FAROLAN VS.

SOLMAC MARKETING CORPORATION

FACTS

Petitioner Ramon Farolan was then the Acting Commissioner of Customs while petitioner Guillermo Parayno was then the
Acting Chief, Customs Intelligence and Investigation Division. They were thus sued in their official capacities as officers in
the government. Nevertheless, they were both held personally liable for the awarded damages.

Solmac Marketing Corporation was the owner of an importation of Clojus Recycling Plastic Products which contained a kind
of polypropylene which was restricted, if not prohibited. Upon investigation, it was agreed upon that the subject imports may
be released but that holes may be drilled on them by the Bureau of Customs prior to their release. Solmac Marketing
Corporation through its counsel wrote to petitioner Commissioner Farolan of Customs asking for the release of the
importation. The importation was not released, however, on the ground that holes had to be drilled on them first. Judgment
was rendered ordering defendants to release the subject importation immediately without drilling of holes. Thus, petitioners
released the same. Even before the RTC rendered its decision, the Clojus shipment was already released to the private
respondent in its capacity as assignee of the same. Be that as it may, the private respondent filed its appeal demanding that
the petitioners be held, in their personal and private capacities, liable for damages despite the finding of lack of bad faith on
the part of the public officers.

ISSUE

Whether or not the petitioners acted in good faith in not immediately releasing the questioned importation, or, simply, can
they be held liable, in their personal and private capacities, for damages to the private respondent.

HELD

The Court finds it difficult to discredit or disregard totally the defendants’ defense of good faith premised on the excuse that
they were all the time awaiting clarification of the Board of Investments on the matter: We hold that this finding of the trial
court is correct for good faith is always presumed and it is upon him who alleges the contrary that the burden of proof lies.
In Abando v. Lozada, we defined good faith as “refer[ring] to a state of the mind which is manifested by the acts of the
individual concerned. It consists of the honest intention to abstain from taking an unconscionable and unscrupulous
advantage of another. It is the opposite of fraud, and its absence should be established by convincing evidence.”

But even granting that the petitioners committed a mistake in withholding the release of the subject importation because
indeed it was composed of OPP film scraps, contrary to the evidence submitted by the National Institute of Science and
Technology that the same was pure oriented OPP, nonetheless, it is the duty of the Court to see to it that public officers are
not hampered in the performance of their duties or in making decisions for fear of personal liability for damages due to
honest mistake. Whatever damage they may have caused as a result of such an erroneous interpretation, if any at all, is in
the nature of a damnum absque injuria. Mistakes concededly committed by public officers are not actionable absent any
clear showing that they were motivated by malice or gross negligence amounting to bad faith. After all, “even under the law
of public officers, the acts of the petitioners are protected by the presumption of good faith.”
LAYNESA VS. UY

FACTS

Robert Morley was the owner of a four (4)-hectare parcel of land in Barrio Tagbong, Pili, Camarines Sur. Petitioner Santos
Laynesa was his tenant over two and a half (2 1/2) hectares of the land. In 1947, Morley sold the 4 has. to Sixto Cuba, Sr. He
maintained Santos as the tenant over the 2 1/2-hectare portion while instituting petitioner Nicolas Laynesa, son of Santos, as
his tenant over the remainder of the property.

Cuba, Sr. died intestate, survived by his children, Sixto Cuba, Jr., Carmelita Cuba Sunga, and Bienvenido Cuba. Santos and
Nicolas continued as tenants, and delivered the owner’s share of the produce to Cuba, Jr. and Bienvenido.

Cuba, Jr. executed a Deed of Absolute Sale of Unregistered Land, transferring the property to respondent Pacita Uy. Cuba, Jr.
was named owner of the land. Notably, the Deed was not registered with the Register of Deeds. Later, Cuba, Jr. executed a
Deed of Assignment or Transfer of Rights of the undelivered owner’s share of the produce in favor of Pacita.

Subsequently, Pacita demanded that the Laynesas vacate the land. She claimed that she had purchased the land. The Laynesas
asked for proof of Pacita’s acquisition, but she could not produce any. After a series of petitions and motions, the Department
of Agrarian Reform Adjudication Board awarded damages to the Laynesas.

ISSUE

Is the DARAB correct?

HELD

NO. The exercise of one’s rights does not make him liable for damages, thus “One who exercises his rights does no injury.”

In Saba v. Court of Appeals, 189 SCRA 50 (1990), we ruled that the exercise of one’s rights does not make him liable for
damages, thus: “One who exercises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from
a person’s exercising his legal rights, it is damnum absque injuria.”

Furthermore, the Court ruled that exemplary damages may only be awarded if the act of the offender is attended by bad
faith or done in wanton, fraudulent, or malevolent manner.
FUENTES, JR. VS. COURT OF APPEALS

FACTS

Alejandro Fuentes Jr. was convicted of murder with treachery. The trial court also held him answerable to pay the actual
damages worth Php8,300.00 on the basis of the mere testimony of the victim’s sister, Angelina Serrano, without any tangible
document to support such claim.

ISSUE

Is the pronouncement on actual damages correct?

HELD

NO.
The award by the court a quo of P8,300.00 as actual damages is not supported by the evidence on record. We have only the
testimony of the victim’s elder sister stating that she incurred expenses of P8,300.00 in connection with the death of
Malaspina. However, no proof of the actual damages was ever presented in court. Of the expenses alleged to have been
incurred, the Court can only give credence to those supported by receipts and which appear to have been genuinely expended
in connection with the death of the victim. Since the actual amount was not substantiated, the same cannot be granted.

In crimes and quasi-delicts, the defendant is liable for all damages which are the natural and probable consequences of the
act or omission complained of. To seek recovery for actual damages it is essential that the injured party proves the actual
amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available.19
Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages.
PEOPLE VS. CUENCA

FACTS

The trial court found the accused Gerry Cuenca and Crisanto Agon, guilty beyond reasonable doubt, both as principals by
direct participation for having conspired and confederated with one another in the commission of the crime of murder. In
addition to sentencing each of them to suffer the penalty of RECLUSION PERPETUA, they were adjudged to pay as actual
damages, the sum of P4,800,000.00 for loss of earning capacity of their victim, Wilfredo Castillo. According to the testimony
of the brother of the victim Felecisimo Castillo, Wilfredo Castillo at the time of his death was earning P250.00 daily as
carpenter.

ISSUE

Is the trial court correct about its basis for awarding actual damages?

HELD

NO. The principle enunciated in People v. Verde, where an award for the loss of earning capacity to the heirs of the deceased
was granted despite the absence of documentary evidence to substantiate such claim, the Court treating the testimony of
the victim’s wife as sufficient to establish the basis for the grant, has been modified by the new ruling in People v. Panabang
which now precludes an award for loss of earning capacity without adequate proof.

The Supreme Court found the award of P4,800,000 for loss of earning capacity to be improper. In People v. Verde, the SC
granted an award for the loss of earning capacity to the heirs of the deceased despite the absence of documentary evidence
to substantiate such claim. We deemed the testimony of the victim’s wife sufficient to establish the basis for the grant.
However, the new ruling in People v. Panabang modifies this principle and now precludes an award for loss of earning capacity
without adequate proof. The bare testimony of the brother of the deceased Felicisimo Castillo that, at the time of his death,
Wilfredo Castillo was earning P250.00 daily as carpenter is not sufficient proof.
CARIAGA VS. LAGUNA TAYABAS BUS COMPANY

A Laguna Tayabas Bus (LTB) had Edgardo Cariaga, a fourth-year medical student of the University of Santos Tomas, as one of
its passengers. The bus bumped against the engine of a train then passing by with such terrific force that the first six wheels
of the latter were derailed, the engine and front part of the body of the bus were wrecked, the driver of the bus died instantly,
while many of its passengers, Edgardo among them, were severely injured.

An action was filed to recover for Edgardo Cariaga, from the LTB and the MRR Co., the total sum of P312,000.00 as actual,
compensatory, moral and exemplary damages, and for his parents, the sum of P18,000.00 in the same concepts.

ISSUE

Can the parents of Edgardo Cariaga claim moral damages?

HELD

NO.

Article 2219 of the Civil Code enumerates the instances when moral damages may be recovered. Plaintiffs' claim for moral
damages not falling under any one of them, the same cannot be granted.

Neither could defendant LTB be held liable to pay moral damages to plaintiffs under Art. 2220 of the Civil Code on account of
breach of its contract of carriage because said defendant did not act fraudulently or in bad faith in connection therewith.

Since the present action is based upon a breach of contract of carriage and plaintiff's parents were not a party thereto and
were not themselves injured as a result of the collision, their claim for actual and compensatory damages is without merit. In
so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were
not a party, and neither can they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that
they were not themselves injured as a result of the collision between the LTB bus and the train owned by the Manila Railroad
Company.
DAVILA VS. PHILIPPINE AIR LINES

FACTS

The tragic crash of a passenger plane of Philippine Air Lines took the lives of all its crew and passengers. Despite its age,
however, the plane had been certified as airworthy by the Civil Aeronautics Administration. It took off from the Manduriao
Airport, Iloilo, on its way to Manila, with 33 people on board, including the plane’s complement. It did not reach its
destination, but crashed at Mt. Baco, Mindoro, one hour and fifteen minutes after take-off. A massive search was undertaken
by the defendant and by other parties as soon as it was realized that the plane’s arrival in Manila was overdue. The plaintiffs,
parents of Pedro T. Davila, Jr., who was one of the passengers, had no definite news of what had happened to their son,
getting what information they could only from conflicting newspaper reports, until they received, a letter of condolence from
the defendant’s president Andres Soriano, informing them that their son had died in the crash.

ISSUE

Whether or not the Philippine Air Lines is liable for violation of its contract of carriage, and for how much.

HELD

Facts in the trial have shown that the common carrier did not observe the standard of care required of it. The standard of
care required of common carriers is that of extraordinary diligence. Article 1733 of the New Civil Code binds common carriers,
“from the nature of their business and by reasons of public policy,. . . to observe extraordinary diligence in the vigilance . . .
for the safety of the passengers transported by them according to all the circumstances of each case.”

Article 1756 of the New Civil Code fixes the burden of proof by providing that “in case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.”

The amount recoverable by the heirs of a victim of tort is not loss of the entire earnings, but rather the loss of that portion of
the earnings which the beneficiary would have received. In other words, only net earnings, not gross earnings, are to be
considered, that is, the total of the earnings less expenses necessary in the creation of such earnings or income and less living
and other incidental expenses. In the case at bar, the deceased’s earnings from three sources of income was P15,000.00 a
year (as radio station manager, lawyer-practitioner and farmer). A deduction of P600.00 a month considering that the
expenses incidental to the generation of such income were necessarily more than if he had only one source, is reasonable.
The amount of P7,800 net yearly income multiplied by 25 years, or P195,000.00 is the amount which should be awarded to
the plaintiffs.
RAAGAS VS. TRAYA

FACTS

The complaint filed by the spouses Melquiades Raagas and Adela Laudiano Raagas against Octavio Traya, his wife, and
Bienvenido Canciller, alleges in essence that the latter was "recklessly" driving a truck owned by his co-defendants along the
public highway, the said vehicle ran over the plaintiffs' three-year old son Regino, causing his instantaneous death. The
plaintiffs ask for actual damages in the sum of P10,000, moral, nominal and corrective damages in a sum to be determined
by the court, Pl,000 as attorney's fees, Pl,000 for expenses of litigation, plus costs.

The court sentenced the defendants, jointly and severally, to pay "to the plaintiffs the sum of P10,000 for the death of their
child Regino Laudiano Raagas, P2,000 for moral damages, Pl,000 actual damages, Pl,000 for attorney's fees, and the costs.

ISSUE

Is the trial court correct?

HELD

NO. The trial court erred. Actual damages must be proved, and that a court cannot rely on "speculation, conjecture or
guesswork" as to the fact and amount of damages, but must depend on actual proof that damages had been suffered and on
evidence of the actual amount (Tomassi v. Villa-Abrille; Suntay Tanjangco v. Jovellanos; Delfin v. Court of Agrarian Relations).
In Malonzo v. Galang, the Supreme Court reaffirmed the rule that although an allegation is not necessary in order that moral
damages may be awarded, "it is, nevertheless, essential that the claimant satisfactorily prove the existence of the factual
basis of the damages and its causal relation to defendant's acts."
RECEIVER FOR NORTH NEGROS SUGAR CO., INC. VS. YBANEZ

FACTS

Pedro V. Ybdfiez and Rosario V. Ybanez are the brother and sister, respectively, and immediate heirs of Cesar V. Ybafiez who
was one of two persons who died as a result of the collision between the car, where said Cesar V. Ybafiez was riding and being
driven by Gil Dominguez, and train No. 5, owned by the North Negros Sugar Company, Inc. A civil action based on culpa
aquiliana was instituted by Pedro V. Ybanez and Rosario V. Ybaiiez against Primitivo Gustilo, Loreto Perez, and their employer,
North Negros Sugar Company, Inc. seeking to recover damages for the death of their brother.

The Court of First Instance dismissed the case. The Court of Appeals reversed the judgment of the lower court and held the
North Negros Sugar Company, Inc. liable for the death of Cesar V. Ybafiez, ordering it to pay plaintiff-appellant Pedro V.
Ybanez damages.

ISSUE

Is the Court of Appeals correct in awarding moral damages to Ybanez?

HELD

NO. The brother or sister of a deceased cannot claim moral damages.

It may well be said that culpa aquiliana, or quasi-delict, is punished both by the old Civil Code—the previous legislation—and
by the new Civil Code. But a less severe sanction, or penalty, for culpa aquiliana is provided for in the new Civil Code. It follows,
therefore, that Article 2206 of the new Civil Code—which provides that only the spouse, legitimate and illegitimate
descendants and ascendants may demand moral damages for mental anguish by reason of the death of the deceased caused
by quasi-delict—should be applied in the case at bar. Hence, petitioner herein, who claims moral damages for the death of
his brother Cesar V. Ybanez caused by quasidelict, is not entitled to, and should not have been awarded, moral damages, by
the Court of Appeals (Heirs of Gervacio Gonzales v. Alegarbes).

Moreover, Article 1902 of the old Civil Code declares that any person who by an act or omission, characterized by fault or
negligence, causes damage to another shall be liable for the damage done. A person is liable for damage done to another by
any culpable act; and by culpable act is meant any act which is blame-worthy when judged by accepted legal standards. The
idea thus expressed is undoubtedly broad enough to include any rational conception of liability for the tortuous acts likely to
be developed in any society (Daywalt v. Corporacion de PP-Agustinos Recoletos, et al).
DAYWALT VS. CORPORACIÓN DE PP. AGUSTINOS RECOLETOS

FACTS

Geo. W. Daywalt seeks to recover from la corporación de los padres recoletos the the sum of p500,000, as damages, on the
ground that said corporation, for its own selfish purposes, unlawfully induced teodorica endencia to refrain from the
performance of her contract for the sale of a tract of land and to withhold delivery to the plaintiff of the torrens title, and
further, maliciously and without reasonable cause, maintained her in her defense to the action of specific performance which
was finally decided in favor of the plaintiff in this court.

ISSUES

Whether a person who is not a party to a contract for the sale of land makes himself liable for damages to the vendee, beyond
the value of the use and occupation, by colluding with the vendor and maintaining him in the effort to resist an action for
specific performance.

Whether the damages which the plaintiff seeks to recover under this head are too remote and speculative to be the subject
of recovery.

HELD

Yes, a stranger to a contract can make himself liable for collusion with the obligor for breach thereof. In this case, the damages
ordinarily recoverable against a vendor for failure to deliver land which he has contracted to deliver is the value of the use
and occupation of the land for the time during which it is wrongfully withheld. The defendant corporation is liable in this
action for the damage resulting to the plaintiff from the wrongful use and occupation of the property has also been already
determined. It is enough that defendant used the property with notice that the plaintiff had a prior and better right article
1902 (now article 2176) of the civil code declares that any person who by an act or omission, characterized by fault or
negligence, causes damage to another shall be liable for the damage so done.

The damages recoverable upon breach of contract are, primarily, the ordinary, natural and in a sense the necessary damage
resulting from the breach. Other damages, known as special damages, are recoverable where it appears that the particular
conditions which made such damages a probable consequence of the breach were known to the delinquent party at the time
the contract was made. This proposition must be understood with the qualification that, if the damages are in the legal sense
remote or speculative, knowledge of the special conditions which render such damages possible will not make them
recoverable. Special damages of this character cannot be recovered unless made the subject of special stipulation.
PEOPLE VS. MAMANTAK

FACTS

Christopher, Teresa Basario’s two-year old son, was kidnapped by the sisters Raga Sarapida Mamantak. The kidnappers also
demanded P30,000.00 as ransom. After sixteen months, the boy was recovered but was unable to recognize his mother. At
the time Christopher was kidnapped, Teresa Basario was pregnant with her third child. The child, born very sickly, eventually
died. The sisters Mamantak and Taurak were charged with kidnapping for ransom. Both were sentenced to suffer the penalty
of RECLUSION PERPETUA, and were jointly and severally ordered to pay the Christopher Basario represented by the mother,
[Ma.] Teresa Basario the amount of PHP50,000.00 as compensatory damages and PHP50,000.00 as moral damages.

ISSUE

Was the award for damages proper?

HELD

In line with prevailing jurisprudence, the award of P50,000 civil indemnity was proper. Pursuant to People v. Garalde the
award of P50,000 moral damages is increased to P200,000 considering the minority of Christopher. Moreover, since the crime
was attended by a demand for ransom, and by way of example or correction, Christopher is entitled to P100,000 exemplary
damages.
NATIONAL POWER CORP. VS. NATIONAL MERCHANDISING CORP.

The National Power Corporation and National Merchandising Corporation executed in Manila a contract for the purchase by
the NPC from the New York firm of four thousand long tons of crude sulfur for its Maria Cristina Fertilizer Plant in Iligan City.

It was stipulated in the contract of sale that the seller would deliver the sulfur at Iligan City within sixty days from notice of
the establishment and that failure to effect delivery would subject the seller and its surety to the payment of liquidated
damages at the rate of two-fifth of one percent of the full contract price for the first thirty days of default and four-fifth of
one percent for every day thereafter until complete delivery is made.

The New York supplier was not able to deliver the sulfur due to its inability to secure shipping space. There was a shutdown
of the NPC's fertilizer plant because there was no sulfur. No fertilizer was produced.

ISSUE

Can NPC legally claim the liquidated damages from the NMC?

HELD

No proof of pecuniary loss is required for the recovery of liquidated damages. The stipulation for liquidated damages is
intended to obviate controversy on the amount of damages. There can be no question that the NPC suffered damages
because its production of fertilizer was disrupted or diminished by reason of the non-delivery of the sulfur. The parties
foresaw that it might be difficult to ascertain the exact amount of damages for non-delivery, so they fixed the liquidated
damages to be paid as indemnity to the NPC. On the other hand, nominal damages are damages in name only or are in fact
the same as no damages. It would not be correct to hold in this case that the NPC suffered damages in name only or that the
breach of contract was merely technical in character.

The NPC is entitled to the full payment of the liquidated damages computed by its official. A painstaking evaluation of the
equities of the case in the light of the arguments of the parties as expounded in their five briefs leads to the conclusion that
the damages due from the defendants should be further reduced to P45,100 which is equivalent to their bidder's bond or to
about ten percent of the selling price of the sulfur.
ASJ CORPORATION VS. EVANGELISTA

Respondent spouses Evangelistas, are engaged in the large-scale business of buying broiler eggs, hatching them, and selling
their hatchlings (chicks) and egg by-products in Bulacan and Nueva Ecija. For the incubation and hatching of these eggs,
respondents availed of the hatchery services of ASJ Corp., a corporation duly registered in the name of Antonio San Juan and
his family.

In the course of conducting business together, the spouses Evangelistas accumulated unpaid dues in their account which led
to the withholding of San Juan of the hatchlings abd egg-by products, upon the condition that they should fully settle their
accounts first, albeit made with threats.

The Evangelistas filed with the RTC an action for damages based on petitioners’ retention of the chicks and by-products. The
RTC held San Juan solidarily liable to respondents for P529,644.80 as actual damages, P100,000.00 as moral damages,
P50,000.00 as attorney’s fees, plus interests and costs of suit. The Court of Appeals affirmed the decision, with the slight
modification of including an award of exemplary damages of P10,000.00 in favor of respondents.

ISSUE

Is the award of damages correct?

HELD

YES. Where it was established that a person suffered some pecuniary loss anchored on another person’s abuse of rights,
although the exact amount of actual damages cannot be ascertained, temperate damages are recoverable. Since it was
established that respondents suffered some pecuniary loss anchored on petitioners’ abuse of rights, although the exact
amount of actual damages cannot be ascertained, temperate damages are recoverable. In arriving at a reasonable level of
temperate damages of P408,852.10, which is equivalent to the value of the chicks and by-products, which respondents, on
the average, are expected to derive.

Since exemplary damages are awarded, attorney’s fees are also proper. Article 2208 of the Civil Code provides that:
“In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded.”
PEOPLE VS. VILLA, JR.

FACTS

Charlie Villa Jr. was found guilty beyond reasonable doubt for the murder of Rodolfo Arevalo. The RTC convicted the appellant
of murder, and imposed upon him the penalty of reclusion perpetua. Appellant was also ordered to indemnify the heirs of
the victim in the amounts of P50,000.00 as death indemnity, and another P50,000.00 as temperate damages. The Court of
Appeals promulgated its Decision affirming the decision of the RTC in all respects, except the award of temperate damages
which it reduced from the amount of P50,000.00 to P25,000.00.

ISSUE

Was the award of damaged correct? Can exemplary damages be recovered in this case?

HELD

As to the award of damages, the Court of Appeals correctly awarded to the heirs of the victim the amount of P50,000.00 as
civil indemnity, P50,000.00 as moral damages and P25,000.00 as temperate damages. The award of moral damages does not
require allegation and proof of the emotional suffering of the heirs, since the emotional wounds from the vicious killing of
the victim cannot be denied. Civil indemnity is mandatory and granted to the heirs of the victim without need of proof other
than the commission of the crime. Based on current jurisprudence, the RTC award of civil indemnity ex delicto in the amount
of P50,000.00 in favor of the heirs of the victim is in order.

Although the prosecution presented evidence that the heirs incurred expenses, no receipts were presented. The award of
temperate damages, in the amount of P25,000.00, to the heirs of the victim is justified. Temperate damages are awarded
where no documentary evidence of actual damages was presented in the trial because it is reasonable to presume that, when
death occurs, the family of the victim incurred expenses for the wake and funeral.

However, in addition to these damages, exemplary damages should also be awarded to the heirs of the victim, since the
qualifying circumstance of treachery was proven by the prosecution. When a crime is committed with an aggravating
circumstance, either qualifying or generic, an award of P25,000.00 as exemplary damages is justified under Article 2230 of
the New Civil Code. This kind of damage is intended to serve as a deterrent to serious wrongdoings and as a vindication of
undue sufferings and wanton invasion of the rights of an injured, or as a punishment for those guilty of outrageous conduct.
PEOPLE VS. TABUELOG

FACTS

The trial court found Christopher Tabuelog guilty of the murder of Clinton Badinas, for failure of the accused to prove self-
defense, complete or incomplete, with the qualifying aggravating circumstance of treachery beyond reasonable doubt,
sentencing him with reclusion perpetua. He was also Ordered to pay the heirs of Badinas Fifty Thousand Pesos (P50,000.00)
as civil indemnity; Fifty Thousand Pesos (P50,000.00) as moral damages; and One Hundred Thirteen Thousand Seven Hundred
Seventy Six Pesos (P113,776.00) as actual damages being the amount agreed upon during the trial; and the Costs.

On appeal, the Court of Appeals affirmed in toto the Decision of the trial court.

ISSUE
Was the awarding of damages correct?

HELD

The trial court correctly awarded P50,000.00 as civil indemnity and P50,000.00 as moral damages in line with prevailing
jurisprudence. However, we cannot sustain the trial court’s award for actual damages in the amount of P113,776.00. While
the victim’s mother, Marqueza Badinas, testified on the civil aspect of the case, she only presented a list of expenses without
submitting the corresponding receipts. The trial court awarded the same noting that it was “agreed upon during trial.” This
is not allowed. The award of actual damages is proper only if the actual amount of loss was proven with a reasonable degree
of certainty. It should be supported by receipts. Thus, actual or compensatory damages cannot be awarded.

Current jurisprudence, however, allows the grant of P25,000.00 as temperate damages when it appears that the heirs of the
victim suffered pecuniary loss but the award thereof cannot be established with certainty.
PEOPLE VS. LOPEZ

Federico Lopez, together with one John Doe whose identity has not yet been established, armed with a short firearm, with
intent to kill, with treachery and evident premeditation, willfully, unlawfully and feloniously attacked, assaulted and shot
Rogelio Seldera and Rodolfo Padapat which caused their immediate death and on the same occasion and with treachery and
evident premeditation wounded Mario Seldera on his breast to the damage and prejudice of the heirs of Rogelio Seldera and
Rodolfo Padapat and also to the damage and prejudice of said Mario Seldera.

Federico Lopez was declared GUILTY of the crime of Double Murder With Frustrated Murder beyond reasonable doubt and
was sentenced to a penalty of Reclusion Perpetua relative to the treacherous killing of Rogelio Seldera, and to pay the heirs
of the late Seldera compensatory damages, moral damages, and likewise sentenced the same accused Lopez of the penalty
of Reclusion Perpetua for the treacherous killing of Rodolfo Padapat, and to pay the heirs of the late Padapat actual expenses
incurred during the wake and burial and other expenses incurred relative to the interment of both deceased payable to the
heirs of both victims, and finally sentenced accused Lopez for the crime of Frustrated Homicide for the injuries sustained by
victim Mario Seldera, with a penalty of Prision Mayor, and to pay the widow of the late Rogelio Seldera moral damages,
exemplary damages, and actual damages in the form of medical expenses.

ISSUE

Should additional damages be awarded?

HELD

Yes. Actual damages representing unearned income of Rogelio Seldera and Alfredo Padapat should also be awarded. Leonida
Seldera testified that her husband was 43 years old when he was killed and that he earned P13,000.00 a year as a farmer. On
the other hand, Alfredo Padapat testified that his son, Rodolfo, was then 25 years old when he died and that he was earning
P5,000.00 a year also as a farmhand. The formula for the computation of unearned income is: net earning capacity (x) = life
expectancy x gross annual income less living expenses (50% of gross annual income). Life expectancy is determined in
accordance with the formula–2/3 x [80 - age of deceased].
PEOPLE VS. TOLENTINO

FACTS

The RTC found the accused EMELIO TOLENTINO y ESTRELLA and JESUS TRINIDAD y MARAVILLA guilty beyond reasonable
doubt of the crime of Murder, and were sentenced to suffer the supreme penalty of DEATH. They were also ordered to pay
the heirs of the victim, Josita Novelo, the amount of P75,000.00 by way of civil indemnity, P50,000.00 as moral damages and
another P50,000.00 as exemplary damages.
In addition, the RTC also found both accused guilty beyond reasonable doubt of the crime of Frustrated Murder, they are
hereby sentenced to suffer the penalty of RECLUSION PERPETUA. They are also ordered to pay their victim, Antonio Bea the
amount of P50,000.00 as civil indemnity, P50,000.00 as moral damages and P30,000.00 as exemplary damages.

The Court of Appeals, on 8 November 2006, promulgated its Decision affirming the judgment of the trial court convicting
the appellants, with modifications on the award of civil liabilities.

ISSUE

Were the award for damages proper?

HELD

YES.

The RTC awarded P75,000.00 in favor of the heirs of Josita Novelo as civil indemnity. The Court of Appeals reduced the award
of civil indemnity to P50,000.00. Civil indemnity is mandatory and granted to the heirs of the victim without need of proof
other than the commission of the crime. Based on current jurisprudence, the RTC award of civil indemnity ex delicto of
P75,000.00 in favor of the heirs of Josita Novelo is in order.

The RTC also correctly awarded moral damages in the amount of P50,000.00 in view of the violent death of the victim. This
does not require allegation and proof of the emotional suffering of the heirs. Article 2230 of the Civil Code states that
exemplary damages may be imposed when the crime was committed with one or more aggravating circumstances, as in this
case. To deter future similar transgressions, the Court finds that an award of P25,000.00 for exemplary damages is proper.
As to 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) attorney’s fees and
expenses of litigation; and (6) interest, in proper cases.

PEOPLE VS. NIETO

FACTS

Regional Trial Court found Salvador Nieto guilty beyond reasonable doubt of the crime of simple rape in both cases committed
against AAA, a mental retardate with a mental age of five years and three months, and sentencing him in each case to suffer
the penalty of reclusion perpetua, and to indemnify AAA in the amount of P50,000.00 as civil indemnity and P20,000.00 as
exemplary damages with the modification for an additional award of moral damages amounting to P50,000.00.

The Court of Appeals, taking into consideration the assignment of error stated by the appellant in his Appellant’s Brief and
after a thorough study of the records of the case, rendered, affirming the conviction of the appellant for two counts of simple
rape with the modification for an additional award of moral damages in the amount of P50,000.00 in each case.

ISSUE

1. Was the award of damages correct? And what was the legal basis?

2. Can the victim be awarded with exemplary damages?

HELD

1. The award of civil indemnity to the rape victim is mandatory upon the finding of the fact of rape. Thus, this Court affirms
the award of P50,000.00 in each case as civil indemnity given by the trial court to the victim.

With respect to moral damages, case law requires automatic award of moral damages to a rape victim without need of proof
because from the nature of the crime it can be assumed that she has suffered moral injuries entitling her to such award. This
award is separate and distinct from civil indemnity, which case law also automatically awards upon proof of the commission
of the crime by the offender. Thus, this Court finds the award of moral damages by the appellate court in the amount of
P50,000.00 for each count of rape proper.

2. As regards the award of exemplary damages, Article 2230 of the New Civil Code provides:
 “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.”

In this case, there being no aggravating circumstance that can be considered, as it is not even alleged in the information, the
award of exemplary damages by the lower courts would have to be deleted.

PEOPLE VS. TABIO

FACTS

The RTC handed down a decision finding Jimmy Tabio guilty and imposing the penalty of death on three (3) counts of qualified
rape. The RTC also ordered appellant to pay P75,000.00 as civil indemnity and P50,000.00 as moral damages.

In this case, the information merely stated that the appellant had carnal knowledge with a mentally retarded complainant. It
does not state that appellant knew of the mental disability of the complainant at the time of the commission of the crime. It
bears stressing that the rules now require that the qualifying circumstance that sanctions the imposition of the death penalty
should be specifically stated in the information. Article 266-B (10) of the Revised Penal Code could not, thus, be applied and
the supreme penalty of death could not be validly imposed. Thus, the Court of Appeals affirmed with modification the decision
of the trial court. The appellate court found appellant guilty of all three (3) counts for simple rape only and not qualified rape.
It also reduced the civil indemnity to P50,000.00 and added an award of P25,000.00 as exemplary damages.

ISSUES

Is the Court of Appeals correct in modifying the trial court’s decision, thus, also modifying the damages awarded to the victim?

HELD

Upon review, it was proven that the accused was guilty with only one count of rape. The modification of damages would also
follow.

As to the civil liability of appellant, the reduction by the appellate court of the civil indemnity to P50,000.00 only, as well as
the additional award of P25,000.00 as exemplary damages, but on rather different premises, considering the conclusion that
he is only guilty of one, not three counts of rape.

The civil indemnity awarded to the victims of qualified rape shall not be less than seventy-five thousand pesos (P75,000.00)
and P50,000.00 for simple rape. This civil indemnity is awarded for each and every count of rape, such that one found guilty
of two counts of simple rape would be liable to pay P50,000.00 for each count, or P100,000.00 in all.
The appellate court implicitly awarded P50,000.00 as civil indemnity for all three counts of simple rape. Such award would
have been improper for a conviction for three counts of simple rape. Still, because appellant is guilty of one count of simple
rape, P50,000.00 still emerges as the appropriate amount of civil indemnity.

In addition, the victim or heirs, as the case may be, can also recover moral damages pursuant to Article 2219 of the Civil Code.
In rape cases, moral damages are awarded without need of proof other than the fact of rape because it is assumed that the
victim has suffered moral injuries entitling her to such an award. In this respect, the Supreme Court agrees with the appellate
court in the award of P50,000.00 as moral damages. The appellate court’s award of P25,000.00 as exemplary damages by
way of public example is also proper.

PEOPLE VS. MALICSI

FACTS

In four separate Informations, Edwin Malicsi was charged with raping AAA, who was then alleged to be 13 years old when
she was raped for the first time and 15 years old during the succeeding rape incidents.

The trial court rendered its decision, finding appellant guilty of four counts of qualified rape. The trial court sentenced
appellant to suffer the penalty of death for each count of rape, and to pay AAA P300,000 as civil indemnity (P75,000 for each
count), and P200,000 as moral damages (P50,000 for each count).

The Court of Appeals found that the trial court erred in sentencing him to suffer the death penalty on four counts of qualified
rape and that he should only be convicted of simple rape. The minority of the victim and the offender’s relationship to the
victim, which constitute only one special qualifying circumstance, must be alleged in the Information and proved with
certainty. In this case, the Informations filed against appellant merely stated that he is the “uncle” of AAA. This is not the
sufficient allegation required by law because the Information must allege that he is a relative by consanguinity or affinity
within the third civil degree and the same should be proven during the trial.

The Court of Appeals correctly imposed the penalty of reclusion perpetua on appellant. The appellate court also affirmed the
award by the trial court of P200,000 in moral damages.

ISSUE

Was the Court of Appeals correct?

HELD

The appellate court correctly affirmed the award by the trial court of P200,000 in moral damages. Moral damages are
automatically granted to the rape victim without presentation of further proof other than the commission of the crime.
However, the reduction of the award of civil indemnity from P300,000 to P200,000 should be made in accordance with
prevailing jurisprudence. Civil indemnity in the amount of P50,000 for each count of simple rape is automatically granted
once the fact of rape is established.

JAPAN AIRLINES VS. SIMANGAN

FACTS

Jesus Simangan was booked for a flight bound for the United States of America to donate his kidney to his cousin. While
inside the airplane, JAL’s airline crew suspected respondent of carrying a falsified travel document and imputed that he would
only use the trip to the United States as a pretext to stay and work in Japan. After some exchange, Simangan was bumped off
the flight. Afterwards, he was informed that his travel documents were, indeed, in order. Respondent was refunded the cost
of his plane ticket less the sum of US$500.00 which was deducted by JAL. Subsequently, respondent’s U.S. visa was cancelled.
Displeased by the turn of events, respondent filed an action for damages.

The RTC rendered its decision in favor of Simangan, rendering JAL to pay the him the amount of P1,000,000.00 as moral
damages, the amount of P500,000.00 as exemplary damages and the amount of P250,000.00 as attorney’s fees, plus the cost
of suit. The Court of Appeals affirmed the decision of the RTC with modification in that it lowered the amount of moral and
exemplary damages and deleted the award of attorney’s fees. The reduced sums, as follows: Five Hundred Thousand Pesos
(P500,000.00) as moral damages, and Two Hundred Fifty Thousand Pesos (P250,000.00) as exemplary damages. The award
of attorney’s fees was deleted.

ISSUE

Was Simangan entitled to exemplary damages considering that exemplary damages are not recoverable in breach of contract
of carriage unless the carrier is guilty of wanton, fraudulent, reckless, oppressive or malevolent conduct?

Assuming arguendo that JAL was guilty of breach, JAL did not act in a wanton fraudulent, reckless, oppressive or malevolent
manner as to entitle respondent to exemplary damages.

Assuming arguendo that Simangan was entitled to an award of damages, whether or not the Court of Appeals award of
P750,000 in damages was excessive and unprecedented.
HELD

The acts committed by JAL against respondent amounts to bad faith. As found by the RTC, JAL breached its contract of carriage
with respondent in bad faith. JAL personnel summarily and insolently ordered respondent to disembark while the latter was
already settled in his assigned seat. He was ordered out of the plane under the alleged reason that the genuineness of his
travel documents should be verified. As a general rule, moral damages are not recoverable in actions for damages predicated
on a breach of contract for it is not one of the items enumerated under Article 2219 of the Civil Code.

Clearly, JAL is liable for moral damages. It is firmly settled that moral damages are recoverable in suits predicated on breach
of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith, as in this case. Inattention to and
lack of care for the interests of its passengers who are entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to an award of moral damages. What the law considers as
bad faith which may furnish the ground for an award of moral damages would be bad faith in securing the contract and in
the execution thereof, as well as in the enforcement of its terms, or any other kind of deceit.

EQUITABLE LEASING CORPORATION VS. SUYOM

FACTS

A Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo. Pinned to death under the
engine of the tractor were Respondent Myrna Tamayo’s son, Reniel Tamayo, and Respondent Felix Oledan’s daughter,
Felmarie Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita
Suyom.

Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide and multiple physical
injuries.

Upon verification with the Land Transportation Office, respondents were furnished a copy of Official Receipt and Certificate
of Registration showing that the registered owner of the tractor was “Equitable Leasing Corporation/leased to Edwin Lim.
respondents filed against Raul Tutor, Ecatine Corporation (“Ecatine”) and Equitable
Leasing Corporation (“Equitable”) a Complaint for damages.

Equitable alleged that the vehicle had already been sold to Ecatine and that the former was no longer in possession and
control thereof at the time of the incident. It also claimed that Tutor was an employee, not of Equitable, but of Ecatine.

RTC rendered its Decision ordering petitioner to pay actual and moral damages and attorney’s fees to respondents. It held
that since the Deed of Sale between petitioner and Ecatine had not been registered with the Land Transportation Office (LTO),
the legal owner was still Equitable.11 Thus, petitioner was liable to respondents.

The Court of Appeals sustained the RTC. It held that petitioner was still to be legally deemed the owner/operator of the
tractor, even if that vehicle had been the subject of a Deed of Sale in favor of Ecatine. The CA likewise upheld respondents’
claim for moral damages against petitioner because the appellate court considered Tutor, the driver of the tractor, to be an
agent of the registered owner/ operator.

ISSUES
Whether or not the Court of Appeals and the trial court gravely erred when they decided and held that petitioner [was] liable
for damages suffered by private respondents in an action based on quasi-delict for the negligent acts of a driver who [was],
not the employee of the petitioner.

Whether or not the Court of Appeals and the trial court gravely erred when they awarded moral damages to private
respondents despite their failure to prove that the injuries they suffered were brought by petitioner’s wrongful act.

HELD

Equitable is liable for the deaths and the injuries complained of, because it was the registered owner of the tractor at the
time of the accident. The Supreme Court has consistently ruled that, regardless of sales made of a motor vehicle, the
registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and
primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the
employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies
even if the registered owner of any vehicle does not use it for public service.

These two causes of action (ex delicto or ex quasi delicto) may be availed of, subject to the caveat that the offended party
cannot “recover damages twice for the same act or omission” or under both causes. Since these two civil liabilities are distinct
and independent of each other, the failure to recover in one will not necessarily preclude recovery in the other.

NFD INTERNATIONAL MANNING AGENTS VS. NATIONAL LABOR RELATIONS COMMISSION

FACTS

While M/T Lady Helene was at Island View Port, Durban, South Africa, Ship Master Captain Steiner Andersen dismissed the
21 Filipino seamen, including herein private respondents, from their employment. They were subsequently repatriated,
arriving in the Philippines.

NFD filed before the Adjudication Office of the POEA, a disciplinary complaint against the 21 seamen alleging that they were
guilty of mutiny, insubordination, desertion/attempting to desert the vessel and conspiracy. Subsequently, the POEA
Adjudication Office dismissed the disciplinary complaint filed by NFD, ordering that the names of the 21 seamen be removed
from the POEA watchlist.

Meanwhile, private respondents, together with eight (complainants) of the 21 seamen whose employments were terminated,
filed with the National Labor Relations Commission (NLRC), National Capital Region in Quezon City, a Complaint for wrongful
breach of contract, illegal dismissal and damages against NFD and Vulcanus. They sought recovery of their unpaid wages and
other benefits as well as moral and exemplary damages and attorney’s fees.

The NLRC directed NFD International to jointly and severally pay the appellants complainants [private respondents and their
companions] their wages for the payment of the unexpired portion of their respective contracts, and unpaid wages including
moral and exemplary damages of P50,000.00 each and ten percent (10%) attorney’s fees of the total amount awarded. The
Court of Appeals affirmed the decision.

ISSUES

Whether private respondents’ termination from their employment was valid, and subsequently, the grant for damages
justified.

HELD
While the Court agrees with petitioners that there is no evidence to prove that force, violence or intimidation was employed
to effect the disembarkation of the Filipino seamen, the Court still sustains the finding of the CA that the dismissal of private
respondents and their companions was done in bad faith, contrary to morals, good customs or public policy, arbitrary and
oppressive to labor, thus entitling them to the award of moral and exemplary damages. Moral damages are recoverable
where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs or public policy.

On the other hand, exemplary damages are proper when the dismissal was effected in a wanton, oppressive or malevolent
manner, and public policy requires that these acts must be suppressed and discouraged. In the instant case, it is undisputed
that respondents and the other Filipino seamen were actually engaged in the performance of their assigned tasks aboard
M/T Lady Helene and were even rendering overtime work when they were unceremoniously directed to disembark from their
vessel. Moreover, the total absence of any prior written notice of the charges against them, the opportunity to defend
themselves against such charges and a written notice of the subsequent decision of the Ship Master to terminate their
employment establish the arbitrary and oppressive character of the dismissal from employment of private respondents and
their companions.

PAGSUYUIN VS. INTERMEDIATE APPELLATE COURT

FACTS

One Mrs. Gregoria B. Schlander, then a resident of Olongapo City and an acquintance of private respondent Salud Pagsuyuin
was able to secure a loan with the Manila Banking Corporation upon a security of a real estate mortgage of property belonging
to Salud Pagsuyuin consisting of two (2) two-storey buildings. Salud Pagsuyuin was informed that her property had been
mortgaged by Mrs. Gregoria B. Schlander in favor of said bank and she immediately went to verify the accuracy of the
information which she found to be true, but then Mrs. Schlander had already absconded and left for the United States. As
the loan indicated hereinabove was not paid at maturity, the Manila Banking Corporation at Olongapo City started to
foreclose the mortgaged properties extrajudicially. To protect, her interest on her property, Salud Pagsuyuin filed suit against
the Manila Banking Corporation, Mrs. Gregoria B. Schlander and her husband Mr. Schlander, including the City Sheriff of
Olongapo City, to annul the said real estate mortgage with a prayer for preliminary injunction.

The trial court rendered its decision in favor of Salud Pagsuyuin, ordering defendants jointly and severally to pay plaintiff the
amount of P20,000.00 as moral damages and exemplary damages; and ordering defendants jointly and severally to pay the
amount of P20,000.00 as attorney’s fees.

On Appeal, the Intermediate Appellate Court ruled that the decision appealed from is affirmed but with the modification:
ordering defendants jointly and severally to pay plaintiff the amount of P5,000.00 as moral and exemplary damages; and
ordering defendants jointly and severally to pay the amount of P5,000.00 as attorney’s fees.

ISSUES

Is the award of moral damages proper and what is its legal basis?

HELD
YES. As shown in the records of the case, the trial court and respondent Court of Appeals are in unison as to the findings of
the former that a sufficient cause of action had been proved by overwhelming preponderance of evidence of the private
respondent as against the petitioners Rafael Pagsuyuin, et al.

For moral damages to be awarded, it is essential that the claimant must have satisfactorily proved during the trial the
existence of the factual basis of the damages and its causal connection with adverse party’s acts. This is so because moral
damages, though incapable of pecuniary estimation, 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.

THE PENINSULA MANILA VS. ALIPIO

FACTS

Elaine M. Alipio was hired merely as a reliever nurse by The Peninsula Manila. After about four years of employment in the
hotel, she inquired why she was not receiving her 13th month pay. In response, petitioners required her to submit a summary
of her tour of duty for 1997. After she had submitted the said summary, Alipio was paid P8,000 as her 13th month pay for
1997. Alipio likewise requested for the payment of her 13th month pay for 1993 to 1996, but her request was denied.

On 1998, Alipio was informed by a fellow nurse that she can only report for work after meeting up with co-petitioner of The
Peninsula, Benilda Santos. When Alipio met with Santos, Alipio was asked regarding her payslip vouchers. She told Santos
that she made copies of her payslip vouchers because Peninsula does not give her copies of the same. Santos was peeved
with Alipio’s response because the latter was allegedly not entitled to get copies of her payslip vouchers. Santos likewise
directed Alipio not to report for work anymore. Subsequently, Alipio filed a complaint for illegal dismissal against the
petitioners.

The Court of Appeals ordered private respondents The Peninsula Manila and Benilda Quevedo-Santos are ordered to reinstate
petitioner Elaine M. Alipio as regular staff nurse without loss of seniority rights; to pay petitioner, jointly and severally, full
backwages and all the benefits to which she is entitled under the Labor Code from December 12, 1994 up to the time of her
actual reinstatement; moral damages in the amount of P30,000.00, exemplary damages in the amount of P20,000[.]00, and
attorney’s fees equivalent to ten (10%) percent of the total monetary award.

ISSUES

Was the Court of Appeals correct in its pronouncement?

HELD

YES. Moral damages are recoverable where the dismissal of the employee was attended with bad faith or was done in a
manner contrary to good customs. Exemplary damages may also be awarded if the dismissal is effected in a wanton,
oppressive or malevolent manner.

Moreover, the award of attorney’s fees equivalent to ten percent (10%) of the total monetary award is consistent with
prevailing jurisprudence and thus ought to be affirmed.

VENTANILLA VS. CENTENO

FACTS

This is an action to recover damages claimed to have been suffered by Oscar Ventanilla due to Atty. Gregorio Centeno’s
neglect in perfecting within the reglementary period his appeal from an adverse judgment rendered by the Court of First
Instance of Manila, attorney's fees and costs. After trial, the Court rendered judgment in favor of the plaintiff and against the
defendant, ordering the latter to pay the former the sum of P200 as nominal damages and the costs. The plaintiff appealed
to the Court of Appeals, which certified the case to this Court on the ground that only questions of law are raised. The
defendant did not appeal.

ISSUE

Was the award of nominal damages correct? Can other damages be claimed?

HELD

The award of P200 as nominal damages to a client who sued his lawyer for damages by reason of the latter's negligence in
not perfecting the client's appeal, was considered sufficient under the facts of the instant case.

The claim of a client for damages against a lawyer, who failed to perfect the client's appeal from a judgment, was considered
highly speculative. The claim was based on the theory that, because the appeal was not perfected, the client was not able to
recover on appeal moral and actual damages "from the adverse party. Moral damages may be recovered in the cases
mentioned in article 2219 of the New Civil Code and in the case of the death of a passenger being transported by a common
carrier. No moral damages may be recovered for quasi-delicts not causing physical injuries. Moral damages cannot be
recovered in an action by the client against a lawyer who was negligent in not perfecting the client's appeal from a judgment.

Moderate damages cannot be recovered in case no actual damages, but only nominal damages, were awarded. Corrective
damages cannot be recovered as a matter of right. They can be recovered, in the discretion of the court, if the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. The assessment of nominal damages is left to the
discretion of the court, according to the circumstances of the case. They are not intended for indemnification of loss suffered
but for the vindication or recognition of a right violated or invaded.

THE INSULAR LIFE ASSURANCE COMPANY, LTD. VS. COURT OF APPEALS

FACTS

Sun Brothers & Company filed a petition for declaratory relief with the RTC seeking judicial interpretation of the “option to
renew” clause under a Contract of Lease. Under the contract, Sun Brothers leased for a period of five years a parcel of land
and the building constructed thereon. The contract stipulated that the lease was renewable at the option of the tenant, Sun
Brothers, for an additional five years, provided the exercise of the option to renew the lease shall be made by the tenant in
writing to The Insular Life Assurance Company, Ltd. at least ninety days before the expiration of the period. The contract
further provided for monthly rental of P50,000.00 for the first year and an increase of 10% per annum for the succeeding
years, exclusive of real estate taxes and insurance premiums which are for the account of Sun Brothers.

The RTC rendered its decision against Insular, declaring that the contract of lease be renewed for another 5 years; declaring
that the monthly rental on the leased premises be P100,000.00 exclusive of real estate taxes and insurance premiums, less
any amounts that petitioner may have paid respondent in the meantime; ordering Insular to pay herein petitioner the amount
of P20,000.00 as attorney’s fees; and to pay the cost.

ISSUE

Is the petitioner is entitled to an award of moral and exemplary damages and attorney’s fees?

HELD
The Insular’s prayer that moral damages not less than P5 Million be awarded because its name and reputation has been
defamed by Sun Brothers, is not tenable. The rule is that moral damages cannot be granted in favor of a corporation. Being
an artificial person and having existence only in legal contemplation, a corporation has no feelings, no emotions, no senses;
it cannot, therefore, experience physical suffering, mental anguish, fright, serious anxiety, wounded feelings or moral shock
or social humiliation, which can be suffered only by one having a nervous system.

As to Insular’s plea for exemplary damages, the Court finds the same meritorious. In contracts and quasi-contracts, the court
may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
Sun Brothers was in evident bad faith and wantonly and oppressively insisted that it had a unilateral right to renew to lease
thereby resulting in an impasse between the parties and which Sun Brothers took advantage of and used as a basis for
instituting the proceedings for declaratory relief, although its prior actions when the original contract of lease was executed,
spanning more than three decades, indicated that it was well-aware of the contractual stipulation that after a twenty-year
period of lease, the right to renew the lease was subject to such terms and conditions that the parties may mutually agree
upon at the time, as expressly provided for in the original contract of lease.

Under Article 2208 of the Civil Code, attorney’s fees may be awarded not only when exemplary damages is awarded but also
when a party is compelled to litigate or to incur expenses to protect its interest by reason of an unjustified act of the other
party.60 In the present case, Insular was constrained to engage the services of counsel and to incur expenses of litigation in
order to protect its interest to the subject property against Sun Brothers’ utterly unfounded insistence on an alleged unilateral
right to renew the lease. The award of P250,000.00 is reasonable in view of the time it has taken this case to be resolved.

SILVA VS PERALTA

Esther, in good faith, regarded herself as Saturnino Silva’s lawful wife, and that the man himself led her into this belief prior
to his leaving. Unknown to Esther, Elenita Ledesma Silva married Saturnino in the United States. Esther was not made
aware of it.

The trial court found that there is no sufficient ground to impose upon Esther any liability for damages or to destroy her
original good faith, there being no proof that the existence of a valid marriage between Saturnino and Elenita was
adequately driven home to Esther before a case was instituted. That the two appellants Silva were living together as
husband and wife was certainly not sufficient proof, considering Saturnino Silva’s past history and conduct.

The silvas prayed for the prohibition upon Esther Peralta from representing herself, directly or indirectly, as the wife of
Saturnino Silva should result in an award of moral damages in favor of appellant Elenita Ledesma, whose exclusive right to
the appellation is recognized by the decision.

The trial court ruled against the Silvas in favor of Esther Peralta

ISSUE

Is the court correct in imposing the Silvas to pay damages to Esther, considering the fact that they are legally married?

HELD
YES. The fact that appellee was banned from representing herself as Mrs. “S.S.”, does not authorize, the award of moral
damages in favor of the man’s lawful wife, there having been no further finding that the assumption of the disputed status
by appellee was made in bad faith or through culpable negligence.

CAEDO VS YU KHE TAI

FACTS

Marcial Ceado to the airport, where his son Ephraim was scheduled to take a plane for Mindoro. With them in the car
were Mrs. Caedo and three daughters. Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his driver
Rafael Bernardo at the wheel. The two cars were traveling at fairly moderate speeds. Their headlights were mutually
noticeable from a distance. Ahead of the Cadillac, going in the same direction, was a carretela owned by a certain Pedro
Bautista. The carretela was towing another horse by means of a short rope held at the other end by Pedro's son, Julian
Bautista.

The Mercury was coming from the opposite direction. Bernardo, instead of slowing down or stopping altogether behind
the carretela until that lane was clear, veered to the left in order to pass. As he did so the curved end of his ear's right rear
bumper caught the forward rim of the rig's left wheel, wrenching it off and carrying it along as the car skidded obliquely to
the other lane, where it collided with the oncoming vehicle.

The trial court found Rafael Bernardo negligent and held his employer, Yu Khe Tai, solidarily liable with him.

ISSUE

Is Yu Khe Tai solidarily liable with Rafael Bernardo?

HELD

NO, Yu Khe Tai is not solidarily liable.

The test of imputed negligence under Article 2184 of the Civil Code is, to a great degree, necessarily subjective. Car
owners are not held to a uniform and inflexible standard of diligence as are professional drivers. In many cases they refrain
from driving their own cars and instead hire other persons to drive for them precisely because they are not trained or
endowed with sufficient discernment to know the rules of traffic or to appreciate the relative dangers posed by the different
situations that are continually encountered on the road. What would be a negligent omission under the aforesaid Article on
the part of a car owner who is in the prime of age and knows how to handle a motor vehicle is not necessarily so on the part,
say, of an old and infirm person who is not similarly equipped.

The law does not require that a person must possess a certain measure of skill or proficiency either in the mechanics
of driving or in the observance of traffic rules before he may own a motor vehicle. The test of his negligence, within the
meaning of Article 2184, is his omission to do that which the evidence of his own senses tells him he should do in order to
avoid the accident. And as far as perception is concerned, absent a minimum level imposed by law, a maneuver that appears
to be f raught with danger to one passenger may appear to be entirely safe and commonplace to another. Were the law to
require a uniform standard of perceptiveness, employment of professional drivers by car owners who, by their very
inadequacies, have real need of drivers' services, would be effectively proscribed.

CITY OF MANILA VS. TEOTICO

FACTS

Genaro N. Teotico was within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting
for about five minutes, he managed to hail jeepney that came along to a stop. As he stepped down from the curb to board
the jeepney, and took a few steps, he fell inside an uncovered and unlighted catchbasin or manhole. Due to the fall, his head
hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid.

Teotico filed with the Court a complaint for damages. The City of Manila quoted, "The city shall not be liable or held for
damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer,
to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board,
or other officers while enf orcing or attempting to enforce said provisions."

ISSUE

Is the City of Manila correct?

HELD

No.
 Section 4 of Republic Act 409 refers to liability arising from negligence, in general, regardless of the object thereof,
whereas Article 2189 of the Civil Code governs liability due to "defective streets," in particular. Under Article 2189 of the Civil
Code, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the
province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or
municipality has either "control or supervision" o ver said street or road.

Where a person "fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue," which street is
under the control or supervision of the City of Manila, the latter is liable for damages for the injuries suffered by the former.
The liability of the City of Manila in the case at bar is governed by Article 2189 of the Civil Code which provides that:
"Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason
of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or
supervision."

GUILATCO VS. CITY OF DAGUPAN

FACTS

While FLORENTINA A. GUILATCO was about to board a motorized tricycle at a sidewalk located at Perez Blvd. (a National
Road, under the control and supervision of the City of Dagupan) accidentally fell into a manhole located on said sidewalk,
thereby causing her right leg to be fractured. As a result thereof, she had to be hospitalized, operated on, confined.

ISSUE

Is the City of Dagupan liable for damages?

HELD

YES. The liability of public corporations for damages arising from injuries suffered by pedestrians from the defective
condition of roads is expressed in the Civil Code. It is not even necessary for the defective road or street to belong to the
province, city, or municipality for liability to attach. The article only requires that either control or supervision is exercised
over the defective road or street.
 In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the
City Engineer. The same charter of Dagupan also provides that the laying out, construction and improvement of streets,
avenues and alleys and sidewalks, and regulation of the use thereof, may be legislated by the Municipal Board. Thus the
charter clearly indicates that the city indeed has supervision and control over the sidewalk where the open drainage hole is
located.

TORTS AND DAMAGES

CASE DIGESTS
Digested By:

Donali Gem M. Pableo