[G.R. No. 128024.

May 9, 2000]
BEBIANO M. BAEZ, petitioner, vs. HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC., respondents.
DECISION
GONZAGA_REYES, J.:
The orders of respondent judge[1] dated June 20, 1996 and October 16, 1996, taking jurisdiction over an action for
damages filed by an employer against its dismissed employee, are assailed in this petition for certiorari under Rule 65 of
the Rules of Court for having been issued in grave abuse of discretion.
Petitioner was the sales operations manager of private respondent in its branch in Iligan City. In 1993, private respondent
"indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the National Labor Relations
Commission ("NLRC") in Iligan City. In a decision dated July 7, 1994, Labor Arbiter Nicodemus G. Palangan found
petitioner to have been illegally dismissed and ordered the payment of separation pay in lieu of reinstatement, and of
backwages and attorney's fees. The decision was appealed to the NLRC, which dismissed the same for having been filed
out of time.[2] Elevated by petition for certiorari before this Court, the case was dismissed on technical grounds [3]; however,
the Court also pointed out that even if all the procedural requirements for the filing of the petition were met, it would still be
dismissed for failure to show grave abuse of discretion on the part of the NLRC. Slxmis
On November 13, 1995, private respondent filed a complaint for damages before the Regional Trial Court ("RTC") of
Misamis Oriental, docketed as Civil Case No. 95-554, which prayed for the payment of the following: Slxsc
a. P709,217.97 plus 12% interest as loss of profit and/or unearned income of three years;
b. P119,700.00 plus 12% interest as estimated cost of supplies, facilities, properties, space, etc. for three
years;
c. P5,000.00 as initial expenses of litigation; and
d. P25,000.00 as attorney's fees.[4]
On January 30, 1996, petitioner filed a motion to dismiss the above complaint. He interposed in the court below that the
action for damages, having arisen from an employer-employee relationship, was squarely under the exclusive original
jurisdiction of the NLRC under Article 217(a), paragraph 4 of the Labor Code and is barred by reason of the final judgment
in the labor case. He accused private respondent of splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before the Labor Arbiter. He also pointed out that the civil action
of private respondent is an act of forum-shopping and was merely resorted to after a failure to obtain a favorable decision
with the NLRC.Scslx
Ruling upon the motion to dismiss, respondent judge issued the herein questioned Order, which summarized the basis for
private respondent's action for damages in this manner: Slx
Paragraph 5 of the complaint alleged that the defendant violated the plaintiffs policy re: His business in
his branch at Iligan City wherein defendant was the Sales Operations Manager, and paragraph 7 of the
same complaint briefly narrated the modus operandi of defendant, quoted herein: Defendant canvassed
customers personally or through salesmen of plaintiff which were hired or recruited by him. If said
customer decided to buy items from plaintiff on installment basis, defendant, without the knowledge of
said customer and plaintiff, would buy the items on cash basis at ex-factory price, a privilege not given to
customers, and thereafter required the customer to sign promissory notes and other documents using the
name and property of plaintiff, purporting that said customer purchased the items from plaintiff on
installment basis. Thereafter, defendant collected the installment payments either personally or through
Venus Lozano, a Group Sales Manager of plaintiff but also utilized by him as secretary in his own
business for collecting and receiving of installments, purportedly for the plaintiff but in reality on his own
account or business. The collection and receipt of payments were made inside the Iligan City branch
using plaintiffs facilities, property and manpower. That accordingly plaintiffs sales decreased and reduced
to a considerable extent the profits which it would have earned. [5]
In declaring itself as having jurisdiction over the subject matter of the instant controversy, respondent court stated: Mesm
A perusal of the complaint which is for damages does not ask for any relief under the Labor Code of the
Philippines. It seeks to recover damages as redress for defendant's breach of his contractual obligation to
plaintiff who was damaged and prejudiced. The Court believes such cause of action is within the realm of
civil law, and jurisdiction over the controversy belongs to the regular courts.
While seemingly the cause of action arose from employer- employee relations, the employer's claim for
damages is grounded on the nefarious activities of defendant causing damage and prejudice to plaintiff as
alleged in paragraph 7 of the complaint. The Court believes that there was a breach of a contractual
obligation, which is intrinsically a civil dispute. The averments in the complaint removed the controversy

from the coverage of the Labor Code of the Philippines and brought it within the purview of civil law.
(Singapore Airlines, Ltd. Vs. Pao, 122 SCRA 671.) xxx [6]
Petitioner's motion for reconsideration of the above Order was denied for lack of merit on October 16, 1996. Hence, this
petition. Calrky
Acting on petitioner's prayer, the Second Division of this Court issued a Temporary Restraining Order ("TRO ") on March
5, 1997, enjoining respondents from further proceeding with Civil Case No. 95-554 until further orders from the
Court. Kycalr
By way of assignment of errors, the petition reiterates the grounds raised in the Motion to Dismiss dated January 30,
1996, namely, lack of jurisdiction over the subject matter of the action,res judicata, splitting of causes of action, and forumshopping. The determining issue, however, is the issue of jurisdiction. Kyle
Article 217(a), paragraph 4 of the Labor Code, which was already in effect at the time of the filing of this case,
reads: Exsm
ART. 217. Jurisdiction of Labor Arbiters and the Commission. --- (a) Except as otherwise provided under
this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether agricultural or nonagricultural:
xxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the employeremployee relations;
xxx
The above provisions are a result of the amendment by Section 9 of Republic Act ("R.A.") No. 6715, which took effect on
March 21, 1989, and which put to rest the earlier confusion as to who between Labor Arbiters and regular courts had
jurisdiction over claims for damages as between employers and employees. Sppedjo
It will be recalled that years prior to R.A. 6715, jurisdiction over all money claims of workers, including claims for damages,
was originally lodged with the Labor Arbiters and the NLRC by Article 217 of the Labor Code. [7] On May 1, 1979, however,
Presidential Decree ("P.D.") No. 1367 amended said Article 217 to the effect that "Regional Directors shall not indorse and
Labor Arbiters shall not entertain claims for moral or other forms of damages." [8] This limitation in jurisdiction, however,
lasted only briefly since on May 1, 1980, P.D. No. 1691 nullified P.D. No. 1367 and restored Article 217 of the Labor Code
almost to its original form. Presently, and as amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in
Article 217 is comprehensive enough to include claims for all forms of damages "arising from the employer-employee
relations". Miso
Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to claims for damages
filed by employees,[9] we hold that by the designating clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the
basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case. Nexold
Even under Republic Act No. 875 (the "Industrial Peace Act", now completely superseded by the Labor Code),
jurisprudence was settled that where the plaintiff's cause of action for damages arose out of, or was necessarily
intertwined with, an alleged unfair labor practice committed by the union, the jurisdiction is exclusively with the (now
defunct) Court of Industrial Relations, and the assumption of jurisdiction of regular courts over the same is a nullity. [10] To
allow otherwise would be "to sanction split jurisdiction, which is prejudicial to the orderly administration of justice." [11] Thus,
even after the enactment of the Labor Code, where the damages separately claimed by the employer were allegedly
incurred as a consequence of strike or picketing of the union, such complaint for damages is deeply rooted from the labor
dispute between the parties, and should be dismissed by ordinary courts for lack of jurisdiction. As held by this Court
in National Federation of Labor vs. Eisma, 127 SCRA 419: Manikx
Certainly, the present Labor Code is even more committed to the view that on policy grounds, and equally
so in the interest of greater promptness in the disposition of labor matters, a court is spared the often
onerous task of determining what essentially is a factual matter, namely, the damages that may be
incurred by either labor or management as a result of disputes or controversies arising from employeremployee relations.
There is no mistaking the fact that in the case before us, private respondent's claim against petitioner for actual damages
arose from a prior employer-employee relationship. In the first place, private respondent would not have taken issue with
petitioner's "doing business of his own" had the latter not been concurrently its employee. Thus, the damages alleged in

the complaint below are: first, those amounting to lost profits and earnings due to petitioner's abandonment or neglect of
his duties as sales manager, having been otherwise preoccupied by his unauthorized installment sale scheme; and
second, those equivalent to the value of private respondent's property and supplies which petitioner used in conducting
his "business ". Maniks
Second, and more importantly, to allow respondent court to proceed with the instant action for damages would be to open
anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the dissipation of
private respondent's property. This issue has been duly raised and ruled upon in the illegal dismissal case, where private
respondent brought up as a defense the same allegations now embodied in his complaint, and presented evidence in
support thereof. The Labor Arbiter, however, found to the contrary ---that no business losses may be attributed to
petitioner as in fact, it was by reason of petitioner's installment plan that the sales of the Iligan branch of private
respondent (where petitioner was employed) reached its highest record level to the extent that petitioner was awarded the
1989 Field Sales Achievement Award in recognition of his exceptional sales performance, and that the installment scheme
was in fact with the knowledge of the management of the Iligan branch of private respondent. [12] In other words, the issue
of actual damages has been settled in the labor case, which is now final and executory. Manikan
Still on the prospect of re-opening factual issues already resolved by the labor court, it may help to refer to that period
from 1979 to 1980 when jurisdiction over employment-predicated actions for damages vacillated from labor tribunals to
regular courts, and back to labor tribunals. In Ebon vs. de Guzman, 113 SCRA 52,[13] this Court discussed:
The lawmakers in divesting the Labor Arbiters and the NLRC of jurisdiction to award moral and other
forms of damages in labor cases could have assumed that the Labor Arbiters' position-paper procedure of
ascertaining the facts in dispute might not be an adequate tool for arriving at a just and accurate
assessment of damages, as distinguished from backwages and separation pay, and that the trial
procedure in the Court of First Instance would be a more effective means of determining such damages.
xxx
Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC
of the jurisdiction to award damages in labor cases because that setup would mean duplicity of suits,
splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and
the same claim.
So, on May 1, 1980, Presidential Decree No. 1691 (which substantially reenacted Article 217 in its original
form) nullified Presidential Decree No. 1367 and restored to the Labor Arbiter and the NLRC their
jurisdiction to award all kinds of damages in cases arising from employer-employee relations. xxx
(Underscoring supplied)
Clearly, respondent court's taking jurisdiction over the instant case would bring about precisely the harm that the
lawmakers sought to avoid in amending the Labor Code to restore jurisdiction over claims for damages of this nature to
the NLRC. Oldmiso
This is, of course, to distinguish from cases of actions for damages where the employer-employee relationship is merely
incidental and the cause of action proceeds from a different source of obligation. Thus, the jurisdiction of regular courts
was upheld where the damages, claimed for were based on tort [14], malicious prosecution[15], or breach of contract, as
when the claimant seeks to recover a debt from a former employee [16] or seeks liquidated damages in enforcement of a
prior employment contract. [17]
Neither can we uphold the reasoning of respondent court that because the resolution of the issues presented by the
complaint does not entail application of the Labor Code or other labor laws, the dispute is intrinsically civil. Article 217(a)
of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for
damages arising from employer-employee relations ---in other words, the Labor Arbiter has jurisdiction to award not only
the reliefs provided by labor laws, but also damages governed by the Civil Code. [18]
Thus, it is obvious that private respondent's remedy is not in the filing of this separate action for damages, but in properly
perfecting an appeal from the Labor Arbiter's decision. Having lost the right to appeal on grounds of untimeliness, the
decision in the labor case stands as a final judgment on the merits, and the instant action for damages cannot take the
place of such lost appeal.
Respondent court clearly having no jurisdiction over private respondent's complaint for damages, we will no longer pass
upon petitioner's other assignments of error. Ncm
WHEREFORE, the Petition is GRANTED, and the complaint in Civil Case No. 95-554 before Branch 39 of the Regional
Trial Court of Misamis Oriental is hereby DISMISSED. No pronouncement as to costs. Ncmmis
SO ORDERED.

PEOPLE OF THEPHILIPPINES,
Appellee,
- versus CERILLO TAMBIS,
Appellant.

G.R. No. 175589

Promulgated:
July 28, 2008

DECISION
CARPIO MORALES, J.:
Cerilo Tambis (appellant) was charged before the Regional Trial Court (RTC) of Quezon City with Murder in an
Information reading:
That on or about the 12 th day of June 1998 in Quezon City[,] Philippines, the above-named
accused, with intent to kill, with treachery and evident premeditation did then and there willfully, unlawfully,
and feloniously attack, assault, and employ personal violence upon the person of one GAUDIOSO
MORAL JR. by then and there stabbing him on the left portion of his body thereby causing upon him [a]
serious and grave wound which was the direct and immediate cause of his death to the damage and
prejudice of the heirs of GAUDIOSO MORAL JR.[1]
xxxx

Through the testimony of Luzviminda Moral (Luzviminda), the widow of Gaudioso Moral, Jr. (the
victim), the prosecution established the following: [2]
At around 10:00 oclock in the evening of June 12, 1998, as Luzviminda was at her neighbors house to fetch her
husband-the victim who was drinking with a group, appellant arrived. Appellant suddenly stabbed the victim on the left
abdomen and attempted to stab him a second time but Luzviminda pushed appellant away as the victim repaired to hide
inside the neighbors house. The victim died of the stab wound at a hospital the following day.[3]
Upon the other hand, appellant, admitting that he stabbed the victim, claimed self-defense, averring that when the
victim saw him, the latter got mad and attacked him with a knife to thus draw him to grab the knife with which he stabbed
the victim.[4]
Branch 219 of the Quezon City RTC credited the claim of the prosecution. [5] It rejected appellants claim of selfdefense. And it held that while the killing was not attended by evident premeditation, it was attended by treachery, thus:
x x x In this case, the victim was drinking with his buddies, unarmed, and in no position to defend
himself when the accused suddenly appeared and stabbed him. Although, as testified to by the victims
wife, the accused had warned the group Walang kikilos! x x x which should have alerted the victim or put
him on guard, the suddenness [of] his attack against Gaudioso Moral, who was unarmed, demonstrated
that the accused deliberately employed a method of attack which ensured the execution of his felonious
design without risk to himself arising from any defense which his victim might make. [6] (Underscoring
supplied)

The trial court thus convicted appellant of Murder, by Decision of June 17, 1999, disposing as follows:
WHEREFORE, finding the accused Cerilo Tambis y Ollana guilty beyond reasonable doubt of the
crime of Murder, the Court hereby sentences him to suffer the penalty of [r]eclusion[p]erpetua; to pay the
heirs of Gaudioso Moral the amount of P26,034.93 as actual damages; the amount of P30,000.00 as
moral damages; the amount of P1,640,034.50 as compensatory damages for the loss of the victims
earning capacity, and P75,000.00 as indemnity for his death, and to pay the costs.

SO ORDERED.[7]
Appellant lodged before this Court an appeal which it forwarded to the Court of Appeals following People v.
Mateo which directs the intermediate review of decisions imposing the penalty of death, reclusion perpetua, or life
imprisonment.[9]
[8]

In his Brief, appellant assigned as lone error the trial courts finding that the qualifying circumstance of treachery
attended the commission of the crime, [10] he contendingthat by saying Walang kikilos!, he actually warned appellant of the
impending attack;[11] and that even if the attack was sudden and the victim was in a vulnerable position, theywere not
deliberately sought.[12]
The Solicitor General countered:
[T]here is no discernible relation between appellants utterance (walang kikilos) and his
supposed lack of a conscious design to adopt a treacherous mode of attack that would negate treachery.
For alevosia to be considered as a qualifying circumstance, two conditions need to be
satisfied: (a) the employment of means, manner or method of execution which would ensure the safety of
the malefactor from defensive or retaliatory acts on the part of the victim, no opportunity being given to
the latter to defend himself or retaliate; and (b) the means, method, or manner of execution were
deliberately or consciously adopted by the offender. . . . The essence of treachery is that the attack comes
without warning and in a swift, deliberate and unexpected manner, affording the hapless, unarmed and
unsuspecting victim no chance to resist or escape. . . . Such treacherous manner is patent in appellants
chosen mode of attack on the victim.
That appellant consciously adopted his treacherous mode of attack is indicated by the fact that
he proceeded to the place where the victim was drinking carrying a knife. There is no showing that
appellant went to the said place or was carrying the knife for some other purpose. Neither is their any
showing that he merely chanced upon the victim who was caught off-guard nor there was provocation on
the part of the victim.
xxxx
Appellants utterance prior to the attack cannot be considered a warning that would negate
treachery. For a warning to negate treachery, such must give the intended victim the opportunity to defend
himself. Since appellants utterance [was] made immediately prior to the attack, such cannot constitute
adequate warning that would have given the victim the chance to escape or parry the blow. Effectively,
the utterance was inconsequential to the progress of the attack for even with such utterance, the victim
still was not able to defend himself.[13] (Emphasis in the original, underscoring supplied (citations omitted))
By Decision of July 27, 2006, the Court of Appeals affirmed [14] the trial courts decision. Appellant thereupon
brought the case to this Court.[15]

In separate manifestations, appellant and the Solicitor General informed that they would no longer file
supplemental briefs, their respective positions having been adequately discussed in the Briefs they had earlier filed which
had been passed upon by the Court of Appeals.[16]
From a review of the records of the case, this Court finds that, contrary to appellants argument, the Court of
Appeals committed no reversible error in appreciating the qualifying circumstance of treachery.
x x x Treachery may still be appreciated even though the victim was forewarned of the danger to
his person. In other words, even when the victim is warned of the danger, if the execution of the attack
made it impossible for him to defend himself or to retaliate, alevosia can still be
appreciated. (Underscoring supplied)[17]

Appellants
sudden
attack
deprived
the
victim
of
an
opportunity
to
defend himself. His
utterance walang kikilos cannot be construed as warning to the victim to defend himself. It indicates a caveat to restrain
anyone from coming to the victims defense.
Appellants appeal thus fails.
As it is well-established that an appeal in criminal proceedings throws the whole case open for review of all
aspects, including those not raised by the parties, [18] the Court, after combing through the documentary evidence for the
prosecution, finds that a modification of the decision respecting the civil aspect of the case is in order.
The trial court awarded P26,034.93 as actual damages representing expenses for the hospitalization, wake, and
funeral of the victim.[19] A recomputation of the amounts reflected in the documentary evidence (Exhibits G, G-1 to G-18,
H, H-1, I, and I-1[20]) basis of the award yields, however, a total of P26,300.45.
As for the award of P1,640,034.50 representing compensatory damages, the trial court arrived at it in this wise:
x x x The [amount] was computed taking into account the following: a) his age at the time of
his demise 41 years old; b) his life expectancy 65 years; c) his monthly salary of P7,624.70 [as driver
of Egon Trade, Inc.][21] plus 13th month pay of P6,214.70; and d) his gross earnings for 24 years
P2,342,906.4.
Deducting thirty percent 30% therefrom as his living expenses (702,817.92), the actual
damages to be paid by the accused should, therefore, be P1,640,034.50. In considering the thirty
percent rate, the Court took into account the fact that he was the sole bread winner of the family and
he had three minor children.[22]

Jurisprudence, however, has established the following formula for computing compensation for loss of earning
capacity:
net earning capacity = [2/3 x (80-age at time of death) x (gross annual income reasonable and
necessary living expenses],[23] and pegged reasonable and necessary reasonable expenses at 50% of
earnings in the absence of contrary evidence. [24] Applying this formula, this Court arrives
at P1,269,047.30as compensatory damages.
WHEREFORE, the July 27, 2006 Decision of the Court of Appeals affirming that of Branch 219 of the Quezon City
Regional Trial Court is MODIFIED in that the award of actual damages for the hospitalization, wake, and funeral expenses
is INCREASED to P26,300.45, and the award of compensatory damages for loss of earning capacity
is REDUCED to P1,269,047.30. In all other respects, the challenged Decision is AFFIRMED.
SO ORDERED.

PEOPLE OF THE
PHILIPPINES,

G.R. No. 177753

Appellee,

Present:
YNARES-SANTIAGO, * Acting C.J.,
CARPIO MORALES,** J.,
Acting Chairperson,
BRION,
DEL CASTILLO, and
ABAD, JJ.

- versus -

BENJAMIN OCAMPO,
Appellant.

Promulgated:
September 25, 2009

x-------------------------------------------x

DECISION

CARPIO MORALES, J.:

Benjamin Ocampo (appellant) was indicted for Murder before the Regional Trial Court (RTC) of Baguio City,
alleged to have been committed as follows:
That on or about the 9th day of October, 2003, in the City of Baguio, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, with intent to kill and with treachery,
did then and there willfully, unlawfully and feloniously stab RUBEN NGO Y TYCHINGCO with a
stainless knife, thereby inflicting upon the latter: stab wound on the neck, and as a result thereof the
said Ruben Ngo y Tychingco died.
That the killing was attended by the qualifying circumstance of treachery considering that the
accused suddenly attacked/stabbed the victim who did not have any means to defend himself. [1]
From the evidence for the prosecution consisting of, among other things, the testimony of eyewitnesses Mary Ann
Lombay (Mary Ann) and Rosemarie Ngo, wife of Ruben Ngo (the victim), the following version of events is culled: [2]
At around 4:30 p.m. of October 9, 2003, while the victim and his wife were buying garlic chips from Mary Anns
store at 439 Old Market Building, Baguio City, appellant suddenly surfaced, pushed himself between the spouses, stabbed
the victim at the right side of his neck with a kitchen knife, and walked away.
The post-mortem examination of the victim who died two hours after the stabbing yielded the following findings:
GENERAL:
Fairly developed, fairly nourished, previously embalmed male cadaver. Needle puncture noted
at the left arm, left cubital region and left wrist.
HEAD AND NECK:
1.
2.
3.

Incised wound, neck, measuring 10 x 4 cm, 6 cm right of the anterior

midline with stitches applied.
Incised wound, neck, measuring 2 x .02 cm, just along the anterior midline
with 4 stitches applied.
Incised wound, neck, measuring 13.5 x 3 cm, 6 cm left of the anterior
midline.
The right sterno-cleido-mastoid muscle are noted to be hemorrhagic.

Incised wound noted at the trachea and esophagus.

Hemorrhages noted on areas of external and internal jugular veins,
bilateral.
Incised wound noted at the bifurcation of the left carotid artery.

x x x x[3]
The cause of death of the victim was determined to be hemorrhagic shock secondary to stab wound of the neck. [4]
Explaining the number and nature of the wounds on the victims neck, Dr. Elizardo Daileg (Dr. Daileg) who
conducted the post-mortem examination declared that the wounds along the anterior midline and at the left of the anterior
midline were surgical wounds, while the wound at the right of the anterior midline was most likely a stab wound which was
extended surgically for the exploration and ligation of the injured blood vessels; [5] and that the stab wound was 10 to 12
centimeters deep, and the carotid artery and jugular veins were injured. [6]
Dr. Daniel Recolizado, who attended to the victim when he was brought to the hospital, corroborated Dr. Dailegs
testimony.[7]
Upon the other hand, appellant, denying the accusation and interposing alibi, [8] claimed as follows:
He was drinking with friends from 8:00 a.m. to 3:00 p.m. of October 9, 2003, after which he repaired to
the Everlasting Memorial Park where his parents are buried and where he continued drinking as he was depressed over
the death on October 5, 2003 of his brother. He stayed in the park until 6:30 p.m.
From the park, he went to the house of his friend Manny Guanzon (Guanzon) at Brawer Road where he slept and
washed his face. He then went to a beerhouse alongMagsaysay Avenue where he continued drinking until 9:00 p.m. when
he checked in at the Leisure Lodge where he spent the night.
Denying having gone to the public market in the afternoon of October 9, 2003, appellant claimed that he was a
victim of a frame-up, of which the Chinese are the masterminds, he having been exposing a Chinese syndicate. [9]
By Decision of June 15, 2004, Branch 6 of the Baguio City RTC convicted appellant of Murder, disposing as
follows:
WHEREFORE, the Court finds the accused Benjamin Ocampo guilty beyond reasonable
doubt of the offense of Murder, defined and penalized under Article 248 of the Revised Penal Code as
charged in the Information and hereby sentences him to suffer the penalty of Reclusion Perpetua; to
indemnify the heirs of the deceased Ruben Ngo the sum of P50,000.00 as civil indemnity for his
death; P235,682.78 as actual damages incurred in connection with his death, P671,760.00 as
unearned income; and P300,000.00 as moral damages for the mental anguish and pain suffered by
his heirs as a result of his death; all indemnifications being without subsidiary imprisonment in case of
insolvency, and to pay the costs.

The accused Benjamin Ocampo, being a detention prisoner, is entitled to be credited 4/5 of his
preventive imprisonment in the service of his sentence in accordance with Article 29 of the Revised
Penal Code.
SO ORDERED.[10] (Underscoring supplied)

Before the Court of Appeals to which appellant challenged the trial courts decision, he faulted the trial court as
follows:

I
x x x IN FINDING [THAT] THE ACCUSED-APPELLANT WAS POSITIVELY IDENTIFIED BY THE
PROSECUTION WITNESSES AS THE ASSAILANT.
II
GRANTING ARGUENDO THAT THE ACCUSED-APPELLANT STABBED RUBEN NGO, THE
COURT A QUO ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY BEYOND REASONABLE
DOUBT FOR THE CRIME OF MURDER.[11]
By Decision[12] of February 13, 2007, the Court of Appeals affirmed the conviction of appellant but modified his civil
liability in light of the following observations:
We reduce the award of actual damages from P235,682.78 to P69,681.70. x x x [O]nly
substantiated and proven expenses or those that appear to have been genuinely incurred in
connection with the death, wake or burial of the victim will be recognized. Based on the record, We
cannot consider some of the receipts submitted by the prosecution for it was not shown that they were
expended in relation to the death or funeral of the victim. The list submitted by Rosemarie Ngo with
respect to the expenses incurred in the transfer of the body of the victim and the food served during
the wake and burial is self-serving and cannot be considered competent proof. The court can only
award actual damages if supported by receipts. However, current jurisprudence grants the award
of P25,000.00 as temperate damages when it appears that the heirs of the victim had suffered
pecuniary losses but the amount thereof cannot be proved with certainty.
Likewise, the award of moral damages should be reduced from P300,000.00 to P50,000.00 in
line with the prevailing jurisprudence. Moral damages are not intended to enrich the victims heirs but
rather they are awarded to allow them to obtain means for diversion that could serve to alleviate their
moral and psychological sufferings.
With respect to the award of P671,760.00 by way of loss of earning capacity, We hereby
increase it to P671,999.97. As testified to by Rosemarie Ngo, the victim was receiving a net monthly
income of P6,000.00 as a dried fish dealer. His annual income, computed at the rate of P6,000.00 per
month multiplied by twelve (12) months is P72,000.00. From this amount will be deducted his
necessary and incidental expenses estimated at fifty percent (50%) thereof, leaving a balance
of P36,000.00. As the victim was fifty-two (52) years old at the time of his death, his life expectancy of
eighteen point sixty seven (18.67) years is derived using this formula: 2/3 x [80-(age of victim at the
time of death)]. Multiplying the balance of P36,000.00 by his life expectancy of 18.67 years, We arrive
at P671.999.97 as his loss of earning capacity.
In addition to the civil indemnity and damages awarded by the trial court, exemplary damages
in the amount of P25,000.00 must be awarded given the presence of treachery which qualified the
killing to murder. Article 2230 of the Civil Code provides that in criminal offenses, exemplary damages
may be imposed only when the crime was committed with one ore more aggravating
circumstances. The term aggravating circumstances as used therein should be construed in its
generic sense since it did not specify otherwise. [13] (Underscoring supplied)

Thus the Court of Appeals disposed:

WHEREFORE, premises considered, the Decision dated June 15, 2004 rendered by
the Regional Trial Court of Baguio City, Branch 6 in Criminal Case No. 22124-R, finding him guilty of
the crime of murder is hereby AFFIRMED WITH MODIFICATON. The award of loss of earning

capacity
is increased to P671,999.97. The
award
of
actual
and
moral
damages
is reduced to P69,681.70 and P50,000.00, respectively. The accused-appellant is further ordered to
pay the heirs of the victim Ruben Ngo P25,000.00 as exemplary damages andP25,000.00
as temperate damages. (Emphasis and underscoring supplied)
SO ORDERED.[14]

Before this Court at which appellant filed a Notice of Appeal, [15] he and the Solicitor General adopted and repleaded
the arguments they raised in the briefs they respectively filed before the Court of Appeals. [16]
Appellant questions his identification by Mary Ann as the perpetrator of the crime, arguing that Mary Ann failed to
point to him when the policeman showed her photographs of many possible suspects, but that when shown his photograph
the following day, she identified him as the culprit. He thus posits that the power of suggestion might have influenced her to
point to him as the culprit.[17]
When an accused challenges his identification by witnesses, he in effect attacks their credibility. [18] Appellate courts
will not generally disturb the assessment by the trial court of the credibility of witnesses whose testimonies it has heard and
their deportment and manner of testifying it has observed. [19]
In crediting the testimony of eyewitness Mary Ann, the appellate court observed:
x x x Mary Ann Lomboy was unable to identify accused appellant-from several pictures shown
to her by the policemen precisely because accused-appellant was not in any of those
photographs. When shown a lone photograph of the accused-appellant, Mary Ann Lomboy
positively identified him as Ruben Ngos assailant because she knew and remembered him to be the
assailant. Her identification was based solely on her recollection as an eyewitness and it cannot
be said that she was influenced by the policemen to wrongly accuse the accused-appellant. There is
no showing that the prosecution witnesses were ill-motivated to testify against him. [20] (Emphasis and
underscoring supplied)

Appellant has not, however, refuted the foregoing observation of the appellate court.
Mary Anns answer to the question of the trial court when it was eliciting from her the basis of her identification of
appellant as the culprit should put the issue to rest.
xxxx
Court: Just one question from the court because the counsel keeps on repeating that the picture was
the basis for your identifying the accused. What is actually your basis for identifying the
accused as the assailant? Was it the fact that you saw the stabbing or was it the picture
shown to you?
[MARY ANN]
A: He is the one I saw when he stabbed the victim.
Q: So your basis is what you actually saw in the stabbing, not the picture itself?
A: Yes, Your Honor.[21]
x x x x (Emphasis and underscoring supplied)
Notably, the victims wife corroborated Mary Anns identification of appellant as the assailant. [22]

Clutching at straws, appellant claims that he was suffering from delusions or psychosis, hence, he could not have
consciously adopted a mode of attack without endangering himself, citing the assessment by the Department of Psychiatry
of the Baguio General Hospital and Medical Center in its Psychiatric Evaluation Report which states that:
Mr. Ocampo was psychotic before, during, and after the alleged crime. He was psychotic
before the alleged crime, as he firmly believed without rational basis that the Chinese mafia had
influenced the jeepney driver of the vehicle that caused his brothers death. During the commission of
the alleged crime, he was psychotic as he vowed to avenge his brothers death and reportedly stabbed
to death a Chinese-looking passerby whom he firmly believed to be a member of the Chinese
mafia. He was also psychotic after the alleged crime, as he still harbored delusional beliefs that the
Chinese mafia had infiltrated and influenced the government and that they were after him.
[23]
(Underscoring supplied)

Appellant thus appeals to the Court to take notice of his psychosis which, to him, was manifested by his behavior
and irrational statements during the trial of the case. [24]
The assessment of appellants mental condition by the Department of Psychiatry of the Baguio General Hospital
and Medical Center may not be appreciated to rule out treachery in the commission of the crime. As the Court of Appeals
noted:
x x x [T]he accused appellant only presented the Psychiatric Evaluation Report conducted on
him stating that he was psychotic during, before and after the incident but admitted that the doctors
who examined him were not presented in court. In failing to present Gwendolyn C. Cayad, the medical
officer
who
prepared
the
questioned
report
as
a
witness,
the
report
is
considered hearsay evidence. And even if We admit this report as an exception to the hearsay rule,
this report cannot be given evidentiary weight for it involves an opinion of one who must first be
established as an expert witness. Without presenting the doctor who prepared the psychiatric report to
show her qualifications as an expert witness, the report could not be given weight or credit. The report
has very little probative value due to the absence of the examining physician.
We agree with the Office of the Solicitor General that the trial court could not take judicial
notice of the accused-appellants psychosis. This requires presentation of competent proof.The
defense cannot expect the trial court to take judicial notice of the accused-appellants psychosis based
on his behavior and irrational statements during the trial for the presumption always is for sanity. To
establish his insanity, this issue must be properly heard and ruled upon by the court. x x
x[25] (Emphasis and underscoring supplied)

At all events, the Report does not establish that appellants alleged psychosis rendered him incapable of
consciously adopting his chosen mode of attack at the time of the commission of the offense. It bears noting that when
appellant was examined on November 12, 2003 and on December 4, 2003 or after the commission of the crime on
October 9, 2003, the Report notes that he was conscious, oriented as to time, person, and place, and had intact remote,
recent, and immediate memories.[26]
With respect to the appellate courts affirmance with modification (increase) of the trial courts award of
compensation for the victims loss of earning capacity, the Court takes exception thereto. As will be shown shortly, the
testimony of the victims wife that he had a P6,000 monthly net income as a dealer of dried fish does not suffice to grant
such award.[27]
The general rule is that documentary evidence is necessary to prove the victims annual income. Excepted from the
rule[28] for testimonial evidence to suffice as proof is if the victim was either: (1) self-employed, earning less than the
minimum wage under current labor laws, and judicial notice may be taken of the fact that in the victims line of work, no

documentary evidence is available; or (2) employed as a daily wage worker earning less than the minimum wage under
current labor laws.[29]
During the lifetime of the victim, he was a self-employed dried fish dealer from Camarines Norte. For an award of
indemnity for loss of earning capacity to be proper based solely on his wifes testimony, it has to be shown that during his
lifetime, he earned less than minimum wage under current labor laws and no documentary evidence is available.
The victims wife testified that as a dried fish dealer, he earned P15,000 gross income per month and a net
monthly income of P6,000.[30]
If the victims daily wage is computed based on 22 working days a month, assuming that the victim did not work on
Saturdays and Sundays, the result would be as follows:
P6,000 net monthly income / 22 days per month = P273
per day
The amount of P273 is above the minimum wage range for non-agricultural workers in Region V, which is P196P239 per day.[31]
If the victims daily wage is computed based on 30 working days per month, assuming that the victim worked every
day of the month (although it is of common knowledge that the usual practice is to rest on week-ends), the result would be
as follows:
P6,000 net monthly income / 30 days per month = P200 per
day

Again, the amount of P200 per day is within the minimum wage range for non-agricultural workers in Region V,
which is P196-P239 per day.
If the Court bases the computation on 26 working days per month, assuming that the victim rested only on
Sundays, the result would be as follows:
P6,000 net monthly income / 26 days per month = P231
per day

The amount is still within the minimum wage range for non-agricultural workers in Region V.
If the Court bases the computation on 16 working days per month, based on the testimony that the victim stayed
in Baguio three to four days to deliver goods [32] and assuming that the stay was every week, the result would be as
follows:
P6,000 net monthly income / 16 days per month = P375 per
day.
The amount this time is above the minimum wage range for non-agricultural workers in Region V, which is P196P239 per day.
If the Court bases the computation on 12 working days per month, assuming that the victim stayed
in Baguio three days per week to deliver his goods, the result would be
P6,000 net income per month / 12 days per month = P500
per day

Again, the amount is above the minimum wage range for non-agricultural workers in Region V, which is P196P239 per day.
Based on the above computations, as the victims daily wage was either within or above but never below the
minimum wage range, no indemnity for loss of earning capacity can be awarded based on his wifes testimony alone.
But even if the victim were earning below minimum wage, a third requirement has to be satisfied for testimonial
evidence to suffice as basis for an award of indemnity for loss of earning capacity: that in the victims line of work no
documentary evidence is available.
It is of common knowledge that a fish dealer keeps records of his transactions. In fact, the victims wife was able to
testify as to his gross and net earnings -- gross earnings being understood by her to be sold as the total amount of fish
sold from which expenses are deducted[33] -- which would only be possible if records were being kept.[34] The wife did not,
however, present documentary proof showing how she arrived at her estimate of gross and net earnings.
In fine, no indemnity for loss of earning capacity may be awarded based on the victims wifes testimony alone.
The Court takes exception, too, to the award by the appellate court of temperate damages in the amount of P25,000, such
kind of damage being recoverable only when some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be proved with certainty.[35] In the case at bar, actual damages had been proven and awarded.
Finally, the Court, following current jurisprudence,[36] increases the civil indemnity to P75,000.
WHEREFORE, the February 13, 2007 Decision of the Court of Appeals is AFFIRMED with the
MODIFICATION that the award of civil indemnity is increased toP75,000 and the awards of P671,999.97 for loss of earning
capacity and of P25,000 as temperate damages are DELETED.
The Court thus finds the accused-appellant, Benjamin Ocampo, GUILTY beyond reasonable doubt of Murder and
is sentenced to suffer the penalty of reclusion perpetua; to pay the heirs of Ruben Ngo P75,000 as civil
indemnity, P235,682.78 as actual damages, and P25,000 exemplary damages; and to pay the costs.
SO ORDERED.

G.R. No. 81026

April 3, 1990
PAN MALAYAN INSURANCE CORPORATION, petitioner,
vs.
COURT OF APPEALS, ERLINDA FABIE AND HER UNKNOWN DRIVER, respondents.
Regulus E. Cabote & Associates for petitioner.
Benito P. Fabie for private respondents.

CORTES, J.:
Petitioner Pan Malayan Insurance Company (PANMALAY) seeks the reversal of a decision of the Court of Appeals which
upheld an order of the trial court dismissing for no cause of action PANMALAY's complaint for damages against private
respondents Erlinda Fabie and her driver.
The principal issue presented for resolution before this Court is whether or not the insurer PANMALAY may institute an
action to recover the amount it had paid its assured in settlement of an insurance claim against private respondents as the
parties allegedly responsible for the damage caused to the insured vehicle.
On December 10, 1985, PANMALAY filed a complaint for damages with the RTC of Makati against private respondents
Erlinda Fabie and her driver. PANMALAY averred the following: that it insured a Mitsubishi Colt Lancer car with plate No.
DDZ-431 and registered in the name of Canlubang Automotive Resources Corporation [CANLUBANG]; that on May 26,
1985, due to the "carelessness, recklessness, and imprudence" of the unknown driver of a pick-up with plate no. PCR220, the insured car was hit and suffered damages in the amount of P42,052.00; that PANMALAY defrayed the cost of
repair of the insured car and, therefore, was subrogated to the rights of CANLUBANG against the driver of the pick-up and
his employer, Erlinda Fabie; and that, despite repeated demands, defendants, failed and refused to pay the claim of
PANMALAY.
Private respondents, thereafter, filed a Motion for Bill of Particulars and a supplemental motion thereto. In compliance
therewith, PANMALAY clarified, among others, that the damage caused to the insured car was settled under the "own
damage", coverage of the insurance policy, and that the driver of the insured car was, at the time of the accident, an
authorized driver duly licensed to drive the vehicle. PANMALAY also submitted a copy of the insurance policy and the
Release of Claim and Subrogation Receipt executed by CANLUBANG in favor of PANMALAY.
On February 12, 1986, private respondents filed a Motion to Dismiss alleging that PANMALAY had no cause of action
against them. They argued that payment under the "own damage" clause of the insurance policy precluded subrogation
under Article 2207 of the Civil Code, since indemnification thereunder was made on the assumption that there was no
wrongdoer or no third party at fault.
After hearings conducted on the motion, opposition thereto, reply and rejoinder, the RTC issued an order dated June 16,
1986 dismissing PANMALAY's complaint for no cause of action. On August 19, 1986, the RTC denied PANMALAY's
motion for reconsideration.
On appeal taken by PANMALAY, these orders were upheld by the Court of Appeals on November 27, 1987. Consequently,
PANMALAY filed the present petition for review.
After private respondents filed its comment to the petition, and petitioner filed its reply, the Court considered the issues
joined and the case submitted for decision.
Deliberating on the various arguments adduced in the pleadings, the Court finds merit in the petition.
PANMALAY alleged in its complaint that, pursuant to a motor vehicle insurance policy, it had indemnified CANLUBANG for
the damage to the insured car resulting from a traffic accident allegedly caused by the negligence of the driver of private
respondent, Erlinda Fabie. PANMALAY contended, therefore, that its cause of action against private respondents was
anchored upon Article 2207 of the Civil Code, which reads:
If the plaintiffs property has been insured, and he has received indemnity from the insurance company for the
injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be
subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. . . .
PANMALAY is correct.
Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured property is destroyed or
damaged through the fault or negligence of a party other than the assured, then the insurer, upon payment to the assured,
will be subrogated to the rights of the assured to recover from the wrongdoer to the extent that the insurer has been
obligated to pay. Payment by the insurer to the assured operates as an equitable assignment to the former of all remedies
which the latter may have against the third party whose negligence or wrongful act caused the loss. The right of
subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon written assignment of claim. It

accrues simply upon payment of the insurance claim by the insurer [Compania Maritima v. Insurance Company of North
America, G.R. No. L-18965, October 30, 1964, 12 SCRA 213; Fireman's Fund Insurance Company v. Jamilla & Company,
Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323].
There are a few recognized exceptions to this rule. For instance, if the assured by his own act releases the wrongdoer or
third party liable for the loss or damage, from liability, the insurer's right of subrogation is defeated [Phoenix Ins. Co. of
Brooklyn v. Erie & Western Transport, Co., 117 US 312, 29 L. Ed. 873 (1886); Insurance Company of North America v.
Elgin, Joliet & Eastern Railway Co., 229 F 2d 705 (1956)]. Similarly, where the insurer pays the assured the value of the
lost goods without notifying the carrier who has in good faith settled the assured's claim for loss, the settlement is binding
on both the assured and the insurer, and the latter cannot bring an action against the carrier on his right of subrogation
[McCarthy v. Barber Steamship Lines, Inc., 45 Phil. 488 (1923)]. And where the insurer pays the assured for a loss which
is not a risk covered by the policy, thereby effecting "voluntary payment", the former has no right of subrogation against
the third party liable for the loss [Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, G. R. No. L-22146,
September 5, 1967, 21 SCRA 12].
None of the exceptions are availing in the present case.
The lower court and Court of Appeals, however, were of the opinion that PANMALAY was not legally subrogated under
Article 2207 of the Civil Code to the rights of CANLUBANG, and therefore did not have any cause of action against private
respondents. On the one hand, the trial court held that payment by PANMALAY of CANLUBANG's claim under the "own
damage" clause of the insurance policy was an admission by the insurer that the damage was caused by the assured
and/or its representatives. On the other hand, the Court of Appeals in applying theejusdem generis rule held that Section
III-1 of the policy, which was the basis for settlement of CANLUBANG's claim, did not cover damage arising from collision
or overturning due to the negligence of third parties as one of the insurable risks. Both tribunals concluded that
PANMALAY could not now invoke Article 2207 and claim reimbursement from private respondents as alleged wrongdoers
or parties responsible for the damage.
The above conclusion is without merit.
It must be emphasized that the lower court's ruling that the "own damage" coverage under the policy impliesdamage to
the insured car caused by the assured itself, instead of third parties, proceeds from an incorrect comprehension of the
phrase "own damage" as used by the insurer. When PANMALAY utilized the phrase "own damage" a phrase which,
incidentally, is not found in the insurance policy to define the basis for its settlement of CANLUBANG's claim under the
policy, it simply meant that it had assumed to reimburse the costs for repairing the damage to the insured
vehicle [See PANMALAY's Compliance with Supplementary Motion for Bill of Particulars, p. 1; Record, p. 31]. It is in this
sense that the so-called "own damage" coverage under Section III of the insurance policy is differentiated from Sections I
and IV-1 which refer to "Third Party Liability" coverage (liabilities arising from the death of, or bodily injuries suffered by,
third parties) and from Section IV-2 which refer to "Property Damage" coverage (liabilities arising from damage caused by
the insured vehicle to the properties of third parties).
Neither is there merit in the Court of Appeals' ruling that the coverage of insured risks under Section III-1 of the policy
does not include to the insured vehicle arising from collision or overturning due to the negligent acts of the third party. Not
only does it stem from an erroneous interpretation of the provisions of the section, but it also violates a fundamental rule
on the interpretation of property insurance contracts.
It is a basic rule in the interpretation of contracts that the terms of a contract are to be construed according to the sense
and meaning of the terms which the parties thereto have used. In the case of property insurance policies, the evident
intention of the contracting parties, i.e., the insurer and the assured, determine the import of the various terms and
provisions embodied in the policy. It is only when the terms of the policy are ambiguous, equivocal or uncertain, such that
the parties themselves disagree about the meaning of particular provisions, that the courts will intervene. In such an
event, the policy will be construed by the courts liberally in favor of the assured and strictly against the insurer [Union
Manufacturing Co., Inc. v. Philippine Guaranty Co., Inc., G.R., No. L-27932, October 30, 1972, 47 SCRA 271; National
Power Corporation v. Court of Appeals, G.R. No. L-43706, November 14, 1986, 145 SCRA 533; Pacific Banking
Corporation v. Court of Appeals, G.R. No. L-41014, November 28, 1988, 168 SCRA 1. Also Articles 1370-1378 of the Civil
Code].
Section III-1 of the insurance policy which refers to the conditions under which the insurer PANMALAY is liable to
indemnify the assured CANLUBANG against damage to or loss of the insured vehicle, reads as follows:
SECTION III LOSS OR DAMAGE
1. The Company will, subject to the Limits of Liability, indemnify the Insured against loss of or damage to the
Scheduled Vehicle and its accessories and spare parts whilst thereon:

(a) by accidental collision or overturning, or collision or overturning consequent upon mechanical

breakdown or consequent upon wear and tear;
(b) by fire, external explosion, self ignition or lightning or burglary, housebreaking or theft;
(c) by malicious act;
(d) whilst in transit (including the processes of loading and unloading) incidental to such transit by road,
rail, inland, waterway, lift or elevator.
xxx
xxx
xxx
[Annex "A-1" of PANMALAY's Compliance with Supplementary Motion for Bill of Particulars; Record, p. 34;
Emphasis supplied].
PANMALAY contends that the coverage of insured risks under the above section, specifically Section III-1(a), is
comprehensive enough to include damage to the insured vehicle arising from collision or overturning due to the fault or
negligence of a third party. CANLUBANG is apparently of the same understanding. Based on a police report wherein the
driver of the insured car reported that after the vehicle was sideswiped by a pick-up, the driver thereof fled the scene
[Record, p. 20], CANLUBANG filed its claim with PANMALAY for indemnification of the damage caused to its car. It then
accepted payment from PANMALAY, and executed a Release of Claim and Subrogation Receipt in favor of latter.
Considering that the very parties to the policy were not shown to be in disagreement regarding the meaning and coverage
of Section III-1, specifically sub-paragraph (a) thereof, it was improper for the appellate court to indulge in contract
construction, to apply the ejusdem generis rule, and to ascribe meaning contrary to the clear intention and understanding
of these parties.
It cannot be said that the meaning given by PANMALAY and CANLUBANG to the phrase "by accidental collision or
overturning" found in the first paint of sub-paragraph (a) is untenable. Although the terms "accident" or "accidental" as
used in insurance contracts have not acquired a technical meaning, the Court has on several occasions defined these
terms to mean that which takes place "without one's foresight or expectation, an event that proceeds from an unknown
cause, or is an unusual effect of a known cause and, therefore, not expected" [De la Cruz v. The Capital Insurance &
Surety Co., Inc., G.R. No. L-21574, June 30, 1966, 17 SCRA 559; Filipino Merchants Insurance Co., Inc. v. Court of
Appeals, G.R. No. 85141, November 28, 1989]. Certainly, it cannot be inferred from jurisprudence that these terms,
without qualification, exclude events resulting in damage or loss due to the fault, recklessness or negligence of third
parties. The concept "accident" is not necessarily synonymous with the concept of "no fault". It may be utilized simply to
distinguish intentional or malicious acts from negligent or careless acts of man.
Moreover, a perusal of the provisions of the insurance policy reveals that damage to, or loss of, the insured vehicle due to
negligent or careless acts of third parties is not listed under the general and specific exceptions to the coverage of insured
risks which are enumerated in detail in the insurance policy itself [See Annex "A-1" of PANMALAY's Compliance with
Supplementary Motion for Bill of Particulars, supra.]
The Court, furthermore. finds it noteworthy that the meaning advanced by PANMALAY regarding the coverage of Section
III-1(a) of the policy is undeniably more beneficial to CANLUBANG than that insisted upon by respondents herein. By
arguing that this section covers losses or damages due not only to malicious, but also to negligent acts of third parties,
PANMALAY in effect advocates for a more comprehensive coverage of insured risks. And this, in the final analysis, is
more in keeping with the rationale behind the various rules on the interpretation of insurance contracts favoring the
assured or beneficiary so as to effect the dominant purpose of indemnity or payment [SeeCalanoc v. Court of Appeals, 98
Phil. 79 (1955); Del Rosario v. The Equitable Insurance and Casualty Co., Inc., G.R. No. L-16215, June 29, 1963, 8 SCRA
343; Serrano v. Court of Appeals, G.R. No. L-35529, July 16, 1984, 130 SCRA 327].
Parenthetically, even assuming for the sake of argument that Section III-1(a) of the insurance policy does not cover
damage to the insured vehicle caused by negligent acts of third parties, and that PANMALAY's settlement of
CANLUBANG's claim for damages allegedly arising from a collision due to private respondents' negligence would amount
to unwarranted or "voluntary payment", dismissal of PANMALAY's complaint against private respondents for no cause of
action would still be a grave error of law.
For even if under the above circumstances PANMALAY could not be deemed subrogated to the rights of its assured under
Article 2207 of the Civil Code, PANMALAY would still have a cause of action against private respondents. In the pertinent
case of Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, supra., the Court ruled that the insurer who may have
no rights of subrogation due to "voluntary" payment may nevertheless recover from the third party responsible for the
damage to the insured property under Article 1236 of the Civil Code.
In conclusion, it must be reiterated that in this present case, the insurer PANMALAY as subrogee merely prays that it be
allowed to institute an action to recover from third parties who allegedly caused damage to the insured vehicle, the
amount which it had paid its assured under the insurance policy. Having thus shown from the above discussion that

PANMALAY has a cause of action against third parties whose negligence may have caused damage to CANLUBANG's
car, the Court holds that there is no legal obstacle to the filing by PANMALAY of a complaint for damages against private
respondents as the third parties allegedly responsible for the damage. Respondent Court of Appeals therefore committed
reversible error in sustaining the lower court's order which dismissed PANMALAY's complaint against private respondents
for no cause of action. Hence, it is now for the trial court to determine if in fact the damage caused to the insured vehicle
was due to the "carelessness, recklessness and imprudence" of the driver of private respondent Erlinda Fabie.
WHEREFORE, in view of the foregoing, the present petition is GRANTED. Petitioner's complaint for damages against
private respondents is hereby REINSTATED. Let the case be remanded to the lower court for trial on the merits.
SO ORDERED.

NATIONAL HOUSING AUTHORITY,

Petitioner,

G.R. No. 166518

Present:
- versus -

HEIRS
OF
ISIDRO
GUIVELONDO,
REGIONAL TRIAL COURT OF CEBU CITY,
BRANCH 19, and the COURT OF APPEALS,
Respondents.

PUNO, C.J., Chairperson,

CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.

Promulgated:

June 16, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
PUNO, C.J.:
Before us is a petition for review on certiorari under Rule 45 seeking the reversal of the Decision [1] of the Court of
Appeals (CA) in CA G.R. SP No. 85807 affirming the omnibus order [2] of the Regional Trial Court (RTC), Branch 19, Cebu
City, and the order[3] denying the reconsideration thereof.
This case is an offshoot of G.R. No. 154411, promulgated on June 19, 2003, entitled National Housing Authority (NHA)
v. Heirs of Guivelondo, in which we resolved once and for all the validity of the order of expropriation issued by the RTC
of Cebu City, Branch 11, condemning the properties of respondents located in Barangay Carreta, Cebu City at P11,200.00
per square meter and the propriety of the garnishment against petitioners funds and personal properties for the payment
of just compensation to respondents. Pending the final resolution of G.R. No. 154411, a writ of execution was issued on
January 14, 2001 by the RTC, Branch 11 in the amount of P104,641,600.00, as computed fromrespondents' 9,343 square
meters of land valued at P11,200.00 each. Pursuant to said writ of execution, the court sheriff of RTC, Branch 11, Mr.
Pascual Abordo, commenced levy and garnishment upon NHA properties, which included bank deposits in various banks.
Hence, on June 16, 2001, the Philippine National Bank (PNB) and the Land Bank of the Philippines (LBP) released the
amount of P24,305,774.82 to respondents, bringing the balance of the unsatisfied just compensation to P80,335,825.18.
On December 26, 2001, petitioner's account with the Philippine Veterans' Bank (PVB) was garnished in the amount

of P24,305,774.82, which then brought the computed balance of unpaid just compensation to P80,299,506.72, though the
PVB had yet to release said amount to respondents. On July 10, 2003, the Development Bank of the Philippines (DBP)
released the garnished amount of P78,754,907.07, further bringing down the balance to P1,544,299.65. Subsequently, on
July 31, 2003, upon the release by the LBP of the garnished amount of P1,474,299.65, the payment of respondents' just
compensation seemed to have been fully satisfied, save for the release of the earlier garnished amount
of P24,305.774.82. Finally, on August 28, 2003, the amount of P36,318.46 was remitted to respondents by the PVB,
prompting Sheriff Abordo to issue a notice of lifting or discharge of levy/garnishment to the PNB, LBP, DBP, PVB and to
the General Manager/Property Custodian of NHA.
On October 8, 2003, Sheriff Abordo received a letter from respondents' counsel requesting the former for the listing of the
garnished and released accounts of petitioner. In his reply letter dated October 9, 2003, Sheriff Abordo summarized said
garnishments and revealed that there was an unsatisfied amount of P70,300.00. Hence, in his progress report to the RTC,
Branch 11, dated October 14, 2003, Sheriff Abordo informed the court to wit:
Further, undersigned Sheriff respectfully informs the Honorable Court that when he prepared his aforesaid
Reply Letter and made a reconciliation of the garnished and released accounts of plaintiff, he discovered
that he inaccurately reflected in his Progress Report dated July 14, 2003 a balance
of P80,229,206.72 where it should have been P80,299,206.72 which, as stated in the same report was
arrived at after deducting from the total just compensation of P104,641,600.00 the garnished and
released money deposits of NHA with PNB and Landbank in the amount of P24,305,774.82 and the
garnished but not yet released /claimed money deposit of NHA with Philippine Veterans Bank in the
amount of P36,618.46. In other words, by mathematical computation: P104,641,600.00 P24,305,774.82
P36,618.36 = P80,299,206.72 and not P80,229,206.72. The balance reflected in the undersigned Sheriff's
Progress Report dated July 14, 2003 is short by P70,000.00, hence, this did not result to over satisfaction
of the judgment of the Honorable Court.
Futhermore, undersigned Sheriff respectfully informs the Honorable Court that the amount released by
Philippine Veterans Bank is only P36,318.46 albeit its letter dated December 26, 2001 stated an amount
of P36,618.46 (short by P300).[4] (emphases in the original)
On November 6, 2003, seeking to claim the unsatisfied amount of P70,300.00, respondents filed with the RTC a motion
for the issuance of an alias writ of execution. On November 12, 2003, respondents likewise filed a motion for payment of
interest anchored on the premise that petitioner made piecemeal payments of the judgment amount, causing a 32-month
delay in the full satisfaction thereof which entitled respondents to the payment of a legal interest of 12% per annum. To
simplify matters, respondents confined their claim to the interest for the principal amount of P80,335,825.18 reckoned
from October 31, 2000, the date the entry of judgment was issued, to July 2003, when the last garnishment took place,
without including the P70,300.00 yet to be satisfied in the said principal amount.
Pursuant to a motion for inhibition filed by petitioner on August 4, 2003, the case was re-raffled to the RTC, Branch 19,
which ordered petitioner to file its comment/opposition to both motions. After hearing the case, the RTC, Branch 19 issued
an omnibus order dated February 16, 2004, disposing of the issues as follows:
WHEREFORE, on the Motion for Issuance of an Alias Writ of [E]xecution, the same is GRANTED. Let an
Alias Writ of Execution issue to satisfy the shortage amount of Php70,300.00.
Defendants' Motion for Payment of Interest is likewise GRANTED. Plaintiff is hereby directed to pay the
defendants within five (5) days from receipt hereof the amount of Php25,695,746.15 representing interest
of 12% p.a. for thirty two (32) months of the unsatisfied portion of the just compensation in the amount of
Php80,299,206.72. Plaintiff is futher directed to pay interest of 12% p.a. on the Php25,695,746.15 interest
from the date the five-day period given by the Court expired until the same is paid.
xxx
SO ORDERED.[5]
On February 24, 2004, petitioner filed a motion for reconsideration which was denied by the RTC, Branch 19 in an order
dated July 27, 2004. Aggrieved, petitioner filed a petition for review on certiorari with the CA which was denied for lack of
merit in a decision dated December 16, 2004, ratiocinating thus:

We now come to the question on whether respondent judge was correct in imposing interest of 12% per
annum for the delay in payment of just compensation by petitioner sans an explicit pronouncement for
such provision in the decision. We rule in the affirmative on the following reasons:
1)

A judgment is not confined to what appears on the face of the decision but also those necessarily
included therein or necessary thereto. Where a legal provision exists providing for legal interest, the
same not only constitute judicial notice, but by operation of law, becomes inherent in every decision.

2)

The imposition of interest at the time the decision was rendered would be purely conjectural and
speculative considering that delay in the payment could only be ascertained at the time following after
the rendition of the decision. The remedy for any delay may be ventilated during the execution stage
as in this case. Delay takes the nature of a supervening event between the rendition of the decision
and its due execution, and the judge may take cognizance of it not only for the purpose of expediency
but also to prevent multiplicity of suits. At any rate, the judge is now familiar with the history and
development of the case, and it is he who can give the most prudent assessment over an issue such
as that of delay and the concomitant damages for the delay.
xxx
Conversely, [w]e also find nothing irregular in issuance of the alias writ of execution by respondent judge
covering the deficiency in the actual judgment amount. The rule is that the execution must conform
substantially to that ordained or decreed in the dispositive part of the decision. Therefore, upon report of
the sheriff of a deficiency in the execution of the judgment amount, an alias writ of execution covering said
deficiency is proper.[6]
Hence, petitioner filed the instant petition for review, where it argues that the CA gravely erred in affirming the RTC when it
granted respondents motion for issuance of an alias writ of execution and motion for payment of interest, considering that
expropriation proceedings have already been terminated and that the order to pay respondents just compensation was
silent on the payment of interest.
We deny the petition.
As a side issue, petitioner points out that the CA erred in ruling that RTC, Branch 19 had jurisdiction over the case, as
petitioner was allegedly not notified of 1) the Order dated October 16, 2003 where the Presiding Judge of Branch 11
inhibited himself from handling the expropriation, 2) the Order of the Executive Judge of the RTC approving such
inhibition, and 3) the Order re-raffling the case to RTC, Branch 11. We are not convinced. In the first place, it was
petitioner which filed a Motion for Inhibition against the presiding judge of RTC, Branch 11, Hon. Isaias Dicdican, a move
that precipitated the re-raffling of the case to Branch 19 of the same RTC. Hence, petitioner cannot deny that it had
knowledge of moves to have the case handled by another branch. Assuming arguendo that petitioner honestly believed
that the case was still pending with Branch 11, petitioner still cannot claim that it had no knowledge of the proceedings in
Branch 19. It is well to remember that the court frowns upon the undesirable practice of a party submitting his case for
decision and then accepting the judgment only if favorable, and attacking it for lack of jurisdiction when adverse. [7] While
jurisdiction of a tribunal may be challenged at any time, sound public policy bars petitioner from doing so after having
procured that jurisdiction himself, speculating on the fortunes of litigation. [8] In the instant case, the fact remains that
petitioner filed motions with Branch 19 and even sought relief therefrom when it opposed the two motions subject of this
petition. As such, it is estopped from attacking the jurisdiction of RTC, Branch 19 in the instant case.
Petitioner likewise contends that the trial court erred in exercising jurisdiction in resolving the two motions as the subject
thereof constituted new, independent, separate, and substantial matters which are foreign to the expropriation case which
had already been terminated.[9] Petitioners contention is untenable.
It is well-settled that the jurisdiction of the court to execute its judgment continues even after the judgment had become
final for the purpose of enforcement of judgment. [10] The present case is no exception. Therefore, notwithstanding the final
resolution on the validity of the expropriation made by this Court on June 19, 2003 in G.R. No. 154411, the RTC, Branch
19 can still rule on the motions for the issuance of an alias writ of execution and payment of interest. As the CA correctly

stated: ...the duty of the court does not end with the tender of the decision. Equal is the duty of the court to enforce said
decision to the fullest of its intent, tenor and mandate. To sustain a contrary view would not only trivialize the decision, but
would also render it meaningless; the justice sought by the aggrieved party and supposedly conferred by the court turned
inutile.[11]
On the issue of payment of interest, we find petitioners theory implausible. Petitioner insists that the payment of interest to
respondents is not proper since nowhere in the recordsfrom the orders of the RTC all the way to this Courtdoes it state
that respondents are entitled to damages. [12] As such, petitioner asserts that respondents had already waived its right to
claim interest. We are not persuaded.
In support of its argument, petitioner cites Dalmacio Urtula v. Republic of the Philippines,[13] which ruled that:
xxx
Urtula's dilemma lies in his mistaken concept of the nature of the interest that he failed to claim in
the expropriation case and which he now claims in this separate case. Said interest is not contractual, nor
based on delict or quasi-delict, but one that
runs as a matter of law and follows as a matter of course from the right of the landowner
to be placed in as good a position as money can accomplish, as of the date of the taking
(30 C.J.S. 230).
Understood as such, Urtula, as defendant in the expropriation case, could have raised the matter of
interest before the trial court even if there had been no actual taking yet by the Republic and the said
court could have included the payment of interest in its judgment but conditioned upon the actual taking,
because the rate of interest upon the amount of just compensation (6%) is a known factor, and it can
reasonably be expected that at some future time, the expropriator would take possession of the property,
though the date be not fixed. In this way, multiple suits would be avoided. Moreover, nothing prevented
appellee from calling the attention of the appellate courts (even by motion to reconsider before judgment
became final) to the subsequent taking of possession by the condemnor, and asking for allowance of
interest on the indemnity, since that followed the taking as a matter of course, and raised no issue
requiring remand of the records to the Court of origin.
As the issue of interest could have been raised in the former case but was not raised, res
judicata blocks the recovery of interest in the present case. It is settled that a former judgment constitutes
a bar, as between the parties, not only as to matters expressly adjudged, but all matters that could have
been adjudged at the time. It follows that interest upon the unrecoverable interest, which plaintiff also
seeks, cannot, likewise, be granted.
It is not amiss to note that Section 3 of Rule 67 of the Revised Rules of Court, in fact, directs the
defendant in an expropriation case to "present in a single motion to dismiss or for other appropriate relief,
all of his objections and defenses . . ." and if not so presented "are waived." As it is, the judgment allowing
the collection of interest, now under appeal in effect amends the final judgment in the expropriation case,
a procedure abhorrent to orderly judicial proceedings. [14] (citations omitted)
Unfortunately for petitioner, the abovequoted doctrine is not applicable to the instant case for the simple reason that
respondents herein do not ask for interest as part of the judgment in an expropriation case, but for interest which is
imposed due to the delay in the payment of a money judgment. As stated above, the former is imposed in order to place
the owner in a position as good as (but not better than) the position he was in before the taking occurred, while the latter
is considered as legal interest, to be computed at 12% per annum from such finality until its satisfaction, [15] because the
interim period is deemed to be equivalent to a forebearance of credit. [16] Consequently, the award of the former needs to
be stated in the judgment, while the award of the latter need not. [17] Moreover, the former is computed from the date of
possession or filing of the complaint for expropriation, [18] the latter is merely computed from the time the judgment
becomes final and executory.[19] Therefore, we find no patent error in the imposition of interest on petitioner.
As to the issue of the validity of the alias writ of execution, we affirm the finding of the CA that there was no irregularity in
the issuance thereof. [20] The rule is that a writ of execution must conform substantially to every essential particular of the
judgment promulgated.[21] An execution which is not in harmony with the judgment is bereft of validity; it must conform
particularly to that ordained in the dispositive portion of the decision. [22] In the case at bar, the sheriff himself discovered a
deficiency in the execution of the judgment in the amount of P70,300.00. Therefore, upon report of the same by the
sheriff, an alias writ of execution covering said deficiency is only proper to preserve the tenor of the judgment and to
ensure the faithful execution thereof.
IN VIEW WHEREOF, the instant petition is DENIED. The decision of the Court of Appeals is AFFIRMED.
SO ORDERED.

EMERITA M. DE GUZMAN, Petitioner,

- versus -

G.R. No. 188072

Promulgated:
October 19, 2011

ANTONIO M. TUMOLVA,
Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the February 24, 2009
Decision[1] of the Court of Appeals (CA) and its May 26, 2009 Resolution [2] in CA-G.R. SP. No. 104945 entitled Antonio M.
Tumolva v. Emerita M. De Guzman.
The Facts
On September 6, 2004, petitioner Emerita M. De Guzman (De Guzman), represented by her attorneys-in-fact, Lourdes
Rivera and Dhonna Chan, and respondent Antonio Tumolva, doing business under the name and style A.M. Tumolva
Engineering Works (the Contractor), entered into a Construction Agreement[3] (Agreement) for the construction of an
orphanage consisting of an administration building, directors/guests house, dining and service building, childrens
dormitory, male staff house, and covered walkways in Brgy. Pulong Bunga, Purok 4, Silang, Cavite, for a contract price of
15,982,150.39. Incorporated in the Agreement was the plan and specifications of the perimeter fence. The Contractor,
however, made deviations from the agreed plan[4] with respect to the perimeter fence of the orphanage.
On September 6, 2005, after the completion of the project, De Guzman issued a Certificate of Acceptance. For his part,
the Contractor issued a quitclaim acknowledging the termination of the contract and the full compliance therewith by De
Guzman.
In November 2006, during typhoon Milenyo, a portion of the perimeter fence collapsed and other portions tilted. In her
Letter dated December 5, 2006, De Guzman, through counsel, demanded the repair of the fence in accordance with the
plan. In response, the Contractor claimed that the destruction of the fence was an act of God and expressed willingness to
discuss the matter to avoid unnecessary litigation. De Guzman, however, reiterated her demand for the restoration of the
wall without additional cost on her part, or in the alternative, for the Contractor to make an offer of a certain amount by
way of compensation for the damages she sustained. Her demand was not heeded.
On February 14, 2008, De Guzman filed a Request for Arbitration [5] of the dispute before the Construction Industry
Arbitration Commission (CIAC). She alleged that the Contractor deliberately defrauded her in the construction of the
perimeter fence by under sizing the required column rebars from 12mm. based on the plan to only 10mm., the required
concrete hollow blocks from #6 to #5, and the distance between columns from 3.0m to 4.3m. [6] Further, the Contractor
neither anchored the lenten beams to the columns nor placed drains or weepholes along the lower walls. She prayed for
an award of actual, moral and exemplary damages, as well as attorneys fees and expenses of litigation, and for the
inspection and technical assessment of the construction project and the rectification of any defect.
In his Answer with Counterclaim, the Contractor denied liability for the damaged fence claiming, among others, that its
destruction was an act of God. He admitted making deviations from the plan, but pointed out that the same were made
with the knowledge and consent of De Guzman through her representatives, Architect Quin Baterna and Project Engineer
Rodello Santos (Engineer Santos), who were present during the construction of the fence. He further argued that pursuant
to the Agreement, the claim for damages was already barred by the 12-month period from the issuance of the Certificate
of Acceptance of the project within which to file the claim. He, thus, prayed for the dismissal of the action and interposed a
counterclaim for actual and compensatory damages for the additional work/change orders made on the project in the
amount of 2,046,500.00, attorneys fees and litigation expenses.

After due proceedings, the CIAC issued the Award dated July 17, 2008 in favor of De Guzman, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered and AWARD is made on the monetary claims of Claimant EMERITA M. DE
GUZMAN, directing Respondent Contractor ANTONIO M. TUMOLVA, to pay her the following amounts:
187,509.00 as actual damages for reconstructing the collapsed and damaged perimeter fence.
Interest is awarded on the foregoing amount at the legal rate of 6% per annum computed from the date of this
Award. After finality thereof, interest at the rate of 12% per annum shall be paid thereon until full payment
of the awarded amount shall have been made, this interim period being deemed to be at that time already
a forbearance of credit (Eastern Shipping Lines, Inc. v. Court of Appeals (243 SCRA 78 [1994])
100,000.00 as moral damages.
100,000.00 as exemplary damages.
50,000.00 for attorneys fees and expenses of litigation.
437,509.00 TOTAL AMOUNT DUE THE CLAIMANT
The CIAC staff is hereby directed to make the necessary computation of how much has been paid by Claimant as
its proportionate share of the arbitration costs totaling 110,910.44,which computed amount shall be
reimbursed by Respondent to the Claimant.
SO ORDERED.[7]
Aggrieved, the Contractor filed before the CA a Petition for Review with prayer for the issuance of a temporary
restraining order, challenging the CIACs award of damages in favor of De Guzman.
On February 24, 2009, the CA modified the Award rendered by CIAC. The dispositive portion of the decision states:
WHEREFORE, the instant petition is partly GRANTED. The assailed Award dated July 17, 2008
rendered by the CIAC in CIAC Case No. 03-2008 is herebyMODIFIED, deleting the award of actual,
moral and exemplary damages, but awarding temperate damages in the amount of 100,000.00 for
reconstructing the collapsed and damaged perimeter fence. The rest of the Award stands.
SO ORDERED.[8]
The CA held that although the Contractor deviated from the plan, CIACs award of actual damages was not proper
inasmuch as De Guzman failed to establish its extent with reasonable certainty. The CA, however, found it appropriate to
award temperate damages considering that De Guzman suffered pecuniary loss as a result of the collapse of the
perimeter fence due to the Contractors negligence and violation of his undertakings in the Agreement. It further ruled that
there was no basis for awarding moral damages reasoning out that De Guzmans worry for the safety of the children in the
orphanage was insufficient to justify the award. Likewise, it could not sustain the award of exemplary damages as there
was no showing that the Contractor acted in wanton, reckless, fraudulent, oppressive, or malevolent manner.
De Guzman filed a motion for reconsideration of the said decision, but it was denied for lack of merit by the CA in
its Resolution dated May 26, 2009.
Hence, De Guzman interposed the present petition before this Court anchored on the following
GROUNDS
(I)
THE COURT OF APPEALS ERRED IN RULING THAT THE EVIDENCE ON RECORD FAILED TO
SUFFICIENTLY ESTABLISH THE AMOUNT OF ACTUAL DAMAGES THAT PETITIONER DE GUZMAN
CAN RECOVER FROM THE RESPONDENT.

(II)

THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER DE GUZMAN IS NOT ENTITLED
TO AWARDS OF MORAL AND EXEMPLARY DAMAGES.[9]

De Guzman argues inter alia that the Contractor is liable for the actual damages that she suffered from the collapse of the
perimeter fence. He failed to put weep holes on the collapsed portion of the said fence, which could have relieved the
pressure from the wet soil of the adjoining higher ground.
De Guzman adds that the computation of the cost of rebuilding the collapsed portion of the perimeter fence by Engineer
Santos constituted substantial evidence warranting an award of actual damages. His affidavit served as his direct
testimony in the case even if he did not appear during the hearing. Having been notarized, it must be admissible in
evidence without further proof of authenticity.
Further, De Guzman questions the CAs deletion of the award for moral and exemplary damages. She insists that
her anxiety and suffering over the safety of the children in the orphanage entitled her to an award of moral damages. It is
likewise her position that the Contractors wanton acts of deliberately cheating the benefactors of the orphanage by
making deviations on the approved plan through the use of construction materials of inferior quality warranted the
imposition of exemplary damages against the Contractor.
The Courts ruling
There is no doubt that De Guzman incurred damages as a result of the collapse of the perimeter fence. The
Contractor is clearly guilty of negligence and, therefore, liable for the damages caused. As correctly found by the CA:
Nonetheless, the Court sustains the CIACs conclusion that the CONTRACTOR was negligent in
failing to place weepholes on the collapsed portion of the perimeter fence. Fault or negligence of the
obligor consists in his failure to exercise due care and prudence in the performance of the obligation as
the nature of the obligation so demands, taking into account the particulars of each case. It should be
emphasized that even if not provided for in the plan, the CONTRACTOR himself admitted the necessity of
putting weepholes and claimed to have actually placed them in view of the higher ground elevation of the
adjacent lot vis--vis the level ground of the construction site. Since he was the one who levelled the
ground and was, thus, aware that the lowest portion of the adjoining land was nearest the perimeter
fence, he should have ensured that sufficient weepholes were placed because water would naturally flow
towards the fence.
However, the CONTRACTOR failed to refute Mr. Ramos claim that the collapsed portion of the
perimeter fence lacked weepholes. Records also show that the omission of such weepholes and/or their
being plastered over resulted from his failure to exercise the requisite degree of supervision over the
work, which is the same reason he was unable to discover the deviations from the plan until the fence
collapsed. Hence, the CONTRACTOR cannot be relieved from liability therefor.[10]
The Court finds no compelling reason to deviate from this factual finding by the CIAC, as affirmed by the CA. It is settled
that findings of fact of quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect, but also finality, especially when affirmed by the CA. In particular, factual
findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal. [11]
CIACs award of actual damages, however, is indeed not proper under the circumstances as there is no concrete
evidence to support the plea. In determining actual damages, one cannot rely on mere assertions, speculations,
conjectures or guesswork, but must depend on competent proof and on the best evidence obtainable regarding specific
facts that could afford some basis for measuring compensatory or actual damages. [12] Article 2199 of the New Civil Code
defines actual or compensatory damages as follows:
Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory
damages.

Unfortunately, De Guzman failed to adduce evidence to satisfactorily prove the amount of actual damage
incurred. Contrary to her assertion, the handwritten calculation of reconstruction costs made by Engineer Santos
and attached to his affidavit cannot be given any probative value because he never took the witness stand to
affirm the veracity of his allegations in his affidavit and be cross-examined on them. In this regard, it is well to
quote the ruling of the Court in the case of Tating v. Marcella,[13] to wit:
There is no issue on the admissibility of the subject sworn statement. However, the admissibility of
evidence should not be equated with weight of evidence. The admissibility of evidence depends on its relevance
and competence while the weight of evidence pertains to evidence already admitted and its tendency to convince
and persuade. Thus, a particular item of evidence may be admissible, but its evidentiary weight depends on
judicial evaluation within the guidelines provided by the rules of evidence. It is settled that affidavits are classified
as hearsay evidence since they are not generally prepared by the affiant but by another who uses his own
language in writing the affiants statements, which may thus be either omitted or misunderstood by the one writing
them. Moreover, the adverse party is deprived of the opportunity to cross-examine the affiant. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on the witness stand
to testify thereon.
Neither is there any evidence presented to substantiate Engineer Santos computation of the reconstruction
costs. For such computation to be considered, there must be some other relevant evidence to corroborate the same.
[14]
Thus, the CA was correct in disregarding the affidavit of Engineer Santos for being hearsay and in not giving probative
weight to it. There being no tangible document or concrete evidence to support the award of actual damages, the same
cannot be sustained.
Nevertheless, De Guzman is indeed entitled to temperate damages as provided under Article 2224 of the Civil
Code for the loss she suffered. When pecuniary loss has been suffered but the amount cannot, from the nature of the
case, be proven with certainty, temperate damages may be recovered. Temperate damages may be allowed in cases
where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced
that the aggrieved party suffered some pecuniary loss. [15]Undoubtedly, De Guzman suffered pecuniary loss brought about
by the collapse of the perimeter fence by reason of the Contractors negligence and failure to comply with the
specifications. As she failed to prove the exact amount of damage with certainty as required by law, the CA was correct in
awarding temperate damages, in lieu of actual damages. However, after weighing carefully the attendant circumstances
and taking into account the cost of rebuilding the damaged portions of the perimeter fence, the amount of 100,000.00
awarded to De Guzman should be increased. This Court, in recognition of the pecuniary loss suffered, finds the award of
150,000.00 by way of temperate damages as reasonable and just under the premises.
As to the CIACs award of 100,000.00 as moral damages, this Court is one with the CA that De Guzman is not
entitled to such an award. The record is bereft of any proof that she actually suffered moral damages as contemplated in
Article 2217 of the Code, which provides:
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of
the defendants wrongful act or omission.
Certainly, the award of moral damages must be anchored on a clear showing that she actually experienced
mental anguish, besmirched reputation, sleepless nights, wounded feelings, or similar injury. There could not have been a
better witness to this experience than De Guzman herself. [16] Her testimony, however, did not provide specific details of the
suffering she allegedly went through after the fence collapsed while she was miles away in the United States. As the CA
aptly observed, the testimony of the OWNER as to her worry for the safety of the children in the orphanage is insufficient
to establish entitlement thereto.[17] Since an award of moral damages is predicated on a categorical showing by the
claimant that she actually experienced emotional and mental sufferings, it must be disallowed absent any evidence
thereon.[18]

Moreover, under the aforequoted provision, moral damages cannot be recovered as the perimeter fence collapsed
in the midst of the strong typhoon Milenyo. It was not clearly established that the destruction was the proximate result of
the Contractors act of making deviation from the plan. As correctly concluded by the CA, viz:

However, while it cannot be denied that the Contractor deviated from the plan, there was no clear
showing whether the same caused or contributed to the collapse/tilting of the subject perimeter fence. No
competent evidence was presented to establish such fact. As the CIAC itself acknowledged, (t)here is no
way by which to accurately resolve this issue by the evidence submitted by the parties. The statement of
Edwin B. Ramos, Engineering Aide at the Office of the Municipal Engineer of Silang, Cavite, who
conducted an ocular inspection of the collapsed perimeter fence, that the observed deviations from the
plan affected the strength of the fence and made it weaker, such that its chance of withstanding the
pressure of water from the other side thereof was greatly diminished or affected was merely an
expression of opinion. As he himself admitted, he is not qualified to render an expert opinion. [19]

Further, De Guzman was not able to show that her situation fell within any of the cases enumerated in Article 2219 [20] of
the Civil Code upon which to base her demand for the award of moral damages.
Neither does the breach of contract committed by the Contractor, not being fraudulent or made in bad faith, warrant the
grant of moral damages under Article 2220 which provides that:

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

De Guzman cannot be awarded exemplary damages either, in the absence of any evidence showing that the Contractor
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner as provided in Article 2232 of the Civil
Code. The ruling in the case of Nakpil and Sons v. Court of Appeals,[21] relied upon by De Guzman, where it was
emphasized that the wanton negligence in effecting the plans, designs, specifications, and construction of a building is
equivalent to bad faith in the performance of the assigned task, finds no application in the case at bench. As already
pointed out, there is negligence on the part of Contractor, but it is neither wanton, fraudulent, reckless, oppressive, nor
malevolent.
The award of exemplary damages cannot be made merely on the allegation of De Guzman that the Contractors
deviations from the plans and specifications without her written consent was deplorable and condemnable. The Court
regards the deviations as excusable due to the unavailability of the approved construction materials. Besides, these were
made known to De Guzmans project manager who was present all the time during the construction. Indeed, no deliberate
intent on the part of the Contractor to defraud the orphanages benefactors was ever shown, much less proved. As may be
gleaned from his testimony:
xxx
2.2.0 : What can you say to the claim that the column rebars were reduced in size from 12mm to 10mm?
A : That is untrue.
2.2.1 : Why did you say that it was untrue?
A : Because the column rebars that we used is 12mm and not 10mm contrary to the claim of the
claimant. The column rebars that claimant and his engineers claimed to have been undersized
[were] those already subjected to stretching. Due to the lateral load on the perimeter fence
coming from the water that accumulated thereon, the strength of the column bars was

subjected to such kind of force beyond its capacity thereby resulting them to yield or mapatid.
As a result of such stretching, the column rebars were deformed thereby causing it [to] change
its width but the length was extended. You can compare it to a candy like tira-tira which if you
stretch it becomes longer but its width is reduced. The other column rebars on the perimeter
fence which [were] not subjected to stretching will prove what I am stating.
2.2.2 : Also, in the said request for arbitration, it was claimed that the required hollow blocks (CHB) was
reduced also from #6 to #5, how would you explain this?

A : It is true but such deviation was known to them in view of the fact that there was no available CHB #6
in Silang, Cavite and so to save on the travel cost in bringing materials from Manila to the site, it
was agreed that such CHB #5 shall be used instead.
2.2.3 : What was the effect of such deviation in using CHB #5 instead of CHB #6?
A : No effect, madam.
2.2.4 : Why did you state so, Mr. Witness?
A : Because the entire area of the land which is being secured by the perimeter fence was fully covered
with the fence which is made of CHB. This simply implies that even though we used a much
lesser size of CHB, but we increased the compressive strength of the mortar and filler used in
the premises. This has really no effect because we cover the entire place with fence.
2.2.5

: It was also claimed that the distance between columns was deviated from 3.0 m. to 4.0 m, will
you please explain this matter.

A : The computation of the distance between the columns of the perimeter fence as appearing on the plan
was 3.0 m inside to inside. However, the computation made by the engineer of the claimant as
alleged in their Request for Arbitration was 4.0 m. outside to outside which should be 3.6 m.
outside to outside as correct distance.

2.2.6 : It now appears from your statement that there was a deviation as between the 3.0 m. inside to
inside computation in the plan and the actual 3.6 m. outside to outside computation made by
the engineers of the claimant. My question Mr. Witness is, what would be the effect of such
deviation on the columns?
A : It is true that there was such a deviation on the distance of the column but it will have no effect
because still the factor of safety was well provided for. Even the existing law on building
construction supports this matter. I even sought Engineer Rommel Amante on the matter and
his report supports my allegation.
2.2.7 : Was such deviation approved by the claimant or the representatives of the claimant?
A : Yes because during all the time the construction of the perimeter fence was done, the project manager
of the claimant was present and observing the works. Further, they have executed a Certificate
of Final Acceptance of the project.[22]
xxx

As regards the award of attorneys fees, the Court upholds De Guzmans entitlement to reasonable attorneys
fees, although it recognizes that it is a sound policy not to set a premium on the right to litigate. [23] It must be recalled that

De Guzmans repeated demands for the repair of the fence or the payment of damages by way of compensation, were not
heeded by the Contractor. The latters unjust refusal to satisfy De Guzmans valid, just and demandable claim constrained
her to litigate and incur expenses to protect her interest. Article 2208 of the Civil Code, thus, provides:
Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
xxx

(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;
xxx
Finally, the dismissal of the Contractors counterclaim is sustained for lack of merit. In his Comment[24] and Memorandum,
[25]
the Contractor pleaded that damages should have been awarded to him. This deserves scant consideration. A perusal
of the record reveals that the matter as regards the return of what he had donated by reason of De Guzmans ingratitude
was not among the issues raised in this petition. Thus, the same cannot be taken cognizance by the Court.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated February 24, 2009 and its
Resolution dated May 26, 2009 are AFFIRMED with theMODIFICATION that the award of 100,000.00 as temperate
damages is increased to 150,000.00. The award shall earn interest at the rate of 12% per annum reckoned from the
finality of this judgment until fully paid.
SO ORDERED.

ALFONSO T. YUCHENGCO, Petitioner,

G.R. No. 184315

versus -

Promulgated:
November 28, 2011

THE
MANILA CHRONICLE
PUBLISHING
CORPORATION, NOEL CABRERA, GERRY
ZARAGOZA, DONNA GATDULA, RODNEY P.
DIOLA, RAUL VALINO, THELMA SAN JUAN and
ROBERT COYIUTO, JR.,
Respondents.
RESOLUTION
PERALTA, J.:
For resolution is the Motion for Reconsideration [1] dated January 15, 2010, filed by the respondents, and the
Supplemental Motion for Reconsideration [2] of respondent Robert Coyiuto, Jr., dated March 17, 2010, from the Decision
rendered in favor of petitioner Alfonso T. Yuchengco, dated November 25, 2009.
At the outset, a brief narration of the factual and procedural antecedents that transpired and led to the filing of the
motions is in order.
The present controversy arose when in the last quarter of 1993, several allegedly defamatory articles against
petitioner were published in The Manila Chronicle by Chronicle Publishing Corporation. Consequently, petitioner filed a
complaint against respondents before the Regional Trial Court (RTC) of Makati City, Branch 136, docketed as Civil Case
No. 94-1114, under three separate causes of action, namely: (1) for damages due to libelous publication against Neal H.
Cruz, Ernesto Tolentino, Noel Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula, Raul Valino, Rodney P. Diola,
all members of the editorial staff and writers of The Manila Chronicle, and Chronicle Publishing; (2) for damages due to
abuse of right against Robert Coyiuto, Jr. and Chronicle Publishing; and (3) for attorneys fees and costs against all the
respondents.
On November 8, 2002, the trial court rendered a Decision [3] in favor of petitioner.
Aggrieved, respondents sought recourse before the Court of Appeals (CA). On March 18, 2008, the CA rendered
a Decision[4] affirming in toto the decision of the RTC.
Respondents then filed a Motion for Reconsideration [5] praying that the CA reconsider its earlier decision and
reverse the decision of the trial court. On August 28, 2008, the CA rendered an Amended Decision [6] reversing the earlier
Decision.
Subsequently, petitioner filed the present recourse before this Court which puts forth the following assignment of
errors:
A.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN

RULING THAT THE CASE OF ARTURO BORJAL, ET AL. V. COURT OF APPEALS, ET AL.,
CITED BY RESPONDENTS IN THEIR MOTION FOR RECONSIDERATION, WARRANTED THE
REVERSAL OF THE CA DECISION DATED MARCH 18, 2008.

B.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN

RULING THAT THE SUBJECT ARTICLES IN THE COMPLAINT FALL WITHIN THE CONCEPT
OF PRIVILEGED COMMUNICATION.

C.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN

RULING THAT PETITIONER IS A PUBLIC OFFICIAL OR PUBLIC FIGURE. [7]

On November 25, 2009, this Court rendered a Decision partially granting the petition.

Respondents later filed a Motion for Reconsideration dated January 15, 2010, which the Court denied in the
Resolution[8] dated March 3, 2010.
Meanwhile, respondent Coyiuto, Jr. also filed a Motion for Leave to File Supplemental Motion for Reconsideration
with Attached Supplemental Motion, both dated March 17, 2010.
On April 21, 2010, this Court issued a Resolution [9] resolving to recall the Resolution dated March 3, 2010; grant
Coyiuto, Jr.s motion for leave to file supplemental motion for reconsideration; note the supplemental motion for
reconsideration; and require petitioner to comment on the motion for reconsideration and supplemental motion for
reconsideration.
On June 22, 2010, petitioner filed his Comment on the Motion for Reconsideration [10] dated January 15, 2010 and
Comment on respondent Coyiuto, Jr.s Supplemental Motion for Reconsideration [11] dated 17 March 2010.
In the Motion for Reconsideration, respondents moved for a reconsideration of the earlier decision on the
following grounds:
1.
2.
3.
4.
5.
6.

7.
8.
9.

10.

MALICE-IN-FACT HAS NOT BEEN PROVEN.

PETITIONER IS A PUBLIC FIGURE.
THE SUBJECT OF THE PUBLICATIONS CONSTITUTES FAIR COMMENTS, ON PUBLIC
ISSUES, ON MATTERS OF PUBLIC INTEREST AND NATIONAL CONCERN.
RESPONDENTS DID NOT ACT IN A RECKLESS MANNER OR IN COMPLETE DISREGARD OF
THE TRUTH OF THE MATTERS COVERED BY THE SUBJECT PUBLICATIONS.
THE PROTECTIVE MANTLE OF QUALIFIED PRIVILEGED COMMUNICATIONS PROTECTS THE
SUBJECT PUBLICATIONS.
THERE IS NO LEGAL OR EVIDENTIARY BASIS TO HOLD DONNA GATDULA, JOINTLY AND
SEVERALLY, LIABLE FOR THE SUBJECT PUBLICATIONS, TOGETHER WITH THE EDITORS AND
STAFF OF THE NEWSPAPER.
THERE IS NO EVIDENCE TO HOLD THELMA SAN JUAN RESPONSIBLE FOR THE SUBJECT
PUBLICATIONS.
THE QUICK NOTES COLUMN OF MR. RAUL VALINO ARE BASED ON FACTS; THUS, NOT
LIBELOUS.
ROBERT COYIUTO, JR. IS NOT IMPLEADED WITH THE EDITORS AND STAFF MEMBERS OF
THE MANILA CHRONICLE, BUT IS SUED IN HIS PERSONAL CAPACITY FOR AN ABUSE OF
RIGHT AND NO EVIDENCE LINKS HIM TO THE SUBJECT PUBLICATIONS.
THE AWARDED DAMAGES ARE EXCESSIVE, EQUITABLE AND UNJUSTIFIED.[12]

In his Supplemental Motion for Reconsideration, Coyiuto, Jr. raises the following arguments:
I.
WITH ALL DUE RESPECT, THIS HONORABLE COURT OBVIOUSLY OVERLOOKED THE FACT THAT
IN PETITIONERS AMENDED COMPLAINT (DATED OCTOBER 17, 1994), RESPONDENT ROBERT
COYIUTO, JR. WAS NOT SUED FOR DAMAGES ALLEGEDLY DUE TO LIBELOUS PUBLICATIONS
(FIRST CAUSE OF ACTION). HE WAS SUED, HOWEVER, IN HIS PERSONAL CAPACITY FOR ABUSE
OF RIGHT (SECOND CAUSE OF ACTION) ALLEGEDLY, AS CHAIRMAN OF THE BOARD,
OFFICER,PRINCIPAL OWNER, OF THE MANILA CHRONICLE PUBLISHING CORPORATION UNDER
ARTICLES 19 AND 20 OF THE CIVIL CODE. AS SUCH, THE IMPOSITION OF MORAL (P25 MILLION
PESOS) AND EXEMPLARY (P10 MILLION PESOS) DAMAGES AGAINST RESPONDENT COYIUTO,
JR. HAS NO BASIS IN LAW AND CONTRARY TO THE SPECIFIC PROVISIONS OF ARTICLES 2219
AND 2229, IN RELATION TO ARTICLE 2233, RESPECTIVELY, OF THE CIVIL CODE AS WILL BE
ELUCIDATED HEREUNDER.

II.
WITH ALL DUE RESPECT, APART FROM THE SELF-SERVING/UNILATERAL ALLEGATION IN
PARAGRAPH 3.11 OF THE AMENDED COMPLAINT (ANNEX C OF PETITION FOR REVIEW), NO IOTA
OF EVIDENCE WAS ADDUCED ON TRIAL IN SUPPORT OF THE ALLEGATION THAT RESPONDENT
COYIUTO, JR. WAS CHAIRMAN, PRINCIPAL OWNER AND OFFICER OF RESPONDENT MANILA
CHRONICLE PUBLISHING CORPORATION. SEC DOCUMENTS SHOW THE CONTRARY, AS WILL BE
DISCUSSED HEREUNDER. SO HOW COULD RESPONDENT COYIUTO, JR. BE IMPLEADED TO
HAVE ABUSED HIS RIGHT AS A NON-CHAIRMAN, NON-STOCKHOLDER, NON-OFFICER OF
RESPONDENT MANILA CHRONICLE PUBLISHING CORPORATION? IT IS FUNDAMENTAL THAT THE
BURDEN OF PROOF RESTS ON THE PARTY ASSERTING A FACT OR ESTABLISHING A CLAIM
(RULE 131, REVISED RULES OF COURT).[13]

From the foregoing, it is apparent that the motion for reconsideration generally restates and reiterates the
arguments, which were previously advanced by respondents and does not present any substantial reasons, which were
not formerly invoked and passed upon by the Court.
However, from the supplemental motion for reconsideration, it is apparent that Coyiuto, Jr. raises a new matter
which has not been raised in the proceedings below. This notwithstanding, basic equity dictates that Coyiuto, Jr. should be
given all the opportunity to ventilate his arguments in the present action, but more importantly, in order to write finis to the
present controversy. It should be noted that the Resolution denying the Motion for Reconsideration was later recalled by
this Court in the Resolution dated March 3, 2010, and therein, petitioner was given the opportunity to refute Coyiuto, Jr.s
arguments by filing his comment on the motion for reconsideration and the supplemental motion for reconsideration,
which petitioner complied with.
From these Comments and contrary to Coyiuto, Jr.s contention, it was substantially established that he was the
Chairman of Manila Chronicle Publishing Corporation when the subject articles were published. Coyiuto, Jr. even admitted
this fact in his Reply and Comment on Request for Admission, [14] to wit:

4. Defendant Robert Coyiuto Jr. ADMITS that he was the Chairman of the Board but not President
of the Manila Chronicle during the period Novemeber (sic) to December 1993.
5. Defendant Robert Coyiuto Jr. DENIES paragraph 11. He has already conveyed such denial to
plaintiff in the course of the pre-trial. It was The Manila Chronicle, a newspaper of general circulation, of
which he is, admittedly Chairman of the Board, that published the items marked as plaintiffs Exhibits A, B,
C, D, E, F, and G.
xxxx
12.
This case, based on plaintiffs Amended Complaint, is limited to the publications in
The Manila Chronicle marked plaintiffs Exhibits A to G, consecutively, published by defendant Manila
Chronicle. Thus, only the question of whether Mr. Robert Coyiuto, Jr. was Chairman and President of
defendant Manila Chronicle, during these publications and whether he caused these publications, among
all of plaintiffs queries, are relevant and material to this case. And defendant Robert Coyiuto, Jr. has
answered that: Yes, he was Chairman of the Board. No, he was never President of The Manila
Chronicle. No, he did not cause the publications in The Manila Chronicle: it was the Manila Chronicle that
published the news items adverted to.[15]

Both the trial court and the CA affirmed this fact. We reiterate that factual findings of the trial court, when adopted
and confirmed by the CA, are binding and conclusiveon this Court and will generally not be reviewed on appeal. While this
Court has recognized several exceptions [16] to this rule, none of these exceptions exists in the present case.Accordingly,
this Court finds no reason to depart from the findings of fact of the trial court and the CA.

More importantly and contrary again to Coyiuto, Jr.s contention, the cause of action of petitioner based on abuse
of rights, or Article 19, in relation to Article 20 of the Civil Code, warrants the award of damages.
The principle of abuse of rights as enshrined in Article 19 of the Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

This provision of law sets standards which must be observed in the exercise of ones rights as well as in the
performance of its duties, to wit: to act with justice; give everyone his due; and observe honesty and good faith. [17]
In Globe Mackay Cable and Radio Corporation v. Court of Appeals,[18] it was elucidated that while Article 19 lays
down a rule of conduct for the government of human relations and for the maintenance of social order, it does not provide
a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21 would be proper. The Court
said:
One of the more notable innovations of the New Civil Code is the codification of "some basic
principles that are to be observed for the rightful relationship between human beings and for the stability
of the social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL CODE OF
THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the defect of the old Code which
merely stated the effects of the law, but failed to draw out its spirit, incorporated certain fundamental
precepts which were "designed to indicate certain norms that spring from the fountain of good
conscience" and which were also meant to serve as "guides for human conduct [that] should run as
golden threads through society, to the end that law may approach its supreme ideal, which is the sway
and dominance of justice." (Id.) Foremost among these principles is that pronounced in Article 19 which
provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.
This article, known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which must be observed not only in the exercise of one's rights, but also in the
performance of one's duties. These standards are the following: to act with justice; to give everyone his
due; and to observe honesty and good faith. The law, therefore, recognizes a primordial limitation on all
rights; that in their exercise, the norms of human conduct set forth in Article 19 must be observed. A right,
though by itself legal because recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But while Article 19 lays down a rule of conduct for the government
of human relations and for the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.[19]

Corollarilly, Article 20 provides that every person who, contrary to law, willfully or negligently causes damage to
another shall indemnify the latter for the same. It speaks of the general sanctions of all other provisions of law which do
not especially provide for its own sanction. When a right is exercised in a manner which does not conform to the
standards set forth in the said provision and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be responsible. [20] Thus, if the provision does not provide a remedy for its violation, an action for
damages under either Article 20 or Article 21 of the Civil Code would be proper.
The question of whether or not the principle of abuse of rights has been violated resulting in damages under
Article 20 or other applicable provision of law, depends on the circumstances of each case. In the present case, it was
found that Coyiuto, Jr. indeed abused his rights as Chairman of The Manila Chronicle, which led to the publication of the
libelous articles in the said newspaper, thus, entitling petitioner to damages under Article 19, in relation to Article 20.

Consequently, the trial court and the CA correctly awarded moral damages to petitioner. Such damages may be
awarded when the transgression is the cause of petitioners anguish. [21] Further, converse to Coyiuto, Jr.s argument,
although petitioner is claiming damages for violation of Articles 19 and 20 of the Civil Code, still such violations directly
resulted in the publication of the libelous articles in the newspaper, which, by analogy, is one of the ground for the
recovery of moral damages under (7) of Article 2219.[22]
However, despite the foregoing, the damages awarded to petitioner appear to be too excessive and warrants a
second hard look by the Court.
While there is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral
damages, the same should not be palpably and scandalously excessive. Moral damages are not intended to impose a
penalty to the wrongdoer, neither to enrich the claimant at the expense of the defendant. [23]
Even petitioner, in his Comment [24] dated June 21, 2010, agree that moral damages are not awarded in order to
punish the respondents or to make the petitioner any richer than he already is, but to enable the latter to find some cure
for the moral anguish and distress he has undergone by reason of the defamatory and damaging articles which the
respondents wrote and published. [25] Further, petitioner cites as sufficient basis for the award of damages the plain reason
that he had to go through the ordeal of defending himself everytime someone approached him to ask whether or not the
statements in the defamatory article are true.
In Philippine Journalists, Inc. (Peoples Journal) v. Thoenen, [26] citing Guevarra v. Almario,[27] We noted that the
damages in a libel case must depend upon the facts of the particular case and the sound discretion of the court, although
appellate courts were more likely to reduce damages for libel than to increase them. So it must be in this case.
Moral damages are not a bonanza. They are given to ease the defendants grief and suffering. Moral damages
should be reasonably approximate to the extent of the hurt caused and the gravity of the wrong done. [28] The Court,
therefore, finds the award of moral damages in the first and second cause of action in the amount of P2,000,000.00
andP25,000,000.00, respectively, to be too excessive and holds that an award of P1,000,000.00 and P10,000,000.00,
respectively, as moral damages are more reasonable.
As for exemplary damages, Article 2229 provides that exemplary damages may be imposed by way of example or
correction for the public good. Nonetheless, exemplary damages are imposed not to enrich one party or impoverish
another, but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. [29] On this basis,
the award of exemplary damages in the first and second cause of action in the amount of P500,000.00
and P10,000,000.00, respectively, is reduced to P200,000.00 andP1,000,000.00, respectively.
On the matter of attorneys fees and costs of suit, Article 2208 of the same Code provides, among others, that
attorneys fees and expenses of litigation may be recovered in cases when exemplary damages are awarded and where
the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered. In any event,
however, such award must be reasonable, just and equitable. [30] Thus, the award of attorneys fees and costs is reduced
from P1,000,000.00 to P200,000.00.
One final note, the case against respondent was one for damages based on the publication of libelous articles
against petitioner; hence, only civil in nature. The rule is that a party who has the burden of proof in a civil case must
establish his cause of action by a preponderance of evidence. Thus, respondents liability was proven only on the basis of
preponderance of evidence, which is quite different from a criminal case for libel where proof beyond reasonable doubt
must be established.
Corollarilly, under Article 360 of the Revised Penal Code, the person who caused the publication of a defamatory
article shall be responsible for the same. Hence, Coyiuto, Jr. should have been held jointly and solidarily liable with the
other respondents in the first cause of action under this article and not on the basis of violation of the principle of abuse of
rights founded on Articles 19 and 20 of the Civil Code. Because of the exclusion of Coyiuto, Jr. in the first cause of action
for libel, he cannot be held solidarily liable with the other respondents in the first cause of action. Nonetheless, since
damage to petitioner was in fact established warranting the award of moral and exemplary damages, the same could only

be awarded based on petitioners second cause of action impleading Coyiuto, Jr. for violation of the principle of abuse of
right.
It did not escape the attention of the Court that in filing two different causes of action based on the same
published articles, petitioner intended the liability of Coyiuto, Jr. to be different from the other respondents. It can be
inferred that if Coyiuto, Jr. was impleaded in the first cause of action for recovery of the civil liability in libel, petitioner could
not have prayed for higher damages, considering that the other respondents, who are jointly and severally liable with one
another, are not in the same financial standing as Coyiuto, Jr. Petitioner, in effect, had spared the other respondents from
paying such steep amount of damages, while at the same time prayed that Coyiuto, Jr. pay millions of pesos by way of
moral and exemplary damages in the second cause of action.
WHEREFORE, the Motion for Reconsideration and Supplemental Motion for Reconsideration are PARTIALLY
GRANTED. The Decision of this Court, datedNovember 25, 2009, is MODIFIED to read as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:
1. On the First Cause of Action, ordering defendants Chronicle Publishing, Neil H. Cruz, Ernesto
Tolentino, Noel Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula, Raul Valino and Rodney
Diola, to pay plaintiff Yuchengco, jointly and severally:
a.
b.
damages;

the amount of One Million Pesos (P1,000,000.00) as moral damages; and

the amount of Two Hundred Thousand Pesos (P200,000.00) as exemplary

2. On the Second Cause of Action, ordering defendants Robert Coyiuto, Jr. and Chronicle
Publishing to pay plaintiff Yuchengco, jointly and severally:
a.
b.

the amount of Ten Million Pesos (P10,000,000.00) as moral damages; and

the amount of One Million Pesos (P1,000,000.00) as exemplary damages;

3. On the Third Cause of Action, ordering all defendants to pay plaintiff Yuchengco, jointly and
severally, the amount of Two Hundred Thousand Pesos (P200,000.00) as attorneys fee and legal costs.
Costs against respondents.
SO ORDERED.

G.R. No. 133831. February 14, 2003

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. APOLONIO CULTURA, accused-appellant.
DECISION

SANDOVAL-GUTIERREZ, J.:
On appeal is the Decision[1] of the Regional Trial Court, Branch 43, Dumaguete City, Negros Oriental, in Criminal
Case No. 12492, convicting Apolonio Cultura, accused-appellant, of rape and sentencing him to suffer the penalty
of reclusion perpetua and to pay Dahlia Rose Balsamo, complainant, the amount of P50,000.00 as civil indemnity.
On May 13, 1996, an Information was filed with the said court charging the accused-appellant with rape committed in
the following manner:
"That on April 9, 1996 at about 12:00 o'clock noon at Barrio Datag, Siaton, Negros Oriental, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused by means of force and intimidation with the use of a knife
willfully, unlawfully and feloniously, did then and there lie and succeeded in having sexual intercourse with an eleven (11)
year old victim Dalia Rose C. Balsamo, without the latter's consent.
"Contrary to Article 335 of the Revised Penal Code." [2]
Upon arraignment, the accused-appellant pleaded not guilty to the crime charged. [3] Thereafter, trial ensued.
The evidence for the prosecution, as synthesized by the Solicitor General in the Appellees Brief, is as follows:
"At about 11:00 o'clock a.m. of April 9, 1996, eleven year-old Dahlia Rose Balsamo, and her brother Longlong, were at the
Siaton River, just below their house at Datag, Siaton, Negros Oriental (p. 5, tsn, August 13, 1996) catching shrimps (p.
8, id.). Since the Siaton River was waist-deep, Dahlia took off her clothes while catching shrimps with a spear gun (p. 3,
tsn, October 25, 1996).Longlong, however, went home ahead of Dahlia who wanted to take a bath after catching shrimps
(p. 19, tsn, August 13, 1996). While at the river, Dahlia saw her neighbor, Apolonio Cultura, alias Onyot approaching her
after coming from a bamboo grove (p. 6, tsn, October 26, 1996). When Onyot neared Dahlia, he boxed her twice causing
her to fall and to lose consciousness (pp. 6-7,supra). When Dahlia recovered, she found herself in the bamboo
grove. Dahlia stood up and saw blood oozing out of her sexual organ. Dahlia ran home but saw Onyot on the road near
his farm(p. 7, tsn, October 25, 1996). Onyot warned her not to tell her parents about the incident, otherwise, he will kill her
family (p. 7, supra).
"Upon reaching home, Leoncio Balsamo, Dahlia's father, noticed that Dahlia's sexual organ was bleeding. When asked by
her father as to what happened, Dahlia answered that she was raped by Onyot (pp. 8-9, tsn, November 18,
1996). Immediately, Leoncio brought Dahlia to the barangay captain who, upon noticing that Dahlia's shorts was drenched
with blood, advised them to proceed to the police station at the municipal hall (pp. 6 and 10, supra). After the incident was
blottered by the police, Dahlia, upon police advice, was brought to the Bayawan District Hospital where her bleeding
sexual organ was cleaned and sutured (p. 11, supra). On examination, Dr. Mitylene Besario Tan, Dahlia's attending
physician, found that Dahlia sustained a lacerated wound located at the mid-lower aspect, vaginal mucosa extending to
the perimeum. The wound was a very serious one because it extended from the inside to the outside of the victim's
vagina. Without medical attendance, it would cause profuse bleeding leading to anemia and possibly to hypovolemic
shock and death (p. 8, tsn, July 9, 1996)." [4]
The evidence for the defense consisted of the testimonies of the accused-appellant and Roger Sumili.
Roger Sumili testified that he is a trysicad[5] operator and that the accused-appellant is his driver. On April 9, 1996,
the accused-appellant rented his trysicad and plied the routes around the poblacion of Siaton, Negros Oriental from 6:00
o'clock in the morning until 12:00 o'clock noon. [6] Then, they ate lunch at the poblacion market. Thirty minutes later, the
accused-appellant resumed driving the trysicad and proceeded to Barangay 2 of Siaton, while Sumili drove
another trysicad towards the opposite direction. They encountered each other at the crossroads and also at the
marketplace at 2:00 o'clock in the afternoon. Two hours later, Sumili saw the accused-appellant with a policeman riding in
a trysicad heading towards the Siaton police station. [7]Sumili later learned that the accused-appellant was charged with
rape. According to Sumili, Barangay Datag (where the crime took place) is far from the poblacion although the distance
may be traversed by a trysicad or pedicab.[8]
For his part, the accused-appellant, in a very brief testimony, denied committing the crime charged and raised the
defense of alibi. He testified that on April 9, 1996 at around 12:00 noon, he was at poblacion Siaton, Negros Oriental,
driving a trysicad owned by Roger Sumili. He maintained that he and complainant are not neighbors in Barangay Datag
where she lives.[9] According to him, he resides in Camansi, Tanjay.
On March 16, 1998, the trial court rendered its Decision, the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered finding the accused Apolonio Cultura alias "Onyot", guilty beyond
reasonable doubt of the crime of rape defined and punished under Article 335 of the Revised Penal Code, as amended,
under circumstances provided under no. 3 of the same Article of the Revised Penal Code, and the penalty of Reclusion
Perpetua is hereby imposed upon the said accused, who is directed to indemnify the victim in the amount of P50,000.00.
"The accused is granted full time credit of the duration of his preventive custody.
"SO ORDERED."[10]

Hence, this appeal.

In his Brief, the accused-appellant contends that the trial court erred:
"IN CONVICTING ACCUSED-APPELLANT OF RAPE DESPITE THE FACT THAT HIS GUILT WAS NOT PROVED
BEYOND REASONABLE DOUBT."[11]
In the main, the issue is the credibility of complainant Dahlia Rose Balsamo. It is apt to point out once more that
factual findings of the trial court, particularly its assessment of the credibility of witnesses, are entitled to great weight on
appeal. This is based on the principle that the assessment of the credibility of witnesses is a matter best left to the trial
court because of its unique position of being able to ascertain and measure the sincerity and spontaneity of witnesses
through the actual observation of their manner of testifying, demeanor and behavior in court. [12]
The complainant testified as follows:
xxx
Q On April 9, 1996 at about 11:00 oclock in the morning, can you still recall where were you?
A Yes.
Q Where were you?
A I was catching.
Q What were you catching?
A Shrimps.
Q Where were you catching shrimps?
A In the river of Siaton.
Q That river of Siaton is far from your house?
A Just below.
Q Who was with you when you were catching shrimps at the river of Siaton?
A Longlong but he went home ahead of me.
Q You are saying that after Longlong went ahead of you, you were left alone at the river?
A Yes.
Q How deep was the river where you were catching shrimps?
A Until the waistline.
Q When you were catching shrimps at the river, were you wearing something or were you naked?
A None.
Q While you were catching shrimps, will you please tell us what happened if anything happened?
A There was.
Q What happened?
A He boxed me twice.
Q Who boxed you twice?
A Onyok.
Q Is that Onyok present in the courtroom now?
A Yes.
Q Can you please point him to the Court?
A That man.
NOTE:
Witness is pointing to a man whom when called and asked his name answered Apolonio Cultura.
Q When you said that you were boxed by Onyok, where were you boxed by Onyok, at the river or already away
from the river?
A In the river.
Q Were you hit by Onyok?
A Yes.
Q Where were you hit?
A At the side.
Q After you were boxed at the side and you were hit, what did Onyok do, if any?
A I fell down.
Q When you already fell down, what did Onyok do to you if you can still remember?
A I lost my senses for a while.
Q When you recovered your senses, do you remember where were you, were you still at the river or away from
the river?

A I can remember.
Q Where were you?
A By the bamboo grove.
Q When you said that you recovered your consciousness at the bamboo grove, when you recovered your
consciousness, what happened and what did you see of your body if you remember?
A I found out that he was already gone.
Q What about you, were you still naked at the time you regained consciousness?
A Yes.
Q What did you see with your body after you recovered your consciousness?
A I did not have clothes on and when I stood up the blood sputtered.
Q Where did this blood come from that spluttered?
A From my vagina.
Q How much was this blood that came out from your vagina?
A Much blood.
Q What did you feel after you saw that there was so much blood coming out from your vagina?
A Pain.
Q What did you do after you discovered that there was so much blood coming from your vagina?
A I ran.
Q To which direction were you going?
A To the road.
Q To whom did you see, if any, when you were at the road?
A I saw Onyok.
Q When you saw Onyok right there at the road, did you hear anything that he said to you at that time?
A Yes, there was.
Q What did he say to you?
A He said that if I were to tell those things to my father, he would kill all of us.
Q After hearing those words from Onyok, what did you do next?
A I ran.
Q To which direction were you going?
A To our house.
Q Were you able to arrive at your house?
A Yes.
Q Who was there in your house when you arrived there?
A My father.
Q What did you tell your father, if any?
A I said I was sexually abused by Onyok.
Q When you arrived at your house and you told your father that you were sexually abused by Onyok, do you
remember if you were still bleeding at that time?
A Yes.
Q Did you show your vagina bleeding to your father?
A Yes.
Q What did your father do after he saw that your vagina was bleeding at that time?
A He changed clothing.
Q Do you know why he was changing his clothes?
A Yes.
Q Why, where was he going at that time?
A We were going to the police.
Q Were you able to go to the police?
A Yes.
Q What police station is that? Is that the police station of Siaton or some other municipalities?
A In Siaton only.
Q When you arrived at the Police Station of Siaton, can you remember what the police did to you?
A I can remember.
Q What did they do?

A They attended to me and they went to the person who sexually abused me.
Q From the Police Station of Siaton, do you remember where did you go next?
A Yes, I remember.
Q Where did you go next?
A In the hospital.
Q Can you still remember if that hospital was still in Siaton?
A Yes.
Q Do you remember what the doctor did to you at the hospital?
A They cleaned me.
Q Do you still remember if when you arrived at the hospital, you were still bleeding?
A Still bleeding.
Q After the doctor cleaned you, where did you go next?
A To the center.
Q That center is still within Siaton?
A Yes.
x x x[13]
Dr. Mitylene Tan of the Municipal Health Office in Siaton, testified that she examined Dahlia Rose Balsamo for
vaginal bleeding at the Rural Health Unit Office, Siaton, Negros Oriental.She suffered from a "lacerated wound, mid-lower
aspect, vaginal mucosa extending to the perineum" and endured severe vaginal bleeding caused by the wound. Without
prompt medical assistance, the wound would have led to anemia, hypovolemic shock or death. Dr. Tan opined that a male
organ could have caused the laceration and vaginal bleeding.
A review of the records and evaluation of the evidence show that the complainant told the truth and that she
positively identified the accused-appellant. As correctly ruled by the trial court, there is sufficient circumstantial evidence to
warrant his conviction.
Section 4, Rule 133 of the Revised Rules of Court, as amended, enumerates the conditions when circumstantial
evidence may be sufficient for conviction, thus:
"SEC. 4. Circumstantial Evidence, when sufficient. Circumstantial evidence is sufficient for conviction if:
(a) There is more than one circumstance;
(b) The facts from which the inferences are derived are proven; and
(c) The combination of all circumstances is such as to produce conviction beyond reasonable doubt."
As jurisprudentially formulated, a judgment of conviction based on circumstantial evidence can be upheld only if the
circumstances proven constitute an unbroken chain which leads to one fair and reasonable conclusion pointing to the
defendant as the guilty person, i.e., the circumstances proven must be consistent with each other, consistent with the
hypothesis that the accused is guilty, and at the same time inconsistent with any other hypothesis except that of guilty. [14]
The following incidents, glaringly shown by the records, constitute an unbroken chain of events which leads to the
conclusion that the accused-appellant committed the crime charged.
First, complainant Dahlia Rose Balsamo was bathing in the river alone;
Second, the accused-appellant approached her and boxed her twice;
Third, she lost consciousness;
Fourth, she woke up in a bamboo grove, naked and alone;
Fifth, as she stood up, she felt pain in her vagina and found it was bleeding;
Sixth, when she started walking home, she met the accused-appellant near the road;
Seventh, he threatened her not to tell her father about the incident;
Eighth, the medical findings showed that she suffered a "lacerated wound, mid-lower aspect, vaginal mucosa extending to
the perineum." The bleeding was so severe that the wound had to be sutured;
Ninth, the prosecution witness, Barangay captain Sergio Ege, declared that he saw blood on her shorts when she and her
father approached him for assistance.[15] Police Investigator SPO2 Inocencio V. de la Pea, another prosecution witness,
also saw blood on the lower portion of her body.[16]
The foregoing circumstances convince us with moral certainty that the accused-appellant raped herein complainant
when she was unconscious.
Significantly, we cannot discern any reason why the complainant would fabricate the charge against the accusedappellant. No woman would contrive a rape story, allow an examination of her private parts and permit herself to be
subjected to scrutiny at a public trial if she is not motivated solely by a desire to have the culprit apprehended and
punished.[17]

Furthermore, the conduct of the victim immediately following the alleged assault is of utmost importance in
establishing the truth or falsity of the charges of rape. [18] Here, the complainant promptly told her father that she had been
raped. She was thereafter taken to the barangay chairman and the police authorities for assistance. Her act of
immediately reporting the commission of the rape is considered a factor in strengthening her credibility.[19]
Thus, the accused-appellants defense of denial and alibi must fail. Alibi is the weakest of all defenses for it is easy to
fabricate. It cannot prevail over the positive identification of the accused by credible witnesses as the perpetrator of the
crime. For the defense of alibi to prosper, the accused must be able to (a) prove his presence at another place at the time
of the perpetration of the offense, and (b) demonstrate that it is physically impossible for him to be at the scene of the
crime.[20] In the case at bar, Sumili testified that the distance between thepoblacion (where the accused-appellant was
driving the trysicad) and Barangay Datag (the scene of the crime) may be negotiated by trysicad. Clearly, it was possible
for the accused-appellant to be at Barangay Datag at that particular time when the crime was committed.
Although the Information alleged that the complainant was eleven (11) years old when she was raped, the
prosecution failed to prove the same during the trial.
Article 335 of the Revised Penal Code, as amended by RA 7659, defines rape as the crime committed by a person
having carnal knowledge of a woman under any of the following circumstances: (1) by using force or intimidation; (2)
when the woman is deprived of reason or otherwise unconscious; and (3) when the woman is under twelve years of age
or is demented. The crime shall be punished by reclusion perpetua.[21]
The trial court correctly convicted the accused-appellant on the basis of Article 335 (2) of the Revised Penal Code,
i.e., that the rape was committed when the woman was unconscious.It bears reiterating that the prosecution has
established by evidence beyond reasonable doubt that the complainant was unconscious at the time she was raped. The
carnal knowledge of an unconscious woman constitutes rape, opposition or resistance not being required, for the state of
the woman at that time signifies that she has no will. [22]
Regarding the accused-appellants civil liability, we note that the trial court awarded civil indemnity in the amount
of P50,000.00 but failed to grant moral damages. In rape cases, the victims injury is inherently concomitant with the
odious crime to warrant per se an award for moral damages without the requirement of proof of mental and physical
suffering.[23] Moral damages in rape cases are given without need of showing that the victim suffered the trauma of mental,
physical and psychological sufferings that constitute the bases thereof. [24] Pursuant to current jurisprudence, the amount
of P50,000.00 as moral damages is proper.[25]
WHEREFORE, the Decision of the Regional Trial Court, Branch 43, Dumaguete City, Negros Oriental in Criminal
Case No. 12492, convicting accused-appellant Apolonio Cultura of the crime of rape defined and penalized by Article 335
(2) of the Revised Penal Code, as amended, and sentencing him to reclusion perpetua is AFFIRMED with
MODIFICATION in the sense that he is ordered to pay the victim, Dahlia Rose Balsamo, the additional amount
of P50,000.00 as moral damages.
SO ORDERED.

FONTANA RESORT AND COUNTRY CLUB,

INC. AND RN DEVELOPMENT CORP.,
Petitioners,

G.R. No. 154670

Promulgated:

- versus -

January 30, 2012

SPOUSES ROY S. TAN AND SUSAN C.

TAN,
Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
For review under Rule 45 of the Rules of Court is the Decision [1] dated May 30, 2002 and Resolution [2] dated
August 12, 2002 of the Court Appeals in CA-G.R. SP No. 67816. The appellate court affirmed with modification the
Decision[3] dated July 6, 2001 of the Securities and Exchange Commission (SEC) En Banc in SEC AC Case No. 788
which, in turn, affirmed the Decision [4] dated April 28, 2000 of Hearing Officer Marciano S. Bacalla, Jr. (Bacalla) of the SEC
Securities Investigation and Clearing Department (SICD) in SEC Case No. 04-99-6264.
Sometime in March 1997, respondent spouses Roy S. Tan and Susana C. Tan bought from petitioner RN
Development Corporation (RNDC) two class D shares of stock in petitioner Fontana Resort and Country Club, Inc.
(FRCCI), worth P387,300.00, enticed by the promises of petitioners sales agents that petitioner FRCCI would construct a
park with first-class leisure facilities in Clark Field, Pampanga, to be called Fontana Leisure Park (FLP); that FLP would be
fully developed and operational by the first quarter of 1998; and that FRCCI class D shareholders would be admitted to
one membership in the country club, which entitled them to use park facilities and stay at a two-bedroom villa for five (5)
ordinary weekdays and two (2) weekends every year for free. [5]
Two years later, in March 1999, respondents filed before the SEC a Complaint [6] for refund of the P387,300.00
they spent to purchase FRCCI shares of stock from petitioners. Respondents alleged that they had been deceived into
buying FRCCI shares because of petitioners fraudulent misrepresentations. Construction of FLP turned out to be still
unfinished and the policies, rules, and regulations of the country club were obscure.
Respondents narrated that they were able to book and avail themselves of free accommodations at an FLP villa
on September 5, 1998, a Saturday. They requested that an FLP villa again be reserved for their free use on October 17,
1998, another Saturday, for the celebration of their daughters 18 th birthday, but were refused by petitioners.Petitioners
clarified that respondents were only entitled to free accommodations at FLP for one week annually consisting of five (5)
ordinary days, one (1) Saturday and one (1) Sunday[,] and that respondents had already exhausted their free Saturday
pass for the year. According to respondents, they were not informed of said rule regarding their free accommodations at
FLP, and had they known about it, they would not have availed themselves of the free accommodations on September 5,
1998. In January 1999, respondents attempted once more to book and reserve an FLP villa for their free use on April 1,
1999, a Thursday. Their reservation was confirmed by a certain Murphy Magtoto. However, on March 3, 1999, another
country club employee named Shaye called respondents to say that their reservation for April 1, 1999 was cancelled
because the FLP was already fully booked.
Petitioners filed their Answer[7] in which they asserted that respondents had been duly informed of the privileges
given to them as shareholders of FRCCI class D shares of stock since these were all explicitly provided in the promotional
materials for the country club, the Articles of Incorporation, and the By-Laws of FRCCI. Petitioners called attention to the
following paragraph in their ads:
GUEST ROOMS
As a member of the Fontana Resort and Country Club, you are entitled to 7 days stay consisting
of 5 weekdays, one Saturday and one Sunday. A total of 544 elegantly furnished villas available in two
and three bedroom units.[8]
Petitioners also cited provisions of the FRCCI Articles of Incorporation and the By-Laws on class D shares of
stock, to wit:

Class D shares may be sold to any person, irrespective of nationality or Citizenship. Every
registered owner of a class D share may be admitted to one (1) Membership in the Club and subject to
the Clubs rules and regulations, shall be entitled to use a Two (2) Bedroom Multiplex Model Unit in the
residential villas provided by the Club for one week annually consisting of five (5) ordinary days, one (1)
Saturday and one (1) Sunday. (Article Seventh, Articles of Incorporation)
Class D shares which may be sold to any person, irrespective of nationality or Citizenship. Every
registered owner of a class D share may be admitted to one (1) Membership in the Club and subject to
the Clubs rules and regulations, shall be entitled to use a Two (2) Bedroom Multiplex Model Unit in the
residential villas provided by the Club for one week annually consisting of five (5) ordinary days, one (1)
Saturday and one (1) Sunday. [Section 2(a), Article II of the By-Laws.] [9]

Petitioners further denied that they unjustly cancelled respondents reservation for an FLP villa on April 1, 1999,
explaining that:
6. There is also no truth to the claim of [herein respondents] that they were given and had
confirmed reservations for April 1, 1998. There was no reservation to cancel since there was no confirmed
reservations to speak of for the reason that April 1, 1999, being Holy Thursday, all reservations for the
Holy Week were fully booked as early as the start of the current year. The Holy Week being a peak
season for accommodations, all reservations had to be made on a priority basis; and as admitted by
[respondents], they tried to make their reservation only on January 4, 1999, a time when all reservations
have been fully booked. The fact of [respondents] non-reservation can be attested by the fact that no
confirmation number was issued in their favor.
If at all, [respondents] were wait-listed as of January 4, 1999, meaning, they would be given
preference in the reservation in the event that any of the confirmed members/guests were to cancel. The
diligence on the part of the [herein petitioners] to inform [respondents] of the status of their reservation
can be manifested by the act of the Clubs personnel when it advised [respondents] on March 3, 1999 that
there were still no available villas for their use because of full bookings. [10]

Lastly, petitioners averred that when respondents were first accommodated at FLP, only minor or finishing
construction works were left to be done and that facilities of the country club were already operational.
SEC-SICD Hearing Officer Bacalla conducted preliminary hearings and trial proper in the case. Respondents filed
separate sworn Question and Answer depositions. [11]Esther U. Lacuna, a witness for respondents, also filed a sworn
Question and Answer deposition.[12] When petitioners twice defaulted, without any valid excuse, to present evidence on
the scheduled hearing dates, Hearing Officer Bacalla deemed petitioners to have waived their right to present evidence
and considered the case submitted for resolution.[13]
Based on the evidence presented by respondents, Hearing Officer Bacalla made the following findings in his
Decision dated April 28, 2000:
To prove the merits of their case, both [herein respondents] testified. Ms. Esther U. Lacuna
likewise testified in favor of [respondents].
As established by the testimonies of [respondents] witnesses, Ms. Esther U. Lacuna, a duly
accredited sales agent of [herein petitioners] who went to see [respondents] for the purpose of inducing
them to buy membership shares of Fontana Resort and Country Club, Inc. with promises that the park will
provide its shareholders with first class leisure facilities, showing them brochures (Exhibits V, V-1 and V-2)
of the future development of the park.

Indeed [respondents] bought two (2) class D shares in Fontana Resort and Country Club, Inc.
paying P387,000.00 to [petitioners] as evidenced by provisional and official receipts (Exhibits A to S), and
signing two (2) documents designated as Agreement to Sell and Purchase Shares of Stock (Exhibits T to
U-2).
It is undisputed that many of the facilities promised were not completed within the specified
date. Ms. Lacuna even testified that less than 50% of what was promised were actually delivered.
What was really frustrating on the part of [respondents] was when they made reservations for the
use of the Clubs facilities on the occasion of their daughters 18 th birthday on October 17, 1998 where they
were deprived of the clubs premises alleging that the two (2) weekend stay which class D shareholders
are entitled should be on a Saturday and on a Sunday. Since [respondents] have already availed of one
(1) weekend stay which was a Saturday, they could no longer have the second weekend stay also on a
Saturday.
Another occasion was when [respondents] were again denied the use of the clubs facilities
because they did not have a confirmation number although their reservation was confirmed.
All these rules were never communicated to [respondents] when they bought their membership
shares.
It would seem that [petitioners], through their officers, would make up rules as they go along. A
clever ploy for [petitioners] to hide the lack of club facilities to accommodate the needs of their members.
[Petitioners] failure to finish the development works at the Fontana Leisure Park within the period
they promised and their failure or refusal to accommodate [respondents] for a reservation on October 17,
1998 and April 1, 1999, constitute gross misrepresentation detrimental not only to the [respondents] but to
the general public as well.
All these empty promises of [petitioners] may well be part of a scheme to attract, and induce
[respondents] to buy shares because surely if [petitioners] had told the truth about these matters,
[respondents] would never have bought shares in their project in the first place. [14]

Consequently, Hearing Officer Bacalla adjudged:

WHEREFORE, premises considered, judgment is hereby rendered directing [herein petitioners]
to jointly and severally pay [herein respondents]:
1)
The amount of P387,000.00 plus interest at the rate of 21% per
annum computed from August 28, 1998 when demand was first made, until such time as
payment is actually made.[15]

Petitioners appealed the above-quoted ruling of Hearing Officer Bacalla before the SEC en banc. In its Decision
dated July 6, 2001, the SEC en banc held:
WHEREFORE, the instant appeal is hereby DENIED and the Decision of Hearing Officer
Marciano S. Bacalla, Jr. dated April 28, 2000 is hereby AFFIRMED. [16]

In an Order[17] dated September 19, 2001, the SEC en banc denied petitioners Motion for Reconsideration for
being a prohibited pleading under the SEC Rules of Procedure.

Petitioners filed before the Court of Appeals a Petition for Review under Rule 43 of the Rules of Court. Petitioners
contend that even on the sole basis of respondents evidence, the appealed decisions of Hearing Officer Bacalla and the
SEC en banc are contrary to law and jurisprudence.
The Court of Appeals rendered a Decision on March 30, 2002, finding petitioners appeal to be partly meritorious.
The Court of Appeals brushed aside the finding of the SEC that petitioners were guilty of fraudulent
misrepresentation in inducing respondents to buy FRCCI shares of stock. Instead, the appellate court declared that:
What seems clear rather is that in inducing the respondents to buy the Fontana shares, RN Development
Corporation merely repeated to the spouses the benefits promised to all holders of Fontana Class D
shares. These inducements were in fact contained in Fontanas promotion brochures to prospective
subscribers which the spouses must obviously have read.[18]

Nonetheless, the Court of Appeals agreed with the SEC that the sale of the two FRCCI class D shares of stock by
petitioners to respondents should be rescinded. Petitioners defaulted on their promises to respondents that FLP would be
fully developed and operational by the first quarter of 1998 and that as shareholders of said shares, respondents were
entitled to the free use of first-class leisure facilities at FLP and free accommodations at a two-bedroom villa for five (5)
ordinary weekdays and two (2) weekends every year.
The Court of Appeals modified the appealed SEC judgment by ordering respondents to return their certificates of
shares of stock to petitioners upon the latters refund of the price of said shares since [t]he essence of the questioned
[SEC] judgment was really to declare as rescinded or annulled the sale or transfer of the shares to the respondents. [19]The
appellate court additionally clarified that the sale of the FRCCI shares of stock by petitioners to respondents partakes the
nature of a forbearance of money, since the amount paid by respondents for the shares was used by petitioners to defray
the construction of FLP; hence, the interest rate of 12% per annum should be imposed on said amount from the date of
extrajudicial demand until its return to respondents. The dispositive portion of the Court of Appeals judgment reads:
WHEREFORE, premises considered, the appealed judgment is MODIFIED: a) petitioner Fontana
Resort and Country Club is hereby ordered to refund and pay to the respondents Spouses Roy S. Tan
and Susana C. Tan the amount of P387,000.00, Philippine Currency, representing the price of two of its
Class D shares of stock, plus simple interest at the rate of 12% per annum computed from August 28,
1998 when demand was first made, until payment is completed; b) the respondent spouses are ordered
to surrender to petitioner Fontana Resort and Country Club their two (2) Class D shares issued by said
petitioner upon receipt of the full refund with interest as herein ordered. [20]

Petitioners filed a Motion for Reconsideration, but it was denied by the Court of Appeals in its Resolution dated
August 12, 2002.
Hence, the instant Petition for Review.
Petitioners, in their Memorandum,[21] submit for our consideration the following issues:
a.
Was the essence of the judgment of the SEC which ordered the return of the
purchase price but not of the thing sold a declaration of rescission or annulment of the contract of sale
between RNDC and respondents?
b.
Was the order of the Court of Appeals to FRCCI which was not the seller of the thing
sold (the seller was RNDC) to return the purchase price to the buyers (the respondents) in accordance
with law?

c.
Was the imposition of 12% interest per annum from the date of extra-judicial
demand on an obligation which is not a loan or forbearance of money in accordance with law? [22]

Petitioners averred that the ruling of the Court of Appeals that the essence of the SEC judgment is the rescission
or annulment of the contract of sale of the FRCCI shares of stock between petitioners and respondents is inconsistent
with Articles 1385 and 1398 of the Civil Code. The said SEC judgment did not contain an express declaration that it
involved the rescission or annulment of contract or an explicit order for respondents to return the thing sold. Petitioners
also assert that respondents claim for refund based on fraud or misrepresentation should have been directed only against
petitioner RNDC, the registered owner and seller of the FRCCI class D shares of stock. Petitioner FRCCI was merely the
issuer of the shares sold to respondents. Petitioners lastly question the order of the Court of Appeals for petitioners to pay
12% interest per annum, the same being devoid of legal basis since their obligation does not constitute a loan or
forbearance of money.
In their Memorandum,[23] respondents chiefly argue that petitioners have posited mere questions of fact and none
of law, precluding this Court to take cognizance of the instant Petition under Rule 45 of the Rules of Court. Even so,
respondents maintain that the Court of Appeals did not err in ordering them to return the certificates of shares of stock to
petitioners upon the latters refund of the price thereof as the essence of respondents claim for refund is to rescind the sale
of said shares. Furthermore, both petitioners should be held liable since they are the owners and developers of
FLP. Petitioner FRCCI is primarily liable for respondents claim for refund, and petitioner RNDC, at most, is only
subsidiarily liable considering that petitioner RNDC is a mere agent of petitioner FRCCI. Respondents finally insist that the
imposition of the interest rate at 12% per annum, computed from the date of the extrajudicial demand, is correct since the
obligation of petitioners is in the nature of a forbearance of money.
We find merit in the Petition.
We address the preliminary matter of the nature of respondents Complaint against petitioners. Well-settled is the
rule that the allegations in the complaint determine the nature of the action instituted. [24]
Respondents alleged in their Complaint that:
16. [Herein petitioners] failure to finish the development works at the Fontana Leisure Park within
the time frame that they promised, and [petitioners] failure/refusal to accom[m]odate [herein respondents]
request for reservations on 17 October 1998 and 1 April 1999, constitute gross misrepresentation and a
form of deception, not only to the [respondents], but the general public as well.
17. [Petitioners] deliberately and maliciously misrepresented that development works will be
completed when they knew fully well that it was impossible to complete the development works by the
deadline. [Petitioners] also deliberately and maliciously deceived [respondents] into believing that they
have the privilege to utilize Club facilities, only for [respondents] to be later on denied such use of Club
facilities. All these acts are part of [petitioners] scheme to attract, induce and convince [respondents] to
buy shares, knowing that had they told the truth about these matters, [respondents] would never have
bought shares in their project.
18. On 28 August 1998, [respondents] requested their lawyer to write [petitioner] Fontana Resort
and Country Club, Inc. a letter demanding for the return of their payment. x x x.
19. [Petitioner] Fontana Resort and Country Club, Inc. responded to this letter, with a letter of its
own dated 10 September 1998, denying [respondents] request for a refund. x x x.
20. [Respondents] replied to [petitioner] Fontana Resort and Country Clubs letter with a letter
dated 13 October 1998, x x x. But despite receipt of this letter, [petitioners] failed/refused and continue to
fail /refuse to refund/return [respondents] payments.

xxxx
22. [Petitioners] acted in bad faith when it sold membership shares to [respondents], promising
development work will be completed by the first quarter of 1998 when [petitioners] knew fully well that
they were in no position and had no intention to complete development work within the time they
promised. [Petitioners] also were maliciously motivated when they promised [respondents] use of Club
facilities only to deny [respondents] such use later on.
23. It is detrimental to the interest of [respondents] and quite unfair that they will be made to
suffer from the delay in the completion of the development work, while [petitioners] are already enjoying
the purchase price paid by [respondents].
xxxx
26. Apart from the refund of the amount of P387,300.00, [respondents] are also entitled to be paid
reasonable interest from their money. Afterall, [petitioners] have already benefitted from this money,
having been able to use it, if not for the Fontana Leisure Park project, for their other projects as well. And
had [respondents] been able to deposit the money in the bank, or invested it in some worthwhile
undertaking, they would have earned interest on the money at the rate of at least 21% per annum. [25]

The aforequoted allegations in respondents Complaint sufficiently state a cause of action for the annulment of a
voidable contract of sale based on fraud under Article 1390, in relation to Article 1398, of the Civil Code, and/or rescission
of a reciprocal obligation under Article 1191, in relation to Article 1385, of the same Code. Said provisions of the Civil Code
are reproduced below:
Article 1390. The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties:
1.
2.
influence or fraud.

Those where one of the parties is incapable of giving consent to a contract;

Those where the consent is vitiated by mistake, violence, intimidation, undue

These contracts are binding, unless they are annulled by a proper action in court. They are
susceptible of ratification.
Article 1398. An obligation having been annulled, the contracting parties shall restore to each
other the things which have been the subject matter of the contract, with their fruits, and the price with its
interest, except in cases provided by law.
In obligations to render service, the value thereof shall be the basis for damages.
Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if
the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of
a period.
This is understood to be without prejudice to the rights of third persons who have acquired the
thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.

Article 1385. Rescission creates the obligation to return the things which were the object of the
contract, together with their fruits, and the price with its interest; consequently, it can be carried out only
when he who demands rescission can return whatever he may be obliged to return.
Neither shall rescission take place when the things which are the object of the contract are legally
in the possession of third persons who did not act in bad faith.

In this case, indemnity for damages may be demanded from the person causing the loss.

It does not matter that respondents, in their Complaint, simply prayed for refund of the purchase price they had
paid for their FRCCI shares,[26] without specifically mentioning the annulment or rescission of the sale of said shares. The
Court of Appeals treated respondents Complaint as one for annulment/rescission of contract and, accordingly, it did not
simply order petitioners to refund to respondents the purchase price of the FRCCI shares, but also directed respondents
to comply with their correlative obligation of surrendering their certificates of shares of stock to petitioners.
Now the only issue left for us to determine whether or not petitioners committed fraud or defaulted on their
promises as would justify the annulment or rescission of their contract of sale with respondents requires us to reexamine
evidence submitted by the parties and review the factual findings by the SEC and the Court of Appeals.
As a general rule, the remedy of appeal by certiorari under Rule 45 of the Rules of Court contemplates only
questions of law and not issues of fact. This rule, however, is inapplicable in cases x x x where the factual findings
complained of are absolutely devoid of support in the records or the assailed judgment of the appellate court is based on
a misapprehension of facts.[27] Another well-recognized exception to the general rule is when the factual findings of the
administrative agency and the Court of Appeals are contradictory.[28] The said exceptions are applicable to the case at bar.
There are contradictory findings below as to the existence of fraud: while Hearing Officer Bacalla and the SEC en
banc found that there is fraud on the part of petitioners in selling the FRCCI shares to respondents, the Court of Appeals
found none.
There is fraud when one party is induced by the other to enter into a contract, through and solely because of the
latters insidious words or machinations. But not all forms of fraud can vitiate consent. Under Article 1330, fraud refers
to dolo causante or causal fraud, in which, prior to or simultaneous with the execution of a contract, one party secures the
consent of the other by using deception, without which such consent would not have been given. [29] Simply stated, the
fraud must be the determining cause of the contract, or must have caused the consent to be given. [30]
[T]he general rule is that he who alleges fraud or mistake in a transaction must substantiate his allegation as the
presumption is that a person takes ordinary care for his concerns and that private dealings have been entered into fairly
and regularly.[31] One who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must
establish by full, clear and convincing evidence such specific acts that vitiated a partys consent, otherwise, the latters
presumed consent to the contract prevails. [32]
In this case, respondents have miserably failed to prove how petitioners employed fraud to induce respondents to
buy FRCCI shares. It can only be expected that petitioners presented the FLP and the country club in the most positive
light in order to attract investor-members. There is no showing that in their sales talk to respondents, petitioners actually
used insidious words or machinations, without which, respondents would not have bought the FRCCI
shares. Respondents appear to be literate and of above-average means, who may not be so easily deceived into parting
with a substantial amount of money. What is apparent to us is that respondents knowingly and willingly consented to
buying FRCCI shares, but were later on disappointed with the actual FLP facilities and club membership benefits.
Similarly, we find no evidence on record that petitioners defaulted on any of their obligations that would have
called for the rescission of the sale of the FRCCI shares to respondents.

The right to rescind a contract arises once the other party defaults in the performance of his obligation.
Rescission of a contract will not be permitted for a slight or casual breach, but only such substantial and fundamental
breach as would defeat the very object of the parties in making the agreement. [34] In the same case as fraud, the burden of
establishing the default of petitioners lies upon respondents, but respondents once more failed to discharge the same.
[33]

Respondents decry the alleged arbitrary and unreasonable denial of their request for reservation at FLP and the
obscure and ever-changing rules of the country club as regards free accommodations for FRCCI class D shareholders.
Yet, petitioners were able to satisfactorily explain, based on clear policies, rules, and regulations governing FLP
club memberships, why they rejected respondents request for reservation on October 17, 1998. Respondents do not
dispute that the Articles of Incorporation and the By-Laws of FRCCI, as well as the promotional materials distributed by
petitioners to the public (copies of which respondents admitted receiving), expressly stated that the subscribers of FRCCI
class D shares of stock are entitled free accommodation at an FLP two-bedroom villa only for one week annually
consisting of five (5) ordinary days, one (1) Saturday and one (1) Sunday. Thus, respondents cannot claim that they
were totally ignorant of such rule or that petitioners have been changing the rules as they go along. Respondents had
already availed themselves of free accommodations at an FLP villa on September 5, 1998, a Saturday, so that there was
basis for petitioners to deny respondents subsequent request for reservation of an FLP villa for their free use onOctober
17, 1998, another Saturday.
Neither can we rescind the contract because construction of FLP facilities were still unfinished by 1998. Indeed,
respondents allegation of unfinished FLP facilities was not disputed by petitioners, but respondents themselves were not
able to present competent proof of the extent of such incompleteness. Without any idea of how much of FLP and which
particular FLP facilities remain unfinished, there is no way for us to determine whether petitioners were actually unable to
deliver on their promise of a first class leisure park and whether there is sufficient reason for us to grant rescission or
annulment of the sale of FRCCI shares. Apparently, respondents were still able to enjoy their stay at FLP despite the still
ongoing construction works, enough for them to wish to return and again reserve accommodations at the park.
Respondents additionally alleged the unreasonable cancellation of their confirmed reservation for the free use of
an FLP villa on April 1, 1999. According to respondents, their reservation was confirmed by a Mr. Murphy Magtoto, only to
be cancelled later on by a certain Shaye. Petitioners countered that April 1, 1999 was a Holy Thursday and FLP was
already fully-booked. Petitioners, however, do not deny that Murphy Magtoto and Shaye are FLP employees who dealt
with respondents. The absence of any confirmation number issued to respondents does not also discount the possibility
that the latters reservation was mistakenly confirmed by Murphy Magtoto despite FLP being fully-booked. At most, we
perceive a mix-up in the reservation process of petitioners. This demonstrates a mere negligence on the part of
petitioners, but not willful intention to deprive respondents of their membership benefits. It does not constitute default that
would call for rescission of the sale of FRCCI shares by petitioners to respondents. For the negligence of petitioners as
regards respondents reservation for April 1, 1999, respondents are at least entitled to nominal damages in accordance
with Articles 2221 and 2222 of the Civil Code.[35]
In Almeda v. Cario,[36] we have expounded on the propriety of granting nominal damages as follows:
[N]ominal damages may be awarded to a plaintiff whose right has been violated or invaded by the
defendant, for the purpose of vindicating or recognizing that right, and not for indemnifying the plaintiff for
any loss suffered by him. Its award is thus not for the purpose of indemnification for a loss but for the
recognition and vindication of a right. Indeed, nominal damages are damages in name only and not in
fact. When granted by the courts, they are not treated as an equivalent of a wrong inflicted but simply a
recognition of the existence of a technical injury. A violation of the plaintiff's right, even if only technical, is
sufficient to support an award of nominal damages. Conversely, so long as there is a showing of a
violation of the right of the plaintiff, an award of nominal damages is proper.[37]

It is also settled that the amount of such damages is addressed to the sound discretion of the court, taking into account
the relevant circumstances.[38]

In this case, we deem that the respondents are entitled to an award of P5,000.00 as nominal damages in recognition of
their confirmed reservation for the free use of an FLP villa on April 1, 1999 which was inexcusably cancelled by petitioner
on March 3, 1999.
In sum, the respondents Complaint sufficiently alleged a cause of action for the annulment or rescission of the
contract of sale of FRCCI class D shares by petitioners to respondents; however, respondents were unable to establish by
preponderance of evidence that they are entitled to said annulment or rescission.
WHEREFORE, in view of the foregoing, the Petition is hereby GRANTED. The Decision dated May 30, 2002 and
Resolution dated August 12, 2002 of the Court Appeals in CA-G.R. SP No. 67816 are REVERSED and SET
ASIDE. Petitioners are ORDERED to pay respondents the amount of P5,000.00 as nominal damages for their negligence
as regards respondents cancelled reservation for April 1, 1999, but respondents Complaint, in so far as the annulment or
rescission of the contract of sale of the FRCCI class "D shares of stock is concerned, is DISMISSED for lack of merit.
SO ORDERED.

DANIEL T. SO, Petitioner,

-versusFOOD FEST LAND, INC.
Respondent
x------------------------------------------x

G.R. No. 183628

FOOD FEST LAND, INC., Petitioner,

G.R. No. 183670

-versusDANIEL T. SO,

Promulgated:
Respondent.

April 7, 2010
x-----------------------------------------------------------------------------------------x
DECISION
CARPIO MORALES, J.
Food Fest Land Inc. (Food Fest) entered into a September 14, 1999 Contract of Lease[1] with Daniel T. So (So) over a
commercial space in San Antonio Village, Makati City for a period of three years (1999-2002) on which Food Fest
intended to operate a Kentucky Fried Chicken carry out branch.
Before forging the lease contract, the parties entered into a preliminary agreement dated July 1, 1999, the pertinent
portion of which stated:
The lease shall not become binding upon us unless and until the government agencies
concerned shall authorize, permit or license us to open and maintain our business at the
proposed Lease Premises. We shall promptly make an application for permits, licenses and
authority for our business and shall exercise due diligence to obtain it, provided, however, that
you shall assist us by submitting such documents and papers and comply with such other
requirements as the governmental agencies may impose. We shall give notice to you when the
permits, license and authorities have been obtained. We shall also notify you if any of the
required permits, licenses and authorities shall not be be ( sic) given or granted within fifteen days
(15) from your conform (sic)hereto. In such case, the agreement may be canceled and all rights
and obligations hereunder shall cease.[2] (underscoring supplied)

While Food Fest was able to secure the necessary licenses and permits for the year 1999, it failed to commence business
operations. For the year 2000, Food Fests application for renewal of barangay business clearance was held in abeyance
until further study of [its] kitchen facilities.[3]
As the barangay business clearance is a prerequisite to the processing of other permits, licenses and authority by the city
government, Food Fest was unable to operate. Fearing further business losses, Food Fest, by its claim, communicated its
intent to terminate the lease contract to So who, however, did not accede and instead offered to help Food Fest secure
authorization from the barangay. On Sos advice, Food Fest wrote requests addressed to city officials for assistance to
facilitate renewal.
In August 2000, Food Fest, for the second time, purportedly informed So of its intent to terminate the lease, and it in fact
stopped paying rent.
So later sent a November 22, 2000 demand letter to Food Fest for the payment of rental arrearages and reiterated his
offer to help it secure clearance from the barangay. Thus So wrote: With regard to securing permits from the barangay &
the City Hall, [with] which I am trying to help you, some form of representation, maybe not in cash, would definitely help in
forging a longer term relationship.[4] Food Fest demurred to the offer.
By letter of March 26, 2001,[5] So again demanded payment of rentals from Food Fest from September 2000 to March
2001 amounting to P123,200.00. Food Fest denied any liability, however, and started to remove its fixtures and equipment
from the premises.

On April 2, 2001, So sent Food Fest a Final Notice of Termination with demand to pay and to vacate. [6]
On April 26, 2001, So filed a complaint for ejectment and damages against Food Fest before the Metropolitan Trial Court
(MeTC) of Makati City.
Branch 64 of the MeTC, by Decision of July 4, 2005,[7] rendered judgment in favor of So, disposing as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against defendant, Food Fest Land, Inc., as follows:
a.

Ordering the defendant to pay the unpaid rentals from August 2000 until March 2001 with
penalties accrued thereon. The security deposit in the sum of Sixty Four Thousand Pesos
(Php64,000.00) is forfeited in favor of the plaintiff;

b.

Ordering the defendant to pay liquidated damages in a sum equivalent to 25% of the total
sum due and demandable;
c.
Ordering the defendant to pay the plaintiff a sum equivalent to 25% of the total claim as and
for attorneys fees; and
d.
The costs of suit.
SO ORDERED.[8]
On appeal, Branch 143 of the Regional Trial Court (RTC), by Decision of November 30, 2006,[9] reversed the MeTC
Decision, disposing as follows:
WHEREFORE, premises considered, the judgment of the lower court dated 04 July 2005 is
hereby REVERSED and SET ASIDE, ordering plaintiff Daniel T. So to pay defendant Food Fest
the amount of Thirty Two Thousand Pesos (P32,000.00) as reimbursement for rentals paid for the
months of July and August 2000; Twenty Thousand Pesos (P20,000.00) as exemplary damages;
Twenty Thousand Pesos (P20,000.00) as attorneys fees and costs of suit.
SO ORDERED.[10]
In reversing the MeTC, the RTC found that Food Fest already vacated the leased premises before So filed the complaint
for ejectment; and whereas possession is the only issue for resolution in an ejectment case, Sos cause of action only
pertained to collection of the rental arrears.
As to Sos claim for payment of arrears, the RTC noted that since the claim exceeded the jurisdictional amount over which
it can cognize, the RTC, applying Sec. 8, Rule 40 of the Rules of Court, [11] treated the case as if it was originally filed with
it.
On the merits, the RTC held that Food Fests failure to secure the authority to commence business operations
resulted in the termination of its contractual obligations to So, including the obligation to pay rent.
On petition for review, the Court of Appeals, by Decision of April 18, 2008,[12] upheld the RTCs jurisdiction over the
complaint. It, however, declared that Food Fests obligation to pay rent was not extinguished upon its failure to secure
permits to operate. Thus, it disposed:
WHEREFORE, premises considered, the assailed decision dated November 30, 2006 of the
RTC, Branch 143, Makati City is hereby REVERSED and SET ASIDE, ordering respondent FFLI
to pay petitioner Daniel T. So the following:
1.

Unpaid rentals from August 2000 until March 31, 2001 with penalties accrued thereon.
The security deposit is forfeited in favor of petitioner So;
2.
Temperate damages in the amount of P50,000.00;
3.
P20,000.00 as attorneys fees; and
4.
Costs of suit.

SO ORDERED.[13]

The parties respective motions for reconsideration having been denied, they filed their respective petitions before this
Court which, by Resolution of October 6, 2008, resolved to consolidate G.R. No. 183628 (Daniel T. So vs. Food Fest
Land, Inc.) with G.R. No. 183670 (Food Fest Land, Inc. vs. Daniel T. So).
So maintains that the MeTC had jurisdiction over his complaint for ejectment. For, So contends, Food Fest did not vacate
the leased premises before his filing (on April 26, 2001) of the complaint.
So admitted in his Complaint, however, that Food Fest started pulling out equipment and other machineries from
the premises even before the final notice was received by it on April 2, 2001.
13. In or the last few days of March 2001 , defendant FOOD FEST LAND, INC. started to
remove and pull out its equipment, appliances, fittings, furnishings, movable articles and other
accessories and facilities that it had earlier placed and installed in the leased premises, but due to
its wanton lack of care in doing so, so much damage and destruction was caused to the leased
premises, resulting in the breakage of and damage to the concrete walls and partition in the
building as well as the steel gate leading to the leased premises and other parts of the building
and its premises.[14] (emphasis and underscoring supplied)
Two elements are paramount in possession there must be occupancy, apprehension or taking, and there must be intent to
possess.[15] In the present case, given the immediately quoted allegation-admission of So, intent to possess was not
present on Food Fests part.
In another vein, So claims that Food Fest did not exercise care in removing the installations and fixtures, thereby causing
destruction to the premises to thus entitle him to damages, as well as to damages corresponding to unrealized profits
(lucrum cessans) to answer for the period during which the unit was not rented out.
Unrealized profits fall under the category of actual or compensatory damages. If there exists a basis for a
reasonable expectation that profits would have continued to be generated had there been no breach of contract,
indemnification for damages based on such expected profits is proper. This is, however, subject to the rule that a party is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. [16]
Other than the photographs evincing damage to the premises, no evidence was proffered to show Sos entitlement
to unrealized profits. That the leased unit was not subsequently leased is not solely attributable to Food Fest. As borne by
the records, no renovation was undertaken by So for almost three years following Food Fests vacation of the premises in
2001. The quotations issued by construction companies for purposes of renovation were issued only in 2004.
So is not without recourse under the lease contract, however. Thus the pertinent provisions of the lease contract
provide:
7. LIABILITY OF LESSEE FOR DAMAGES- LESSEE hereby agrees that any damage to the
leased premises or its appurtenances caused by said LESSEE or its agents, employees,
customers, guests or any other person without the fault of LESSOR shall be LESSEEs sole
responsibility and liability, which damage shall, upon demand by LESSOR be repaired promptly at
its expense.
16. TERMINATION OF THE LEASE- LESSEE agrees to return and surrender the leased
premises at the expiration of the term of this lease in as good condition as reasonable wear and
tear will permit and without delay whatsoever, devoid of all occupants, furniture, machinery,
equipment and signages, articles and effects of any kind, other than such alterations or
improvements which cannot be removed without damaging the leased premises.

23. PENALTY CLAUSE Any and all accounts payable by LESSEE under this Contract of Lease
and other charges which may be claimed against LESSEE, but not paid by LESSEE to LESSOR

within fifteen (15) days from due date shall be subject to penalty charges of ONE PERCENT (1%)
per month from due date until the account is paid in full.
23.1. Should LESSOR be compelled to seek judicial relief against LESSEE the latter shall, in
addition to any other claim for damages pay as liquidated damages to LESSOR an amount
equivalent to twenty-five percent (25%) of the amount due, but in no case less than P500.00: and
an attorneys fee in the amount equivalent to 25% of the amount claimed but in no case less than
P3,000.00 as well as all expenses of litigation.[17]

Respecting Sos claim for renovation expenses, the same must be denied absent proof as to the actual cost of renovation.
Only firm offers or quotations from construction companies are in the records. Following Article 2224 of the Civil Code,
[18]
however, the appellate courts award of temperate damages is in order.
This Court notes that the appellate court did not award liquidated damages in contravention of the contract. As for the
appellate courts award of P20,000.00 as attorneys fees, the contractual stipulation should prevail.
As for Food Fests invocation of the principle of rebus sic stantibus as enunciated in Article 1267 of the Civil Code to
render the lease contract functus officio, and consequently release it from responsibility to pay rentals, the Court is not
persuaded. Article 1267 provides:
Article 1267. When the service has become so difficult as to be manifestly beyond the
contemplation of the parties, the obligor may also be released therefrom, in whole or in part.

This article, which enunciates the doctrine of unforeseen events, is not, however, an absolute application of the
principle of rebus sic stantibus, which would endanger the security of contractual relations. The parties to the contract
must be presumed to have assumed the risks of unfavorable developments. It is, therefore, only in absolutely exceptional
changes of circumstances that equity demands assistance for the debtor.[19]
Food Fest claims that its failure to secure the necessary business permits and licenses rendered the impossibility and
non-materialization of its purpose in entering into the contract of lease, in support of which it cites the earlier-quoted
portion of the preliminary agreement dated July 1, 1999 of the parties.[20]
The cause or essential purpose in a contract of lease is the use or enjoyment of a thing. [21] A partys motive or particular
purpose in entering into a contract does not affect the validity or existence of the contract; an exception is when the
realization of such motive or particular purpose has been made a condition upon which the contract is made to depend.
The exception does not apply here.
It is clear that the condition set forth in the preliminary agreement pertains to the initial application of Food Fest for the
permits, licenses and authority to operate. It should not be construed to apply to Food Fests subsequent applications.
Consider the following qualification in the preliminary agreement:
xxx We shall also notify you if any of the required permits, licenses and authorities shall not be be
(sic) given or granted within fifteen days (15) from your conform ( sic) hereto. In such case, the
agreement may be canceled and all rights and obligations hereunder shall cease.
[22]
(underscoring supplied)
Food Fest was able to secure the permits, licenses and authority to operate when the lease contract was executed. Its
failure to renew these permits, licenses and authority for the succeeding year, does not, however, suffice to declare the
lease functus officio, nor can it be construed as an unforeseen event to warrant the application of Article 1267.
Contracts, once perfected, are binding between the contracting parties. Obligations arising therefrom have the force of law
and should be complied with in good faith. Food Fest cannot renege from the obligations it has freely assumed when it
signed the lease contract.

WHEREFORE, the Court of Appeals Decision of April 18, 2008 is AFFIRMED with MODIFICATION.
Food Fest is ORDERED to pay So liquidated damages in the amount equivalent to 25% of the total sum due and
demandable. Further, So is ORDERED to pay attorneys fees in the amount equivalent to 25% of the total sum due and
demandable. In all other respects, the decision is AFFIRMED.
SO ORDERED.

G.R. No. 142029

February 28, 2001
ERLINDA FRANCISCO, doing business in the name and style of Cebu Fountainhead Bakeshop and JULIANA
PAMAONG, petitioners,
vs.
RICARDO FERRER, JR., ANNETTE FERRER, ERNESTO LO AND REBECCA LO, respondents.
PARDO, J.:
Appeal via certiorari1 taken by petitioners from the decision of the Court of Appeals 2 increasing the trial court's award of
moral damages to Ricardo Ferrer, Jr., Annette Ferrer, Ernesto Lo and Rebecca Lo to two hundred fifty thousand pesos
(P250,000.00) and awarding exemplary damages in the amount of one hundred thousand pesos (P100,000.00), in
addition to the following:
"1. The cost of the wedding cake in the amount of P3,175.00;
"2. Attorney's fees in the amount of P10,000.00; and
"3. Cost of litigation."
The facts, as found by the Court of Appeals,3 are as follows:
"On November 19, 1992 Mrs. Rebecca Lo and her daughter Annette Ferrer ordered a three-layered cake from
Fountainhead Bakeshop, Mango Avenue Branch. It was then agreed that the wedding cake shall be delivered at
5:00 o'clock in the afternoon at the Cebu Country Club, Cebu City, stating clearly that the wedding is scheduled
on December 14, 1992.
"Plaintiffs made their first deposit in the amount of P1,000.00 on November 19, 1992 and two weeks thereafter
made a full payment on the remaining balance.
"On the day of the wedding, December 14, 1992, plaintiffs arrived at the Cebu Country Club around 6:00 o'clock
in the evening. They immediately notice the absence of the wedding cake.
"At 7:00 o'clock in the evening they made a follow-up call to Fountainhead Bakeshop and was informed that it was
probably late because of the traffic.
"At 8:00 o'clock they were informed that no wedding cake will be delivered because the order slip got lost.
Plaintiffs were then compelled to buy the only available cake at the Cebu Country Club which was a sans rival.
Even though they felt that it was a poor substitute to a wedding cake, the cutting of the cake is always a part of
the ceremony.
"At 10:00 o'clock in the evening, the wedding cake arrived but plaintiffs declined to accept it, besides their order
was a three-layered cake and what was actually delivered was a two-layered one.
"Subsequently, defendant Erlinda Francisco sent a letter of apology accompanied with a P5,000.00 check,
however, the same was declined by plaintiffs because they felt it was inadequate.
"Two weeks after the wedding, defendant Erlinda Francisco called Mrs. Rebecca Lo and apologized.
"Ricardo Ferrer, son-in-law of Rebecca Lo corroborated the latter's testimony, stating that two weeks after the
wedding, as a result of the non-delivery of the wedding cake, Ramon Montinola, the son-in-law of Erlinda

Francisco, went to Rebecca Lo's residence and offered the sum of P5,000.00 to indemnify for the damage done,
but it was rejected."4
On March 12, 1993, respondents filed with the Regional Trial Court, Cebu City an action for breach of contract with
damages against petitioners.5
After due trial, on May 19, 1995, the trial court rendered a decision in favor of plaintiffs [herein defendants], the dispositive
portion of which reads as follows:
"THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the plaintiffs and against Erlinda
Francisco.
"Directing the latter to pay the former the following:
"1. The cost of the wedding cake in the amount of P3,175.00;
"2. Moral damages in the amount of P30,000.00;
"3. Attorney's fees in the amount of P10,000.00; and
"4. Cost of litigation.
"SO ORDERED."6
On May 25, 1995, petitioners appealed to the Court of Appeals. 7
After due proceedings, on July 05, 1999, the Court of Appeals promulgated its decision modifying the appealed decision
as set out in the opening paragraph of this opinion. 8
Hence, this appeal.9
The issues raised are (1) whether the Court of Appeals erred in affirming the trial court's award of moral damages and
increasing the amount from thirty thousand (30,000.00) to two hundred fifty thousand pesos (P250,000.00); and (2)
whether the Court of Appeals was justified in awarding in addition to moral damages, exemplary damages of one hundred
thousand pesos (P100,000.00).1wphi1.nt
Petitioners submit that the Court of Appeals and the trial court erred in awarding moral damages in favor of respondents
because moral damages are recoverable in breach of contract cases only where the breach was palpably wanton,
reckless, malicious, in bad faith, oppressive or abusive. 10
We agree. "To recover moral damages in an action for breach of contract, the breach must be palpably wanton, reckless,
malicious, in bad faith, oppressive or abusive."11
"Under the provisions of this law,12 in culpa contractual or breach of contract, moral damages may be recovered when the
defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of his
contractual obligation and, exceptionally, when the act of breach of contract itself is constitutive of tort resulting in physical
injuries."13
"Moral damages may be awarded in breaches of contracts where the defendant acted fraudulently or in bad faith." 14
"Bad faith does not simply connote bad judgment or negligence, it imports a dishonest purpose or some moral obliquity
and conscious doing of a wrong, a breach of known duty through some motive or interest or ill will that partakes of the
nature of fraud."15
In this case, "[w]e find no such fraud or bad faith." 16
"Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer."17
"The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law
always presumes good faith. It is not enough that one merely suffered sleepless nights, mental anguish, serious anxiety
as the result of the actuations of the other party. Invariably such action must be shown to have been willfully done in bad
faith or will ill motive."18 "Mere allegations of besmirched reputation, embarrassment and sleepless nights are insufficient
to warrant an award for moral damages. It must be shown that the proximate cause thereof was the unlawful act or
omission of the [private respondent] petitioners." 19
"An award of moral damages would require certain conditions to be met, to wit: (1) first, there must be an injury, whether
physical, mental or psychological, clearly sustained by the claimant; (2) second, there must be culpable act or omission
factually established; (3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained
by the claimant; and (4) fourth, the award of damages is predicated on any of the cases stated in Article 2219" of the Civil
Code.21
"It must again be stressed that moral damages are emphatically not intended to enrich a plaintiff at the expense of the
defendant."22 "When awarded, moral damages must not be palpably and scandalously excessive as to indicate that it was
the result of passion, prejudice or corruption on the part of the trial court judge" 23 or appellate court justices.24

In the same fashion, to warrant the award of exemplary damages, "[t]he wrongful act must be accompanied by bad faith,
and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent
manner."25
"The requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to
compensatory damages, and only after the claimant's right to them has been established; (2) that they can not be
recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be
awarded to the claimant; (3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or
malevolent manner."26
Nevertheless, the facts show that when confronted with their failure to deliver on the wedding day the wedding cake
ordered and paid for, petitioners gave the lame excuse that delivery was probably delayed because of the traffic, when in
truth, no cake could be delivered because the order slip got lost. For such prevarication, petitioners must be held liable for
nominal damages for insensitivity, inadvertence or inattention to their customer's anxiety and need of the hour. "Nominal
damages are 'recoverable where a legal right is technically violated and must be vindicated against an invasion that has
produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or
actual damages whatsoever have been or can be shown.'" 27 Nominal damages may be awarded "to a plaintiff whose right
has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying
the plaintiff for any loss suffered."28
WHEREFORE, the Court GRANTS the petition. The Court REVERSES the decision of the Court of Appeals in CA-G. R.
CV No. 50894, and in lieu thereof, sentences petitioners to pay respondents, as follows:
1. The cost of the wedding cake in the amount of P3,175.00;
2. Nominal damages in the amount of P10,000.00;
3. Attorney's fees in the amount of P10,000.00; and
4. Costs of litigation.
No costs in this instance.
SO ORDERED.

PEOPLE OF THE PHILIPPINES,

Plaintiff-Appellee,
- versus -

G.R. No. 189301

Promulgated:
December 15, 2010

JOSE PEPITO D. COMBATE a.k.a. PEPING,

Accused-Appellant.

DECISION
VELASCO, JR., J.:
The Case

This is an appeal from the January 30, 2008 Decision [1] of the Court of Appeals (CA) in CA-G.R. CEB CR-H.C. No.
00294 entitled People of the Philippines v. Jose Pepito D. Combante a.k.a. Peping, which affirmed with modification the
July 2, 2003 Decision[2] in Criminal Case Nos. 95-17070 & 95-17071 of the Regional Trial Court (RTC), Branch 50 in
Bacolod City.
Accused-appellant Jose Pepito D. Combate stands convicted of the crime of Murder and Homicide, as defined
and penalized under Articles 248 and 249 of the Revised Penal Code (RPC), respectively. He was sentenced to suffer the
penalties of reclusion temporal and reclusion perpetua.

The Facts
The charge against accused-appellant stemmed from two Informations:
Criminal Case No. 95-17070
th
That on or about 16 day of March, 1995, in the Municipality of Murcia, Province of Negros
Occidental, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
armed with a firearm, with treachery, with intent to kill and taking advantage of nighttime, did then and
there, willfully, unlawfully and feloniously attack, assault and shoot on EDMUND PRAYCO y OSABEL,
thereby inflicting gunshot wounds upon the body of the latter which caused the death of the said victim.
Contrary to law.[3]
Criminal Case No. 95-17071
That on or about 16th day of March, 1995, in the Municipality of Murcia, Province of Negros
Occidental, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
armed with a firearm, with treachery, with intent to kill and taking advantage of nighttime, did then and
there, willfully, unlawfully and feloniously attack, assault and shoot on LEOPOLDO GUIRO, JR. y PEREZ
alias Nene thereby inflicting gunshot wounds upon the body of the latter which caused the death of the
said victim.
Contrary to law.[4]
On November 28, 2001, the trial court ordered the consolidation of the two cases. When arraigned with
assistance of counsel, accused-appellant pleaded not guilty to both charges. Thereafter, a joint trial ensued.
During the trial, the prosecution offered the testimonies of Shenette Guiro, the wife of the deceased victim
Leopoldo Guiro; Jose Tomaro; Rebecca Montino Apdo; Senior Police Officer 1 (SPO1) Rolando Salamisan; Inspector
Jose Labuyo; Police Inspector William Senoron; PO1 Rommel Pregil; Dr. Jimmy Nadal; and Dr. Emmanuel Bando. On the
other hand, the defense presented as its witnesses Magno Montinola and accused-appellant.
The Prosecutions Version of Facts
On March 16, 1995, at around 9 oclock in the evening, Tomaro parked his passenger jeepney at the garage of
Leopoldos mother, Patria Guiro, located at Purok 2,Barangay Minoyan in Murcia, Negros Occidental. He then proceeded
to the house of Leopoldo where he usually sleeps after driving the jeepney owned by Leopoldos parents.
Upon entering the gate, Tomaro met Leopoldo and Edmund Prayco, who were on their way out. Leopoldo invited
him to join them in drinking liquor but he declined saying he was already tired. He continued on his way and was about to
ascend the stairs when he heard a gunshot. He rushed back to the road and there he saw accused-appellant pointing a
gun at the fallen Leopoldo. When Edmund was about to intervene, accused-appellant also shot Edmund at a very close
range. After shooting Edmund, accused-appellant turned his attention back to Leopoldo and shot him for a second time.
Tomaro then rushed to help Leopoldo and pleaded for his life. Instead of heeding his plea, accused-appellant
pointed his gun towards Tomaro and pulled the trigger but the gun did not fire. At that instant, Tomaro jumped on accusedappellant and was able to grab the gun. Tomaro tried to shoot accused-appellant but the gun still did not fire. Hastily,
accused-appellant fled to the direction of Bacolod City.
Leopoldo and Edmund were later brought to the Bacolod Sanitarium and Hospital. Edmund was declared dead on
arrival, while Leopoldo died the following day.
Version of the Defense
Accused-appellants defense, on the other hand, was confined to a denial, to wit:
In the evening of March 16, 1995, accused-appellant was in his house drinking liquor when Montinola, a close
friend, arrived to fetch him. He was told to report to thebarangay hall and to render duty as a tanod. Before leaving,
Montinola also partook of a small quantity of liquor.
On their way to the barangay hall, they passed by the house of Leopoldo, who was drinking liquor by the side of
the street fronting his house, along with Tomaro, Edmund, and someone else who accused-appellant could not identify.
He and Montinola were walking on the left side of the street going towards the direction of the Mambucal Resort, while
Leopoldo and his group were on the right side. Accused-appellant then extended a greeting to Leopoldo, who responded
with a sarcastic remark. Accused-appellant and Montinola ignored the rudeness thrown their way and just continued
walking.
They, however, soon noticed Leopoldo crossing the street and started to follow them. Edmund likewise also
followed them but on the other side of the street. Suddenly, accused-appellant saw Leopoldo pull something out from his
waist. He then heard a gunshot and saw Leopoldo fall to the ground. He pushed Montinola aside and they ran away.

After a few moments, he heard more gunshots coming from the direction of where Leopoldo and his group were
situated. He was stricken with fear so he went home. Later, he learned that he was the suspect in the killing of Leopoldo
and Edmundo. Thus, to avoid trouble, he fled to Victorias City, Negros Occidental where he was arrested by
the Murcia police on October 13, 2001.
The story of accused-appellant was corroborated by Montinola.

Ruling of the Trial Court

After trial, the RTC convicted accused-appellant. The dispositive portion of its July 2, 2003 Decision reads:
FOR ALL THE FOREGOING, judgment is hereby rendered finding the accused Jose Combate,
Jr. y Dallarte alias Peping, GUILTY beyond reasonable doubt of the crime of HOMICIDE in Criminal Case
NO. 95-17071 as Principal thereof. There being no modifying circumstances, the accused is sentenced to
suffer the penalty of RECLUSION TEMPORAL in its medium period. Applying the Indeterminate Sentence
Law, the accused shall serve a prison term of Eight (8) Years and One (1) Day of Prision Mayor to Fifteen
(15) years of Reclusion Temporal.
By way of civil liability, the accused is condemned to pay the heirs of the late Leopoldo Guiro the
following:
1.
The sum of P50,000.00 as death indemnity.
2.
The sum of P932,712.00 as compensatory damages and;
3.
The sum of P56,319.59 as reimbursement for the burial expenses.
In addition, the accused is ordered to pay Shenette Guiro the sum of P50,000.00 as moral
damages.
The accused is also declared GUILTY of MURDER for the death of Edmund Prayco as charged in
the Information in Criminal Case No. 95-17070 as Principal thereof. There being no modifying
circumstances, the accused is sentenced to suffer the penalty of RECLUSION PERPETUA. He is
condemned to pay the heirs of the late Edmund Prayco the sum of P50,000.00 as death indemnity and
the sum of P30,000.00 as compensatory damages.[5]
Ruling of the Appellate Court
On January 30, 2008, the CA affirmed the judgment of the lower court and modified the award of damages. The
dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the Decision of the Regional Trial court, Branch 50 of
Bacolod City dated 2 July 200[3] is AFFIRMED WITH MODIFICATIONS. The award of compensatory
damages in both cases is deleted, and in lieu thereof, exemplary damages of P25,000.00 is awarded to
the heirs of Leopoldo Guiro and another P25,000.00 to the heirs of Edmund Prayco. In all other respects,
the assailed decision is affirmed.
SO ORDERED.[6]
The Issue
Hence, this appeal is before us, with accused-appellant maintaining that the trial court erred in convicting him of
the crimes of homicide and murder, despite the fact that his guilt was not proved beyond reasonable doubt.
The Courts Ruling
We sustain accused-appellants conviction.
Factual findings of the trial court should be respected
In his Brief, accused-appellant says that the trial court failed to consider several inconsistencies in the testimonies
of the prosecution witnesses. First, as to Tomaro, who directly implicated accused-appellant, his testimony was
unsubstantiated and did not conform to the physical evidence. According to Tomaro, Edmund was shot at close range yet
no powder burns were found around the entry wound. Second, as to the testimony of Shenette Guiro, accused-appellant
harps on the fact that she never mentioned Tomaro being present at the scene of the crime and that she only heard one
gunshot while the other witnesses heard three or four. Lastly, as to the testimony of SPO1 Salamisan, accused-appellant
points out that SPO1 Salamisan testified that he only saw one spot of blood when there were two victims.

To accused-appellant, the inconsistencies thus described erode the credibility of the witnesses when taken as a
whole.
We do not agree.
Time-tested is the doctrine that the trial courts assessment of the credibility of a witness is entitled to great weight,
sometimes even with finality.[7] The Supreme Court will not interfere with that assessment, absent any indication that the
lower court has overlooked some material facts or gravely abused its discretion. [8]
Complementing the above doctrine is the equally established rule that minor and insignificant inconsistencies in
the testimony tend to bolster, rather than weaken, the credibility of witnesses, for they show that the testimony is not
contrived or rehearsed.[9] As the Court put it in People v. Cristobal, Trivial inconsistencies do not rock the pedestal upon
which the credibility of the witness rests, but enhances credibility as they manifest spontaneity and lack of scheming. [10]
A careful review of the records shows that the RTC, as well as the CA, committed no reversible error when it gave
credence to the testimonies of the prosecution witnesses, as opposed to accused-appellants bare denials.
Moreover, the testimony of a witness must be considered in its entirety and not merely on its truncated parts. The
technique in deciphering a testimony is not to consider only its isolated parts and anchor a conclusion on the basis of said
parts. In ascertaining the facts established by witnesses, everything stated by them on direct, cross, and redirect
examinations must be calibrated and considered. [11] It must be stressed in this regard that facts imperfectly or erroneously
stated in an answer to one question may be supplied or explained as qualified by the answer to other question. The
principle falsus in uno, falsus in omnibus is not strictly applied to this jurisdiction.[12] As explained in People v. Osias:
It is perfectly reasonable to believe the testimony of a witness with respect to some facts and
disbelieve it with respect to other facts. And it has been aptly said that even when witnesses are found to
have deliberately falsified in some material particulars, it is not required that the whole of their
uncorroborated testimony be rejected but such portions thereof deemed worthy of belief may be
credited.
The primordial consideration is that the witness was present at the scene of the crime and
that he positively identified [the accused] as one of the perpetrators of the crime charged x x x.
[13]
(Emphasis supplied.)
In this case, we agree with the trial court that the alleged inconsistencies merely refer to minor details which do
not affect the witnesses credibility. In disregarding the alleged inconsistent statements, the trial court explained:
The inconsistencies are more imagined than real. The inconsistencies, like the ownership of the
passenger jeepney, whether said jeepney is owned by Guiro or his mother, are so trivial and does not at
all affect credibility.
The accused also makes much fuss about the fact that Shenette Guiro heard only one (1) shot
while the other prosecution witnesses as well as the accused and his witness Magno Montinola, heard
three (3) to four (4) shots. The accused conveniently forgot that Shenette Guiro was asleep when the
shooting took place. She was awakened by the shot she heard and that shot might have been the last
shot.
The accused flays the testimony of Jose Tomaro as incredible and unbelievable when the said
witness testified that he ran and cradled Guiro in his arms after the latter was shot. The accused asserts
that it is unnatural for a person to unnecessarily expose himself to danger.
The argument need not detain the Court. It is a settled rule on evidence that witnesses to a crime
react in different ways. (Pp. vs. Paynor, 261 SCRA 615).
There is no standard behavior when one is considered with a strange, startling or
frightening situation. (Pp. v. De Leon, 262 SCRA 445)
Moreover, Jose Tomaro has no quarrel with the accused. He has every reason to expect that he
will not be assaulted as he was not making any aggressive move against him. [14]
Likewise, we are not persuaded as to the alleged inconsistency of Tamaros testimony that Edmund was shot at
close range but the physical evidence revealed that there were no powder burns around the entry wounds. In his
testimony, Tamaro described the incident as follows:

COURT:
Q: Now according to your testimony, the next time around, Combate was pointing his gun at Prayco?
WITNESS

A: Yes, sir.
Q: He pointed his gun to Prayco and fired his gun. At the time he fired his gun, how far was he from
Prayco?
COURT
Witness indicating a very short distance where the Court Interpreter is situated which is less than
(1) meter away.[15] (Emphasis supplied.)
As aptly held by the CA, such testimony is in fact consistent with the lack of powder burns on Edmunds body, viz:
The distance from which a shot is fired affects the nature and extent of the injury caused on the
victim. In close range fire, the injury is not only due to the missile but also due to the pressure of the
expanded gases, flame and other solid products of combustion. In contrast, distant fire usually produces
the characteristic effect of the bullet alone. A shot fired from a distance of more than 60 cm or about two
(2) feet does not produce the burning, smudging or tattooing typically present in loose contact or near fire,
short range fire and medium range fire.
Powder burns is a term commonly used by physicians whenever there is blackening of the margin
at the entrance of the gunshot wound. The blackening is due to smoke smudging, gunpowder tattooing
and, to a certain extent, burning of the wound margin.
In this case, the fact that there were no powder burns found in EDMUNDs body indicates that the
shots were fired at a distance of more than two (2) feet which is consistent with Jose Tomaros testimony
that Edmund was shot at about less than 1 meter away from appellant. [16]

Defense of denial cannot prevail over positive identification

For his defense, accused-appellant wants this Court to believe his innocence and offers his version of the facts
wherein he did not commit the crime. This Court is not persuaded.
Categorical and consistent positive identification, absent any showing of ill motive on the part of the eyewitness
testifying on the matter, prevails over the defense of denial. [17]Accused-appellant was positively and categorically identified
by the witnesses. They have no reason to perjure and accused-appellant was unable to prove that the prosecution
witnesses were moved by any consideration other than to see that justice is done. Thus, the presumption that their
testimonies were not moved by any ill will and bias stands, and, therefore, their testimonies are entitled to full faith and
credit.[18]
Lest it be overlooked, accused-appellant fled to Victorias City, Negros Occidental right after the incident, an act
that is evidence of his guilt. It is well-established that the flight of an accused is competent evidence to indicate his guilt;
and flight, when unexplained, is a circumstance from which an inference of guilt may be drawn. [19] Indeed, the wicked flee
when no man pursueth, but the innocent are as bold as lion. [20]
Award of damages
This Court will now endeavor to end, once and for all, the confusion as to the proper award of damages in criminal
cases where the imposable penalty for the crime isreclusion perpetua or death. As a rule, the Court awards three kinds of
damages in these types of criminal cases: civil indemnity and moral and exemplary damages. We shall discuss all three.
First, civil indemnity ex delicto is the indemnity authorized in our criminal law for the offended party, in the amount
authorized by the prevailing judicial policy and apart from other proven actual damages, which itself is equivalent to actual
or compensatory damages in civil law.[21] This award stems from Art. 100 of the RPC which states, Every person criminally
liable for a felony is also civilly liable.
Civil liability ex delicto may come in the form of restitution, reparation, and indemnification. [22] Restitution is defined
as the compensation for loss; it is full or partial compensation paid by a criminal to a victim ordered as part of a criminal
sentence or as a condition for probation.[23] Likewise, reparation and indemnification are similarly defined as the
compensation for an injury, wrong, loss, or damage sustained. [24] Clearly, all of these correspond to actual or
compensatory damages defined under the Civil Code.[25]
The other kinds of damages, i.e., moral and exemplary or corrective damages, [26] have altogether different jural
foundations.
The second type of damages the Court awards are moral damages, which are also compensatory in nature. Del Mundo v.
Court of Appeals explained the nature and purpose of moral damages, viz:

Moral damages, upon the other hand, may be awarded to compensate one for manifold injuries
such as physical suffering, mental anguish, serious anxiety, besmirched reputation, wounded feelings and
social humiliation. These damages must be understood to be in the concept of grants, not punitive
or corrective in nature, calculated to compensate the claimant for the injury suffered. Although
incapable of exactness and no proof of pecuniary loss is necessary in order that moral damages may be
awarded, the amount of indemnity being left to the discretion of the court, it is imperative, nevertheless,
that (1) injury must have been suffered by the claimant, and (2) such injury must have sprung from any of
the cases expressed in Article 2219[27] and Article 2220[28] of the Civil Code. (Emphasis supplied.)
Similarly, in American jurisprudence, moral damages are treated as compensatory damages awarded for mental
pain and suffering or mental anguish resulting from a wrong. [29] They may also be considered and allowed for resulting
pain and suffering, and for humiliation, indignity, and vexation suffered by the plaintiff as result of his or her assailants
conduct, as well as the factors of provocation, the reasonableness of the force used, the attendant humiliating
circumstances, the sex of the victim, [and] mental distress. [30]
The rationale for awarding moral damages has been explained in Lambert v. Heirs of Rey Castillon: [T]he award of moral
damages is aimed at a restoration, within the limits possible, of the spiritual status quo ante; and therefore, it must be
proportionate to the suffering inflicted.[31]
And lastly, the Court awards exemplary damages as provided for in Arts. 2229 and 2230 of the Civil Code, viz:
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed
when the crime was committed with one or more aggravating circumstances. Such damages are separate
and distinct from fines and shall be paid to the offended party.

Clearly, as a general rule, exemplary damages are only imposed in criminal offenses when the crime was
committed with one or more aggravating circumstances, be they generic or qualifying. However, there have been
instances wherein exemplary damages were awarded despite the lack of an aggravating circumstance. This led the Court
to clarify this confusion in People v. Dalisay, where it categorically stated that exemplary damages may be awarded, not
only in the presence of an aggravating circumstance, but also where the circumstances of the case show the
highly reprehensible or outrageous conduct of the offender, to wit:
Prior to the effectivity of the Revised Rules of Criminal Procedure, courts generally awarded
exemplary damages in criminal cases when an aggravating circumstance, whether ordinary or qualifying,
had been proven to have attended the commission of the crime, even if the same was not alleged in the
information. This is in accordance with the aforesaid Article 2230. However, with the promulgation of the
Revised Rules, courts no longer consider the aggravating circumstances not alleged and proven in the
determination of the penalty and in the award of damages. Thus, even if an aggravating circumstance has
been proven, but was not alleged, courts will not award exemplary damages. x x x
xxxx
Nevertheless, People v. Catubig laid down the principle that courts may still award exemplary
damages based on the aforementioned Article 2230, even if the aggravating circumstance has not been
alleged, so long as it has been proven, in criminal cases instituted before the effectivity of the Revised
Rules which remained pending thereafter. Catubig reasoned that the retroactive application of the
Revised Rules should not adversely affect the vested rights of the private offended party.
Thus, we find, in our body of jurisprudence, criminal cases, especially those involving rape,
dichotomized: one awarding exemplary damages, even if an aggravating circumstance attending the
commission of the crime had not been sufficiently alleged but was consequently proven in the light of
Catubig; and another awarding exemplary damages only if an aggravating circumstance has both been
alleged and proven following the Revised Rules. Among those in the first set are People v. Laciste,
People v. Victor, People v. Orilla, People v. Calongui, People v. Magbanua, People of the Philippines v.
Heracleo Abello y Fortada, People of the Philippines v. Jaime Cadag Jimenez, and People of the
Philippines v. Julio Manalili. And in the second set arePeople v. Llave, People of the Philippines v. Dante
Gragasin y Par, and People of the Philippines v. Edwin Mejia. Again, the difference between the two sets
rests on when the criminal case was instituted, either before or after the effectivity of the Revised Rules.

xxxx
Nevertheless, by focusing only on Article 2230 as the legal basis for the grant of exemplary
damages taking into account simply the attendance of an aggravating circumstance in the commission of
a crime, courts have lost sight of the very reason why exemplary damages are awarded. Catubig is
enlightening on this point, thus
Also known as punitive or vindictive damages, exemplary or corrective damages are
intended to serve as a deterrent to serious wrong doings, and as a vindication of undue
sufferings and wanton invasion of the rights of an injured or a punishment for those guilty
of outrageous conduct. These terms are generally, but not always, used interchangeably.
In common law, there is preference in the use of exemplary damages when the award is to
account for injury to feelings and for the sense of indignity and humiliation suffered by a
person as a result of an injury that has been maliciously and wantonly inflicted, the theory
being that there should be compensation for the hurt caused by the highly reprehensible
conduct of the defendant associated with such circumstances as willfulness, wantonness,
malice, gross negligence or recklessness, oppression, insult or fraud or gross fraud that
intensifies the injury. The terms punitive or vindictive damages are often used to refer to
those species of damages that may be awarded against a person to punish him for his
outrageous conduct. In either case, these damages are intended in good measure to deter
the wrongdoer and others like him from similar conduct in the future.
Being corrective in nature, exemplary damages, therefore, can be awarded, not only in the
presence of an aggravating circumstance, but also where the circumstances of the case show the highly
reprehensible or outrageous conduct of the offender. In much the same way as Article 2230 prescribes an
instance when exemplary damages may be awarded, Article 2229, the main provision, lays down the very
basis of the award. Thus, in People v. Matrimonio, the Court imposed exemplary damages to deter other
fathers with perverse tendencies or aberrant sexual behavior from sexually abusing their own daughters.
Also, in People v. Cristobal, the Court awarded exemplary damages on account of the moral corruption,
perversity and wickedness of the accused in sexually assaulting a pregnant married woman. Recently,
in People of the Philippines v. Cristino Caada, People of the Philippines v. Pepito Neverio and The People
of the Philippines v. Lorenzo Layco, Sr., the Court awarded exemplary damages to set a public example,
to serve as deterrent to elders who abuse and corrupt the youth, and to protect the latter from sexual
abuse.
It must be noted that, in the said cases, the Court used as basis Article 2229, rather than Article
2230, to justify the award of exemplary damages. Indeed, to borrow Justice Carpio Morales words in her
separate opinion in People of the Philippines v. Dante Gragasin y Par, [t]he application of Article 2230 of
the Civil Code strictissimi juris in such cases, as in the present one, defeats the underlying public policy
behind the award of exemplary damages to set a public example or correction for the public good. [32]
Before awarding any of the above-mentioned damages, the Court, however, must first consider the penalty
imposed by law. Under Republic Act No. (RA) 7659 or An Act to Impose the Death Penalty on Certain Heinous Crimes,
Amending for that Purpose the Revised Penal Laws, and for Other Purposes, certain crimes under the RPC and special
penal laws were amended to impose the penalty of death under certain circumstances.
For a full appreciation of the award on damages, it is imperative that a thorough discussion of RA 7659 be
undertaken. Each crime will be discussed as well as the proper amount of damages for each crime.
Under RA 7659, the following crimes are punishable by reclusion perpetua: piracy in general,[33] mutiny on the
high seas,[34] and simple rape.[35]
For the following crimes, RA 7659 has imposed the penalty of reclusion perpetua to death: qualified piracy;
[36]
qualified bribery under certain circumstances; [37]parricide;[38] murder;[39] infanticide, except when committed by the
mother of the child for the purpose of concealing her dishonor or either of the maternal grandparents for the same
purpose;[40] kidnapping and serious illegal detention under certain circumstances; [41] robbery with violence against or
intimidation of persons under certain circumstances; [42] destructive arson, except when death results as a consequence of
the commission of any of the acts penalized under the article; [43] attempted or frustrated rape, when a homicide is
committed by reason or on occasion thereof; plunder; [44] and carnapping, when the driver or occupant of the carnapped
motor vehicle is killed or raped in the course of the commission of the carnapping or on the occasion thereof. [45]
RA 7659 imposes the penalty of death on the following crimes:
(a)
In qualified bribery, when it is the public officer who asks or demands the gift or present.

(b)
In kidnapping and serious illegal detention: (i) when the kidnapping or detention was committed for the
purpose of extorting ransom from the victim or any other person; (ii) when the victim is killed or dies as a consequence of
the detention; (iii) when the victim is raped, subjected to torture or dehumanizing acts.
(c)
In destructive arson, when as a consequence of the commission of any of the acts penalized under
Article 320, death results.
(d)
In rape: (i) when by reason or on occasion of the rape, the victim becomes insane or homicide is
committed; (ii) when committed with any of the following attendant circumstances: (1) when the victim is under eighteen
(18) years of age and the offender is a parent, ascendant, step-parent, guardian, relative by consanguinity or affinity within
the third civil degree, or the common-law-spouse of the parent of the victim; (2) when the victim is under the custody of
the police or military authorities; (3) when the rape is committed in full view of the husband, parent, any of the children or
other relatives within the third degree of consanguinity; (4) when the victim is a religious or a child below seven years old;
(5) when the offender knows that he is afflicted with Acquired Immune Deficiency Syndrome (AIDS) disease; (6) when
committed by any member of the Armed Forces of the Philippines or the Philippine National Police or any law
enforcement agency; and (7) when by reason or on the occasion of the rape, the victim has suffered permanent physical
mutilation.
Nevertheless, all these must be taken in relation to Art. 63 of the RPC, which provides:
Article 63. Rules for the application of indivisible penalties. - In all cases in which the law
prescribes a single indivisible penalty, it shall be applied by the courts regardless of any mitigating or
aggravating circumstances that may have attended the commission of the deed.
In all cases in which the law prescribes a penalty composed of two indivisible penalties, the
following rules shall be observed in the application thereof:
1.
2.
3.
4.

When in the commission of the deed there is present only one aggravating
circumstance, the greater penalty shall be applied.
When there are neither mitigating nor aggravating circumstances in the commission
of the deed, the lesser penalty shall be applied.
When the commission of the act is attended by some mitigating circumstance and
there is no aggravating circumstance, the lesser penalty shall be applied.
When both mitigating and aggravating circumstances attended the commission of
the act, the courts shall reasonably allow them to offset one another in consideration of
their number and importance, for the purpose of applying the penalty in accordance with
the preceding rules, according to the result of such compensation.

Thus, in order to impose the proper penalty, especially in cases of indivisible penalties, the court has the duty to
ascertain the presence of any mitigating or aggravating circumstances. Accordingly, in crimes where the imposable
penalty is reclusion perpetua to death, the court can impose either reclusion perpetua or death, depending on the
mitigating or aggravating circumstances present.
But with the enactment of Republic Act No. (RA) 9346 or An Act Prohibiting the Imposition of Death Penalty in the
Philippines, the imposition of death penalty is now prohibited. It provides that in lieu of the death penalty, the penalty
of reclusion perpetua shall be imposed when the law violated makes use of the nomenclature of the penalties of the RPC.
[46]

As a result, courts now cannot impose the penalty of death. Instead, they have to impose reclusion perpetua.
Despite this, the principal consideration for the award of damages, following the ruling in People v. Salome [47] and People
v. Quiachon,[48] is the penalty provided by law or imposable for the offense because of its heinousness, not the public
penalty actually imposed on the offender.[49]
When the circumstances surrounding the crime would justify the imposition of the penalty of death were it not for
RA 9346, the Court has ruled, as early as July 9, 1998 inPeople v. Victor,[50] that the award of civil indemnity for the crime
of rape when punishable by death should be PhP 75,000. We reasoned that [t]his is not only a reaction to the apathetic
societal perception of the penal law and the financial fluctuations over time, but also an expression of the displeasure of

the Court over the incidence of heinous crimes against chastity.[51] Such reasoning also applies to all heinous crimes found
in RA 7659.
In addition to this, the Court likewise awards moral damages. In People v. Arizapa,[52] PhP 50,000 was awarded as
moral damages without need of pleading or proving them, for in rape cases, it is recognized that the victims injury is
concomitant with and necessarily results from the odious crime of rape to warrant per se the award of moral damages.
[53]
Subsequently, the amount was increased to PhP 75,000 in People v. Soriano.[54]
As to exemplary damages, existing jurisprudence has pegged its award at PhP 30,000, [55] despite the lack of any
aggravating circumstance. The reason, as previously discussed, is to deter similar conduct and to serve as an example for
public good.
Essentially, despite the fact that the death penalty cannot be imposed because of RA 9346, the imposable penalty
as provided by the law for the crime, such as those found in RA 7569, must be used as the basis for awarding damages
and not the actual penalty imposed.
On the other hand, when the circumstances surrounding the crime call for the imposition of reclusion
perpetua only, the Court has ruled that the proper amounts should be PhP 50,000 as civil indemnity, PhP 50,000 as moral
damages, and PhP 30,000 as exemplary damages.[56]
Accordingly, in Criminal Case Nos. 95-17070 and 95-17071, the exemplary damages awarded by the CA in the
amount of PhP 25,000 should be increased to PhP 30,000.00 in line with prevailing jurisprudence.
Moreover, the deletion of the award of compensatory damages for unearned income by the CA in Criminal Case
No. 95-17071 is proper. This Court pronounced in People v. Mallari:[57]
The rule is that documentary evidence should be presented to substantiate a claim for damages
for loss of earning capacity. By way of exception, damages therefore may be awarded despite the
absence of documentary evidence provided that there is testimony that the victim was either (1) selfemployed earning less than the minimum wage under current labor laws, and judicial notice may be taken
of the fact that in the victims line of work no documentary evidence is available; or (2) employed as a
daily-wage worker earning less than the minimum wage under current labor laws.
In this case, neither of the exemption applies. The earnings of Leopoldo at the time of his death were above
minimum wage set by labor laws in his respective place at the time of his death. [58] As testified to by his wife, Shenette
Guiro, Leopoldo was earning between PhP 200 to PhP 300 per day. This is more than minimum wage. Hence, absent any
documentary evidence, the award of compensatory damages must be deleted.
Likewise, the deletion of the award of compensatory damages by the CA in Criminal Case No. 95-17070 is proper
for lack of any basis. The trial court did not discuss why it awarded compensatory damages to the heirs of Edmund.
Interest on damages
When death occurs due to a crime, the following may be recovered: (1) civil indemnity ex delicto for the death of
the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorneys fees and
expenses of litigation; and (6) interest, in proper cases.[59] In People v. Tubongbanua,[60] interest at the rate of six percent
(6%) was ordered to be applied on the award of damages. This rule would be subsequently applied by the Court in
several cases such as Mendoza v. People,[61]People v. Buban,[62] People v. Guevarra,[63] and People v. Regalario.[64] Thus,
we likewise adopt this rule in the instant case. Interest of six percent (6%) per annum should be imposed on the award of
civil indemnity and all damages, i.e., actual or compensatory damages, moral damages and exemplary damages, from the
date of finality of judgment until fully paid.
WHEREFORE, the appeal is DENIED. The CA Decision in CA-G.R. CEB CR-H.C. No. 00294 finding accusedappellant Jose Pepito D. Combate guilty of the crimes charged is AFFIRMED with MODIFICATION. As modified, the
ruling of the trial court should read as follows:
FOR ALL THE FOREGOING, judgment is hereby rendered finding the accused Jose Combate,
Jr. y Dallarte alias Peping, GUILTY beyond reasonable doubt of the crime of HOMICIDE in Criminal Case
NO. 95-17071 as Principal thereof. There being no modifying circumstances, the accused is sentenced to
suffer the penalty of RECLUSION TEMPORAL in its medium period. Applying the Indeterminate Sentence
Law, the accused shall serve a prison term of Eight (8) Years and One (1) Day of Prision Mayor to Fifteen
(15) years of Reclusion Temporal.
By way of civil liability, the accused is condemned to pay the heirs of the late Leopoldo Guiro the
following:
1.
The sum of P50,000.00 as civil indemnity; and
2.
The sum of P56,319.59 as reimbursement for the burial expenses.

In addition, the accused is ordered to pay Shenette Guiro the sum of P50,000.00 as moral
damages and P30,000.00 as exemplary damages.
The accused is also declared GUILTY of MURDER for the death of Edmund Prayco as charged in
the Information in Criminal Case No. 95-17070 as Principal thereof. There being no modifying
circumstances, the accused is sentenced to suffer the penalty of RECLUSION PERPETUA. He is
condemned to pay the heirs of the late Edmund Prayco the sum of P50,000.00 as civil indemnity,
P50,000.00 as moral damages and P30,000.00 as exemplary damages.
Finally, interest at the rate of six percent (6%) per annum shall be applied to the award of
civil indemnity, moral damages and exemplary damages from the finality of judgment until fully
paid in the two (2) aforementioned criminal cases.
SO ORDERED.