary expenses of his own living", which should be deducted from his earnings. Thus, it has been consistently held that earning capacity, as an element of damages to one's estate for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire money, "less the necessary expense for his own living.3 Stated otherwise, the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received.4 In other words, only net earnings, not gross earning, are to be considered5 that is, the total of the earnings less expenses necessary in the creation of such earnings or income6 and less living and other incidental expenses.7

All things considered, We are of the opinion that it is fair and reasonable to fix the deductible living and other expenses of the deceased at the sum of P1,184.00 a year, or about P100.00 a month, and that, consequently, the loss sustained by his sisters may be roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by this Court;8 (b) P1,727.95, actually spent by private respondents for medical and burial expenses; and (c) attorney's fee, which was fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner herein, first to the Court of Appeals and later to this Supreme Court, should be increased

to P2,500.00. In other words, the amount adjudged in the decision appealed from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at the legal rate, from December 29, 1961, date of the promulgation of the decision of the trial court.

G.R. No. 74442 August 31, 1987

PAN AMERICAN WORLD AIRWAYS, INC., petitioner, vs.THE INTERMEDIATE APPELLATE COURT, TEOFISTA P. TINITIGAN, joined by her husband, SEVERINO TINITIGAN, respondents.

Before Us is a petition to review by certiorari the judgment 1 of the respondent Court of Appeals (IAC) affirming with modification the decision 2 rendered by the trial court in favor of the plaintiffs 3 and against the defendant 4sentencing the latter to pay the former the sum of US$1,546.15 or its equivalent in Philippine Currency as actual and compensatory damages, P500,000.00 as moral damages, P200,000.00 as exemplary damages, P100,000.00 as attorney's fees and to pay the costs of litigation. The modification consists in that the payment of US$1,546.15 or its equivalent in Philippine Currency must be valued at the present rate of exchange.

The statement of the case is as follows:

On February 5, 1975, private respondent herein, Teofista P. Tinitigan, filed a complaint against petitioner herein, Pan American World Airways, Inc. (Pan Am for brevity) for damages arising from defendant's alleged refusal to accommodate her on Pan Am Flight No. 431 from Sto. Domingo, Republica Dominica to San Juan, Puerto Rico on April 29, 1973 notwithstanding the fact that she possessed a confirmed plane ticket purchased from Pan Ams Office at Sto. Domingo and thus causing her to suffer mental anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation She prayed that she be awarded moral damages of P500,000.00, exemplary damages of P200,000.00, attorney's fees of P100,000.00 and actual damages sustained by her in the amount of US$1,546.15.

In its Answer, defendant denied that plaintiff was a confirmed passenger since the ticket for Flight No. 431 issued to her was on an open space basis which meant that she could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. Plaintiff was advised by

defendant of this fact when plaintiff changed her ticket for a new route with San Juan as additional part of her itinerary.

After due trial, the lower court rendered judgment on August 6, 1980 in favor of plaintiff and awarded the amount of damages as prayed for.

Defendant appealed said decision on both questions of fact and law to the respondent court assigning errors, to wit:

I The lower court erred in holding that plaintiff had a confirmed reservation on Pan Am Flight 431 from Santo Domingo, Republica Dominica to San Juan, Puerto Rico on April 29, 197 3.

II Te lower court erred in holding defendant- appellant liable for compensatory damages in the sum of US$1,546.15, moral damages in the sum of P500,000.00 and exemplary damages in the sum of P200,000.00, it being contrary to law and the evidence.

III The lower court erred in awarding attorney's fees to plaintiff.- -

IV. The lower court erred in not dismissing the complaint.

Respondent-appellate Court affirmed the assailed judgment of the trial court with modification as earlier stated. Hence, the instant petition, appellant-petitioner submitting the following grounds:

I. Respondent is a holder of an open, unconfirmed or a standby ticket.

II. Private respondent's ticket was not issued with an assigned seat.

III. The issuance of the boarding card to respondent Tinitigan and the fact that she was allowed to go through the departure area passing through customs and immigration did not make her a confirmed passenger.

IV. There is no evidence to support respondent court's findings that private respondent's seat was given to a white man.

V. The conclusion that the luggage of private respondent was taken on board flight 431 is not borne out by the evidence.

VI. Petitioner did not breach its contract with private respondent.

VII. There is no evidence to support private respondent's alleged loss of $1,000.00 in pofits.

In other words, the aforementioned grounds can be briefly stated as follows:

I. The respondent court misappreciated and ignored the facts of the case;

II. The conclusions of the respondent court were not supported by the evidence.

Evidence for the plaintiff in the lower court consisted of Teofista Tinitigan's sole testimony in open court supported by documentary evidence marked as Exhibits "A" to "J" while evidence for the defendant consisted of documents marked as Exhibits "1" to "12."

Findings of fact of the lower court show that plaintiff, a businesswoman and a multimillionaire in her own right as evidenced by Exhs. "J" to "J-7", (proprietor of Sampaguita Restaurant, New York City USA; Treasurer of the Molave Development Corp., Phil., proprietor of Cavite Household Appliances and Rowena's Handicraft, Phil.), was on a business trip with a Pan-Am ticket (San Francisco-Miami-Haiti-San Francisco). While in Haiti, she inquired from Pan-Am employees how she could proceed to San Juan, Puerto Rico for business reasons. Whereupon she was advised that her ticket was valid for Sto. Domingo, Republica Dominica only but in Santo Domingo she could make arrangements with Pan-Am for her trip to San Juan.

While in Sto. Domingo, after talking thru the telephone with Mrs. Lilibeth Warner, the former said that she (plaintiff) must be in San Juan that same day, to sign her contract or lose it. Plaintiff expected to make a profit of $1,000 in said contract. Plaintiff then proceeded to the airport at about 2 o'clock in the afternoon, or 3 hours ahead of the scheduled Pan Am flight. She was told to wait and upon the arrival of the plane bound for San Juan, she surrendered to the Pan Am employees passenger ticket No. 0264200919952 (Exh. "3") with Sto. Domingo-Miami

Route and she was issued passenger ticket No. 023443466114 (Exh. "D" of Exh. "2") for flight No. 431 with Sto. Domingo-San Juan-Miami route. She was also issued baggage claim No. 474-618 (Exh. "A") and given the corresponding boarding pass (Exh. "B") and assigned seat 3-A (Exh. "B-1") after she paid the fare and terminal fee. Appellee was then instructed to proceed to the Immigration Section where her passport (Exh. "C") was stamped accordingly.

While plaintiff was standing in line preparatory to boarding the aircraft, Rene Nolasco, a Pan Am employee ordered her in a loud voice to step out of line because her ticket was not confirmed to her consternation and embarrassment in the presence of several people who heard and order. Despite her Pleas that she should be in San Juan because it was very important to her, she was not allowed to board the aircraft. And as if to add insult to injury, she saw that her seat was given to a white man prompting her to engage Nolasco, who knows both the English and Spanish languages, in a heated argument provoking her into telling him that she would file a suit against Pan Am. Later, a few Pan Am employees went near her to tell her she could finally board the plane and on the pretext that they would inspect her baggage, they led her to another place, which she finally realized, was not the departure area. Meanwhile, the plane took off without her but with her luggage on board. She was forced to return to her hotel without any luggage much less an extra dress. It was a good thing that the Hotel people remembered her because they do not usually accommodate female guests, without any luggage to stay in the hotel. While normally, hotel accommodation was paid before departure, plaintiff was made to pay the room accommodation petition in advance (Exh. "E").

She finally retrieved her luggage after five days in San Francisco after presenting her baggage ticket (Exh. "A"). She brought the matter to the attention of Mr. V.W. Smith, Manager of Pan Am in San Francisco, who sent a letter of apology (Exh. "G") for the "inconveniences" Pan Am caused her (plaintiff) and attached a refund check (Exh. "H") reflecting the value of the flight coupon issued for the flight from Sto. Domingo to San Juan in which plaintiff was denied boarding.

On the other hand, there was no oral evidence for defendant Pan Am. Evidence consisted of documents which included depositions and counter depositions of witnesses and the following:

Exh. "1", Pan Am manifest on Fight 431 dated April 29, 1973 from Sto. Domingo to San Juan, Dominican Republic; Exh, 2, Ticket Coupon No.

026443466114 dated April 29, 1973 issued to plaintiff with status "open" with routing Sto. Domingo-Miami; Exh. 3, Ticket Coupon No. 0264200919952 dated April 29, 1973; Exh. 4, Letter of defendant's witness Raul Fiallo to Director of Pan Am Manila dated March 29, 1974 furnishing a copy of said letter to Pan Am Sto. Domingo; Exh. 5 ltem No. 26 in Exhibit I enclosed in blue ink which reads "T. Tinitigan NB"; Exh. 6, Message sent by deponent Raul Fiallo to Mr. McKenzie, Pan Am ,Manila; Exh. 7, Brown envelope containing the deposition of the witness; Exhs. 8, 8- A to 8-G, Certification of the deposition officer and the deposition of Raul Fiallo consisting of 8 pages in Spanish, Exh. 8-A-1, Signature of the deponent appearing at the left hand margin in every page of the deposition; Exhs. 9, 9-A to 9-F, Translation of the deposition from Spanish to English consisting of 7 pages; Exh. 10 Official Receipt representing fee of the Languages Internationale in translating the deposition from Spanish to English; Exh. 11, Deponents answer to cross interrogatories written in Spanish; and Exh. 12, Translation to deponents answer to cross-interrogatories from Spanish to English by Languages International upon plaintiff's request. (pp. 46-47, Record on Appeal)

Considering the aforementioned evidence for both parties, the lower court said:

Examining the evidence presented, the Court finds that the same preponderates in favor of the plaintiff. The plaintiff having been issued by the defendant with the necessary ticket (Exh. "D"), baggage claim symbol (Exh. "A"), the requisite boarding pass (Exh. "B") with assigned seat 3-A and her having been cleared through immigration (Exhs. C and C-1) all clearly and unmistakably show that plaintiff was indeed a confirmed passenger of defendant's Flight No. 431 for San Juan and that for all legal intents and purposes the contract of carriage between the plaintiff and the defendant was already perfected which bound the latter to transport the former to her place of destination on

said Flight. This conclusion finds eloquent support in Exhibit Q of the defendant showing that plaintiff was included in the passenger manifest of said flight. The failure therefore of the defendant to accommodate plaintiff in said flight and the taking in by it of a white man in lieu of plaintiff, who was brazenly ordered by an employee of the defendant to get off the line and unceremoniously whisked off from the departure area on the pretext that her luggage had to undergo custom's inspection to plaintiff's chargrin and great humiliation smacks of a clear case of racial discrimination for which the defendant should be held liable in damages to the plaintiff.

Moreover, the written apology offered by the defendant to the plaintiff, thru its Manager in San Francisco, (Exh. G) is a tell-tale indication of an admission of fault by the defendant for the "inconvenience" it caused plaintiff.

The defense put up by the defendant to the effect that the issuance by it of the boarding pass in favor of plaintiff with an assigned seat was merely in compliance with the formal requirements of immigration fails to generate belief. There was no evidence presented, save the evidently self-serving declaration of deponent Fiallo Rodriguez, of such a requirement by the immigration laws of said foreign country.

Considering the sex, age and the social and -business stature of the plaintiff in the community, the amounts of moral damages claimed by her in the complaint cannot be said to be unreasonable. Moreover, the award of exemplary damages is called for under the circumstances to teach defendant a lesson for the public good.

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant sentencing the latter to pay the former the sum of US$1,546.15 or its equivalent in Philippine Currency, as actual and compensatory damages, P200,000.00 as moral damages, P200,000.00 as

exemplary damages, P20,000.00 as attorney's fee's and the costs of litigation.

SO ORDERED. (pp. 47-49, Record on Appeal)

In its ruling, the appellate respondent court was merely echoing the findings of the lower court and in finding no merit in the appeal, gave the following reasons:

FIRST: It is clear from the evidence that defendant issued a Passenger Ticket and Baggage Check No. 026443466114 (Exh. "D") with assigned seat 3-A (Exh. "B-1") and the corresponding pass (Exh. "B") and baggage claim symbol (Exh. "A"). Plaintiff was made to pay the fare and terminal fee. At the immigration section, plaintiff's passport (Exh. "C") was stamped accordingly (Exh. "C-3"). Plaintiff's name was included in the passenger manifest (Exh. "1," "5") of PAN AM for Flight 431 dated April 19, 1973. And these show that plaintiff was indeed a confirmed passenger of defendant's Flight 431 for San Juan on April 29, 1973. There was, therefore, a contract or carriage perfected between plaintiff and defendant for the latter to take plaintiff to her place of destination.

By refusing to accommodate plaintiff in said flight, defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff.

Defendant has from the start argued that plaintiff was merely to chance passenger thus she had to give way to a passenger with a confirmed reservation. However, defendant through Mr. Jose Raul Fiolla Rodriguez, testified that he cannot say exactly what the total capacity of the plane on Flight 431 was; that he does not know whether Mrs. Tinitigan was allowed to buy a ticket because there was still space available; that he cannot say whether Mrs. Tinitigan was the first or last to buy a ticket to San Juan because there is no knowing; that there is no way of knowing who

occupied the seat (3-A) assigned to Mrs. Tinitigan; that he does not know if the ticket number of the person who occupied seat 3-A was higher or lower that the ticket number of Mrs. Tinitigan because it cannot be determined; that a higher number than that of Mrs. Tinitigan's ticket does not necessarily mean that Mrs. Tinitigan bought her ticket ahead; that no one else with open ticket was assigned the same seat number as Mrs. Tinitigan; that PAN AM does not practice the principle of "first come, first served."

In other words, defendant would like us to believe that plaintiff was a chance passenger only and was not assured of her flight on that day. Defendant, however has no way of proving the same as it was not certain whether plaintiff was a chance passenger or not.

Bad faith means a breach of a known duty through some motive or interest or ill will. Self enrichment or fraternal interest and not personal illwill may have been the motive of defendant, but it is malice nevertheless. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off non- caucasian to accommodate whites is very regrettable.

When defendant's employee ordered plaintiff to step out of line because her ticket was not confirmed despite plaintiff's pleas that she should be in San Juan that day, this caused plaintiff embarrassment because so many people heard the same and plaintiff was prevented from boarding the plane at all while her seat (3-A) was given to another passenger (a white man). For being subjected to such indignities, plaintiff suffered social humiliation, wounded feelings, serious anxiety, and mental anguish. Defendant should be held liable to plaintiff for moral damages.

A contract to transport passengers is quite different in kind and degree from any other contractual relation. And this, because of the relation which an air-

carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of carriage therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages. 5

By not allowing plaintiff to board Flight 431 on April 29, 1973, plaintiff was not able to sign a contract with Mrs. Lilibeth Warner who had earlier placed an order for a sizeable number of "capiz", shells in which transaction plaintiff expected to derive a profit of US $1,000.00. Plaintiff had to return to the Hotel El Embajador drom the aircraft costing her US$20.00. She had to pay for additional accommodations in said hotel for US$26.15 and the damage to her personal property amounted to US$500.00. Defendant should be held liable to the plaintiff in the amount of US$1,546.15 or its equivalent in Philippine Currency at the present rate of exchange as actual or compensatory damages.

Defendant having breached its contract with plaintiff in bad faith, it is not error for the trial court to have awarded exemplary damages. The rational behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good . 6 In view of it nature, it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines.

An award of attorney's fees is also in order, having found bad faith on the part of defendant.

WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications: defendant is sentenced to pay the plaintiff the sum of US$1,546.15 or its equivalent in Philippine Currency at the present rate of exchange with the US dollar.

Costs against defendant-appellant.

SO ORDERED. (pp. 3-5, Decision, pp. 96-98, Rollo)

It is noted that petitioner submitted in this petition the same grounds enumerated in its Motion for Reconsideration of the assailed judgment of the respondent appellate court anchoring its claim mainly on the appreciation of facts as supported by the evidence on record. These same grounds are also raised in petitioner's appeal from the judgment of the lower court to the respondent appellate court which affirmed the said assailed judgment.

All of the issues raised by petitioner are factual issues which the trial court ruled upon by favoring plaintiff's evidence as more credible than the evidence — for the defendant. A cursory reading of the decision of the trial court as well as the decision of the appellate court reveals that all evidence available were considered. It is not the function of this Court to analyze or weigh evidence all over again, as Our jurisdiction is limited to reviewing errors of law that might have been committed by the lower courts. Moreover, the findings of the lower court as to the credibility of the witnesses will not be generally disturbed on appeal and if the appeal is on questions of fact, the factual findings of the appellate court are binding on Us (Collector of Customs of Manila vs. IAC, 137 SCRA 3).

We believe, however the amount of some damages awarded to be exorbitant: We therefore reduce the moral and exemplary damages to the combined total sum of Two Hundred Thousand (P200,000.00) Pesos and the attorney's fees to Twenty Thousand (P20,000.00) Pesos. The award of actual damages in the amount of One Thousand Five Hundred Forty Six American dollars and fifteen cents (US$1,546.15) computed at the exchange rate prevailing at the time of payment is hereby retained and granted.

WHEREFORE, as modified, the assailed decision of respondent appellate court is hereby AFFIRMED.

SO ORDERED.

G.R. No. L-56487 October 21, 1991

REYNALDA GATCHALIAN, petitioner, vs.ARSENIO DELIM and the HON. COURT OF APPEALS, respondents.

FELICIANO, J.:p

At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded, as a paying passenger,

respondent's "Thames" mini bus at a point in San Eugenio, Aringay, La Union, bound for Bauang, of the same province. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch. Several passengers, including petitioner Gatchalian, were injured. They were promptly taken to Bethany Hospital at San Fernando, La Union, for medical treatment. Upon medical examination, petitioner was found to have sustained physical injuries on the leg, arm and forehead, specifically described as follows: lacerated wound, forehead; abrasion, elbow, left; abrasion, knee, left; abrasion, lateral surface, leg, left. 1

On 14 July 1973, while injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited them and later paid for their hospitalization and medical expenses. She also gave petitioner P12.00 with which to pay her transportation expense in going home from the hospital. However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already prepared Joint Affidavit which stated, among other things:

That we were passengers of Thames with Plate No. 52-222 PUJ Phil. 73 and victims after the said Thames met an accident at Barrio Payocpoc Norte, Bauang, La Union while passing through the National Highway No. 3;

That after a thorough investigation the said Thames met the accident due to mechanical defect and went off the road and turned turtle to the east canal of the road into a creek causing physical injuries to us;

xxx xxx xxx

That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries.

xxx xxx xxx 2

(Emphasis supplied)

Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La Union an actionextra contractu to recover compensatory and moral damages. She alleged in the complaint that her injuries sustained from the vehicular mishap had left her with a conspicuous white scar measuring 1 by 1/2 inches on the forehead, generating mental suffering and an inferiority complex on her part; and that as a result, she had to retire in seclusion and stay away from her friends. She also alleged that the scar diminished her facial beauty and deprived her of opportunities for employment. She prayed for an award of: P10,000.00 for loss of employment and other opportunities; P10,000.00 for the cost of plastic surgery for removal of the scar on her forehead; P30,000.00 for moral damages; and P1,000.00 as attorney's fees.

In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner had already been paid and moreover had waived any right to institute any action against him (private respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit on 14 July 1973.

After trial, the trial court dismissed the complaint upon the ground that when petitioner Gatchalian signed the Joint Affidavit, she relinquished any right of action (whether criminal or civil) that she may have had against respondent and the driver of the mini-bus.

On appeal by petitioner, the Court of Appeals reversed the trial court's conclusion that there had been a valid waiver, but affirmed the dismissal of the case by denying petitioner's claim for damages:

We are not in accord, therefore, of (sic) the ground of the trial court's dismissal of the complaint, although we conform to the trial court's disposition of the case — its dismissal.

IN VIEW OF THE FOREGOING considerations, there being no error committed by the lower court in dismissing the plaintiff-appellant's complaint, the judgment of dismissal is hereby affirmed.

Without special pronouncement as to costs.

SO ORDERED. 3

In the present Petition for Review filed in forma pauperis, petitioner assails the decision of the Court of Appeals and ask this Court to award her actual or compensatory damages as well as moral damages.

We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. The relevant language of the Joint Affidavit may be quoted again:

That we are no longer interested to file a complaint, criminal or civil against the said driver and ownerof the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries. (Emphasis supplied)

A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. 4 A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person.

The degree of explicitness which this Court has required in purported waivers is illustrated in Yepes and Susaya v. Samar Express Transit (supra), where the Court in reading and rejecting a purported waiver said:

. . . It appears that before their transfer to the Leyte Provincial Hospital, appellees were asked to sign as, in fact, they signed the document Exhibit I wherein they stated that "in consideration of the expenses which said operator has incurred in properly giving us the proper medical treatment, we hereby manifest our desire to waive any and all claims against the operator of the Samar Express Transit."

xxx xxx xxx

Even a cursory examination of the document mentioned above will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make the waiver — which obviously is not the same as making an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and

unequivocal (Decision of the Supreme Court of Spain of July 8, 1887) — which is not the case of the one relied upon in this appeal. (Emphasis supplied)

If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent.

Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. 5 To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. 6 We believe such a purported waiver is offensive to public policy.

Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held that there was no enforceable waiver of her right of action, should have awarded her actual or compensatory and moral damages as a matter of course.

We have already noted that a duty to exercise extraordinary diligence in protecting the safety of its passengers is imposed upon a common carrier. 7 In

case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." 8 In fact, because of this statutory presumption, it has been held that a court need not even make an express finding of fault or negligence on the part of the common carrier in order to hold it liable. 9 To overcome this presumption, the common carrier must slow to the court that it had exercised extraordinary diligence to prevent the injuries. 10 The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good paterfamilias established in respect of the ordinary relations between members of society. A common carrier is bound to carry its passengers safely" as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances". 11

Thus, the question which must be addressed is whether or not private respondent has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial before the court a quo, to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, respondent utterly failed to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. InServando v. Philippine Steam Navigation Company, 12 the Court summed up the essential characteristics of force majeure by quoting with approval from the Enciclopedia Juridica Española:

Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability non-performance. The Partidas, the antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of

houses, unexpected fire, shipwreck, violence of robber.

In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Española says: 'In legal sense and, consequently, also in relation to contracts, a "caso fortuito" presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the "caso fortuito", or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of respondent common carrier. In her direct examination, petitioner Gatchalian narrated that shortly before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at one part of the bus. One of the passengers, an old woman, cried out, "What happened?" ("Apay addan samet nadadaelen?"). The driver replied, nonchalantly, "That is only normal" ("Ugali ti makina dayta"). The driver did not stop to check if anything had gone wrong with the bus. Moreover, the driver's reply necessarily indicated that the same "snapping sound" had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver.

We turn to petitioner's claim for damages. The first item in that claim relates to revenue which petitioner said she failed to realize because of the effects of the

vehicular mishap. Petitioner maintains that on the day that the mini-bus went off the road, she was supposed to confer with the district supervisor of public schools for a substitute teacher's job, a job which she had held off and on as a "casual employee." The Court of Appeals, however, found that at the time of the accident, she was no longer employed in a public school since, being a casual employee and not a Civil Service eligible, she had been laid off. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. In view of her employment status as such, the Court of Appeals held that she could not be said to have in fact lost any employment after and by reason of the accident. 13 Such was the factual finding of the Court of Appeals, a finding entitled to due respect from this Court. Petitioner Gatchalian has not submitted any basis for overturning this finding of fact, and she may not be awarded damages on the basis of speculation or conjecture. 14

Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. If the scar is relatively small and does not grievously disfigure the victim, the cost of surgery may be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., 15 this Court awarded actual or compensatory damages for, among other things, the surgical removal of the scar on the face of a young boy who had been injured in a vehicular collision. The Court there held:

We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta are inadequate. In allowing not more than P1,000.00 as compensation for the "permanent deformity and — something like an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly normal condition, surgical intervention was needed, for

which the doctor's charges would amount to P3,000.00, exclusive of hospitalization fees, expenses and medicines.Furthermore, the operation, according to Dr. Diño, would probably have to be repeated in order to effectuate a complete cure, while removal of the scar on the face obviously demanded plastic surgery.

xxx xxx xxx

The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that can not be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor impair his right to a full indemnity.

. . . Still, taking into account the necessity and cost of corrective measures to fully repair the damage;the pain suffered by the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted; and further considering that a repair, however, skillfully conducted, is never equivalent to the original state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000.00. (Emphasis supplied)

Petitioner estimated that the cost of having her scar surgically removed was somewhere between P10,000.00 to P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam, a witness presented as an expert by petitioner, testified that the cost would probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact that a considerable amount of time has lapsed since the mishap in 1973 which may be expected to increase not only the cost but also very probably the difficulty of removing the scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery is not unreasonable.

Turning to petitioner's claim for moral damages, the long-established rule is that moral damages may be awarded where gross negligence on the part of the common carrier is shown. 18 Since we have earlier concluded that respondent common carrier and his driver had been grossly negligent in connection with the bus mishap which had injured petitioner and other passengers, and recalling the aggressive manuevers of respondent, through his wife, to get the victims to waive their right to recover damages even as they were still hospitalized for their injuries, petitioner must be held entitled to such moral damages. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact even more modest. 19

WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the then Court of First Instance of La Union dated 4 December 1975 are hereby REVERSED and SET ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda Gatchalian the following sums: 1) P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the removal of the scar on petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees, the aggregate amount to bear interest at the legal rate of 6% per annum counting from the promulgation of this decision until full payment thereof. Costs against private respondent.

SO ORDERED.

G.R. No. L-61418 September 24, 1987

KOREAN AIRLINES CO., LTD., petitioner, vs.HON. COURT OF APPEALS, THE HON. EDUARDO C. TUTAAN, Presiding Judge, Court of First Instance of Rizal, Branch V. Quezon City, AZUCENA and JANUARIO TOMAS, respondents.

CRUZ, J.:

This is one of the many cases that have unnecessarily clogged the dockets of this Court because they should not have been brought to us in the first place.

The issues are mainly factual. They have been resolved by the trial court, which has been affirmed by the respondent court, except as to the award of damages, which has been reduced. We see no reason why the decision had to be elevated to us.

Time and again we have stressed that this Court is not a trier of facts. 1 We leave these matters to the lower courts, which have more opportunity and facilities to examine these matters. We have no jurisdiction as a rule to reverse their findings. 2 The exception invoked is that there is a clear showing of a grave abuse of discretion on their part, but we do not see it here.

We are satisfied from the findings of the respondent court (and of the trial court) that the private respondent was, in the language of the airline industry, "bumped off." She had a confirmed ticket. She arrived at the airport on time. However, she was not allowed to board because her seat had already been given to another passenger. As a result, she suffered damages for which the petitioner should be held liable.

Specifically, petitioner Korean Airlines (hereinafter called KAL) issued to Azucena Tomas a plane ticket to Los Angeles, California, U.S.A., on Flight No. KE 612 departing from the Manila International Airport on July 29, 1977, at 2:20 p.m. She paid the fare of P2,587.88 3 She and her husband arrived at the KAL check-in counter at 1.:50 p.m. of that date 4 and presented her ticket to Augusto Torres, Jr., who was in charge. Torres refused to check her in, saying that the Immigration Office was already closed. 5 Januario Tomas, her husband, rushed to the said office, which was still open, and was told by the immigration officer on duty that his wife could still be cleared for departure. Januario rushed back to Torres to convey this information and asked that his wife be checked in. Torres said this was no longer possible because her seat had already been given to another passenger. His reason was that Azucena had arrived late and had not checked in within forty minutes before departure time. 6

There is no evidence in the record of any rule requiring passengers to check in at least forty minutes before departure time, as invoked by Torres. KAL admits that it has not been able to cite any statutory or administrative requirement to this effect. 7 In fact, the alleged rule is not even a condition of the plane ticket purchased by Azucena.

At the same time, KAL invokes the memorandum-circular of February 24, 1975, issued by the Commission on Immigration and Deportation which says that "all passengers authorized to leave for abroad shall be required to check in with the Immigration Departure Control Officer at least thirty minutes before the scheduled departure." The record shows that Azucena was ready to comply.

If, as Torres said, he gave Azucena's seat to a chance passenger thirty-eight minutes before departure time 8instead of waiting for Azucena, then he was intentionally violating the said circular. Significantly, it was proved he was not telling the truth when he said the Immigration Office was already closed although it was in fact still open at the time the private respondents arrived. Moreover, the immigration officer on duty expressed his willingness to clear Azucena Tomas for departure, thus indicating that she was well within the provisions of the memorandum-circular. Torres' refusal to check her in was clearly unjustified.

As it appeared later, the real reason why she could not be checked in was not her supposed tardiness but the circumstance that Torres had prematurely given her seat to a chance passenger. That person certainly had less right to prior accommodation than the private respondent herself.

The claim that the real party in interest is the Gold N. Apparel Manufacturing Corporation and not the private respondent 9 is also untenable. Counsel for Azucena Tomas declared at the trial that she was suing in her personal capacity. 10 In testifying about her participation in the said corporation, she was only stressing her status as a respected and well-connected businesswoman to show the extent of the prejudice caused to her interests by the unjustified acts of the petitioner.

It is clear that the petitioner acted in bad faith in violating the private respondent's rights under their contract of carriage and is therefore liable for the injuries she has sustained as a result. We agree with the Court of Appeals, however, that the award should be reduced to P50,000.00 for actual and compensatory damages, P30,000.00 for moral damages, and P20,000.00 for attorney's fees, the exemplary damages to be eliminated altogether.

WHEREFORE, the appealed decision of the respondent court is AFFIRMED in toto, with costs against the petitioner.

SO ORDERED.

[G.R. No. 107518.  October 8, 1998]

PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS and MARIA EFIGENIA FISHING CORPORATION, respondents.

ROMERO, J.:

A party is entitled to adequate compensation only for such pecuniary loss actually suffered and duly proved.[1] Indeed, basic is the rule that to recover actual damages, the amount of loss must not only be capable of proof but must actually be proven with a reasonable degree of certainty, premised upon competent proof or best evidence obtainable of the actual amount thereof.[2] The claimant is duty-bound to point out specific facts that afford a basis for measuring whatever compensatory damages are borne.[3] A court cannot merely rely on speculations, conjectures, or guesswork as to the fact and amount of damages[4] as well as hearsay[5] or uncorroborated testimony whose truth is suspect.[6] Such are the jurisprudential precepts that the Court now applies in resolving the instant petition.

The records disclose that in the early morning of September 21, 1977, the M/V Maria Efigenia XV, owned by private respondent Maria Efigenia Fishing Corporation, was navigating the waters near Fortune Island in Nasugbu, Batangas on its way to Navotas, Metro Manila when it collided with the vessel Petroparcel which at the time was owned by the Luzon Stevedoring Corporation (LSC).

After investigation was conducted by the Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro rendered a decision finding the Petroparcel at fault.  Based on this finding by the Board and after unsuccessful demands on petitioner,[7] private respondent sued the LSC and the Petroparcel captain, Edgardo Doruelo, before the then Court of First Instance of Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two pesos (P1,252.00) and the legal research fee of two pesos (P2.00).[8] In particular, private respondent prayed for an award of P692,680.00, allegedly representing the value of the fishing nets, boat equipment and cargoes of M/V Maria Efigenia XV, with interest at the legal rate plus 25% thereof as attorney’s fees.  Meanwhile, during the pendency of the case, petitioner PNOC Shipping and Transport

Corporation sought to be substituted in place of LSC as it had already acquired ownership of the Petroparcel.[9]

For its part, private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead for the recovery of the lost value of the hull of M/V Maria Efigenia XV.[10] Accordingly, in the amended complaint, private respondent averred that M/V Maria Efigenia XV had an actual value of P800,000.00 and that, after deducting the insurance payment of P200,000.00, the amount of P600,000.00 should likewise be claimed.  The amended complaint also alleged that inflation resulting from the devaluation of the Philippine peso had affected the replacement value of the hull of the vessel, its equipment and its lost cargoes, such that there should be a reasonable determination thereof.  Furthermore, on account of the sinking of the vessel, private respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven.[11]

Subsequently, the complaint was further amended to include petitioner as a defendant[12] which the lower court granted in its order of September 16, 1985.[13] After petitioner had filed its answer to the second amended complaint, on February 5, 1987, the lower court issued a pre-trial order[14] containing, among other things, a stipulations of facts, to wit:

“1.     On 21 September 1977, while the fishing boat `M/V MARIA EFIGENIA’ owned by plaintiff was navigating in the vicinity of Fortune Island in Nasugbu, Batangas, on its way to Navotas, Metro Manila, said fishing boat was hit by the LSCO tanker ‘Petroparcel’ causing the former to sink.

2.      The Board of Marine Inquiry conducted an investigation of this marine accident and on 21 November 1978, the Commandant of the Philippine Coast Guard, the Honorable Simeon N. Alejandro, rendered a decision finding the

cause of the accident to be the reckless and imprudent manner in which Edgardo Doruelo navigated the LSCO ‘Petroparcel’ and declared the latter vessel at fault.

3.      On 2 April 1978, defendant Luzon Stevedoring Corporation (LUSTEVECO), executed in favor of PNOC Shipping and Transport Corporation a Deed of Transfer involving several tankers, tugboats, barges and pumping stations, among which was the LSCO Petroparcel.

4.      On the same date on 2 April 1979 (sic), defendant PNOC STC again entered into an Agreement of Transfer with co-defendant Lusteveco whereby all the business properties and other assets appertaining to the tanker and bulk oil departments including the motor tanker LSCO Petroparcel of defendant Lusteveco were sold to PNOC STC.

5.      The aforesaid agreement stipulates, among others, that PNOC-STC assumes, without qualifications, all obligations arising from and by virtue of all rights it obtained over the LSCO `Petroparcel’.

6.      On 6 July 1979, another agreement between defendant LUSTEVECO and PNOC-STC was executed wherein Board of Marine Inquiry Case No. 332 (involving the sea accident of 21 September 1977) was specifically identified and assumed by the latter.

7.      On 23 June 1979, the decision of Board of Marine Inquiry

was affirmed by the Ministry of National Defense, in its decision dismissing the appeal of Capt. Edgardo Doruelo and Chief mate Anthony Estenzo of LSCO `Petroparcel’.

8.      LSCO `Petroparcel’ is presently owned and operated by PNOC-STC and likewise Capt. Edgardo Doruelo is still in their employ.

9.      As a result of the sinking of M/V Maria Efigenia caused by the reckless and imprudent manner in which LSCO Petroparcel was navigated by defendant Doruelo, plaintiff suffered actual damages by the loss of its fishing nets, boat equipments (sic) and cargoes, which went down with the ship when it sank the replacement value of which should be left to the sound discretion of this Honorable Court.”

After trial, the lower court[15] rendered on November 18, 1989 its decision disposing of Civil Case No. C-9457 as follows:

“WHEREFORE, and in view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendant PNOC Shipping & Transport Corporation, to pay the plaintiff:

a.       The sum of P6,438,048.00 representing the value of the fishing boat with interest from the date of the filing of the complaint at the rate of 6% per annum;

b.       The sum of P50,000.00 as and for attorney’s fees; and

c.       The costs of suit.

The counterclaim is hereby DISMISSED for lack of merit.  Likewise, the case against defendant Edgardo Doruelo is hereby DISMISSED, for lack of jurisdiction.

SO ORDERED.”

In arriving at the above disposition, the lower court cited the evidence presented by private respondent consisting of the testimony of its general manager and sole witness, Edilberto del Rosario.  Private respondent’s witness testified that M/V Maria Efigenia XV was owned by private respondent per Exhibit A, a certificate of ownership issued by the Philippine Coast Guard showing that M/V Maria Efigenia XV was a wooden motor boat constructed in 1965 with 128.23 gross tonnage.  According to him, at the time the vessel sank, it was then carrying 1,060 tubs (bañeras) of assorted fish the value of which was never recovered.  Also lost with the vessel were two cummins engines (250 horsepower), radar, pathometer and compass.  He further added that with the loss of his flagship vessel in his fishing fleet of fourteen (14) vessels, he was constrained to hire the services of counsel whom he paid P10,000 to handle the case at the Board of Marine Inquiry and P50,000.00 for commencing suit for damages in the lower court.

As to the award of P6,438,048.00 in actual damages, the lower court took into account the following pieces of documentary evidence that private respondent proffered during trial:

(a)     Exhibit A – certified xerox copy of the certificate of ownership of M/V Maria Efigenia XV;

(b)     Exhibit B – a document titled “Marine Protest” executed by Delfin Villarosa, Jr. on September 22, 1977 stating that as a result of the collision, the M/V Maria Efigenia

XVsustained a hole at its left side that caused it to sink with its cargo of 1,050 bañeras valued at P170,000.00;

(c)     Exhibit C – a quotation for the construction of a 95-footer trawler issued by Isidoro A. Magalong of I. A. Magalong Engineering and Construction on January 26, 1987 to Del Rosario showing that construction of such trawler would cost P2,250,000.00;

(d)     Exhibit D – pro forma invoice No. PSPI-05/87-NAV issued by E.D. Daclan of Power Systems, Incorporated on January 20, 1987 to Del Rosario showing that two (2) units of CUMMINS Marine Engine model N855-M, 195 bhp. at 1800 rpm. would cost P1,160,000.00;

(e)     Exhibit E – quotation of prices issued by Scan Marine Inc. on January 20, 1987 to Del Rosario showing that a unit of Furuno Compact Daylight Radar, Model FR-604D, would cost P100,000.00 while a unit of Furuno Color Video Sounder, Model FCV-501 would cost P45,000.00 so that the two units would cost P145,000.00;

(f)      Exhibit F – quotation of prices issued by Seafgear Sales, Inc. on January 21,

1987 to Del Rosario showing that two (2) rolls of nylon rope (5” cir. X 300fl.) would costP140,000.00; two (2) rolls of nylon rope (3” cir. X 240fl.), P42,750.00; one (1) binocular (7 x 50), P1,400.00, one (1) compass (6”), P4,000.00 and 50 pcs. of floats, P9,000.00 or a total of P197, 150.00;

(g)     Exhibit G – retainer agreement between Del Rosario and F. Sumulong Associates Law Offices stipulating an acceptance fee of P5,000.00, per appearance fee of P400.00, monthly retainer of P500.00, contingent fee of 20% of the total amount recovered and that attorney’s fee to be awarded by the court should be given to Del Rosario; and

(h)     Exhibit H – price quotation issued by Seafgear Sales, Inc. dated April 10, 1987 to Del Rosario showing the cost of poly nettings as: 50 rolls of 400/18 3kts. 100md x 100mtrs.,P70,000.00; 50 rolls of 400/18 5kts. 100md x 100mtrs., P81,500.00; 50 rolls of 400/18 8kts. 100md x 100mtrs., P116,000.00, and 50 rolls of 400/18 10kts. 100md x 100mtrs.,P146,500

and banera (tub) at P65.00 per piece or a total of P414,065.00

The lower court held that the prevailing replacement value of P6,438,048.00 of the fishing boat and all its equipment would regularly increase at 30% every year from the date the quotations were given.

On the other hand, the lower court noted that petitioner only presented Lorenzo Lazaro, senior estimator at PNOC Dockyard & Engineering Corporation, as sole witness and it did not bother at all to offer any documentary evidence to support its position.  Lazaro testified that the price quotations submitted by private respondent were “excessive” and that as an expert witness, he used the quotations of his suppliers in making his estimates.  However, he failed to present such quotations of prices from his suppliers, saying that he could not produce a breakdown of the costs of his estimates as it was “a sort of secret scheme.”  For this reason, the lower court concluded:

“Evidently, the quotation of prices submitted by the plaintiff relative to the replacement value of the fishing boat and its equipments in the tune of P6,438,048.00 which were lost due to the recklessness and imprudence of the herein defendants were not rebutted by the latter with sufficient evidence.  The defendants through their sole witness Lorenzo Lazaro relied heavily on said witness’ bare claim that the amount afore-said is excessive or bloated, but they did not bother at all to present any documentary evidence to substantiate such claim.  Evidence to be believed, must not only proceed from the mouth of the credible witness, but it must be credible in itself.  (Vda. de Bonifacio vs. B. L. T. Bus Co., Inc. L-26810, August 31, 1970).”

Aggrieved, petitioner filed a motion for the reconsideration of the lower court’s decision contending that: (1) the lower court erred in holding it liable for damages; that the lower court did not acquire jurisdiction over the case by paying only P1,252.00 as docket fee; (2) assuming that plaintiff was entitled to damages, the lower court erred in awarding an amount greater than that prayed for in the second amended complaint; and (3) the lower court erred when it failed to resolve the issues it had raised in its memorandum.[16] Petitioner likewise filed a supplemental motion for reconsideration expounding on whether the lower court acquired jurisdiction over the subject matter of the case despite therein plaintiff’s failure to pay the prescribed docket fee.[17]

On January 25, 1990, the lower court declined reconsideration for lack of merit.[18] Apparently not having received the order denying its motion for reconsideration, petitioner still filed a motion for leave to file a reply to private respondent’s opposition to said motion.[19] Hence, on February 12, 1990, the lower court denied said motion for leave to file a reply on the ground that by the issuance of the order of January 25, 1990, said motion had become moot and academic.[20]

Unsatisfied with the lower court’s decision, petitioner elevated the matter to the Court of Appeals which, however,  affirmed the same in toto on October 14, 1992.[21] On petitioner’s assertion that the award of P6,438,048.00 was not convincingly proved by competent and admissible evidence, the Court of Appeals ruled that it was not necessary to qualify Del Rosario as an expert witness because as the owner of the lost vessel, “it was well within his knowledge and competency to identify and determine the equipment installed and the cargoes loaded” on the vessel. Considering the documentary evidence presented as in the nature of market reports or quotations, trade journals, trade circulars and price lists, the Court of Appeals held, thus:

“Consequently, until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of

evidence, the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial court.  In fact, where the lower court is confronted with evidence which appears to be of doubtful admissibility, the judge should declare in favor of admissibility rather than of non-admissibility (The Collector of Palakadhari, 124 [1899], p. 43, cited in Francisco, Revised Rules of Court, Evidence, Volume VII, Part I, 1990 Edition, p. 18).  Trial courts are enjoined to observe the strict enforcement of the rules of evidence which crystallized through constant use and practice and are very useful and effective aids in the search for truth and for the effective administration of justice.  But in connection with evidence which may appear to be of doubtful relevancy or incompetency or admissibility, it is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but admitting them unless plainly irrelevant, immaterial or incompetent, for the reason that their rejection places them beyond the consideration of the court.  If they are thereafter found relevant or competent, can easily be remedied by completely discarding or ignoring them.  (Banaria vs. Banaria, et al., C.A. No. 4142, May 31, 1950; cited in Francisco, Supra).”  [Underscoring supplied].

Stressing that the alleged inadmissible documentary exhibits were never satisfactorily rebutted by appellant’s own sole witness in the person of Lorenzo Lazaro, the appellate court found that petitioner ironically situated itself in an “inconsistent posture by the fact that its own

witness, admittedly an expert one, heavily relies on the very same pieces of evidence (price quotations) appellant has so vigorously objected to as inadmissible evidence.”  Hence, it concluded:

“x x x.  The amount of P6,438,048.00 was duly established at the trial on the basis of appellee’s documentary exhibits (price quotations) which stood uncontroverted, and which already included the amount by way of adjustment as prayed for in the amended complaint.  There was therefore no need for appellee to amend the second amended complaint in so far as to the claim for damages is concerned to conform with the evidence presented at the trial.  The amount of P6,438,048.00 awarded is clearly within the relief prayed for in appellee’s second amended complaint.”

On the issue of lack of jurisdiction, the respondent court held that following the ruling in Sun Insurance Ltd. v. Asuncion,[22] the additional docket fee that may later on be declared as still owing the court may be enforced as a lien on the judgment.

Hence, the instant recourse.

In assailing the Court of Appeals’ decision, petitioner posits the view that the award of P6,438,048 as actual damages should have been in light of these considerations, namely: (1) the trial court did not base such award on the actual value of the vessel and its equipment at the time of loss in 1977; (2) there was no evidence on extraordinary inflation that would warrant an adjustment of the replacement cost of the lost vessel, equipment and cargo; (3) the value of the lost cargo and the prices quoted in respondent’s documentary evidence only amount to P4,336,215.00; (4) private respondent’s failure to adduce evidence to support its claim for unrealized profit and business opportunities; and (5) private

respondent’s failure to prove the extent and actual value of damages sustained as a result of the 1977 collision of the vessels.[23]

Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained.  They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose a penalty.[24] In actions based on torts or quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of.[25] There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses (daño emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante).[26] Thus:

“Where goods are destroyed by the wrongful act of the defendant the plaintiff is entitled to their value at the time of destruction, that is, normally, the sum of money which he would have to pay in the market for identical or essentially similar goods, plus in a proper case damages for the loss of use during the period before replacement.  In other words, in the case of profit-earning chattels, what has to be assessed is the value of the chattel to its owner as a going concern at the time and place of the loss, and this means, at least in the case of ships, that regard must be had to existing and pending engagements.x x x.

x x x. If the market value of the ship reflects the fact that it is in any case virtually certain of profitable employment, then nothing can be added to that value in respect of charters actually lost, for to do so would be pro tanto to compensate the plaintiff twice over.  On the other hand, if the ship is valued

without reference to its actual future engagements and only in the light of its profit-earning potentiality, then it may be necessary to add to the value thus assessed the anticipated profit on a charter or other engagement which it was unable to fulfill.  What the court has to ascertain in each case is the `capitalised value of the vessel as a profit-earning machine not in the abstract but in view of the actual circumstances,’ without, of course, taking into account considerations which were too remote at the time of the loss.”[27] [Underscoring supplied].

As stated at the outset, to enable an injured party to recover actual or compensatory damages, he is required to prove the actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available.[28] The burden of proof is on the party who would be defeated if no evidence would be presented on either side.  He must establish his case by a preponderance of evidence which means that the evidence, as a whole, adduced by one side is superior to that of the other. [29] In other words, damages cannot be presumed and courts, in making an award must point out specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne.[30]

In this case, actual damages were proven through the sole testimony of private respondent’s general manager and certain pieces of documentary evidence.  Except for Exhibit B where the value of the 1,050 bañeras of fish were pegged at their September 1977 value when the collision happened, the pieces of documentary evidence proffered by private respondent with respect to items and equipment lost show similar items and equipment with corresponding prices in early 1987 or approximately ten (10) years after the collision.  Noticeably, petitioner did not object

to the exhibits in terms of the time index for valuation of the lost goods and equipment.  In objecting to the same pieces of evidence, petitioner commented that these were not duly authenticated and that the witness (Del Rosario) did not have personal knowledge on the contents of the writings and neither was he an expert on the subjects thereof.[31] Clearly ignoring petitioner’s objections to the exhibits, the lower court admitted these pieces of evidence and gave them due weight to arrive at the award of P6,438,048.00 as actual damages.

The exhibits were presented ostensibly in the course of Del Rosario’s testimony.  Private respondent did not present any other witnesses especially those whose signatures appear in the price quotations that became the bases of the award. We hold, however, that the price quotations are ordinary private writings which under the Revised Rules of Court should have been proffered along with the testimony of the authors thereof.  Del Rosario could not have testified on the veracity of the contents of the writings even though he was the seasoned owner of a fishing fleet because he was not the one who issued the price quotations.  Section 36, Rule 130 of the Revised Rules of Court provides that a witness can testify only to those facts that he knows of his personal knowledge.

For this reason, Del Rosario’s claim that private respondent incurred losses in the total amount of P6,438,048.00 should be admitted with extreme caution considering that, because it was a bare assertion, it should be supported by independent evidence.  Moreover, because he was the owner of private respondent corporation[32] whatever testimony he would give with regard to the value of the lost vessel, its equipment and cargoes should be viewed in the light of his self-interest therein.  We agree with the Court of Appeals that his testimony as to the equipment installed and the cargoes loaded on the vessel should be given credence[33] considering his familiarity thereto.  However, we do not subscribe to the conclusion that his valuation of such equipment, cargo and the vessel itself should be accepted as gospel truth.[34] We must, therefore, examine the documentary evidence

presented to support Del Rosario’s claim as regards the amount of losses.

The price quotations presented as exhibits partake of the nature of hearsay evidence considering that the persons who issued them were not presented as witnesses.[35] Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. Hearsay evidence, whether objected to or not, has no probative value unless the proponent can show that the evidence falls within the exceptions to the hearsay evidence rule.[36] On this point, we believe that the exhibits do not fall under any of the exceptions provided under Sections 37 to 47 of Rule 130.[37]

It is true that one of the exceptions to the hearsay rule pertains to “commercial lists and the like” under Section 45, Rule 130 of the Revised Rules on Evidence.  In this respect, the Court of Appeals considered private respondent’s exhibits as “commercial lists.”  It added, however, that these exhibits should be admitted in evidence “until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of evidence” because “the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial court.”[38] Reference to Section 45, Rule 130, however, would show that the conclusion of the Court of Appeals on the matter was arbitrarily arrived at.  This rule states:

“Commercial lists and the like. – Evidence of statements of matters of interest to persons engaged in an occupation contained in a list, register, periodical, or other published compilation is admissible as tending to prove the truth of any relevant matter so stated if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them there.”

Under Section 45 of the aforesaid Rule, a document is a commercial list if:  (1) it  is a  statement of  matters of  interest  to persons engaged in an occupation; (2) such statement is contained in a list, register, periodical or other published compilation; (3) said compilation is published for the use of persons engaged in that occupation, and (4)  it is generally used and relied upon by persons in the same occupation.

Based on the above requisites, it is our considered view that Exhibits B, C, D, E, F and H[39] are not “commercial lists” for these do not belong to the category of “other published compilations” under Section 45 aforequoted.  Under the principle of ejusdem generis, “(w)here general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned.”[40] The exhibits mentioned are mere price quotations issued personally to Del Rosario who requested for them from dealers of equipment similar to the ones lost at the collision of the two vessels.  These are not published in any list, register, periodical or other compilation on the relevant subject matter.  Neither are these “market reports or quotations” within the purview of “commercial lists” as these are not “standard handbooks or periodicals, containing data of everyday professional need and relied upon in the work of the occupation.”[41] These are simply letters responding to the queries of Del Rosario.  Thus, take for example Exhibit D which reads:

“January 20, 1987

PROFORMA INVOICE NO. PSPI-05/87-NAV

MARIA EFIGINIA FISHING CORPORATION

Navotas, Metro Manila

Attention:   MR. EDDIE DEL ROSARIO

Gentlemen:

In accordance to your request, we are pleased to quote our Cummins Marine Engine, to wit.

Two (2) units CUMMINS Marine Engine model N855-M, 195 bhp.

at 1800 rpm., 6-cylinder in-line, 4-stroke cycle, natural aspirated, 5 ½ in. x 6 in. bore and stroke, 855 cu. In. displacement, keel-cooled, electric starting coupled with Twin-Disc Marine gearbox model MG-509, 4.5:1 reduction ratio, includes oil cooler, companion flange, manual and standard accessories as per attached sheet.

Price FOB Manila - - - - - - - - - - - - - - - P   580,000.00/unitTotal FOB Manila - - - - - - - - - - - - - - - P 1,160,000.00

                                                                    v v v v v v v v v

T E R M S    :            CASH

DELIVERY   :           60-90 days from date of order.

VALIDITY     :          Subject to our final confirmation.

WARRANTY :          One (1) full year against factory defect.

Very truly yours,

POWER SYSTEMS, INC.

(Sgd.)E. D. Daclan”

To be sure, letters and telegrams are admissible in evidence but these are, however, subject to the general principles of evidence and to various rules relating to documentary evidence.[42]Hence, in one case, it was held that a letter from an automobile dealer offering an allowance for an automobile upon purchase of a new automobile after repairs had been completed, was not a “price current” or “commercial list” within the statute which made such items presumptive evidence of the value of the article specified therein.  The letter was not admissible in evidence as a “commercial list” even though the clerk of the dealer testified that he had written the letter in due course of business upon instructions of the dealer.[43]

But even on the theory that the Court of Appeals correctly ruled on the admissibility of those letters or communications when it held that unless “plainly irrelevant, immaterial or incompetent,” evidence should better be admitted rather than rejected on “doubtful or technical grounds,”[44] the same pieces of evidence, however, should not have been given probative weight.  This is a distinction we wish to point out.  Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to considered at all.[45] On the other hand, the probative value of

evidence refers to the question of whether or not it proves an issue.[46] Thus, a letter may be offered in evidence and admitted as such but its evidentiary weight depends upon the observance of the rules on evidence.  Accordingly, the author of the letter should be presented as witness to provide the other party to the litigation the opportunity to question him on the contents of the letter. Being mere hearsay evidence, failure to present the author of the letter renders its contents suspect.  As earlier stated, hearsay evidence, whether objected to or not, has no probative value.  Thus:

“The courts differ as to the weight to be given to hearsay evidence admitted without objection.  Some hold that when hearsay has been admitted without objection, the same may be considered as any other properly admitted testimony.  Others maintain that it is entitled to no more consideration than if it had been excluded.

The rule prevailing in this jurisdiction is the latter one.  Our Supreme Court held that although the question of admissibility of evidence can not be raised for the first time on appeal, yet if the evidence is hearsay it has no probative value and should be disregarded whether objected to or not.  `If no objection is made’ – quoting Jones on Evidence - `it (hearsay) becomes evidence by reason of the want of such objection even though its admission does not confer upon it any new attribute in point of weight.  Its nature and quality remain the same, so far as its intrinsic weakness and incompetency to satisfy the mind are concerned, and as opposed to

direct primary evidence, the latter always prevails.

The failure of the defense counsel to object to the presentation of incompetent evidence, like hearsay evidence or evidence that violates the rules of res inter alios acta, or his failure to ask for the striking out of the same does not give such evidence any probative value.  But admissibility of evidence should not be equated with weight of evidence.  Hearsay evidence whether objected to or not has no probative value.”[47]

Accordingly, as stated at the outset, damages may not be awarded on the basis of hearsay evidence.[48]

Nonetheless, the non-admissibility of said exhibits does not mean that it totally deprives private respondent of any redress for the loss of its vessel.  This is because in Lufthansa German Airlines v. Court of Appeals,[49] the Court said:

“In the absence of competent proof on the actual damage suffered, private respondent is `entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered.” [Underscoring supplied].

Nominal damages are awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law, and quasi-delicts, or in every case where property right has been invaded.[50] Under Article 2223 of the Civil Code, “(t)he adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the

parties to the suit, or their respective heirs and assigns.”

Actually, nominal damages are damages in name only and not in fact.  Where these are allowed, they are not treated as an equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury.[51] However, the amount to be awarded as nominal damages shall be equal or at least commensurate to the injury sustained by private respondent considering the concept and purpose of such damages.[52] The amount of nominal damages to be awarded may also depend on certain special reasons extant in the case.[53]

Applying now such principles to the instant case, we have on record the fact that petitioner’s vessel Petroparcel was at fault as well as private respondent’s complaint claiming the amount ofP692,680.00 representing the fishing nets, boat equipment and cargoes that sunk with the M/V Maria Efigenia XV.  In its amended complaint, private respondent alleged that the vessel had an actual value of P800,000.00 but it had been paid insurance in the amount of P200,000.00 and, therefore, it claimed only the amount of P600,000.00.  Ordinarily, the receipt of insurance payments should diminish the total value of the vessel quoted by private respondent in his complaint considering that such payment is causally related to the loss for which it claimed compensation.  This Court believes that such allegations in the original and amended complaints can be the basis for determination of a fair amount of nominal damages inasmuch as a complaint alleges the ultimate facts constituting the plaintiff's cause of action.[54] Private respondent should be bound by its allegations on the amount of its claims.

With respect to petitioner’s contention that the lower court did not acquire jurisdiction over the amended complaint increasing the amount of damages claimed to P600,000.00, we agree with the Court of Appeals that the lower court acquired jurisdiction over the case when private respondent paid the docket fee corresponding to its claim in its original complaint.  Its failure to pay the docket fee

corresponding to its increased claim for damages under the amended complaint should not be considered as having curtailed the lower court’s jurisdiction.  Pursuant to the ruling inSun Insurance Office, Ltd. (SIOL) v. Asuncion,[55] the unpaid docket fee should be considered as a lien on the judgment even though private respondent specified the amount of P600,000.00 as its claim for damages in its amended complaint.

Moreover, we note that petitioner did not question at all the jurisdiction of the lower court on the ground of insufficient docket fees in its answers to both the amended complaint and the second amended complaint.  It did so only in its motion for reconsideration of the decision of the lower court after it had received an adverse decision.  As this Court held in Pantranco North Express, Inc. v. Court of Appeals,[56] participation in all stages of the case before the trial court, that included invoking its authority in asking for affirmative relief, effectively barred petitioner by estoppel from challenging the court’s jurisdiction.  Notably, from the time it filed its answer to the second amended complaint on April 16, 1985,[57] petitioner did not question the lower court’s jurisdiction.  It was only on December 29, 1989[58] when it filed its motion for reconsideration of the lower court’s decision that petitioner raised the question of the lower court’s lack of jurisdiction. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction.

WHEREFORE, the challenged decision of the Court of Appeals dated October 14, 1992 in CA-G. R. CV No. 26680 affirming that of the Regional Trial Court of Caloocan City, Branch 121, is hereby MODIFIED insofar as it awarded actual damages to private respondent Maria Efigenia Fishing Corporation in the amount of  P6,438,048.00 for lack of evidentiary bases therefor. Considering the fact, however, that: (1) technically petitioner sustained injury but which, unfortunately, was not adequately and properly proved, and (2) this case has dragged on for almost two decades, we believe that an award of Two Million (P2,000,000.00)[59] in favor of private respondent as and for nominal damages is in order.

No pronouncement as to costs.

SO ORDERED.

[G.R. Nos. 118441-42. January 18, 2000]

ARMANDO JOSE y PAZ and MANILA CENTRAL BUS LINES (MCL), represented by its General Manager MR. DANILO T. DE DIOS, petitioners vs. COURT OF APPEALS, ROMMEL ABRAHAM, represented by his father FELIXBERTO ABRAHAM, JOSE MACARUBO and MERCEDES MACARUBO, respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision[1] of the Court of Appeals, reversing the decision of the Regional Trial Court, Branch 172, Valenzuela, Metro Manila and ordering petitioners to pay damages for injuries to persons and damage to property as a result of a vehicular accident.

The facts are as follows:

Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a public utility bus (hereafter referred to as Bus 203) with plate number NVR-III-TB-PIL and body number 203. Bus 203 is owned by the Metro Manila Transit Corporation and is insured with the Government Service Insurance System.

On February 22, 1985, at around six o’clock in the morning, Bus 203, then driven by petitioner Armando Jose, collided with a red Ford Escort driven by John Macarubo on MacArthur Highway, in Marulas, Valenzuela, Metro Manila. Bus 203 was bound for Muntinlupa, Rizal, while the Ford Escort was headed towards Malanday, Valenzuela on the opposite lane. As a result of the collision, the left side of the Ford Escort’s hood was severely damaged while its driver, John

Macarubo, and its lone passenger, private respondent Rommel Abraham, were seriously injured. The driver and conductress of Bus 203 rushed Macarubo and Abraham to the nearby Fatima Hospital where Macarubo lapsed into a coma. Despite surgery, Macarubo failed to recover and died five days later. Abraham survived, but he became blind on the left eye which had to be removed. In addition, he sustained a fracture on the forehead and multiple lacerations on the face, which caused him to be hospitalized for a week.

On March 26, 1985, Rommel Abraham, represented by his father, Felixberto, instituted Civil Case No. 2206-V-85 for damages against petitioners MCL and Armando Jose in the Regional Trial Court, Branch 172, Valenzuela.

On July 17, 1986, the spouses Jose and Mercedes Macarubo, parents of the deceased John Macarubo, filed their own suit for damages in the same trial court, where it was docketed as Civil Case No. 2428-V-86, against MCL alone. On the other hand, MCL filed a third-party complaint against Juanita Macarubo, registered owner of the Ford Escort on the theory that John Macarubo was negligent and that he was the "authorized driver" of Juanita Macarubo. The latter, in turn, filed a counterclaim for damages against MCL for the damage to her car. Civil Case No. 2206-V-85 and Civil Case No. 2428-V-86 were consolidated and later tried jointly. The facts, as found by the trial court, are as follows: Esmsc

In Civil Case No. 2206-V-85, the Court heard the testimonies that during the night previous to the accident of February 22, 1985 at 6:15 a.m., Rommel Abraham and John Macarubo were at a party. There was

therefore, no sleep for them, notwithstanding testimony to the contrary and the service of drinks cannot be totally discounted. After the party at 11 p.m., while both Rommel and John were enroute home to Valenzuela from La Loma, the car encountered mechanical trouble and had to be repaired as its cross-joint was detached. The defect of a cross-joint is not minor and repair thereof would as testified to by Rommel lasted up to early dawn and the car started to run only after five o’clock in the morning. With lack of sleep, the strains of a party still on their bodies, and the attention to the repair coupled with the wait until the car was ready to run, are potentials in a driver for possible accident. The accident happened at 6:15 a.m. when the physical and mental condition of the driver John Macarubo was as expected not too fit for the driving as he could not anymore control the car. The desire to be home quick for the much needed sleep could have prompted him to overtake the preceding vehicle.

Indeed the pictures taken of the two vehicles (Exh. 1,2 and 3) will clearly show that the MCL bus was at its proper lane and not in an overtaking position while the car driven by John Macarubo was positioned in a diagonal manner and crossed the line of the MCL, which is an indication of an overtaking act. If it were the bus that was

overtaking at the time, the car would have been thrown farther away from the point of the impact.

The court is convinced of the close supervision and control of MCL over their drivers, and its exercise of due diligence in seeing to it that no recklessness is committed by its employees, drivers especially, from the unrebutted testimonies of Cesar Cainglet.

The Court noted the respective damages of the two vehicles especially the point of the impact. From these damages as shown by the picture, it can be clearly deduced which vehicle did the bumping. It was the car driven by John Macarubo that hit the MCL which was on its right and correct lane.[2]

Based on the foregoing facts, the trial court rendered judgment on September 28, 1989, dismissing both civil cases against MCL and ruling favorably on its third-party complaint against Juanita Macarubo, ordering the latter to pay MCL P54,232.12 as actual damages, P24,000.00 for lost income, and P10,000.00 as attorney’s fees.

Rommel Abraham, the Macarubo spouses, and third-party defendant Juanita Macarubo then appealed to the Court of Appeals which, on December 21, 1994, rendered a decision reversing the decision of the trial court. It held (1) that the trial court erred in disregarding Rommel Abraham’s uncontroverted testimony that the collision was due to the fault of the driver of Bus 203; (2) that the trial court erred in relying on photographs (Exhs. 1-3) which had been taken an hour after the collision as

within that span of time, the positions of the vehicles could have been changed; (3) that the photographs do not show that the Ford Escort was overtaking another vehicle when the accident happened and that John Macarubo, its driver, was negligent; and (4) that MCL failed to make a satisfactory showing that it exercised due diligence in the selection and supervision of its driver Armando Jose. The dispositive portion of the decision reads: Jksm

WHEREFORE, the appealed decision is hereby REVERSED and the defendants-appellees MCL and Armando Jose are adjudged to pay jointly and severally:

1. Rommel Abraham, represented by his father Felixberto Abraham:

(a) P37,576.47 as actual damages;(b) P50,000.00 as compensatory damages;(c) P15,000.00 as moral damages;(d) P5,000.0

0 as exemplary damages; and(e) P10,000.00 as attorney’s fees.

2. The heirs of John Macarubo:

(a) P50,000.00 as indemnity for his death;(b) P50,000.00 as moral damages;(c) P10,000.00 as exemplary damages; and(d) P10,000.00 as attorney’s fees.

Costs agains

t the appellees.

SO ORDERED.

Hence, this petition for review on certiorari. Petitioners MCL and Armando Jose raise four issues which boil down to the question whether it was the driver of Bus 203 or that of the Ford Escort who was at fault for the collision of the two vehicles.

It is well-settled that a question of fact is to be determined by the evidence offered to support the particular contention.[3] In the proceedings below, petitioners relied mainly on photographs, identified in evidence as Exhibits 1 to 3, showing the position of the two vehicles after the collision. On the other hand, private respondents offered the testimony of Rommel Abraham to the effect that the collision took place because Bus 203 invaded their lane.[4]

The trial court was justified in relying on the photographs rather than on Rommel Abraham’s testimony which was obviously biased and unsupported by any other evidence. Physical evidence is a mute but an eloquent manifestation of truth, and it ranks high in our hierarchy of trustworthy evidence.[5] In criminal cases such as murder or rape where the accused stands to lose his liberty if found guilty, this Court has, in many occasions, relied principally upon physical evidence in ascertaining the truth. In People v. Vasquez,[6] where the physical evidence on record ran counter to the testimonial evidence of the prosecution witnesses, we ruled that the physical evidence should prevail.[7] Esm

In this case, the positions of the two vehicles, as shown in the photographs (Exhs. 1 to 3) taken by MCL line inspector Jesus Custodio about an hour and fifteen minutes after the collision, disputes Abraham’s self-serving testimony that the two vehicles collided because Bus 203 invaded the lane of the Ford Escort and clearly shows that the case is exactly the opposite of what he claimed happened. Contrary to Abraham’s testimony, the photographs show quite clearly that Bus 203 was in its proper lane and that it was the Ford Escort which usurped a portion of the opposite lane. The three photographs show the Ford Escort positioned diagonally on the highway, with its two front wheels occupying Bus 203’s lane. As shown by the photograph marked Exhibit 3, the portion of MacArthur Highway where the collision took place is marked by a groove which serves as the center line separating the right from the left lanes. The photograph shows that the left side of Bus 203 is about a few feet from the center line and that the bus is positioned parallel thereto. This negates the claim that Bus 203 was overtaking another vehicle and, in so doing, encroached on the opposite lane occupied by the Ford Escort.

Indeed, Bus 203 could not have been overtaking another vehicle when the collision happened. It was filled with passengers,[8] and it was considerably heavier and larger than the Ford Escort. If it was overtaking another vehicle, it necessarily had to accelerate. The acceleration of its speed and its heavy load would have greatly increased its momentum so that the impact of the collision would have thrown the smaller and lighter Ford Escort to a considerable distance from the point of impact. Exhibit 1, however, shows that the Ford Escort’s smashed hood was only about one or two meters from Bus 203’s damaged left front. If there had been a great impact, such as would be the case if Bus 203 had been

running at a high speed, the two vehicles should have ended up far from each other.

In discrediting the physical evidence, the appellate court made the following observations:

We cannot believe that it was the car which overtook another vehicle and proceeded to the lane occupied by the bus. There was a traffic jam on the "bus lane" while traffic was light on the "car lane." Indeed, we find it inconceivable that the car, occupying the lane without any traffic, would overtake and traverse a heavy traffic lane.[9] (Underscoring supplied.)

This is correct. However, the fact remains that when the Ford Escort finally came to a stop, it encroached on the opposite lane occupied by Bus 203.

Significantly, Rommel Abraham testified that on February 21, 1985, the night before the accident, he and John Macarubo went to a friend’s house in La Loma where they stayed until 11 p.m.[10] Abraham’s explanation as to why they did not reach Valenzuela until six o’clock in the morning of the next day when the accident happened indicates that the Ford Escort careened and slammed against Bus 203 because of a mechanical defect. Abraham told the court:[11] Esmmis

ATTY. RESPICIO:

Q: I am sorry, Your honor. After leaving Arnel’s place where did you go?

ROMMEL ABRAHAM

A: We proceeded in going home, sir.

Q: You were on your way home?

A: Yes, sir.

Q: What time did you . . . I will reform the question. You met the accident at about 6:00 o’clock the next day, 6:00 o’clock in the morning the next day, did it take you long to reach BBB?

A: Our car had a mechanical trouble somewhere at 2nd Avenue, sir.

Q: What kind of trouble?

A: The cross-joint were detached, sir.

Q: Are you familiar with cars?

A: A little, sir.

COURT:

Q: What time was that when you have this cross-joint problem?

A: About 12:00 o’clock perhaps, sir.

Q: What happened to the cross joint?

A: It was cut, ma’am.

Q: You were able to repair that cross-joint 12:00 o’clock and you were able to run and reached this place of accident at 6:00 o’clock?

A: No, we we’re not able to get spare parts, ma’am.

Q: Why were you able to reach this place at 6:00 o’clock?

A: We went home and look for the spare parts in their house, ma’am.

Q: House of Macarubo?

A: Yes, ma’am.

Q: So you were able to repair the car?

A: Yes, ma’am.

Q: What time were you able to repair the car?

A: Around 5:00 o’clock in the morning, sir.

Q: You were able to replace the cross-joint or what?

A: Ginawaan ng paraan, ma’am.

Q: How?

A: The cross-joint were welded in order to enable us to go home, ma’am.

Q: No spare parts was replaced? Msesm

A: No, ma’am.

Thus, as Rommel Abraham himself admitted, the Ford Escort’s rear cross-joint was cut/detached. This mechanism controls the movement of the rear tires. Since trouble in the cross-joint affects a car’s maneuverability, the matter should have been treated as a serious mechanical problem. In this case, when asked if they were able to repair the cross-joint, Abraham said "Ginawaan ng

paraan, ma’am," by simply welding them just so they could reach home. His testimony indicates that the rear cross-joint was hastily repaired and that, at most, the kind of repairs made thereon were merely temporary; just enough to enable Abraham and Macarubo to reach home. Given such fact, the likelihood is that while the Ford Escort might not have been overtaking another vehicle, it actually strayed into the bus’ lane because of the defective cross-joint, causing its driver to lose control of the vehicle.

The appellate court refused to give credence to the physical evidence on the ground that the photographs were taken an hour after the collision and that within such span of time the bus could have been moved because there was no showing that the driver left the scene of the accident. This is not correct. Constancia Gerolada, Bus 203’s conductress, testified that, immediately after the collision, she and bus driver, petitioner Armando Jose, took the injured driver and passenger of the Ford Escort to the Fatima Hospital.[12] This fact is not disputed by private respondents.

Rommel Abraham mentioned in his appellant’s brief in the appellate court a sketch of the scene of the accident allegedly prepared by one Patrolman Kalale, which shows Bus 203 to be occupying the Ford Escort’s lane. However, the records of this case do not show that such a sketch was ever presented in evidence in the trial court or that Patrolman Kalale was ever presented as a witness to testify on the sketch allegedly prepared by him. Under Rule 132, §3 of the Rules on Evidence, courts cannot consider any evidence unless formally offered by a party.

Finally, the appellate court also ruled that MCL failed to make a satisfactory showing that it exercised the diligence of a good father of a family in the selection and supervision of

its bus driver, Armando Jose.[13] Under the circumstances of this case, we hold that proof of due diligence in the selection and supervision of employees is not required.

The Civil Code provides in pertinent parts:

Art. 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.

Art. 2180. The obligation imposed in Art. 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible. Esmso

. . . .

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.

. . . .

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.

Thus, the responsibility of employers is premised upon the presumption of negligence

of their employees. As held in Poblete v. Fabros:[14]

[I]t is such a firmly established principle, as to have virtually formed part of the law itself, that the negligence of the employee gives rise to the presumption of negligence on the part of the employer. This is the presumed negligence in the selection and supervision of the employee. The theory of presumed negligence, in contrast with the American doctrine of respondent superior, where the negligence of the employee is conclusively presumed to be the negligence of the employer, is clearly deducible from the last paragraph of Article 2180 of the Civil Code which provides that the responsibility therein mentioned shall cease if the employers prove that they observed all the diligence of a good father of a family to prevent damages (12 Manresa, 657; Balica vs. Litonjua and Leynes, 30 Phil. 624; Cangco vs. Manila Railroad Co., 30 Phil. 768), as observed in the same cases just cited.

Therefore, before the presumption of the employer’s negligence in the selection and supervision of its employees can arise, the negligence of the employee must first be established. While the allegations of negligence against the employee and that of an employer-employee relation in the complaint are enough to make out a case of quasi-delict under Art. 2180 of the Civil Code, the failure to prove the employee’s negligence during the trial is fatal to proving the employer’s vicarious liability. In this case,

private respondents failed to prove their allegation of negligence against driver Armando Jose who, in fact, was acquitted in the case for criminal negligence arising from the same incident.[15]

For the foregoing reasons, we hold that the appellate court erred in holding petitioners liable to private respondents. The next question then is whether, as the trial court held, private respondent Juanita Macarubo is liable to petitioners.

Article 2180 of the Civil Code makes the persons specified therein responsible for the quasi-delicts of others. The burden is upon MCL to prove that Juanita Macarubo is one of those specified persons who are vicariously liable for the negligence of the deceased John Macarubo. Exsm

In its third-party complaint, MCL alleged that Juanita Macarubo was the registered owner of the Ford Escort car and that John Macarubo was the "authorized driver" of the car.[16] Nowhere was it alleged that John Macarubo was the son, ward, employee or pupil of private respondent Juanita Macarubo so as to make the latter vicariously liable for the negligence of John Macarubo. The allegation that John Macarubo was "the authorized driver" of the Ford Escort is not equivalent to an allegation that he was an employee of Juanita Macarubo. That John Macarubo was the "authorized driver" of the car simply means that he drove the Ford Escort with the permission of Juanita Macarubo.

Nor did MCL present any evidence to prove that Juanita Macarubo was the employer of John Macarubo or that she is in any way liable for John Macarubo’s negligence under Art. 2180 of the Civil Code. For failure to discharge its burden, MCL’s third-party complaint should be dismissed.

WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaints filed in Civil Cases Nos. 2206-V-85 and 24428-V-86 against Manila Central Bus Lines and Armando Jose, as well as the third-party complaint filed in Civil Case No. 2206-V-85 against Juanita Macarubo, are hereby DISMISSED.

SO ORDERED.

G.R. No. L-19407           November 23, 1966

JUANA SOBERANO and JOSE B. SOBERANO, plaintiffs-appellants, vs.MANILA RAILROAD COMPANY, through the Acting General Manager, Colonel Salvador T. Villa; THE BENGUET AUTO LINE, through the Superintendent, Mr. Casiano Rivera; and SANTIAGO CACCAM, Driver,defendants-appellees.

CASTRO, J.:

This is an appeal, purely on questions of law, from a decision of the Court of First Instance of Baguio City, ordering the defendant Manila Railroad Company to pay the plaintiffs Juana Soberano and her husband Jose Soberano the sum of P5,070.60, with legal interest from June 6, 1956, the date of the filing of the complaint, and to pay the costs.

In the morning of March 8, 1955 in Cabugao, Ilocos Sur, Juana Soberano boarded bus No. 155, with plate No. TPU-5994, of the Benguet Auto Line (BAL), a subsidiary of the Manila Railroad Co. (MRR),1 driven by Santiago Caccam, bound for Baguio City. In that trip, Juana brought with her 3,024 chicken eggs to be sold in Baguio City, and some personal belongings which she needed in that trip. About three kilometers away from Baguio City, along the Naguilian road, the bus hit a stone embankment, causing it to fall into a 65-foot deep precipice, resulting in death to two of its passengers and serious physical injuries to Juana and loss and destruction of all her belongings.

From the scene of the accident, Juana was brought to the Baguio General Hospital. Radiologist Dr. Hector Lopez after examining her injuries, certified that she sustained comminuted fracture in the left mandible near the articulation, cracked fracture in the right temporal bone, crushed fractures, both scapular, and fracture in the 2nd, 3rd and 4th ribs. She was confined in that hospital until April 14, 1955, when she was transferred to the National Orthopedic Hospital,

whereat she stayed until June 6, 1955 when she was discharged. She was also treated by Dr. Luis Martinez of the V. Luna Hospital, and Dr. J.V. de los Santos, both orthopedists, and late by Dr. J. O. Floirendo, an EENT specialist, for "visual and other defects."

Santiago Caccam was thereafter charged in the Court of First Instance of Baguio City with the crime of double homicide and serious physical injuries thru reckless imprudence. He pleaded guilty to the crime of double homicide and serious physical injuries thru simple imprudence and was sentenced accordingly. Juana Soberano did not intervene in the criminal case because she filed a formal reservation to institute a separate civil action for damages and indemnity against the MRR and the BAL.

Because of the loss of the eggs and the destruction of the personal effects that Juana brought with her in that trip, Jose Soberano, her husband, demanded from the defendant companies the value thereof amounting to P370.66 (exh. C-3), of which sum the MRR paid P300 (exh. 2). The MRR also paid the daily expenses, allowances, subsistence, hospitalization, medical fees and medicines of Juana Soberano, as well as the service fees of her caretaker. The MRR has paid a total sum of P4,219 (exhs. 3 & 4). Later the MRR offered to settle the case extrajudicially, tendering to the Soberanos the additional sum of P5,000. The offer was rejected, and the Soberanos filed the present action against the defendant companies and Caccam, to recover from them damages in the total sum of P76,757.76.2 The defendant companies in due time filed their answer to the complaint with counterclaim for damages by way of attorney's fees, and praying that the complaint against them be dismissed, or, in the alternative, that the court approve their offer of settlement. The Soberanos filed a reply to the counterclaim and prayed for its dismissal.

After due trial, the lower court rendered the decision appealed from, dismissing at the same time the complaint against Caccam. The Soberanos moved to have the decision reconsidered. The motion for reconsideration was denied; hence the present recourse.

The nine errors imputed by the Soberanos to the lower court actually pose only two basic issues, namely, whether the dismissal of the complaint against Caccam is proper, and whether the amount of damages awarded is adequate.

Upon the first issue it is the contention of the Soberanos that the lower court, instead of dismissing their complaint against Caccam, should have priorly declared him in default for failure to file an answer to

the complaint. It is true that Caccam did not file any answer to the complaint; but it is also true that the plaintiffs did not move to declare him in default. And no default order may be issued against a defendant who fails to file a timely answer to a complaint except "upon motion of the plaintiff" (sec. 6, Rule 35, old Rules of Court, now sec. 1, Rule 18, Revised Rules of Court), and a court cannot issue a default order motu proprio (Viacrucis, et al. vs. Estenzo, etc., et al., L-18457, June 30, 1962). In spite of the lack of a formal motion to secure a default order against Caccam, however, the Soberanos contend that at the hearing held on July 11, 1959, their counsel, Atty. Marcos Vega, before closing his evidence, manifested to the lower court that because Caccam failed to file an answer to the complaint, he should "be declared in default and that we be allowed to present evidence against him in accordance with our complaint." This manifestation would nevertheless not have precluded the dismissal of the complaint against Caccam. In resolving this manifestation, the lower court asked Vega upon what basis the complaint is predicated, whether on culpa contractual or culpa aquiliana. Vega at first said, "It can be taken as both." But when the lower court pointedly declared that it "cannot allow you or give you both remedies," said counsel replied that the complaint is predicated upon culpa contractual. Because of this reply, the lower court ruled that the Soberanos cannot go against Caccam, because he cannot be held liable on culpa contractual. Vega was given another chance to make a choice, but he finally decided to proceed on the basis of "culpa contractual because we cannot get anything from Caccam", adding that we are ready to present evidence to sustain our allegations against Santiago Caccam, we will close because moral damages against him cannot be recovered just the same."

That the complaint is in fact predicated on culpa contractual can be seen front a perusal thereof. While it names three defendants, the MRR the BAL, and Santiago Caccam, the prayer thereof shows that the action is directed against the first two only, "to declare the defendant companies Manila Railroad Company and Benguet Auto Line solidarily liable." And although paragraph 11 of the complaint recites that the incident was "due to the negligence and reckless imprudence of the defendant driver Santiago Caccam," it is significant that there is no prayer for declaration of liability against Caccam.

The complaint against Caccam was therefore properly dismissed. He was not a party to the contract; he was a mere employee of the BAL. The parties to that contract are Juana Soberano, the passenger, and the MRR and its subsidiary, the BAL, the bus owner and operator, respectively; and consequent to the inability of the defendant companies to carry Juana Soberano

and her baggage and personal effects securely and safely to her destination as imposed by law (art. 1733, in relation to arts. 1736 and 1755, N.C.C.), their liability to her becomes direct and immediate.

We now come to the question of damages.

The Soberanos initially contend that the lower court erred in disallowing their claim of P200, representing the expenses of Juana Soberano in attending as a witness in the criminal case and attorney's fees incurred in connection therewith. This claim was correctly denied by the lower court, because these expenses were properly taxable in the criminal case. It may be argued that the Soberanos could not have recovered this sum in the criminal case because Juana Soberano expressly filed a formal reservation to institute a separate civil action for damages, but such reservation did not preserve whatever rights they had against Caccam on the basis of the latter's imprudence. The reservation is ineffective as to Caccam as it did not include him among those against whom their rights had been reserved. And the Soberanos not having intervened in the criminal case, this claim must be considered as having been impliedly adjudicated in the criminal case, and cannot therefore be ventilated in the present action.

The Soberanos next contend that the lower court erred in denying their claim for moral damages in the sum of P15,000, for the physical suffering, mental anguish, serious anxiety and fright they suffered as a consequence of the mishap. The lower court denied this claim on the strength of the oft-reiterated ruling of this Court that moral damages cannot be recovered against the employer in actions based on a breach of contract of carriage in the absence of malice, fraud, or bad faith.

The lower court rightly denied the claim for moral damages as far as Jose Soberano is concerned. In case of physical injuries, moral damages are recoverable only by the party injured and not by his next of kin, unless there is express statutory provision to the contrary (Strebel v. Figueras, L-4722, Dec. 29, 1954; Araneta et al. v. Arreglado, et al., L-11394, Sept. 9, 1958). In this case it was Juana Soberano, not her husband Jose, who sustained the bodily injuries.

With respect to the claim of Juana Soberano for moral damages, the rule is well-settled in this jurisdiction that in cases of breach of contract of carriage, moral damages are recoverable only "where the defendant has acted fraudulently or in bad faith" (art. 2220, N.C.C.), and the terms fraud and bad faith have reference to "wanton, reckless, oppressive, malevolent conduct", or, in the very least, to

"negligence so gross as to amount to malice." (Fores Miranda, L-12163, March 4, 1959; Necesito, etc. v. Paras,et al., L-10605-10606, June 30, 1958).

To prove malice and bad faith on the part of the defendant companies, the Soberanos aver that the said defendants intentionally omitted the name of Juana as one of the offended parties in the information in criminal case 1086, and that her name was included therein only upon the intervention of the Soberanos themselves; that the defendant companies prevailed upon Caccam to plead guilty to the lesser crime of double homicide and serious physical injuries thru simple imprudence, purposely to prevent the introduction of evidence of gross negligence amounting to malice against the said companies; that the BAL physician, Dr. Nievera, disowned having been an attending physician of Juana Soberano, and, together with MRR physician Dr. Salvador, suppressed the introduction of the X-ray plates takenof Juana as evidence to prove the extent of the injuries suffered by the latter; and that the defendant companies exerted undue influence upon Dr. Fernandez, who treated Juana's dental injuries, not to testify to such matters or identify a medical certificate issued by him, describing the dental injuries suffered by Juana. These incidents, even if true, cannot be considered as acts committed fraudulently or in bad faith by the defendant companies in the operation of their transportation business which directly resulted in the mishap that caused the injuries to Juana. Moreover, the allegation in paragraph 11 of the complaint that the incident was "due to the negligence and reckless imprudence of the defendant driver Santiago Caccam", does notper se justify an inference of malice or bad faith on the part of the defendant companies (Rex Taxicab Co. v. Bautista, et al., L-15392, Sept. 30, 1962; Cachero v. Manila Yellow Taxicab Co., Inc., L-8721, May 23, 1957), for fraud, malice, or bad faith must be proved to support a claim for moral damages if only physical injuries are sustained (Lira vs. Mercado, L-13358, Sept. 29, 1961).

The absence of fraud, malice, or bad faith on the part of the defendant companies justifies the denial of Juana Soberano's claim for moral damages as well as the denial of the claim for exemplary damages (art. 2232, N.C.C.).

The third claim — for attorney's fees — was also properly denied by the lower court. The Soberanos aver that they were obliged to file a separate civil action for damages against the defendant companies. This claim is predicated upon paragraphs (2) and (5) of article 2208 of the New Civil Code, which provide that attorney's fees and expenses of litigation may be recovered when the defendant's act or omission has compelled the plaintiff to litigate with third persons or

incur expenses to protect his interest, or when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim. It will be observed that the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5,000. The Soberanos, however, rejected the offer and proceeded to court to recover damages in the total sum of P76,757.76. It was not, therefore, the defendant companies that compelled the Soberanos to litigate, or to incur expenses in connection with the litigation instituted by them. The Soberanos went to court after rejecting the defendant companies' offer of settlement. The latter can not likewise be considered to have acted in gross and evident bad faith in not satisfying the claim of the Soberanos, because, as the lower court puts it, the Soberanos "have asked for too much", and the "defendant was justified in resisting this action." We are not without precedent on this point. In Globe Assn. vs. Arcache, L-12378, May 28, 1958, this Court observed that the refusal of the defendant therein to pay the amount claimed was due not to malice but to the fact that the plaintiff therein demanded more than it should, and consequently ruled that the defendant had the right to refuse it; and in the Cachero case, supra, this Court held that the plaintiff in that case cannot recover attorney's fees, because the litigation was caused not by the defendant's failure to pay but by the plaintiff's "exorbitant charge."

We now come to the claim for additional unpaid allowances of Juana Soberano while she was undergoing medical and dental treatment in Manila and Quezon City, in the total sum of P600. In our view, this claim has merit.

The allowance of ten pesos for each day of stay in Quezon City of Juana Soberano was recommended for approval by the superintendent of the BAL, Mr. C. Rivera (exh. C-4) and by the MRR physician, Dr. Salgado, and appears to have been "OK" by the MRR administrative officer, Mr. F.C. Unson (exh. C-5). These exhibits C-4 and C-5 were admitted in evidence without objection from the Government Corporate Counsel who represented the defendant companies. The defendant companies have already paid to Jose Soberano the total sum of P600, covering Juana Soberano's stay for 60 days in a private house, from June 7 to July 5, 1955, and from July 7 to August 5, 1955 (exhs. 3-I and 3-J).

As to the balance of P600, it was error for the lower court to include this sum in the assessment of loss of earning capacity, because this amount represents expenses for board and lodging, short order such as milk and fruit, laundry and transportation of Juana Soberano incurred during her stay in a private house in Quezon City, after her discharge from the National

Orthopedic Hospital, which continued stay was upon the advice of her attending physician that she go to that hospital every other day for physical therapy (exh. C-3). It will be seen under exhibits C-4 and C-5 that the defendant companies agreed to pay the Soberanos the sum of P10.00 a day for her said stay beginning "June 7, 1955 not to exceed 60 days, depending upon the advice of the attending physician or other bone specialist." The deposition of, and a medical certificate issued by, Dr. Juan 0. Floirendo, in EENT specialist who treated Juana Soberano for "visual and other defects", show that he treated her for more than sixty days, from September 10, 1955 to February 2, 1956 (exh. L). The balance of P600 should, therefore, be paid to Juana Soberano.

We come finally to the claim for loss of earning capacity in the total sum of P50,000, based upon the expectancy that Juana Soberano, who was 37 years old at the time of the accident, would live for 20 more years and be able to earn an average annual income of P2,500. On this point, the lower court found that "Juana Soberano suffered greatly and that her injuries left her permanently disfigured and partially disabled as she walks with a stiff neck and her arms have partly lost their full freedom." After finding however, that she is not altogether a helpless woman and can still engage in business, the lower court awarded to her P5,000 to compensate loss of earnings as a result of her partial disability.

The appellants contend that the award is inadequate. We agree.

This Court, in three cases, allowed in one, and increased in the two others, the amount of compensatory damages. In Borromeo v. Manila Electric Railroad and Light Co., 44 Phil. 165 (1922), this Court awarded P2,000 in future damages to the plaintiff therein, after finding that due to the accident, wherein Borromeo's left foot was passed over by the rear wheels of the electric car of the defendant company and had to be amputated, he had to use an artificial foot in order to be able to walk; that he could no longer be employed as a marine engineer which he had been for sixteen years; that at the time of the accident he was a chief engineer with a monthly salary of P375; and that because he knew of no other profession, his incapacity had put an end to his activities and had destroyed his principal source of professional earnings in the future. In Cariaga, et al. v. Laguna Tayabas Bus Co., et al., L-11037, Dec. 29, 1960, this Court increased the award of compensatory damages from P10,490 to P25,000, after finding that Edgardo Cariaga's right forehead was fractured, necessitating the removal of practically all of the right frontal lobe of his brain; that he had become a misfit for any kind of work; that he could hardly walk around without someone helping him and

he had to use a brace on his left leg and foot; that he was a virtual invalid, physically and mentally; that at the time of the accident he was already a fourth-year student in medicine in a reputable university; that his scholastic record is sufficient to justify the assumption that had he continued his studies, he would have finished the course and would have passed the board examinations; and that he could possibly have earned as a medical practitioner the minimum monthly income of P300. And in Araneta, et al. v. Arreglado, et al., L-11394, September 9, 1958, this Court increased the award of compensatory damages from P1,000 to P18,000, after finding that Benjamin Araneta sustained "permanent deformity and — something like an inferiority complex" as well as a "pathological condition on the left side of the jaw" caused by the defendant Dario Arreglado who inflicted the injury upon him voluntarily; that to arrest the degenerative process taking place in the mandible and to restore the injured boy to a nearly normal condition, surgical intervention was needed; that a repair, however skillfully conducted, is never equivalent to the original state; and that because of the injury, the boy had suffered greatly.

In the case at bar, the nature and extent of the physical injuries suffered by Juana Soberano and thereafter effects upon her life and activities, are by three reputable physicians: Dr. Hector Lopes, a radiologist of the Baguio General Hospital; Dr. Angel Poblete, an orthopedist of the National Orthopedic Hospital; and Dr. Juan O. Floirendo, an EENT specialist. Dr. Lopez declared that Juana Soberano suffered comminuted fracture in the left mandible near the articulation, cracked fracture in the right temporal bone, crushed fractures both scapular, and fracture in the 2nd, 3rd and 4th ribs. As a result of these injuries, Dr. Poblete said that she suffered and would continue to suffer limitation of mouth opening, bad approximation of the jaw alignment which is drawn inside, limitation of neck and shoulder movements with numbness on the right side of the face and right and left side of the body, disturbance in vision, and poor mastication resulting in indigestion. Dr. Poblete further testified that she will be "abnormal and naturally she could not be expected to live a normal life." Dr. Floirendo declared that she suffers from pain along the cheeks on both sides of her face, double vision, and paralysis of the ocular muscles due to partial disequilibrium of the eye muscles.

Juana Soberano herself categorically declared, and this was not contradicted, that prior to the accident, she had a complete and healthy set of teeth; that as a result of the accident she lost three of her teeth, and the remaining ones in the upper jaw had to be extracted because they were already loose and a denture had perforce to be made for her; and that her face is permanently disfigured (exhs. K & K-1).

There is absolutely no doubt that the resultant physical handicaps would entail for Juana Soberano a loss of positive economic values. In fact, they will greatly adversely affect her occupation as a pending merchant which she has been since 1950 (exh. A), earning from 1950 to March 8, 1955, when the accident happened, an average annual net income of about P1,500 (exhs. B, B-1 to B-5, inclusive). It is to be assumed that had the interruption to her occupation through defendant's wrongful act not occurred, she would continue earning this average income.

Considering all the facts detailed above, this Court is of the opinion that the sum of P5,000 in compensatory damages awarded to her for loss of earning capacity is inadequate; the amount should be increased to P15,000.

She should also be awarded the sum of P45.35, representing unrealized profits from the 3,024 chicken eggs which she brought with her in the trip and which were destroyed. She brought those eggs to be sold in Baguio City. She bought them at nine centavos each, was to sell them in Baguio City to definite customers at an agreed price of ten and a half centavos each, or with a profit of one and a half centavos per egg.

Finally, all the awards to Juana Soberano should earn interest at the legal rate from the date the judgment a quowas rendered, on November 25, 1960, and not from the date of the filing of the complaint.

ACCORDINGLY, the judgment appealed from is modified to read as follows: "Judgment is therefore rendered ordering the Manila Railroad Company to pay to the plaintiffs (1) P600 representing the balance of the unpaid allowances due to Juana Soberano in connection with her stay in a private house in Quezon City during the period of her medical treatment; (2) P15,000 for loss of earning capacity; and (3) P45.36 for unrealized profits, all of these sums to earn interest at the legal rate from November 25, 1960." Costs against the defendants-appellees.

G.R. No. L-24471           August 30, 1968

SILVERIO MARCHAN and PHILIPPINE RABBIT BUS CO., INC., petitioners, vs.ARSENIO MENDOZA, LEONARDA ILAYA, and ZENAIDA MENDOZA, respondents.

FERNANDO, J.:

Petitioners, the driver of the passenger bus responsible for the injuries sustained by respondent for which he was duly prosecuted and thereafter convicted for serious, less serious, and slight physical injuries, and the bus firm, the Philippine Rabbit Bus Lines, seek the reversal of a Court of Appeals decision of December 14, 1964 and a resolution of March 31, 1965, holding them liable both for compensatory and exemplary damages as well as attorney's fees. It is the contention of petitioners that errors of law were committed when, in the aforesaid decision, it was held that there was an implied contract of carriage between the petitioner bus firm and respondents, the breach of which was the occasion for their liability for compensatory and exemplary damages as well as attorneys fees.

The facts as found by the Court of Appeals follow: "In the evening of February 22, 1954, between 9:00 and 9:30 o'clock, a passenger bus No. 141 of the Philippine Rabbit Bus Lines, bearing Plate No. TPU-708 which was then driven by Silverio Marchan fell into a ditch somewhere in Barrio Malanday, Polo, Bulacan, while travelling on its way to Manila; as a result of which plaintiffs-appellees Arsenio Mendoza, his wife and child, [respondents in this proceeding], who were then inside the bus as passengers were thrown out to the ground resulting in their multiple injuries. Plaintiff Arsenio Mendoza suffered the most serious injuries which damaged his vertebrae causing the paralysis of his lower extremities which up to the time when this case was tried he continued to suffer. The physician who attended and treated plaintiff Arsenio Mendoza opined that he may never walk again. Consequently the driver of said bus Silverio Marchan [now petitioner] was prosecuted for serious, less serious and slight physical injuries through reckless imprudence before the Justice of the Peace Court of Polo Bulacan, and thereafter convicted as charged on June 29, 1956 ..., which judgment of conviction was subsequently affirmed by the Court of First Instance of same province ... In this present action before us, plaintiffs-appellees Arsenio Mendoza, his wife and child sought to recover damages against defendant-appellant Arsenio Marchan, then the driver of bus No. 141 of the Philippine Rabbit Bus Lines, and from defendants-appellants Bienvenido P. Buan and Natividad Paras in their capacity as administrator and administratix, respectively of the estate of the late Florencio P. Buan, doing business under the style name of the Philippine Rabbit Bus Lines, predicated not only on a breach of contract of carriage for failure of defendants operator as well as the defendant driver to safely convey them to their destination, but also on account of a criminal negligence on the part of defendant Silverio Marchan resulting to plaintiff-appellee's multiple physical damages."1

The Court of Appeals in the decision under review found that there was a preponderance of evidence to the effect that while respondents Arsenio Mendoza, his wife, Leonarda Ilaya, and child, Zenaida Mendoza "were waiting for a passenger bus on January 22, 1954 at about 9:00 in the evening at Malanday, they boarded defendants-appellants' bus bearing No. 141 of the Philippine Rabbit Bus Lines with Plate No. TPU-708 bound for Manila. And they were treated as passengers thereto, for they paid their corresponding fares. As they travelled along the highway bound for Manila, said bus was traveling at a high rate of speed without due regard to the safety of the passengers. So much so that one of the passengers had to call the attention of Silverio Marchan who was then at the steering wheel of said bus to lessen the speed or to slow down, but then defendant Silverio Marchan did not heed the request of said passenger; neither did he slacken his speed. On the contrary, defendant Silverio Marchan even increased his speed while approaching a six-by-six truck which was then parked ahead, apparently for the purpose of passing the said parked truck and to avoid collision with the incoming vehicle from the opposite direction. But, when appellant Silverio Marchan veered his truck to resume position over the right lane, the rear tires of said truck skidded because of his high rate of speed, thereby causing said truck to fall into a ditch. Substantially, the happening of the accident' resulting to the multiple injuries of plaintiffs-appellees, was explained by defendant Silverio Marchan who declared that while he was driving his bus from Barrio Malanday bound towards Manila on a road test, he suddenly noticed an oncoming vehicle. He thus shifted his light from dim to bright. Just then, he noticed a six-by-six truck parked on the right lane of the road where he was driving. Confronted with such situation that if he would apply his brake he would bump his bus against the parked truck he then increased his speed with the view of passing the said parked truck, and thereafter he veered to negotiate for the proper position on the right lane, but in so doing he swerved to the right in order to avoid collision from the oncoming vehicle the rear portion of the bus skidded and fell into the ditch."2

Hence the finding of negligence in the decision under review. Thus: "From the facts as established preponderantly by the plaintiff and substantially corroborated by the defendant Silverio Marchan, it is clear that the cause of the accident was the gross negligence of the defendant Silverio Marchan who when driving his vehicle on the night in question was expected to have employed the highest degree of care; and should have been assiduously prudent in handling his vehicle to insure the safety of his passengers. There is no reason why he could not have stopped his vehicle when noticing a parked truck ahead of him if he was not driving at a high speed. His admission to the effect that if he would apply his

brake he would bump or hit the parked truck ahead of him, since there was no time for him to stop the bus he was driving, is a patent indication that he was travelling at a high rate of speed without taking the necessary precaution under the circumstance, considering that it was then nighttime. It is our considered view that under the situation as pictured before us by the driver of said bus, he should not have increased his speed and by-passed the parked truck obviously with the view of preventing a collision with the incoming vehicle. Any prudent person placed under the situation of the appellant would not have assumed the risk as what appellant did. The most natural reaction that could be expected from one under the circumstance was for him to have slackened and reduced his speed. But this was not done simply because defendant-appellant could not possibly do so under the circumstance because he was then travelling at a high rate of speed. In fact, he had increased his speed in order to avoid ramming the parked truck without, however, taking the necessary precaution to insure the safety of his passengers."3

On the above facts, the Court of Appeals, in its decision of December 14, 1964, affirmed the amount of P40,000.00 awarded by the court below as compensatory damages modifying the appealed lower court decision by holding petitioners to pay the amount of P30,000.00 as exemplary damages and sustaining the award of attorney's fees in the amount of P5,000.00. Then came the resolution of March 31, 1965 by the Court of Appeals, where the motion for reconsideration of petitioners was denied for lack of merit.

In their brief as petitioners, the first error assigned is the alleged absence of an implied contract of carriage by the petitioner bus firm and respondent. On this point, it was the holding of the Court of Appeals: "Since it is undisputed by the evidence on record that appellant Silverio Marchan was then at the steering wheel of the vehicle of the defendant transportation company at that moment, the riding public is not expected to inquire from time to time before they board the passenger bus whether or not the driver who is at the steering wheel of said bus was authorized to drive said vehicle or that said driver is acting within the scope of his authority and observing the existing rules and regulations required of him by the management. To hold otherwise would in effect render the aforequoted provision of law (Article 1759) ineffective."4 It is clear from the above Civil Code provision that common carriers cannot escape liability "for the death of or injuries to passengers through the negligence and willful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders..." 5 From Vda. de Medina v. Cresencia,6 where

this Court, through Justice J.B.L. Reyes, stressed the "direct and immediate" liability of the carrier under the above legal provision, "not merely subsidiary or secondary," to Maranan v. Perez,7 a 1967 decision, the invariable holding has been the responsibility for breach of the contract of carriage on the part of the carrier. According to the facts as above disclosed, which this Court cannot disturb, the applicability of Article 1759 is indisputable. Hence, the total absence of merit of the first assignment of error.

The next two errors assigned would dispute the holding of the Court of Appeals in imposing liability in the respective amounts of P40,000.00 for compensatory damages and P30,000.00 for exemplary damages. Again, such assignments of error cannot be looked upon with favor. What the Court of Appeals did deserves not reprobation but approval by this Court.

As to why the amount in compensatory damages should be fixed in the sum of P40,000.00 is explained in the appealed decision thus: "Likewise, it is our considered view that the amount of P40,000.00 awarded by the court below as compensatory damages is quite reasonable and fair, considering that plaintiff Arsenio Mendoza had suffered paralysis on the lower extremities, which will incapacitate him to engage in his customary occupation throughout the remaining years of his life, especially so if we take into account that plaintiff Arsenio Mendoza was only 26 years old when he met an accident on January 22, 1954; and taking the average span of life of a Filipino, he may be expected to live for 30 years more; and bearing in mind the earning capacity of Arsenio Mendoza who before the happening of this accident derived an income of almost P100.00 a month from the business of his father-in-law as Assistant Supervisor of the small [fairs] and his income of P100.00 a month which he derived as a professional boxer."8 Considering that respondent Arsenio Mendoza was only in his middle twenties when, thru the negligence of petitioners, he lost the use of his limbs, being condemned for the remainder of his life to be a paralytic, in effect leading a maimed, well-nigh useless existence, the fixing of such liability in the amount of P40,000.00 as compensatory damages was well within the discretion of the Court of Appeals. 1äwphï1.ñët

As to the finding of liability for exemplary damages, the Court of Appeals, in its resolution of March 31, 1965, stated the following: "We now come to the imposition of exemplary damages upon defendants-appellants' carrier. It is argued that this Court is without jurisdiction to adjudicate this exemplary damages since there was no allegation nor prayer, nor proof, nor counterclaim of error for the same by the appellees. It is to be observed however, that in the

complaint, plaintiffs "prayed for such other and further relief as this Court may deem just and equitable." Now, since the body of the complaint sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as a result of the negligence of said Silverio Marchan who is appellant's employee; and since exemplary damages is intimately connected with general damages, plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the defendant's carrier. Suffice it to state that when plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises, in effect, therefore, the court is called upon the exercise and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint."9

In support of the above view, Singson v. Aragon was cited by the Court of Appeals. 10 As was there held by this Court: "From the above legal provisions it appears that exemplary damages may be imposed by way of example or correction only in addition, among others, to compensatory damages, but that they cannot be recovered as a matter of right, their determination depending upon the discretion of the court. It further appears that the amount of exemplary damages need not be proved, because its determination depends upon the amount of compensatory damages that may be awarded to the claimant. If the amount of exemplary damages need not be proved, it need not also be alleged, and the reason is obvious because it is merely incidental or dependent upon what the court may award as compensatory damages. Unless and until this premise is determined and established, what may be claimed as exemplary damages would amount to a mere surmise or speculation. It follows as a necessary consequence that the amount of exemplary damages need not be pleaded in the complaint because the same cannot be predetermined. One can merely ask that it be determined by the court if in the use of its discretion the same is warranted by the evidence, and this is just what appellee has done.".

Such a principle has been repeatedly upheld. 11 In Corpuz v. Cuaderno, 12 this Court, again through Justice J.B.L. Reyes, made clear that the amount "lies within the province of the court a quo, ..." It must be admitted, of course, that where it could be shown that a tribunal acted "with vindictiveness or wantonness and not in the exercise of honest judgment," then there is room for the interposition of the corrective power of this Tribunal.

No such reproach can be hurled at the decision and resolution now under review. No such indictment

would be justified. As noted earlier, both the second and the third assignments of error are devoid of merit.

Nor is there any occasion to consider further the fourth assigned error, petitioner being dissatisfied with the award of P5,000.00 as attorney's fees to respondents. On its face, such an assignment of an alleged error is conspicuously futile. 1äwphï1.ñët

The judgment, however, must be modified in accordance with the ruling of this Court in Soberano v. Manila Railroad Co. 13 Respondents are entitled to interest for the amount of compensatory damages from the date of the decision of the lower court and legal interest on the exemplary damages from the date of the decision of the Court of Appeals.

WHEREFORE, as thus modified, the decision is affirmed, petitioners being liable for the sum of P40,000.00 in the concept of compensatory damages with interest at the legal rate from and after January 26, 1960, and the sum of P30,000.00 as exemplary damages with interest at the legal rate from and after December 14, 1964, as well as for the sum of P5,000.00 as attorney's fees, likewise earning a legal rate of interest from and after January 26, 1960. Costs against petitioners.

G.R. No. L-63135 June 24, 1983

GLORIA DARROCHA DE CALISTON, petitioner, vs.THE HONORABLE COURT OF APPEALS AND GERONIMO DALMACIO, respondents.

PLANA, J.:

While driving a passenger bus in Bacolod City, private respondent Geronimo Dalmacio ran over Juana Sonza Vda. de Darrocha (a USVA pensioner) who died instantly, survived by her only child, Gloria Darrocha de Caliston, the herein petitioner.

Prosecuted for homicide thru reckless imprudence, Dalmacio was convicted by the Court of First Instance of Negros Occidental, sentenced to imprisonment and ordered to pay the herein petitioner P15,000.00 for the death of the victim, P5,000.00 as moral damages, P5,000.00 for burial expenses and P10,000.00 for loss of pension which the deceased had failed to receive.

On appeal, the former Court of Appeals modified the CFI decision by absolving Dalmacio from the payment of the P10,000.00 for loss of pension and credited him for the amount of P5,000.00 previously paid to the

herein petitioner under a vehicular insurance policy obtained by the bus owner.

The above modifications are now assailed in this petition for review on which the private respondent has filed his comment.

The deletion of the P10,000.00 awarded for loss of pension is unjustified. Under Article 2206 of the Civil Code —

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 shag be paid to the heirs of the latter. . .

The pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible, the surviving heir of the former is entitled to the award of P 10,000.00 which is just equivalent to the pension the decedent would have received for one year if she did not die.

On the other hand, the P5,000.00 paid to the herein petitioner by the insurer of the passenger bus which figured in the accident may be deemed to have come from the bus owner who procured the insurance. Since the civil liability (ex-delicto) of the latter for the death caused by his driver is subsidiary and, at bottom, arises from the same culpa, the insurance proceeds should be credited in favor of the errant driver.

WHEREFORE, the petition is hereby granted partially in that the P10,000.00 award for loss of pension deleted in the appealed Court of Appeals decision is hereby reinstated. Costs against private respondent.

SO ORDERED.

G.R. No. L-54470 May 8, 1990

PHILIPPINE AIRLINES, INC., petitioner, vs.HON. COURT OF APPEALS and NATIVIDAD VDA. DE PADILLA, substituted by her legal heirs, namely: AUGUSTO A. PADILLA, ALBERTO A. PADILLA, CRESENCIO R. ABES (representing the deceased Isabel Padilla Abes) MIGUEL A. PADILLA and RAMON A. PADILLA, respondents.

GRIÑO-AQUINO, J.:

The only legal issue raised by the petitioner in this thirty-year-old case is whether the indemnity for the death of private respondent's son, the late Nicanor A. Padilla should be computed on the basis of his life expectancy, as the trial court and the Court of Appeals did, rather than the life expectancy of private respondent, his only legal heir, as the petitioner contends.

On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the Philippine Air Lines (hereafter PAL) took off from the Manduriao Airport in Iloilo, on its way to Manila, with 33 persons on board, including the plane's complement. The plane did not reach its destination but crashed on Mt. Baco, Mindoro, one hour and fifteen minutes after takeoff .The plane was Identified as PI-C133, a DC-3 type aircraft manufactured in 1942 and acquired by PAL in 1948. It had flown almost 18,000 hours at the time of its illfated flight. It had been certified as airworthy by the Civil Aeronautics Administration.

Among the fatalities was Nicanor Padilla who was a passenger on the star crossed flight. He was 29 years old, single. His mother, Natividad A. Vda. de Padilla, was his only legal heir.

As a result of her son's death, Mrs. Padilla filed a complaint (which was amended twice) against PAL, demanding payment of P600,000 as actual and compensatory damages, plus exemplary damages and P60,000 as attorney's fees.

In its answer, PAL denied that the accident was caused by its negligence or that of any of the plane's flight crew, and that, moreover, the damages sought were excessive and speculative.

On November 23, 1964, the trial court issued a pre-trial order requiring the parties to file on or before January 30, 1965 a stipulation of facts, or a negative manifestation in case they failed to submit a stipulation.

On June 8, 1965, the parties submitted a partial stipulation of facts providing as follows:

1.

Plaintiff is the widow of the late Alberto R. Padilla Filipino, of legal age, and a resident of and with postal address at No. 970 (formerly No. 247) Gral. Solano St., San Miguel, Manila, while defendant Philippine Air Lines, Inc. is a corporation duly organized,

registered and existing under and by virtue of the laws of the Philippines, engaged, as a common carrier in the business of carrying or transporting by air passengers and goods, offering its services to the public as such for compensation, with offices at Makati Bldg., Makati, Rizal.

2.

Nicanor A. Padilla was born on January 10, 1931. He was a son by lawful marriage of plaintiff and Alberto R. Padilla, who died on September 2, 1948.

3.

Nicanor A. Padilla finished the elementary grades in 1943, high school in 1947, graduated the Reserve Officer's Course (Infantry Basic Course) Armed Forces of the Philippines in 1949, and graduated with the degree of Bachelor of Literature in 1951 and the degree of Bachelor of Laws in 1954, all in Ateneo de Manila.

4.

He was admitted by the Supreme Court of the Philippines to practice law on January 28, 1955, and from January 1958, to the time of his death on November 23, 1960, he was associated with the law offices of Senator Ambrosio Padilla, brother of his father, Alberto R. Padilla.

5.

At the time of his death, he was the President and General Manager of the Padilla Shipping Co., Inc. He was also Vice-President and Treasurer of the Allied Overseas Trading Co., Inc.

6.

He was a member of the Board of Directors of the Junior Chamber of Commerce (Jaycees) International and Chairman of its Committee on Governmental Affairs for the term 1960-1961. This Committee on

Governmental Affairs published a pamphlet entitled "Good Government is our Business," for which the deceased was named "Jaycee of the Month of January 1960."

7.

Nicanor A. Padilla, while travelling and being transported and flown as a paid passenger on one [of] defendant's aircraft, a DC-3 with registry No. PI-C133, on "Star Light Flight" No. 26 bound for Manila from the City of Iloilo on November 23, 1960, was killed when said plane crashed in the area of Mount Baco, Oriental Mindoro

8.

Nicanor A. Padilla died single, leaving as his nearest of kin and sole heiress to his estate his mother the plaintiff herein with whom he was residing at the time of his death at 970 Gral. Solano St., Manila.

9.

The aircraft (PI-C133) that crashed on Mt. Baco, Oriental Mindoro on November 23, 1960, was a twin-engine passenger plane of the Philippine Air Lines of the DC-3 type. It was manufactured by Douglas Aircraft Corporation of the United States for the U.S. Army and was purchased from the latter by the Commercial Air lines, Inc., on September 25, 1946. The defendant Philippine Air Lines acquired the plane from the Commercial Air Lines, Inc., on October 15, 1948. The aircraft was registered by Philippine Air Lines with the Civil Aeronautics Administration as PI-C142 on May 10, 1949. On October 15, 1953, PI-C142 met with a non-fatal accident at Piat, Tuguegarao, Cagayan. PAL requested the Civil Aeronautics Administration for a change in the identification mark. Said request was granted and the registration number was changed from PI-C142 to PI-C133 on July 29, 1954. As [ofl November 22, 1960, the day before the fatal crash on Mt. Baco, PI-C133 had a total flying time of 17,996:33 hours.

10.

PI-C133 was issued a certificate of airworthiness by the Civil Aeronautics Administration on September 13, 1960 which was to expire on September 12, 1961; a copy of which is attached hereto as Exhibit "I" and made a part of this stipulation.

11.

Other facts on which the parties cannot agree will be subject to proof at the trial. (pp. 34-39, Record on Appeal; p. 11 7, Rollo.)

On January 15, 1966, the parties submitted another partial stipulation of facts:

1.

That in the book written by Salvador B. Salvosa, M.S. University of Michigan and member of the Actuarial Society of the Philippine, entitled; "Filipino Experience Mortality Table," the complete life expectancy of Filipinos appear on page 3 thereof, a photostat of which is attached hereto as Exhibit "A."

2.

That in said Exhibit "A", the columns under the heading "Age x," refers to the age of the individual, and the columns "oe x" refers to the corresponding number of years the individuals expected to live. Thus, under the column "Age x," a person aged 29, the corresponding life expectancy of said person under column "oex" is "42.60" years; and under said column "Age x" a person aged 60, corresponding life expec tancy of said person under column 'oex' is "17.90" years;

3.

That Salvador B. Salvosa's "Filipino Experience Mortality Table," including the table of life expectancy are used by the Philippine International life Insurance Co., the Sterling Life Insurance Co., the Cardinal Life

Insurance Co., and Star life Insurance Co., and that the same has been approved by the Insurance Commissioner for the use of life insurance companies doing business in the Philippines as shown by a certificate issued by said Commissioner which is attached hereto as Exhibit "B";

4.

That the book of Nelson and Warren, Consulting Actuaries of St. Luis and Kansas cities, Missouri, entitled: "Principal Mortality Tables", contains a table of comparison of complete life expectancy based on principal mortality tables used by life insurance companies, a photostat of which is likewise attached hereto as Exhibits "C", "C-l", "C-2", and "C-3";

5.

That of the life expectancy based on the different systems mentioned in said Exhibits "C", "C-1", "C-2" and "C-3", the following are also used in the Philippines for life insurance purposes: (a) the American Experience appearing in Exhibit "B", 'fifth columns on both pages, the first column corresponding to the age of the individual (pages 12 and 13 of the book); (b) the Standard Industrial, appearing in the same Exhibit "B", "sixth column on both pages (pages 12 and 13 of the book); and (c) the 1941 Commissioner Standard Ordinary, or CSO 1941 for short, appearing in Exhibit "B-1", third column, on both pages (pages 14 and 15 of the book).

6.

That the materiality and applicability [sic] of the life expectancy tables shown in Exhibit A or Exhibits "C", "C-1", "C-2" and "C-3" are left to the judgment of the Honorable Court. (pp. 39-42, Record on Appeal; p. 117, Rollo.)

On March 19, 1970, a third joint partial stipulation of facts was submitted by the parties to the trial court which reads, thus:

JOINT FIRST PARTIAL STIPULATION OF FACTS

Plaintiff and defendant through their respective counsel, respectfully submit the following partial stipulation of facts:

1. Defendant in November, 1960 and even before was authorized and rated to repair aircrafts of U.S. and foreign registries and as such holds the following:

Description Exhibit

a) US FAA Air Agency 1

Certificate

b) US FAA Repair Station

Operations Specifications

(2 pages) PI- 2 and 2-A

c) CAA Rating Grant to operate

Repair Station with ratings on

[sic] (i) Aircraft Metal

propeller Hubs Overhaul Shop,

(ii) Aircraft Engine Overhaul Shop. 3

d) PI.-CAA Rating Grant to operate

a repair station with ratings on

(i) Aircraft of Composite Construction;

(ii) Aircraft of all Metal Construction;

(iii) Aircraft Instrument. 4

2. Defendant maintained and repaired aircrafts of the U.S. Air Force, U.S. Navy and commercial carriers like PANAM Northwest Airways, KLM and other foreign airlines.

3. Also in 1960 defendant was maintaining and following a CAA approved system of aircraft maintenance control using worksheets and work card which record the specific job on any particular aircraft. They are:

a) Preflight inspections consisting of the —

(i) Through Check: — the visual inspection of an aircraft prior to flight and performed in stations where maintenance men are assigned.

(ii) Terminating Check: — the visual inspection of the aircraft performed in stations were aircraft terminated a flight

and where maintenance men are assigned.

(iii) After Maintenance Check: — the visual inspection of an aircraft preparatory to any flight following the completion of any check from Check No. 1 to Cheek No. 6, to wit:

(a) Check No. 1 known as daily inspection check;

(b) Check No. 2 which is accomplished every 125 hours;

(c) Check No. 3 which is accomplished every 250 flying hours;

(d) Check No. 4 which is accomplished every 500 flying hours;

(e) Check No. 5 which is accomplished every 1,250 flying hours;

(f) Check No. 6 which is a series broken down into 6- A, 6-B, 6-C, 6-D, 6-E and 6-F;

4. The Quality Control Division is the custodian of all worksheets for the checks performed and under PI-CAA regulations, is required to keep the records for at least 90 days.

5. The forms used and accomplished for the various checks were:

Description Exhibit

a) Preflight check sheet,

including DC-3C Daily

Airplane and Engine

Routine and Cleaning Routine; 5,6 & 6-A

b) Check No. 2, consisting of

37 work control cards; 7-A to 7-KK

c) Check No. 3 consisting of

49 work control cards; 8, 8-A to 8-XX

d) Check No. 4 consisting of

a work control card; 9, 9-A to 9-F

e) Check No. 5 consisting of 00, 10-A to

9 work control cards; 10-H

f) Check No. 6-A consisting of 11, 11-A to

112 work control cards; 11-(G)

g) Check No. 6-B consisting of 12, 12-A to

114 work control cards; 12-(J)

h) Check No. 6-C consisting of 13, 13-A to

117 work control cards 13-(I)

i) Check No. 6-D consisting of 14,14-A to

110 work control cards; 14-(E)

j) Check No. 6-E consisting of 15,15-A to

120 work control cards; 15-(E)

k) Check No. 6-F consisting of 16,16-A to

118 work control cards 16-(M)

The parties reserve their right to agree to additional stipulation of facts and/or to adduce evidence on other matters not covered by this stipulation.

All exhibits mentioned and identified are attached to this stipulation. (pp. 42-46, Record on Appeal; p. 117, Rollo.)

During the hearing on September 4, 1972, the parties stipulated that they were reproducing the testimonial and documentary evidence presented in Civil Cases Nos. 5728 and 2790 of the Court of First Instance of Iloilo, arising out of the same accident. Certified copy of said transcript of stenographic notes were then submitted to the trial court.

A fourth partial stipulation of facts was submitted by the parties, reading as follows:

PARTIAL STIPULATION OF FACTS

Plaintiff and defendant respectfully submit the following partial stipulation of facts:

1. For the convenience and brevity of these proceedings, considering that

defendant's evidence on the basic issues of fortuitous event and extraordinary diligence of the carrier consists of the witnesses and documents presented in Civil Case No. 5720 of the Court of First Instance of Iloilo entitled "Pedro R. Davila vs. Preciosa C. Tirol," now pending appeal before the Supreme Court in G.R. No. L-28512, defendant has proposed to reproduce in this case the testimonies of same witnesses and documentary evidence Identified and marked in the course of the same proceedings, as reflected in the corresponding transcript of stenographic notes, to wit:

Transcript of

Witnesses Stenographic Notes At Pages Exhibit

a Mario Rodriguez October 30, 1962 1 - 67 37

October 31, 1962 67 - 153 38

January 7, 1963 17 - 74 39

October 14, 1963 6 - 11 40

b. Pedro N. Mallari March 19, 1963 17 - 39)

c. Arturo Camatoy March 19, 1963 39 - 75) 41

d. Ponciano Saldaña March 19, 1963 75 - 88)

e. Melecio Joson March 20, 1963 91 - 161) 42

f. Alfredo Subesa March 20, 1963 162 - 166)

g. Eduardo Estrella October 14, 1963 11 - 27)

h. Vicente Sison October 14, 1963 27 - 74)

i. Felipe Paculaba October 15, 1963 4 - 15

j. Antonio Lopez October 15, 1963 15 - 25) 43

k. Isaac Lamela October 15, 1963 26 - 55)

l. Ramon Pedrosa December 19, 1963 6 - 83 44

m. Cesar Mijares December 20, 1963 15 - 89 45

n. Jaime Manzano February 6, 1964 3 - 15) 46

o. Offer of documen-

tary evidence February 6, 1964 18 - 76)

2. The transcript of stenographic notes are attached hereto and marked as above set forth.

3. If aforenamed witnesses were called to testify in this case, they would give the same testimony as shown in the afore-mentioned transcript of stenographic notes on direct examination, cross-examination and re-direct examination, as the case may be plaintiffs counsel hereby adopting the

manifestations, objections, cross and recross examination by the plaintiff's counsels in Davila vs. PAL, supra and so far as the joint hearings held on December 20, 1963 and February 6, 1964, also of plaintiff's counsels in Abeto, et al. vs. PAL, Civil Case No. 5790, also of the Court of First Instance of Iloilo.

4. All the documentary evidence marked in the course of the hearings shown in the transcripts of stenographic notes attached hereto have already been marked correspondingly before the Commissioner of this Honorable Court on a hearing held on May 24, 1968 with the same exhibit identification.

5. Defendant reserves its right to present evidence on the question of damages.

6. Plaintiff reserves her right to present such further evidence as she may deem proper in rebuttal. (pp. 47-50, Record on Appeal; p. 117, Rollo.)

In addition to the stipulations of facts, private respondent Padilla testified that her son, Nicanor Padilla, prior to his death, was 29 years old, single, in good health, President and General Manager of Padilla Shipping Company at Iloilo City, and a legal assistant of the Padilla Law Office; that upon learning of the death of her son in the plane crash, she suffered shock and mental anguish, because her son who was still single was living with her; and that Nicanor had a life insurance of P20,000, the proceeds of which were paid to his sister.

Eduardo Mate, manager of the Allied Overseas Trading Company, testified that the deceased, Nicanor Padilla, was one of the incorporators of the company and also its vice-president and treasurer, receiving a monthly salary of P455.

Isaac M. Reyes, auditor of the Padilla Shipping Company, declared that the deceased was the President and General of the firm and received a salary of P1,500 monthly.

The trial court in its decision stated that on March 19, 1970, it was manifested in court that "the parties agreed that they will abide with whatever decision the Supreme Court may have in similar cases involving the same airplane crash accident then pending before other courts pending decision in Supreme Court" (p. 51, Rec. on Appeal; p. 117, Rollo)

On August 31, 1973, the trial court promulgated a decision, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering the defendant Philippine Air Lines, Inc. to pay the plaintiff Natividad A. Vda. de Padilla the sum of P477,000.00 as award for the expected income of the deceased Nicanor; P10,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the costs. (pp. 59-60, Record on Appeal; p. 117, Rollo.)

On Appeal to the Court of Appeals (CA-G.R. No. 56079-R) dated July 17, 1980, the decision of the trial court was affirmed in toto.

As pointed out at the outset, the lone issue is whether or not the respondent court erred in computing the awarded indemnity on the basis of the life expectancy of the late Nicanor A. Padilla rather than on the life expectancy of private respondent, and thus erred in awarding what appears to the petitioner as the excessive sum of P477,000 as indemnity for loss of earnings.

Petitioner relies on "the principle of law generally recognized and applied by the courts in the United States" that "the controlling element in determining loss of earnings arising from death is, as established by authorities, the life expectancy of the deceased or of the beneficiary, whichever is shorter (p. 19, Brief for the Defendant-Appellant; p. 119, Rollo).

However, resort to foreign jurisprudence would be proper only if no law or jurisprudence is available locally to settle a controversy. Even in the absence of

local statute and case law, foreign jurisprudence is only persuasive.

For the settlement of the issue at hand, there are enough applicable local laws and jurisprudence. Under Article 1764 and Article 2206(1) of the Civil Code, the award of damages for death is computed on the basis of the life expectancy of the deceased, not of his beneficiary. The articles provide:

Art. 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.

Art. 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; . . . (Emphasis supplied.)

In the case of Davila vs. PAL, 49 SCRA 497 which involved the same tragic plane crash, this Court determined not only PALs liability for negligence or breach of contract, but also the manner of computing the damages due the plaintiff therein which it based on the life expectancy of the deceased, Pedro Davila, Jr. This Court held thus:

The deceased, Pedro Davila, Jr., was single and 30 years of age when he died. At that age one's normal life

expectancy is 33-1/3 years, according to the formula (2/3 x [80-30]) adopted by this Court in the case of Villa Rey Transit, Inc. vs. Court of Appeals on the basis of the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality. However, although the deceased was in relatively good health, his medical history shows that he had complained of and been treated for such ailments as backaches, chest pains and occasional feelings of tiredness. It is reasonable to make an allowance for these circumstances and consider, for purposes of this case, a reduction of his life expectancy to 25 years.

xxx xxx xxx

Considering the fact that the deceased was getting his income from three (3) different sources, namely, from managing a radio station, from law practice and from farming, the expenses incidental to the generation of such income were necessarily more than if he had only one source. Together with his living expenses, a deduction of P600.00 a month, or P7,200.00 a year, seems to Us reasonable, leaving a net yearly income of P7,800.00. This amount, multiplied by 25 years, or P195,000.00 is the amount which should be awarded to the plaintiffs in this particular respect. (pp. 504-505, Rollo.)

The petitioner's recourse to our decision in Alcantara vs. Surro, 93 Phil. 472, undermines instead of supporting its stand here, for the indemnity in that case was also based on the life expectancy of the deceased and not of his beneficiaries.

The petitioner's contention that actual damages under Article 2206 of the Civil Code must be proven by clear and satisfactory evidence is correct, but its perception that such evidence was not presented in this case, is error.

The witnesses Mate and Reyes, who were respectively the manager and auditor of Allied Overseas Trading Company and Padilla Shipping Company, were competent to testify on matters within their personal knowledge because of their positions, such as the income and salary of the deceased,

Nicanor A. Padilla (Sec. 30, Rule 130, Rules of Court). As observed by the Court of Appeals, since they were cross-examined by petitioner's counsel, any objections to their competence and the admissibility of their testimonies, were deemed waived. The payrolls of the companies and the decedent's income tax returns could, it is true, have constituted the best evidence of his salaries, but there is no rule disqualifying competent officers of the corporation from testifying on the compensation of the deceased as an officer of the same corporation, and in any event, no timely objection was made to their testimonies.

Following the procedure used by the Supreme Court in the case of Davila vs. PAL, 49 SCRA 497, the trial court determined the victims gross annual income to be P23,100 based on his yearly salaries of P18,000 from the Padilla Shipping Company and P5,100 from the Allied Overseas Trading Corporation. Considering that he was single, the court deducted P9,200 as yearly living expenses, resulting in a net income of P13,900 (not P15,900 as erroneously stated in the decision). Since Nicanor Padilla was only 29 years old and in good health, the trial court allowed him a life expectancy of 30 years. Multiplying his annual net income of P13,900 by his life expectancy of 30 years, the product is P417,000 (not P477,000) which is the amount of death indemnity due his mother and only forced heir (p. 58, Record on Appeal; p. 117, Rollo).

While as a general rule, an appellee who has not appealed is not entitled to affirmative relief other than the ones granted in the decision of the court below (Aparri vs. CA, 13 SCRA 611; Dy vs. Kuizon, 113 Phil. 592; Borromeo vs. Zaballero, 109 Phil. 332), we nevertheless find merit in the private respondent's plea for relief for the long delay this case has suffered on account of the petitioner's multiple appeals. Indeed, because of the 16 year delay in the disposition of this case, the private respondent herself has already joined her son in the Great Beyond without being able to receive the indemnity she well deserved. Considering how inflation has depleted the value of the judgment in her favor, in the interest of justice, the petitioner should pay legal rate of interest on the indemnity due her. The failure of the trial court to award such interest amounts to a "plain error" which we may rectify on appeal although it was not specified in the appellee's brief (Sec. 7, Rule 51, Rules of Court).

WHEREFORE, the petition is dismissed. The decision of the trial court is affirmed with modification. The petitioner is ordered to pay the private respondent or her heirs death indemnity in the sum of P417,000 (not P477,000), with legal rate of interest of 6% per annum from the date of the judgment on August 31, 1973, until it is fully paid. Costs against the petitioner.

SO ORDERED.

G.R. No. L-51165 June 21, 1990

HEIRS OF AMPARO DE LOS SANTOS, HEIRS OF ERNANIE DELOS SANTOS, HEIRS OF AMABELLA DELOS SANTOS, HEIRS OF LENNY DELOS SANTOS, HEIRS OF MELANY DELOS SANTOS, HEIRS OF TERESA PAMATIAN, HEIRS OF DIEGO SALEM, AND RUBEN REYES, petitioners, vs.HONORABLE COURT OF APPEALS AND COMPANIA MARITIMA, respondents.

MEDIALDEA. J.:

This petition for review on certiorari seeks to set aside the decision of the Court of Appeals in CA-G.R. No. 58118-R affirming the decision in Civil Case No. 74593 of the then Court of First Instance (now Regional Trial Court), Branch XI, Manila which dismissed the petitioners' claim for damages against Compania Maritima for the injury to and death of the victims as a result of the sinking of M/V Mindoro on November 4, 1967.

The trial court found the antecedent facts to be as follows:

This is a complaint originally filed on October 21, 1968 (p. 1, rec.) and amended on October 24, 1968 (p. 16 rec.) by the heirs of Delos Santos and others as pauper litigants against the Compania Maritima, for damages due to the death of several passengers as a result of the sinking of the vessel of defendant, the M/V 'Mindoro', on November 4, 1967.

There is no dispute in the record that the M/V 'Mindoro' sailed from pier 8 North Harbor, Manila, on November 2,1967 at about 2:00 (should have been 6:00 p.m.) in the afternoon bound for New Washington, Aklan, with many passengers aboard. It appears that said vessel met typhoon 'Welming' on the Sibuyan Sea, Aklan, at about 5:00 in the morning of November 4, 1967 causing the death of many of its passengers, although about 136 survived.

Mauricio delos Santos declared that on November 2, 1967 he accompanied his common-law wife, Amparo delos Santos, and children,

namely: Romeo, Josie, Hernani, who was 10 years old, Abella, 7 years old, Maria Lemia, 5 years old and Melany, 5 months old, to pier 8, North Harbor, Manila, to board the M/V Mindoro 'bound for Aklan. It appears that Amparo delos Santos and the aforesaid children brought all their belongings, including household utensils valued at P 1,000.00, with the intention of living in Aklan permanently.

As already stated, the boat met typhoon 'Welming' and due to the strong waves it sank causing the drowning of many passengers among whom were Amparo delos Santos and all the aforesaid children. It appears also that Teresa Pamatian and Diego Salim, who were also passengers also drowned. Plaintiff Ruben Reyes was one of the survivors. 'The plaintiffs presented the birth and death certificates of Amparo delos Santos and the children (Exhs. 1, I-1, J, J-1, K, K-1, L, L-1, 0 to S, pp. 180 to 194 rec.). They also presented copies of the manifest of passengers of the M/V 'Mindoro' on November 2,1967 (Exhs. B & C, pp. 163 to 161 rec.).

Eliadora Crisostomo de Justo, one of the survivors, corroborated the testimony of Mauricio delos Santos that he accompanied Amparo delos Santos and her children to the port to board the M/V Mindoro. She is a cousin of Amparo delos Santos' husband. According to her, when she boarded the second deck of the vessel, she saw about 200 persons therein. She tried to see whether she could be accommodated in the third deck or first deck because the second deck was very crowded. She admitted that she was not included in the manifest because she boarded the boat without a ticket, but she purchased one in the vessel. She testified further that the boat was not able to reach its destination due to its sinking. During the typhoon before the vessel sunk, she was able to board a 'balsa'.

Ruben Reyes, the other survivor, declared that he paid for his ticket before boarding the M/V Mindoro. At

that time he had with him personal belongings and cash all in the amount of P2,900.00. It appears that Felix Reyes Jakusalem, Teresa Pamatian and Amparo delos Santos drowned during the sinking of the vessel. He was able to swim on (sic) an island and was with the others, rescued later on and brought to the hospital. The survivors were then taken ashore (Exh. M, p. 188, rec.).

Dominador Salim declared that Teresa Pamatian, his aunt and Diego Salim, his father, drowned along with the sinking of the M/V Mindoro. Tins witness declared that he accompanied both his father and his aunt to the pier to board the boat and at the time Teresa Pamatian was bringing cash and personal belongings of about P250.00 worth. His father brought with him P200.00 in cash plus some belongings. He admitted that when his father boarded the vessel he did not have yet a ticket.

The plaintiffs further submitted in evidence a copy of a Radiogram stating among other things that the MN Mindoro was loaded also with 3,000 cases of beer, one dump truck and 292 various goods (Exhs. D and D-1, p. 162 rec).

In alleging negligence on the part of the vessel, plaintiffs introduced in evidence a letter sent to the Department of Social Welfare concerning the resurvey of the M/V Mindoro victims (Exh. F, p. 169 rec.) and a telegram to the Social Welfare Administration (Exh. G, p. 170 rec.), a resurvey of the M/V 'Mindoro' victims (Exh. H, p. 171 rec.), a complete list of the M/V 'Mindoro' victims (Exhs. H-1 to H-8, pp. 172179 rec.), a certified true copy of the Special Permit to the Compania Maritima issued by the Bureau of Customs limiting the vessel to only 193 passengers (Exh. X, p. 318 rec.).

It appears that in a decision of the Board of Marine Inquiry, dated February 2, 1970, it was found that the captain and some officers of the crew were negligent in operating the vessel

and imposed upon them a suspension and/or revocation of their license certificates. It appears, however, that this decision cannot be executed against the captain who perished with the vessel (Exhs. E, E-1, E-1-A, E-2 to E-9, pp. 163- 168 rec.).

Upon agreement of the parties, the plaintiffs also introduced in evidence the transcript of stenographic notes of the testimony of Boanerjes Prado before Branch I of this Court (Exh. U, pp. 203-220) and that of Felimon Rebano in the same branch (Exh. V, pp. 225-260 rec.).

The defendant alleges that no negligence was ever established and, in fact, the shipowners and their officers took all the necessary precautions in operating the vessel. Furthermore, the loss of lives as a result of the drowning of some passengers, including the relatives of the herein plaintiff, was due to force majeure because of the strong typhoon 'Welming.' It appears also that there was a note of marine protest in connection with the sinking of the vessel as substantiated by affidavits (Exhs. 3, 3-A, 3-B, 3-C, 3-D, 3-E, 3-F and 3-G rec.). On this score Emer Saul, member of the PC Judge Advocate General's Office, brought to Court records of this case which were referred to their office by the Board of Marine Inquiry. According to him the decision referred to by the plaintiffs was appealed to the Department of National Defense, although he did not know the result of the appeal. At any rate, he knew that the Department of National Defense remanded the case to the Board of Marine Inquiry for further investigation. In the second indorsement signed by Efren I. Plana, Undersecretary of National Defense, it is stated, among other things, that the hearings of the Board of Marine Inquiry wherein the Philippine Coast Guard made the decision lacked the necessary quorum as required by Section 827 of the Tariff and Customs Code. Moreover, the decision of the Commandant of the Philippine Coast Guard relied principally on the findings reached by the Board of Officers after an ex-parte investigation especially in

those aspects unfavorable to the captain (Exh. 1, folder of exhibits).

It appears also that there were findings and recommendations made by the Board of Marine Inquiry, dated March 5, 1968, recommending among other things that the captain of the M/V 'Mindoro,' Felicito Irineo, should be exonerated. Moreover, Captain Irineo went down with the vessel and his lips are forever sealed and could no longer defend himself. This body also found that the ship's compliment (sic) and crew were all complete and the vessel was in seaworthy condition. If the M/V Mindoro' sank, it was through force majeure (Exhs. 2 & 2-A, folder of exhibits).

Defendant also introduced in evidence the transcripts of stenographic notes of the testimony of Francisco Punzalan, marine officer, as well as of Abelardo F. Garcia, Harbor Pilot in Zamboanga City, in Civil Case No. Q-12473 of Branch XXVIII, Court of First Instance of Rizal, Quezon City Branch (Exhs. 3-H & 10-H, folder of exhibits), and of Arturo Ilagan, boat captain, in Civil Case No. Q-1 5962 of Branch V, of the same Court (Exh. 9 folder of exhibits).

It appears that five other vessels left the pier at Manila on November 2, 1967, aside from the M/V Mindoro' (Exhs 4 & 4-A). A certification of the Weather Bureau indicated the place of typhoon 'Welming' on November 2, 1967 (Exh. 6). A certification of the shipyard named El Varadero de Manila stated among other things that the M/V 'Mindoro' was dry-docked from August 25 to September 6, 1967 and was found to be in a seaworthy condition (Exh. 5), and that the said M/V 'Mindoro' was duly inspected by the Bureau of Customs (Exhs. 7, 7-A & 7-B). Another certification was introduced stating among other things that the Bureau of Customs gave a clearance to the M/V 'Mindoro' after inspection (Exh. 8 folder of exhibits). (CFI Decision, Records, pp. 468-471)

On the basis of these facts, the trial court sustained the position of private respondent Compania Maritima

(Maritima, for short) and issued a decision on March 27, 1974, to wit:

WHEREFORE, the Court finds that in view of lack of sufficient evidence, the case be, as it is hereby DISMISSED.

For lack of evidence, the counterclaim is also hereby DISMISSED.

IT IS SO ORDERED. (Records, p. 474)

Forthwith, the petitioners' heirs and Reyes brought an appeal to the Court of Appeals. As earlier mentioned, the appellate court affirmed the decision on appeal. While it found that there was concurring negligence on the part of the captain which must be imputable to Maritima, the Court of Appeals ruled that Maritima cannot be held liable in damages based on the principle of limited liability of the shipowner or ship agent under Article 587 of the Code of Commerce.

The heirs and Reyes now come to Us with the following assignment of errors:

ERROR I

THE HONORABLE RESPONDENT COURT OF APPEALS ERRED IN NOT CONCENTRATING TO (sic) THE PROVISION OF LAW IN THE NEW CIVIL CODE AS EXPRESSED) IN, —

Art. 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.

ERROR II

RESPONDENT COURT OF APPEALS ERRED IN NOT REVERSING THE DECISION OF THE LOWER COURT OF ORIGIN AFTER FINDING A SERIES OF FAULTS AND NEGLIGENCE AND IN NOT ORDERING ITS CO-RESPONDENT COMPANIA MARITIMA TO PAY THE DAMAGES IN ACCORDANCE WITH THE LAW.

ERROR III

THE HONORABLE RESPONDENT COURT OF APPEALS ERRED TO NOTE, OBSERVE AND COMPREHEND THAT ART. 587 OF THE CODE OF COMMERCE IS ONLY FOR THE GOODS WHICH THE VESSEL CARRIED AND DO NOT INCLUDE PERSONS. (Rollo, p. 8)

The petition has merit. At the outset, We note that there is no dispute as to the finding of the captain's negligence in the mishap. The present controversy centers on the questions of Maritima's negligence and of the application of Article 587 of the Code of Commerce. The said article provides:

Art. 587. The ship agent shall also be civilly liable for indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel, but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight it may have earned during the voyage.

Under this provision, a shipowner or agent has the right of abandonment; and by necessary implication, his liability is confined to that which he is entitled as of right to abandon-"the vessel with all her equipments and the freight it may have earned during the voyage" (Yangco v. Laserna, et al., 73 Phil. 330, 332). Notwithstanding the passage of the New Civil Code, Article 587 of the Code of Commerce is still good law. The reason lies in the peculiar nature of maritime law which is 94 exclusively real and hypothecary that operates to limit such liability to the value of the vessel, or to the insurance thereon, if any (Yangco v. Laserna, Ibid). As correctly stated by the appellate court, "(t)his rule is found necessary to offset against the innumerable hazards and perils of a sea voyage and to encourage shipbuilding and marine commerce. (Decision, Rollo, p. 29). Contrary to the petitioners' supposition, the limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers wherein the shipowner or agent may properly be held liable for the negligent or illicit acts of the captain (Yangco v. Laserna, Ibid). It must be stressed at this point that Article 587 speaks only of situations where the fault or negligence is committed solely by the captain. In cases where the shipowner is likewise to be blamed, Article 587 does not apply (see Manila Steamship Co., Inc. v. Abdulhanan, et al., 100 Phil. 32, 38). Such a situation will be covered by the provisions of the New Civil

Code on Common Carriers. Owing to the nature of their business and for reasons of public policy, common carriers are tasked to observe extraordinary diligence in the vigilance over the goods and for the safety of its passengers (Article 1733, New Civil Code). Further, they are bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances (Article 1755, New Civil Code). Whenever death or injury to a passenger occurs, common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as prescribed by Articles 1733 and 1755 (Article 1756, New Civil Code).

Guided by the above legal provisions, We painstakingly reviewed the records of the case and found imprints of Maritima's negligence which compel Us to reverse the conclusion of the appellate court.

Maritima claims that it did not have any information about typhoon 'Welming' until after the boat was already at sea. Modem technology belie such contention. The Weather Bureau is now equipped with modern apparatus which enables it to detect any incoming atmospheric disturbances. In his summary report on tropical cyclone 'Welming' which occurred within the Philippine Area of Responsibility, Dr. Roman L. Kintanar, Weather Bureau Director, stated that during the periods of November 15, 1967, the Bureau issued a total of seventeen (17) warnings or advisories of typhoon 'Welming' to shipping companies. Additionally, he reported that:

By 11:15 a.m. of November lst, or in less than twenty four hours, the storm intensified into a typhoon. It was by then located at 8.7 N 137.3 E with sea level pressure of 978 millibars, an eye diameter of about 18.53 kilometers and a maximum surface wind of 139 kilometers per hour. "As it moved along in the open sea, it intensified further and by 11.07 a.m. of November 2, when its center was at 103 N 131.4 E, it had attained surface winds of about 240 kilometers per hour. ... (Exh. Z, p. 131, Index of Exhibits, p. 11 5, Emphasis supplied).

Considering the above report and the evidence on record showing the late departure of the ship at 6:00 p.m. (instead of the scheduled 2:00 p.m. departure) on November 2, 1967, We find it highly improbable that the Weather Bureau had not yet issued any typhoon bulletin at any time during the day to the

shipping companies. Maritima submitted no convincing evidence to show this omission. It's evidence showing the Weather Bureau's forecast of November 3, 1967 is not persuasive. It merely indicated the weather bulletin of that day. Nowhere could We find any statement therein from the Weather Bureau that it had not issued any forecast on November I and 2, 1967 (Exh. 6, Records, p. 257). Significantly, the appellate court found that the ship's captain through his action showed prior knowledge of the typhoon. The court said:

... It cannot be true that he was apprised of the typhoon only at about 11:00 o'clock the following morning on November 3, 1967 when the Weather report was transmitted to him from the Weather Bureau at which time he plotted its position. For in his radiogram sent to defendant-appellee's office in Manila as early as 8:07 in the morning of November 3, 1967 (Exh. D) he states in the concluding portion 'still observing weather condition.' thereby implicitly suggesting that he had known even before departure of the unusual weather condition. ... (Decision, Rollo, p. 26)

If the captain knew of the typhoon beforehand, it is inconceivable for Maritima to be totally in the dark of 'Welming.' In allowing the ship to depart late from Manila despite the typhoon advisories, Maritima displayed lack of foresight and minimum concern for the safety of its passengers taking into account the surrounding circumstances of the case.

While We agree with the appellate court that the captain was negligent for overloading the ship, We, however, rule that Maritima shares equally in his negligence. We find that while M/V Mindoro was already cleared by the Bureau of Customs and the Coast Guard for departure at 2:00 p.m. the ship's departure was, however, delayed for four hours. Maritima could not account for the delay because it neither checked from the captain the reasons behind the delay nor sent its representative to inquire into the cause of such delay. It was due to this interim that the appellate court noted that "(i)ndeed there is a great probability that unmanifested cargo (such as dump truck, 3 toyota cars, steel bars, and 6,000 beer cases) and passengers (about 241 more than the authorized 193 passengers) were loaded during the four (4) hour interval" (Decision, p. 13, Rollo, p. 26). Perchance, a closer supervision could have prevented the overloading of the ship. Maritima could have directed the ship's captain to immediately depart in view of the fact that as of 11:07 in the morning of November 2,

1967, the typhoon had already attained surface winds of about 240 kilometers per hour. As the appellate court stated, '(v)erily, if it were not for have reached (its) destination and this delay, the vessel could thereby have avoided the effects of the storm" (Decision, Rollo p. 26). This conclusion was buttressed by evidence that another ship, M/V Mangaren, an interisland vessel, sailed for New Washington, Aklan on November 2, 1967, ahead of M/V Mindoro and took the same route as the latter but it arrived safely (Exh. BB-2, Index of Exhibits, pp. 143-144 and Exh. 4-A, Ibid, p. 254).

Maritima presents evidence of the seaworthy condition of the ship prior to its departure to prove that it exercised extraordinary diligence in this case. M/V Mindoro was drydocked for about a month. Necessary repairs were made on the ship. Life saving equipment and navigational instruments were installed.

While indeed it is true that all these things were done on the vessel, Maritima, however, could not present evidence that it specifically installed a radar which could have allowed the vessel to navigate safely for shelter during a storm. Consequently, the vessel was left at the mercy of ''Welming' in the open sea because although it was already in the vicinity of the Aklan river, it was unable to enter the mouth of Aklan River to get into New Washington, Aklan due to darkness and the Floripon Lighthouse at the entrance of the Aklan River was not functioning or could not be seen at all (Exh. 3-H, Index of Exhibits, p. 192-195; see also Exh. 2-A, Ibid, p. 160). Storms and typhoons are not strange occurrences. In 1967 alone before 'Welming,' there were about 17 typhoons that hit the country (Exh. M, Index of Exhibits, p. 115), the latest of which was typhoon Uring which occurred on October 20-25, which cost so much damage to lives and properties. With the impending threat of 'Welming,' an important device such as the radar could have enabled the ship to pass through the river and to safety.

The foregoing clearly demonstrates that Maritima's lack of extraordinary diligence coupled with the negligence of the captain as found by the appellate court were the proximate causes of the sinking of M/V Mindoro.

Hence, Maritima is liable for the deaths and injury of the victims. amount of With the above finding, We now come to the damages due to the petitioners. Ordinarily, We would remand the case to the trial court for the reception of evidence. Considering however, that this case has been pending for almost twenty-three (23) years now and that since all the evidence had already been presented by both parties and received by the trial court, We resolve to decide

the corresponding damages due to petitioners (see Samal v. Court of Appeals, 99 Phil. 230; Del Castillo v. Jaymalin, L-28256, March 17, 1982, 112 SCRA 629).

In their complaint filed with the Court of First Instance, petitioners prayed for moral, actual and exemplary damages, as well as for attorney's fees plus costs.

Under Article 1764 in relation to Article 2206 of the New Civil Code, the amount of damages for the death of a passenger caused by the breach of contract by a common carrier is at least three thousand pesos (P3,000.00). The prevailing jurisprudence has increased the amount of P3,000.00 to P30,000.00 (De Lima v. Laguna Tayabas Co., L-35697-99, April 15, 1988, 160 SCRA 70). Consequently, Maritima should pay the civil indemnity of P30,000.00 to the heirs of each of the victims. For mental anguish suffered due to the deaths of their relatives, Maritima should also pay to the heirs the sum of P10,000.00 each as moral damages.

In addition, it was proven at the trial that at the time of death, (1) Amparo delos Santos had with her cash in the sum of P1,000.00 and personal belongings valued at P500.00; (2) Teresa Pamatian, cash in the sum of P250.00 and personal belongings worth P200.00; and (3) Diego Salem, cash in the sum of P200.00 and personal belongings valued at P100.00. Likewise, it was established that the heirs of Amparo delos Santos and her deceased children incurred transportation and incidental expenses in connection with the trial of this case in the amount of P500.00 while Dominador Salem, son of victim Diego Salem and nephew of victim Teresa Pamatian spent about P100.00 for expenses at the trial. With respect to petitioner Reyes, the evidence shows that at the time of the disaster, he had in his possession cash in the sum of P2,900.00 and personal belongings worth P100.00. Further, due to the disaster, Reyes was unable to work for three months due to shock and he was earning P9.50 a day or in a total sum of P855.00. Also, he spent about P100.00 for court expenses. For such losses and incidental expenses at the trial of this case, Maritima should pay the aforestated amounts to the petitioners as actual damages.

Reyes' claim for moral damages cannot be granted inasmuch as the same is not recoverable in damage action based on the breach of contract of transportation under Articles 2219 and 2220 of the New Civil Code except (1) where the mishap resulted in the death of a passenger and (2) where it is proved that the carrier was guilty of fraud or bad faith, even if death does not result (Rex Taxicab Co., Inc. v. Bautista, 109 Phil. 712). The exceptions do not apply in this case since Reyes survived the incident and no

evidence was presented to show that Maritima was guilty of bad faith. Mere carelessness of the carrier does not per se constitute or justify an inference of malice or bad faith on its part (Rex Taxicab Co., Inc. v. Bautista, supra).

Anent the claim for exemplary damages, We are not inclined to grant the same in the absence of gross or reckless negligence in this case.

As regards the claim for attorney's fees, the records reveal that the petitioners engaged the services of a lawyer and agreed to pay the sum of P 3,000.00 each on a contingent basis (see TSN'S, July 21, 1971, p. 24; November 3, 1971, pp. 18 and 29). In view hereof, We find the sum of P 10,000.00 as a reasonable compensation for the legal services rendered.

ACCORDINGLY, the appealed decision is hereby REVERSED and judgment is hereby rendered sentencing the private respondent to pay the following: (1) P30,000.00 as indemnity for death to the heirs of each of the victims; (2) P10,000.00 as moral damages to the heirs of each of the victims; (3) P6,805.00 as actual damages divided among the petitioners as follows: heirs of Amparo Delos Santos and her deceased children, P2,000.00; heirs of Teresa Pamatian, P450.00; heirs of Diego Salem, P400.00; and Ruben Reyes, P2,955.00; (4) P10,000.00 as attorney's fees; and (5) the costs.

SO ORDERED.

[G.R. No. 110398.  November 7, 1997]

NEGROS NAVIGATION CO., INC., petitioner, vs. THE COURT OF APPEALS, RAMON

MIRANDA, SPS. RICARDO and VIRGINIA DE LA VICTORIA,respondents

MENDOZA, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals affirming with modification the Regional Trial Court’s award of damages to private respondents for the death of

relatives as a result of the sinking of petitioner’s vessel.

In April of 1980, private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin tickets (#74411, 74412, 74413 and 74414) for his wife, daughter, son and niece who were going to Bacolod City to attend a family reunion. The tickets were for Voyage No. 457-A of the M/V Don Juan, leaving Manila at 1:00 p.m. on April 22, 1980.

The ship sailed from the port of Manila on schedule.

At about 10:30 in the evening of April 22, 1980, the Don Juan collided off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport Corporation (PNOC/STC).  As a result, the M/V Don Juan sank. Several of her passengers perished in the sea tragedy.  The bodies of some of the victims were found and brought to shore, but the four members of private respondents’ families were never found.

Private respondents filed a complaint on July 16, 1980 in the Regional Trial Court of Manila, Branch 34, against the Negros Navigation, the Philippine National Oil Company (PNOC), and the PNOC Shipping and Transport Corporation (PNOC/STC), seeking damages for the death of Ardita de la Victoria Miranda, 48, Rosario V. Miranda, 19, Ramon V. Miranda, Jr., 16, and Elfreda de la Victoria, 26.

In its answer, petitioner admitted that private respondents purchased ticket numbers 74411, 74412, 74413 and 74414; that the ticket numbers were listed in the passenger manifest; and that

the Don Juan left Pier 2, North Harbor, Manila on April 22, 1980 and sank that night after being rammed by the oil tanker M/T Tacloban City, and that, as a result of the collision, some of the passengers of the M/V Don Juan died.  Petitioner, however, denied that the four relatives of private respondents actually boarded the vessel as shown by the fact that their bodies were never recovered.  Petitioner further averred that the Don Juan was seaworthy and manned by a full and competent crew, and that the collision was entirely due to the fault of the crew of the M/TTacloban City.

On January 20, 1986, the PNOC and petitioner Negros Navigation Co., Inc. entered into a compromise agreement whereby petitioner assumed full responsibility for the payment and satisfaction of all claims arising out of or in connection with the collision and releasing the PNOC and the PNOC/STC from any liability to it.  The agreement was subsequently held by the trial court to be binding upon petitioner, PNOC and PNOC/STC.  Private respondents did not join in the agreement.

After trial, the court rendered judgment on February 21, 1991, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs, ordering all the defendants to pay jointly and severally to the plaintiffs damages as follows:

To Ramon Miranda:

P42,025.00   for actual damages;

P152,654.55        as compensatory damages for loss of

earning capacity of his wife;

P90,000.00          as compensatory damages for wrongful death of three (3) victims;

P300,000.00 as moral damages;

P50,000.00          as exemplary damages, all in the total amount of P634,679.55; and

P40,000.00   as attorney’s fees.

To Spouses Ricardo and Virginia de la Victoria:

P12,000.00   for actual damages;

P158,899.00        as compensatory damages for loss of earning capacity;

P30,000.00   as compensatory damages for wrongful death;

P100,000.00 as moral damages;

P20,000.00          as exemplary damages, all in the total amount of P320,899.00; and

P15,000.00   as attorney’s fees.

On appeal, the Court of Appeals[1] affirmed the decision of the Regional Trial Court with modification –

1. Ordering and sentencing defendants-appellants, jointly and severally, to pay plaintiff-appellee Ramon Miranda the amount of P23,075.00 as actual damages instead of P42,025.00;

2. Ordering and sentencing defendants-appellants, jointly and severally, to pay plaintiff-appellee Ramon Miranda the amount of P150,000.00, instead of P90,000.00, as compensatory

damages for the death of his wife and two children;

3. Ordering and sentencing defendants-appellants, jointly and severally, to pay plaintiffs-appellees Dela Victoria spouses the amount of P50,000.00, instead of P30,000.00, as compensatory damages for the death of their daughter Elfreda Dela Victoria;

Hence this petition, raising the following issues:

(1)  whether the members of private respondents’ families were actually passengers of the Don Juan;

(2)  whether the ruling in Mecenas v. Court of Appeals,[2] finding the crew members of petitioner to be grossly negligent in the performance of their duties, is binding in this case;

(3)  whether the total loss of the M/V Don Juan extinguished petitioner’s liability; and

(4)  whether the damages awarded by the appellate court are excessive, unreasonable and unwarranted.

First.  The trial court held that the fact that the victims were passengers of the M/V Don Juan was sufficiently proven by private respondent Ramon Miranda, who testified that he purchased tickets numbered 74411, 74412, 74413, and 74414 at P131.30 each from the Makati office of petitioner for Voyage No. 47-A of the M/V Don Juan, which was leaving Manila on April 22, 1980. This was corroborated by the passenger manifest (Exh. E) on which the numbers of the tickets and the names of Ardita Miranda and her children and Elfreda de la Victoria appear.

Petitioner contends that the purchase of the tickets does not necessarily mean that the alleged victims actually took the trip.  Petitioner asserts that it is common knowledge that passengers purchase tickets in advance but do not actually use

them.  Hence, private respondent should also prove the presence of the victims on the ship. The witnesses who affirmed that the victims were on the ship were biased and unreliable.

This contention is without merit. Private respondent Ramon Miranda testified that he personally took his family and his niece to the vessel on the day of the voyage and stayed with them on the ship until it was time for it to leave. There is no reason he should claim members of his family to have perished in the accident just to maintain an action.  People do not normally lie about so grave a matter as the loss of dear ones.  It would be more difficult for private respondents to keep the existence of their relatives if indeed they are alive than it is for petitioner to show the contrary.   Petitioner’s only proof is that the bodies of the supposed victims were not among those recovered from the site of the mishap.  But so were the bodies of the other passengers reported missing not recovered, as this Court noted in the Mecenas[3] case.

Private respondent Miranda’s testimony was corroborated by Edgardo Ramirez.  Ramirez was a seminarian and one of the survivors of the collision. He testified that he saw Mrs. Miranda and Elfreda de la Victoria on the ship and that he talked with them.  He knew Mrs. Miranda who was his teacher in the grade school. He also knew Elfreda who was his childhood friend and townmate.  Ramirez said he was with Mrs. Miranda and her children and niece from 7:00 p.m. until 10:00 p.m. when the collision happened and that he in fact had dinner with them.  Ramirez said he and Elfreda stayed on the deck after dinner and it was there where they were jolted by the collision of the two vessels.  Recounting the moments after the collision, Ramirez

testified that Elfreda ran to fetch Mrs. Miranda.  He escorted her to the room and then tried to go back to the deck when the lights went out.  He tried to return to the cabin but was not able to do so because it was dark and there was a stampede of passengers from the deck.

Petitioner casts doubt on Ramirez’ testimony, claiming that Ramirez could not have talked with the victims for about three hours and not run out of stories to tell, unless Ramirez had a “storehouse” of stories.  But what is incredible about acquaintances thrown together on a long journey staying together for hours on end, in idle conversation precisely to while the hours away?

Petitioner also points out that it took Ramirez three (3) days before he finally contacted private respondent Ramon Miranda to tell him about the fate of his family.  But it is not improbable that it took Ramirez three days before calling on private respondent Miranda to tell him about the last hours of Mrs. Miranda and her children and niece, in view of the confusion in the days following the collision as rescue teams and relatives searched for survivors.

Indeed, given the facts of this case, 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.

Second.  In finding petitioner guilty of negligence and in failing to exercise the extraordinary diligence required of it in the carriage of passengers, both the trial court and the appellate court relied on the findings of this Court in Mecenas v. Intermediate Appellate Court,[4] which case was brought for the death of other passengers.  In that case it was found

that although the proximate cause of the mishap was the negligence of the crew of the M/T Tacloban City, the crew of the Don Juan was equally negligent as it found that the latter’s master, Capt. Rogelio Santisteban, was playing mahjong at the time of collision, and the officer on watch, Senior Third Mate Rogelio De Vera, admitted that he failed to call the attention of Santisteban to the imminent danger facing them.  This Court found that Capt. Santisteban and the crew of the M/V Don Juan failed to take steps to prevent the collision or at least delay the sinking of the ship and supervise the abandoning of the ship.

Petitioner Negros Navigation was found equally negligent in tolerating the playing of mahjong by the ship captain and other crew members while on board the ship and failing to keep the M/VDon Juan seaworthy so much so that the ship sank within 10 to 15 minutes of its impact with the M/T Tacloban City.

In addition, the Court found that the Don Juan was overloaded.   The Certificate of Inspection, dated August 27, 1979, issued by the Philippine Coast Guard Commander at Iloilo City stated that the total number of persons allowed on the ship was 864, of whom 810 are passengers, but there were actually 1,004 on board the vessel when it sank, 140 persons more than the maximum number that could be safely carried by it.

Taking these circumstances together, and the fact that the M/V Don Juan, as the faster and better-equipped vessel, could have avoided a collision with the  PNOC tanker, this Court held that even if the Tacloban City had been at fault for failing to observe an internationally-recognized rule of navigation, the Don Juan was guilty of

contributory negligence.  Through Justice Feliciano, this Court held:

The grossness of the negligence of the “Don Juan” is underscored when one considers the foregoing circumstances in the context of the following facts:  Firstly, the “Don Juan” was more than twice as fast as the “Tacloban City.” The “Don Juan’s” top speed was 17 knots; while that of the “Tacloban City” was 6.3. knots.  Secondly, the “Don Juan” carried the full complement of officers and crew members specified for a passenger vessel of her class.  Thirdly, the “Don Juan” was equipped with radar which was functioning that night.  Fourthly, the “Don Juan’s” officer on-watch had sighted the “Tacloban City” on his radar screen while the latter was still four (4) nautical miles away.  Visual confirmation of radar contact was established by the “Don Juan” while the “Tacloban City” was still 2.7 miles away.  In the total set of circumstances which existed in the instant case, the “Don Juan,” had it taken seriously its duty of extraordinary diligence, could have easily avoided the collision with the “Tacloban City.”  Indeed, the “Don Juan” might well have avoided the collision even if it had exercised ordinarydiligence merely.

It is true that the “Tacloban City” failed to follow Rule 18 of the International Rules of the Road which requires two (2) power-driven vessels meeting end on or nearly end on each to alter her course to starboard (right) so that each vessel may pass on the port side (left) of the other.  The “Tacloban City,”  when the two (2) vessels were only three-tenths (0.3) of a mile apart, turned (for the second time) 15o to port side while the “Don Juan” veered hard to starboard. . . .  [But] “route observance” of the International Rules of the Road will not relieve a vessel from responsibility if the collision could have been avoided by proper care and skill on her part or even by a departure from the rules.

In the petition at bar, the “Don Juan” having sighted the “Tacloban City” when it was still a long way off was negligent in failing to take early preventive action and in allowing the two (2) vessels to come to such close quarters as to render the collision inevitable when there was no necessity for passing so near to the “Tacloban City” as to create that hazard or inevitability, for the “Don Juan” could choose its own distance.  It is noteworthy that the “Tacloban City,” upon turning hard to port shortly before the moment of collision, signalled its intention to do so by giving two (2) short blasts with its horn.  The  “Don Juan” gave no answering horn blast to signal its own intention and proceeded to turn hard to starboard.

We conclude that Capt. Santisteban and Negros Navigation are properly held liable for gross negligence in connection with the collision of the “Don Juan” and “Tacloban City” and the sinking of the “Don Juan” leading to the death of hundreds of passengers. . . .[5]

Petitioner criticizes the lower court’s reliance on the Mecenas case, arguing that, although this case arose out of the same incident as that involved in Mecenas, the parties are different and trial was conducted separately.  Petitioner contends that the decision in this case should be based on the allegations and defenses pleaded and evidence adduced in it or, in short, on the record of this case.

The contention is without merit.  What petitioner contends may be true with respect to the merits of the individual claims against petitioner but not as to the cause of the sinking of its ship on April 22, 1980 and its liability for such accident, of which there can only be one truth.  Otherwise, one would be subscribing to the sophistry:  truth on one

side of the Pyrenees, falsehood on the other!

Adherence to the Mecenas case is dictated by this Court’s policy of maintaining stability in jurisprudence in accordance with the legal maxim “stare decisis et non quieta movere”  (Follow past precedents and do not disturb what has been settled.)  Where, as in this case, the same questions relating to the same event have been put forward by parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.[6] In Woulfe v. Associated Realties Corporation,[7] the Supreme Court of New Jersey held that where substantially similar cases to the pending case were presented and applicable principles declared in prior decisions, the court was bound by the principle of stare decisis.  Similarly, in State ex rel. Tollinger v. Gill,[8] it was held that under the doctrine of stare decisis a ruling is final even as to parties who are strangers to the original proceeding and not bound by the judgment under the res judicata doctrine. The Philadelphia court expressed itself in this wise: “Stare decisis simply declares that, for the sake of certainty, a conclusion reached in one case should be applied to those which follow, if the facts are substantially the same, even though the parties may be different.”[9] Thus,  in J. M. Tuason v. Mariano, supra, this Court relied on its rulings in other cases involving different parties in sustaining the validity of a land title on the principle of “stare decisis et non quieta movere.”

Indeed, the evidence presented in this case was the same as those presented in the Mecenas case, to wit:

Document                                                                                                           M ecenas case                                                                         This case

Decision of Commandant                         Exh. 10[10]                                 Exh. 11-B-NN/XPhil. Coast Guard in BMI CaseNo. 415-80 dated 3/26/81

Decision of the Minister                             Exh. 11[11]                                 Exh. ZZ

of National Defense dated 3/12/82

Resolution on the motion                           Exh. 13[12]                                 Exh. AAA

for reconsideration of the                                                                             (private respondents)decision of the Minister ofNational Defense dated 7/24/84

Certificate  of inspection                            Exh. 1-A[13]                               Exh. 19-NN

dated 8/27/79

Certificate of Stability                                 Exh. 6-A[14]                               Exh. 19-D-NNdated 12/16/76

Nor is it true that the trial court merely based its decision on the Mecenas case.  The trial court made its own independent findings on the basis of the testimonies of witnesses, such as Senior Third Mate Rogelio de Vera, who incidentally gave substantially the same testimony on petitioner’s behalf before the Board of Marine Inquiry. The trial court agreed with the conclusions of the then Minister of National Defense finding both vessels to be negligent.

Third.  The next issue is whether petitioner is liable to pay damages notwithstanding the total loss of its ship.  The issue is not one of first impression.  The rule is well-entrenched in our jurisprudence that a shipowner may

be held liable for injuries to passengers notwithstanding the exclusively real and hypothecary nature of maritime law if fault can be attributed to the shipowner.[15]

In Mecenas, this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry.  Petitioner is, therefore, clearly liable for damages to the full extent.

Fourth.  Petitioner contends that, assuming that the Mecenas case applies, private respondents should be allowed to claim only P43,857.14 each as moral damages because in theMecenas case, the amount of P307,500.00 was awarded to the seven children of the Mecenas couple.  Under petitioner’s formula, Ramon Miranda should receive P43,857.14, while the De la Victoria spouses should receive P97,714.28.

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 in a previous case. Where the issue involved was not raised nor presented 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.[16] The decision in the Mecenas case relates to damages for which petitioner was liable to the claimants in that case.

In the case at bar, the award of P300,000.00 for moral damages is reasonable considering the grief petitioner Ramon Miranda suffered as a result of the loss of his entire family.  As a matter of fact, three months after the collision, he developed a heart condition undoubtedly caused by the strain of the loss of his family.  The P100,000.00 given to Mr. and Mrs. de la Victoria is likewise reasonable and should be affirmed.

As for the amount of civil indemnity awarded to private respondents, the appellate court’s award of P50,000.00 per victim should be sustained.  The amount of P30,000.00 formerly set in De Lima v. Laguna Tayabas Co.,[17] Heirs of Amparo delos Santos v. Court of Appeals,[18] and Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate Court[19] as benchmark was subsequently increased to P50,000.00 in the case of Sulpicio Lines, Inc. v. Court of Appeals,[20] which involved the sinking of another interisland ship on October 24, 1988.

We now turn to the determination of the earning capacity of the victims.  With respect to Ardita Miranda, the trial court awarded damages computed as follows:[21]

In the case of victim Ardita V. Miranda whose age  at the time of the accident was 48 years, her life expectancy was computed to be 21.33 years, and therefore, she could have lived up to almost 70 years old.  Her gross earnings for 21.33 years based on P10,224.00 per annum, would be P218,077.92.  Deducting therefrom 30% as her living expenses, her net earnings would be P152,654.55, to which plaintiff Ramon Miranda is entitled to compensatory damages for the loss of earning capacity of his wife.  In considering 30% as the living expenses of Ardita Miranda, the Court takes into account the fact that plaintiff and his wife were supporting their daughter and son who

were both college students taking Medicine and Law respectively.

In accordance with the ruling in Villa-Rey Transit, Inc. v. Court of Appeals,[22] we think the life expectancy of Ardita Miranda was correctly determined to be 21.33 years, or up to age 69. Petitioner contends, however, that Mrs. Miranda would have retired from her job as a public school teacher at 65, hence her loss of earning capacity should be reckoned up to 17.33 years only.

The accepted formula for determining life expectancy is 2/3  multiplied by (80 minus the age of the deceased).  It may be that in the Philippines the age of retirement generally is 65 but, in calculating the life expectancy of individuals for the purpose of determining loss of earning capacity under Art. 2206(1) of the Civil Code,  it is assumed that the deceased would have earned income even after retirement from a particular job.  In this case, the trial court took into account the fact that Mrs. Miranda had a master’s degree and a good prospect of becoming principal of the school in which she was teaching.  There was reason to believe that her income would have increased through the years and she could still earn more after her retirement, e.g., by becoming a consultant, had she not died.  The gross earnings which Mrs. Miranda could reasonably be expected to earn were it not for her untimely death was, therefore, correctly computed by the trial court to be P218,077.92 (given a gross annual income of P10,224.00 and life expectancy of 21.33 years).

Petitioner contends that from the amount of gross earnings, 60% should be deducted as necessary living expenses, not merely 30% as the trial court

allowed.  Petitioner contends that 30% is unrealistic, considering that Mrs. Miranda’s earnings would have been subject to taxes, social security deductions and inflation.

We agree with this contention.  In Villa-Rey Transit, Inc. v. Court of Appeals,[23] the Court allowed a deduction of P1,184.00 for living expenses from the P2,184.00 annual salary of the victim, which is roughly 54.2% thereof.  The deceased was 29 years old and a training assistant in the Bacnotan Cement Industries.  In People v. Quilaton,[24] the deceased was a 26-year old laborer earning a daily wage.  The court allowed a deduction of P120,000.00 which was 51.3% of his annual gross earnings of P234,000.00.  In People v. Teehankee,[25] the court allowed a deduction ofP19,800.00, roughly 42.4% thereof from the deceased’s annual salary of P46,659.21. The deceased, Maureen Hultman, was 17 years old and had just received her first paycheck as a secretary. In the case at bar, we hold that a deduction of 50% from Mrs. Miranda’s gross earnings (P218,077.92) would be reasonable, so that her net earning capacity should be P109,038.96.  There is no basis for supposing that her living expenses constituted a smaller percentage of her gross income than the living expenses in the decided cases.   To hold that she would have used only a small part of her income for herself, a larger part going to the support of her children would be conjectural and unreasonable.

As for Elfreda de la Victoria, the trial court found that, at the time of her death, she was 26 years old, a teacher in a private school in Malolos, Bulacan, earning P6,192.00 per annum.  Although a probationary employee, she had

already been working in the school for two years at the time of her death and she had a general efficiency rating of 92.85% and it can be presumed that, if not for her untimely death, she would have become a regular teacher.  Hence, her loss of earning capacity is P111,456.00, computed as follows:

net earning capacity (x)    =  life expectancy  x     [  gross annual income less reasonable & necessary living expenses (50%) ]

           x         =     [ 2 (80-26) ]    x           [P6,192.00       -      P3,096.00]

                                    3

                       =            36               x            3,096.00

                 =     P111,456.00

On the other hand,  the award of actual damages in the amount of P23,075.00 was determined by the Court of Appeals on the basis of receipts submitted by private respondents.  This amount is reasonable considering the expenses incurred by private respondent Miranda in organizing three search teams to look for his family, spending for transportation in going to places such as Batangas City and Iloilo, where survivors and the bodies of other victims were found, making long distance calls, erecting a monument in honor of the four victims, spending for obituaries in theBulletin Today  and for food, masses and novenas.

Petitioner’s contention that the expenses for the erection of a monument and other expenses for memorial services for the victims should be considered included in the indemnity for death

awarded to private respondents is without merit.  Indemnity for death is given to compensate for violation of the rights of the deceased, i.e., his right to life and physical integrity.[26] On the other hand, damages incidental to or arising out of such death are for pecuniary losses of the beneficiaries of the deceased.

As for the award of attorney’s fees, we agree with the Court of Appeals that the amount of P40,000.00 for private respondent Ramon Miranda and P15,000.00 for the de la Victoria spouses is justified.  The appellate court correctly held:

The Mecenas case cannot be made the basis for determining the award for attorney’s fees.  The award would naturally vary or differ in each case.  While it is admitted that plaintiff-appellee Ramon Miranda who is himself a lawyer, represented also plaintiffs-appellees Dela Victoria spouses, we note that separate testimonial evidence were adduced by plaintiff-appellee Ramon Miranda (TSN, February 26, 1982, p. 6) and plaintiffs-appellees spouses Dela Victoria (TSN, August 13, 1981, p. 43).  Considering the amount of work and effort put into the case as indicated by the voluminous transcripts of stenographic notes, we find no reason to disturb the award of P40,000.00 for plaintiff-appellee Ramon Miranda and P15,000.00 for plaintiffs-appellees Dela Victoria spouses.[27]

The award of exemplary damages should be increased to  P300,000.00 for Ramon Miranda and P100,000.00 for the de la Victoria spouses in accordance with our ruling in the Mecenascase:

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against such behaviour.  In requiring

compliance with the standard of extraordinary diligence, a standard which is in fact that of the highest possible degree of diligence, from common carriers and in creating a presumption of negligence against them, the law seeks to compel them to control their employees, to tame their reckless instincts and to force them to take adequate care of human beings and their property.  The Court will take judicial notice of the dreadful regularity with which grievous maritime disasters occur in our waters with massive loss of life.  The bulk of our population is too poor to afford domestic air transportation.  So it is that notwithstanding the frequent sinking of passenger vessels in our waters, crowds of people continue to travel by sea.  This Court is prepared to use the instruments given to it by the law for securing the ends of law and public policy.  One of those instruments is the institution of exemplary damages; one of those ends, of special importance in an archipelagic state like the Philippines, is the safe and reliable carriage of people and goods by sea.[28]

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with modification and petitioner is ORDERED to pay private respondents damages as follows:

To private respondent Ramon Miranda:

P23,075.00                    for actual damages;

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

P150,000.00                         as compensatory damages for

wrongful death of three (3) victims;

P300,000.00                  as moral damages;

P300,000.00                         as exemplary damages, all in the total amount of   P 882,113.96 ; and

P40,000.00                    as attorney’s fees.

To private respondents Spouses Ricardo and Virginia de la Victoria:

P12,000.00                    for actual damages;

P111,456.00                         as compensatory damages  for loss of earning capacity;

P50,000.00                    as compensatory damages for wrongful death;

P100,000.00                  as moral damages;

P100,000.00                         as exemplary damages, all in the total amount of   P 373,456.00;  and

P15,000.00                    as attorney’s fees.

Petitioners are further ordered to pay costs of suit.

In the event the Philippine National Oil Company and/or the PNOC Shipping and Transport Corporation pay or are required to pay all or a portion of the amounts adjudged, petitioner Negros Navigation Co., Inc. shall reimburse either of them

such amount or amounts as either may have paid, and in the event of failure of Negros Navigation Co., Inc., to make the necessary reimbursement, PNOC and/or PNOC/STC shall be entitled to a writ of execution without need of filing another action.

SO ORDERED.