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A N N O T A T I O N
FLEABITE: DAMAGES AWARDS IN PHILIPPINE JURISDICTION
By
ROGELIO E. SUBONG*
_____________________________
I. Introduction, p. 552
II. Damages Defined, p. 554
1) In Philippine Jurisdiction, p. 554
2) In American Jurisdiction, p. 555
III. Distinction Among Damages, Damage & Injury, p. 556
IV. Damages in Philippine Law, p. 557
V. Kinds of Damages and their definitions, p. 558
1) Actual or Compensatory, p. 558
2) Moral, p. 559
3) Nominal, p. 559
4) Temperate and Moderate, p. 559
5) Liquidated, p. 560
6) Exemplary or corrective, p. 561
VI. Rationale of Damages, p. 562
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VII. Some Pertinent Cases Showing Amounts of Damages Awarded by the
Courts, p. 563
VIII. The Long and Hard Road to Decent Damages Awards, p. 572
IX. Significance of Negros Navigation Co., Inc. vs. Court of Appeals, et al., p. 574
X. Conclusion, p. 575
______________________________
I. Introduction
Stupidity pays in American courts!!! An elderly woman bought coffee from a
McDonald drive-through in New Mexico, USA. She placed the cup of hot coffeebetween her knees and
_______________
* A.B 62 (UP) & LL.B 66 (UP).
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tried to pull the lid off. The coffee spilled onto her lap and scalded her buttocks,
thighs and labia. She sued McDonalds for gross negligence for selling this hot
unreasonably dangerous coffee. Did the court throw out her case? Think again.
Inspite of the warning on the coffee cup (Caution: Contents Hot!), the jury
rewarded her with that incredible amount of $2.9 million in damages! (Are Lawyers
Burning America?, Newsweek, March 15, 1995, pp. 22-25). The case was settled foran undisclosed amount but still hefty enough to encourage her to buy another cup
of scalding hot coffee from another McDonald chain, and balance the same on top
of her head while drivingfor another rip off. A tenant in Montana, U.S.A., sued the
apartment owner for damages because she slipped over pebbles on the sidewalk of
her rented unit. The lower court granted the motion for summary judgment of the
landlord. But the Montana Supreme Court reversed the ruling and remanded the
case for trial as it held that this failure to maintain the sidewalk was negligence per
se (Tripped Up, ABA Journal, December, 1996, pp. 38-39). And an ex-smoker sued
a cigarette company before a Florida court for damages for allegedly smoke-related
illness. He knew the risk in smoking and received daily warnings labeled on every
pack he buys. Did the court throw out his complaint? In fact he was awarded
$750,000.00 for deliberately causing his own illness (Litigants Talk Tobacco, ABA
Journal, June 1997, pp. 20-21).
What do the plaintiffs in American courts have in common? All three indubitably
possess a luminous traitunmitigated stupidity! But, all these morons may be
laughing all the way to the bank.
In American jurisdiction, awards of damages, especially punitive damages have
been sometimes astronomical. The heirs of airplane crash victims are guaranteed at
least P75,000 for the death of each passenger under an international treaty and a
Federal Act. But the Americans are not happy about this amount and they wanted
more. A couple sued before the US District Court in Charleston, South Carolina, a car
manufacturer for damages for the death of their
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SUPREME COURT REPORTS ANNOTATED
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son (Sergio Jimenez III) after being thrown out of a station wagon due to an
allegedly defective latch in the door. The award? A whopping $ 262.5 million in
damages ($12.5 million in compensatory damages and $250 million dollars in
punitive damages)! This is only for the death of one person (a child whose life
expectancy and expected earnings is not yet clearly defined) and perhaps, there
was even contributory negligence on the part of the couple who must have left the
child unattended while inside the vehicle (ABA Journal, December, 1997, p. 16).
Residents of a mostly black neighborhood of New Orleans, Louisiana, who suffered
mostly minor ailments after a railroad chemical fire (no death occurred) were
awarded an eye-popping judgment of $3.4 billion!!! (ABA Journal, November,
1997, p. 38).
These awards present a sharp and pathetic contrast to awards decreed by our
courts for multiple deaths arising from tortious acts and breach of contract of
carriage. The case of Negros Navigation Co., Inc. vs. Court of Appeals, Ramon
Miranda, Sps. Ricardo & Virginia Miranda, G.R. No. 110398, promulgated on
November 7, 1997, highlights the hard and long climb for commensurate damages
in our courts. Before we discuss and analyze the significance of this case, let us first
bring out some pertinent matters in Philippine and American jurisdictions on the
concept of damages.
II. Damages Defined
1) In Philippine jurisdiction
a) From a legal authority
Professor Melquiades J. Gamboa, in his classic work, An Introduction to Philippine
Law, 2nd Ed., p. 362, defined Damages as the indemnity which a person can
recover as compensation for an injury sustained, either in his person, property, or
rights. Under the Civil Law damnum or dao is the detriment, harm, or loss to
person or property which is occasioned by the fault of another (Escriche, Diccionario
de Legislacion y Jurisprudencia, II, p. 579).
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Damages is the recompense or compensation awarded for the loss or damage
suffered; otherwise expressed, it is the pecuniary value of the consequences which
the law imposes for the breach of duty or violation of some right. (Carmelo V.
Sison, Handbook on the Philippine Law on Damages, 1993 ed., p. 1).
b) From decisions of the Supreme Court and Court of Appeals
In legal contemplation, the term damages is the sum of money which the law
awards or imposes as pecuniary compensation, recompense, or satisfaction for an
injury done or wrong sustained as a consequence either of a breach of a contractual
obligation or a tortuous act.Abbas vs. McPherson, 40 O.G. 2122
The generic term damages includes all kinds of damages contemplated in the
Civil Code. Hence, in asking for any kind of damages, a party places himself at the
disposal of the court which, under the law, is given the discretion to assess moral,
nominal, temperate, liquidated or exemplary damages, without proof of pecuniaryloss.Fuentes v. Carmel Corporation, 75 O.G. 1909.
The above definitions of the courts were reproduced from Justice Moreno, Philippine
Law Dictionary, Second Edition, p. 159.
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2) In American jurisdiction
American Jurisprudence defines damages as the sum of money which the law
awards or imposes as pecuniary compensation, recompense, or satisfaction for an
injury done or a wrong sustained as a consequence either of a breach of a
contractual obligation or a tortious act. Expressed in other terms, damages are the
pecuniary consequences which the law imposes for the breach of some duty or the
violation of some right (22 Am Jur 2d 13).
Damages is the word which expresses in dollars and cents the injury sustained
by a plaintiff and includes both the original debt or damage and whatever interest
ought to be
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added to make a just verdict. Fidelity & C. Co. v. Huse & Carleton, 272 Mass 448,
172 NE 590, 72 ALR 1143 (Ibid.). Blacks Law Dictionary defines Damages as a
pecuniary compensation or indemnification, which may be recovered in the courts
by any person who has suffered loss, detriment, or injury, whether to his person,
property or rights, through the unlawful act or omission or negligence of another. A
sum of money awarded to a person injured by the tort of another. Restatement,
Second, Torts, S 12A (Abridged Fifth Edition, p. 204).
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This is the same definition given in Ballentines Law Dictionary citing Aetna Casualty
& Surety Co. vs. Hanna (CA 5 Fla) 224 F2d 499, 53 ALR 2d 1125 (Third Edition, p.
303).
Oxford Reference: A Concise Dictionary of Law defines Damages as a sum of
money awarded by a court as compensation for a tort or a breach of contract.
Damages are awarded as a lump sum. The general principle is that the plaintiff is
entitled to full compensation (restitutio in integrum) for his losses (Second Edition,
p. 113).
III. Distinction Among Damages, Damage and Injury
The terms Damages, Damage and Injury are sometimes used interchangeably, but
each has a distinct technical legal meaning. Damages, as set forth above, pertainsto the monetary payment or the scale or measure of recovery for a person who
suffered loss or injury due to breach of contract or tortious act of another. While
damage, pertains to the resultant loss, hurt or harm upon such person; and finally,
injury pertains to the invasion or violation of legal right or breach of duty or the
legal wrong to be redressed.
Hence, by way of example, let us take the case of a passenger of a common carrier
who dies or loses a leg in a vehicular accident. Damages refers to the amount of
money he may recover for the loss of his leg or which his heirs may recover in caseof his death; damage refers to the fact of his loss of his
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leg or his death which resulted from the accident; and injury refers to the wrongful
loss of his leg or his wrongful death.
IV. Damages in Philippine Law
The modern concept and principles of damages in our jurisdiction have been mostly
adopted from American laws and jurisprudence. Our Civil Law system did not get
much from the Spanish legal system in the area of damages. This is evident from
the old Civil Code which is also known as the Civil Code of Spain in 1889. For half a
century this Code was the source of our Civil Law or that body of legal provisions
that governs the relationship of the members of the national community with each
other. Under the old code, there were only general principles on damages not as
clearly defined as in American jurisprudence. Provisions on Damages therein mainly
pertain to compensatory damages and damages pursuant to a penal clause in a
contract. The old code did not expressly recognize the concept of moral damages
although it has been awarded by the High Court in some cases. What is noteworthy
is that the provision that absolves an obligor for damages due to fortuitous event
had been reproduced from the old code (Art. 1107a) to the new Code in an
amended and rephrased form as Art. 2201. This provision has spawned a wealth of
jurisprudence on breach of contract and culpa aquilana or tortious cases.
The Code Commission specifically created by law to revise and update the old Civil
Code of Spain of 1899 explained the inclusion of more comprehensive provisions on
damages in the new code:
The subject of Damages is introduced in the Project. The present Code has but
few general principles on the measure of damage. Moreover, practically the only
damages in the present code are compensatory ones and those agreed upon in a
penal clause. Moral damages are not expressly recognized as in the present Civil
Code, although in one instanceinjury to reputationsuch damages have been
allowed by the Supreme Court of Spain and some Spanish jurists believed that
moral damages are allowable. The Supreme Court of the Philippines has awarded
moral damages in a few cases.
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The measure of damages is of far-reaching importance in every legal system. Upon
it depends the just compensation for every wrong or breach of contract.
The Commission has, therefore deemed it advisable to include in the project a Title
on Damages which embodies some principles of American law on the subject. The
American courts have developed abundant rules and principles upon the
adjudication of damages (Report of the Code Commission reproduced from
Carmelo V. Sison, Handbook on Philippine Law on Damages, 1993 ed., p. 1).
V. Kinds of Damages and Their Definitions
Thus under the new Civil Code, a body of provisions ondamages as culled from
American jurisprudence was specifically provided. Under the new Civil Code, the
provisions ondamages are set forth in Title XVIIIDamages, Chapter 1,Articles 2195to 2235. In these articles particularly Art. 2197,there are six (6) forms of damages
as specified in the law,namely:
1) Actual or compensatory;
2) Moral;
3) Nominal;
4) Temperate or moderate;
5) Liquidated; or
6) Exemplary or corrective.
As to their specific definitions
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1) Actual or compensatory
This is not directly defined by the pertinent provision of the new Civil Code.
Art. 2199. Except as provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has duly
proved, such compensation is referred to as actual or compensatory damages.
From the above, actual or compensatory damages are such pecuniary loss suffered
by a person and duly proved by him.
The Supreme Court has defined actual and compensatory damages as those
recoverable because of pecuniary lossin
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business, trade, property, profession, job, or occupation, and the same must be
proved (Perfecto vs. Gonzales, 128 SCRA 635 (1984); Rubio vs. CA, 141 SCRA 488
(1986).
2) Moral
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Under the new Civil Code, the term moral damages is defined by way of
enumerating the things included in this term:
Art. 2217. Moral Damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury, though capable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendants
wrongful act or omission.
Art. 2218. In the adjudication of moral damages, the sentimental value of property,
real or personal, may be considered.
From the above provisions, we can infer that moral damages are monetary
compensation although not capable of pecuniary computation for defendants
wrongful act or omission resulting to physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury.
3) Nominal
The term nominal damages is not also directly defined in the new Civil Code.However, the pertinent codal provision provides the basic idea of this form of
damages:
Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him.
In American jurisdiction, nominal damages are either those damages recoverable
where a legal right is to be vindicated against an invasion that has produced no
actual present loss of any kind or from the nature of the case, some compensable
injury has been shown but the amount of that injury has not been proved (22 Am
Jur 2d 20).
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4) Temperate or moderate
Also the term temperate or moderate damages has not been categorically defined
under the new Civil Code, but it suggests its nature and provides condition when it
may be recovered.
Art. 2224. Temperate or moderate damages which are more than nominal, but less
than compensatory damages, may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the
case, be proved with certainty.
Art. 2225. Temperate damages must be reasonable under the circumstances.
Temperate or moderate damages are between nominal and compensatory. This is
when the court finds that there was monetary loss suffered but the amount cannot
be exactly quantified owing to the nature of the case. The definition of this term in
American Jurisprudence is about similar to what we have in the new Civil Code for
we borrowed this concept from the Americans. Temperate damages are thoseallowed in certain classes, without proof of actual or special damage, where the
wrong done must in fact have caused actual damage to the plaintiff though from the
nature of the case, he cannot furnish independent, distinct proof thereof. Temperate
damages are more than nominal damages, and, rather, are such as would be a
reasonable compensation for the injury sustained. The amount thus allowed is to be
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fixed by the jury, but the court in its instructions should give the jury some data
from which to determine what would be temperate damages (22 Am Jur 2d 33).
This species of damages is difficult to fix precise monetary equivalent and it
includes loss of goodwill, commercial credit or expected customers/clients for a
particular enterprise.
5) Liquidated
As to liquidated damages, the new Civil Code has defined the term:
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Art. 2226. Liquidated damages are those agreed upon by the parties to a contract,
to be paid in case of breach thereof.
The concept of liquidated damages is clear here. It is simply the amount a
contracting party categorically bound himself to pay upon breaching a writtenagreement or contract. Liquidated damages means a sum stipulated and agreed
upon by the parties at the time of entering into a contract, as being payable as
compensation for injuries in the event of a breach (22 Am Jur 2d 297).
6) Exemplary or corrective
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The term exemplary or corrective damages under the new Civil Code is not directly
defined but its nature is also suggested.
Art. 2229. Exemplary or corrective damages are imposed by way of example or
correction for the public good in addition to the moral, temperate, liquidated or
compensatory damages.
From the above the following definition may be elicited: Exemplary or corrective
damages are another species of monetary compensation in favor of a person, as
additional award, who has been adjudged to be entitled to moral, temperate,
liquidated or compensatory damages. In American jurisdiction, exemplary or
corrective damages are called punitive damagesa form of money judgment which
is most feared by defendants in suits for damages in American courts. The reason is
that while other damages may only be limited by the evidence presented, the jury
can award billions of dollars in punitive damages, as it may fancy.
Exemplary, or punitive, damages are generally defined or described as damages
which are given as an enhancement of compensatory damages because of the
wanton, reckless, malicious, or oppressive character of the acts complained of. Such
damages go beyond the compensatory damages suffered in the case; they are
allowed as a punishment of the defendant and as a deterrent to others (22 Am Jur
2d 322).
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VI. Rationale of Damages
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Damages have been devised in the law to fulfill one of its basic goalsto effect a
form of justice to those who have been civilly and criminally wronged. In criminal
law, justice is usually in the form of death or imprisonment of the accused, fine or
damages, or prevention from occupying certain positions (e.g., disqualification fromassuming a public office) or forfeiture of certain benefits. Aside from these
sanctions, there may be also monetary judgments in the form of fines and damages.
In Civil Law, justice may be in the form of judgments granting mandatory or
prohibitory reliefs to the plaintiffs. Then in addition thereto, there may be monetary
awards for amounts due to a collecting party or damages for certain breach of
contract or tortious act.
Damages aim to pecuniarily compensate a person for the wrong done to him to
enable him to pick up the pieces so to speak and as a balm to a wounded feeling.All these six (6) forms of damages have a common denominatorpecuniary
exaction which is expressed in pesos and centavos when awarded by the courts.
The concept of Damages rests upon the need to pay monetary compensation to the
aggrieved party based upon the principle of practicality and acceptance of the
unthinkable and the unchangeable (death or destruction) and the need for the
claimants to move on and go on with their lives after the wrong upon his person or
property or wrong (death) upon his relative. In other words, there is the
unarticulated assumption that a wrong has been done and nothing more can be
done also to resurrect the dead, fully restore the injured limbs or repair or return to
original state a damaged property. Hence, the next best thing is to award
monetarily the wronged party or his heirs for what happened to him or to his
property either as compensation or as punishment to send a strong signal to those
who might commit a similar violation in the future.
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is only justified when there is proof of bad faith on the part of the carrier (Art. 2220).This decision did not exactly follow the concepts of moral and exemplary damages.
b) Alcantara vs. Surro and Meralco, 93 Phil. 472 (1953)
Another case involving breach of contract of carriage was Alcantara vs. Surro &
Meralco, 93 Phil. 471 (1953). Sometime in November, 1945, during the early
months of the Liberation, a bus of Meralco, which was then engaged in public utility,
hit another vehicle also owned by it. The collision pinned to death a passenger. The
minor children of the decedent sued for damages and were awarded the following:
P18,000 expected salary for 4 years (1946 to 1949); P5,000 moral and patrimonial
damages for physical and moral sufferings of his family and P2,155 as pecuniary
expenses. Both parties appealed mainly questioning the award of damages. Held:
Decision affirmed. The High Court held that there was no fixed basis for determining
indemnity for the heirs of a deceased person. Much is left to the discretion of the
court considering the moral and material damages involved. The lower court
considered the following factors: 1) tender ages of the plaintiffs at the time of the
death of their father; 2) age and life expectancy of deceased; 3) health of deceased
at time of death; 4) earning capacity of deceased; 5) actual pecuniary damages; 6)pain and suffering of deceased and plaintiffs; 7) pecuniary situation of the party
liable.
The High Court sustained the award of P18,000 representing the expected salary of
decedent for 4 years had he lived. It cited Com. Act No. 284 setting a ceiling of
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P2,000 for civil liability for death of a person but it pointed out that this amount has
been increased to P6,000 since Liberation in criminal cases as a matter of right and
without necessity of proof. While the lower court noted that under the American
Experience Table of Mortality, the deceased had a life expectancy of 28.90 years (he
died at 39 years old), it did not adopt this basis but fixed the award on the expected
income for 4 years.
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c) Manila Steamship Co., Inc. vs. Insa Abdulhaman, et al., 100 Phil. 33 (1956)
Manila Steamship Co., Inc. vs. Insa Abdulhaman, et al., 100 Phil. 33 (1956) involved
the collision of 2 small motor vessels off the cost San Ramon Beach, Zamboanga
City in 1948. Nine (9) passengers of the smaller vessel, a motor launch died after
the latter capsized. A suit was filed against the 2 owners of the vessels by the heirs.
The lower court found both vessels at fault and rendered judgment against the
owners solidarity. On appeal the Court of Appeals affirmed the finding of joint
liability of the 2 vessel owners but exempted the owner of the motor launch since
this vessel sank and was a total loss. For the death of the 9 passengers the Court of
Appeals affirmed the lower court award of P20,784.00 plus one-half of the cost.
Held: The award of damages was affirmed, but both defendants were declaredsolidarily liable inspite of the sinking of the other vessel because liability extends
beyond the value of the vessel if the owner thereof was at fault for the accident.
d) Villa Rey Transit, Inc. vs. Court of Appeals, 32 SCRA 511 (1970)
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Then in 1970, the High Court came out with a landmark ruling on the computation
of monetary payment for wrongful deaths in Villa Rey Transit, Inc. vs. Court of
Appeals, 32 SCRA 511 (1970). This became a leading guide for the courts in
determining damages for heirs based upon the life expectancy of the deceased.Sometime in March 1970, a young man boarded a bus of a transport company
bound for Manila from Lingayen, Pangasinan. When this bus reached a bridge in
Minalin, Pampanga, it suddenly bumped an animal-driven cart carrying bamboo
poles one of which pierced the bus windshield and hitting a passenger in the head
causing his death. The sisters of the deceased who was 30 years old and single at
the time of death, sued for a total of P63,750.00 in damages for this wrongful death
caused by breach of contract of carriage. The lower court granted the entire claim
which
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decision was sustained by the Court of Appeals. The bus company appealed the
amounts of damages awarded.
Held: Decision affirmed. The High Court held that in determining the amount ofdamages, two (2) factors should be considered: a) life expectancy of the deceased;
and b) fixed loss of beneficiaries. As to life expectancy, the High Court adopted the
formula of the trial court and followed by the Court of Appeals as derived from
American Expectancy Table of Mortality or the actuarial of Combined Experience
Table of Mortality: The formula is as follows: 2/3 x [80 average life span of a person
barring disease, etc., minus 30age of deceased]. In this case, 2/3 x 50 equals
33.33 yearsthe life expectancy of the deceased. And as to the fixed loss of the
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beneficiaries, the High Court ruled that this pertained to net earnings of the
deceased (gross minus necessary expenses) through the years of life expectancy,
plus certain items set forth in the decision. It rejected the ruling in Alcantara vs.
Surro, supra, wherein damages were computed on a fixed four (4)-year basis.
e) Davila vs. PAL, 49 SCRA 497 (1973)
As in other cases decided thereafter, the Supreme Court applied the Villa Rey
computation in Davila vs. PAL, 49 SCRA 497 (1973). In 1960, a young lawyer took a
Phil. Airlines plane from Iloilo City bound for Manila. The plane crashed at Mt. Baco,
a mountain in Mindoro Island killing the victims or a total of 32 persons including
crew. In a suit filed by Davilas parents, the trial court awarded damages for which
both parties appealed.
Held: Decision affirmed with modification as to awards. The High Court found the
airline company at fault as the plane was 32 miles off-course when tragedy struck. It
modified the award by applying the American Expectancy Table of Mortality or the
Actuarial American Expectancy Table of Mortality with adjustment owing to the
health of the deceased. The computed life expectancy of the deceased of about 25
years was multiplied with his net yearly income. Thus the High Court awarded the
following: P195,000 for expected earnings for 25 years, actual losses from the
crash; and
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P10,000 for moral damages; and P10,000 for attorneys fees. P10,000 for exemplary
damages previously awarded was eliminated as there was no wanton, fraudulent,
reckless, oppressive or malevolent actuation on the part of the airline.
f) BLTBCO, et al., vs. CA, et al., 64 SCRA 427 (1975)
However, in BLTBCO, et al. vs. CA, et al., 64 SCRA 427 (1975) the Villa Rey formula
was not applied in computing the benefits for the heirs of a victim of an accident.
Sometime in February, 1963, a passenger bus overtook a vehicle along the South
Superhighway resulting in a head-on collision with an oncoming vehicle. The heirs of
the deceased and a survivor sued for and were awarded damages by the trial court
for this accident. This decision was appealed by the bus company, particularly the
reasonableness of the awards.
Held: Decision affirmed. The award of P4,988.84 for hospitalization, P8,000 for loss
of earnings of the daughter who died (the Villa Rey formula was not applied),
doctors fees of P3,000, reduction of earnings of P3,000; moral damages of P4,000
and attorneys fee of P1,000 were either found reasonable or moderate.
g) Del Castillo vs. Jaymalin, 112 SCRA 637 (1982)
In Del Castillo vs. Jaymalin, 112 SCRA 637 (1982) the High Court increased the
payment for wrongful death pursuant to law but saw no reason to uphold the award
for expected loss of earnings. A father sued a bus company operating in the Bicol
Region for the death of his son, a deaf mute who fell because he was not assisted
while alighting from a bus of latter. A few days thereafter, he died in June, 1960. The
suit for damages dragged for years after the lower court awarded P6,000 for
damages for the death of the son, P35,000 for lost of earning capacity and P5,000
attorneys fees.
Held: Decision affirmed. The case had actually pended for 22 years. The High Court
increased the death payment from P6,000 to P12,000 in line with the prevailing rate
at the time, and attorneys fees of P2,000. The award for loss of earning capacity
was eliminated for lack of proof.
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568
568
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g) Sweet Lines, Inc. vs. Court of Appeals, et al., 121 SCRA 769 (1983)
Sweet Lines, Inc. vs. Court of Appeals, et al., 121 SCRA 769 (1983) showed how our
courts are somewhat sparing in awarding damages in other forms of breach of
contract of carriage which do not result in death or physical injuries to passengers.
A vessel named M/V Sweet Grace was advertised as bound for Catbalogan, Western
Samar in July 1972. Passengers bound for Catbalogan boarded it. Its departure was
delayed due to engine trouble and when it finally left it decided to skip Catbaloganand proceeded directly to Tacloban City so that it can return to Manila on schedule.
Thus, passengers bound for Catbalogan had no recourse but to alight at Tacloban
City and get a ferry for Catbalogan. Four of the Catbalogan-bound passengers sued
for damages which action was sustained by the trial court and affirmed by the Court
of Appeals. Breach of contract was found and the following awards were decreed by
the courts: P75,000 moral damages for the 4 plaintiffs, P30,000 exemplary damages
and P5,000 attorneys fees. The shipping company appealed.
Held: Decision affirmed with modification. The finding of bad faith was upheld bythe High Court. It cited Art. 614 of the Code of Commerce as to the liability of a
captain who fails to fulfill his undertaking and Art. 2220 of the Civil Code awarding
moral damages in case of bad faith in a breach of contract of carriage. However, it
modified the decision by reducing the award of moral damages to only P3,000 for
each of the four (4) plaintiffs. The award of exemplary damages was eliminated
because it cannot be recovered as a matter of right; the Court decides whether or
not they should be adjudicated.
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h) Dee Hua Long Electrical Equipment Corp. vs. Reyes, 145 SCRA 713 (1986)
The case of Dee Hua Long Electrical Equipment Corp. vs. Reyes, 145 SCRA 713(1986) does not involve breach of contract of carriage but fraudulent sale of
defective products. In American courts, this will bring in a hefty amount of punitive
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damages. An electronic repair shop owner sued for damages an electronic partssupplier for parts sold to the former. Plaintiffs received complaints for inadequate
repairs of TV and stereo sets which they traced to defective capacitors bought from
defendant. Defendant defaulted after the filing of the complaint. The lower court
awarded the following: P50,000 actual damages; P50,000 as moral damages;
P50,000 as exemplary damages; and P10,000 as attorneys fees. After several
attempts of defendant to reinstate its standing in court failed, it appealed to the
High Court.
Held: Order of default affirmed by the Supreme Court. However, the High Courteliminated all damages and merely granted P5,000 by way of nominal damages.
It explained that actual damages cannot be awarded because no proof of actual loss
except the mere sworn declarations of private respondents about the allegedly
defective or low quality capacitors. It must be struck for want of adequate
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foundation. Actual or compensatory damages cannot be presumed, but must be
proved. As to moral damages, to be justified, the claimant must satisfactory prove
the existence of the factual basis of the damages. Then too, exemplary damages
cannot be recovered since plaintiff is not entitled to moral or compensatory
damages, and again because the petitioner is not shown to have acted in wanton,
fraudulent, reckless or oppressive manner. And finally, attorneys fee was notawarded because there was no proof of refusal in gross and evident bad faith to
satisfy the claim of plaintiff.
i) De Lima vs. Laguna Tayabas Bus Co., 160 SCRA 70 (1988)
De Lima vs. Laguna Tayabas Bus Co., 160 SCRA 70 (1988) showed how for 30 years
the wheels of justice grinned ever so slow. Since the case was overtaken by events,
the High Court made liberal adjustments on the award of damages in keeping with
the latest level of awards for damages. A vehicular accident involved a passenger
bus and a delivery truck of a soft drinks company sometime in June, 1958. This
resulted in death of a passenger and serious physical injuries to 2 others.
570
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The relative of the deceased and the 2 injured passengers brought separate civil
actions for damages which were jointly heard and decided.
The trial court awarded damages which when appealed to the Court of Appeals the
latter fixed the civil indemnity for the death of the passenger to only P3,000. The
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defendant appealed. The heir of the deceased passenger asked for the increase of
the P3,000 to P12,000.
Held: Although the heir of the deceased did not appeal from the lower court the
award on the amount of moral damages, the High Court still increased the amount
not only to the P12,000 asked for but to the prevailing rate under existing
jurisprudence to P30,000 as the case had pending in court for about 30 years from
the date of the accident in 1958. It declared:
x x x this Court is inclined to adopt a liberal stance in this case as We have done in
previous decision where we have held that litigations should as much as possible be
decided on their merits and not on technicality.
x x x x civil indemnity for the death of Petra de la Cruz was properly awarded by
virtue of Art. 1764 in relation to Art. 2206 of the Civil Code of the Philippines which
allows a minimum indemnity of P3,000.00 for the death of a passenger caused by
the breach of contract by a common carrier. In accordance with prevailing
jurisprudence the indemnity of P3,000 should be increased to P30,000.00 and not
P12,000.00 as prayed for by petitioner.
j) Kapalaran Bus Line vs. Coronado, et al., 176 SCRA 792 (1989)
In Kapalaran Bus Line vs. Coronado, et al., 176 SCRA 792 (1989) the High Court
imposed not only the usual damages, but also exemplary damages to warn common
carriers to observe utmost diligence in transporting their passengers. Sometime in
August 1982, a passenger bus overtook vehicles in an intersection in Laguna, for
which it hit a jeepney head-on. After trial in a complaint even initiated by this bus
company, trial court found the bus company at fault and directed it to pay
compensatory damages, exemplary damages and
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attorneys fees. The Court of Appeals affirmed the decision but eliminated the
award of exemplary damages and attorneys fees and cost of litigation.
Held: The High Court restored and increased the exemplary damages (from P10,000
to P25,000). It also restored the award of attorneys fees and litigation expenses.
The Court imposed exemplary damages because it found that the driver of the bus
company was grossly and very probably criminally negligent in his reckless
disregard of the rights of other vehicles and their passengers and of pedestrians as
well. It thus concluded:
x x x The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) and the destruction of property (whether freight or not)
on our highways by buses, the very size and power of which seem often to inflame
the minds of drivers. Article 2231 of the Civil Code explicitly authorizes the
imposition of exemplary damages in cases of quasi-delicts if the defendant acted
with gross negligence. Thus, we believe that the award of exemplary damages by
the trial court was quite proper x x x.
k) People vs. Quilaton, 205 SCRA 279 (1992)
People vs. Quilaton, 205 SCRA 279 (1992) does not pertain to breach of contract ofcarriage, nevertheless it demonstrates the more recent adjustments by the High
Court in the computation of damages arising from wrongful deaths. This is a
criminal prosecution of an accused who stabbed to death his officer-in-charge in a
government office. After trial, he was found guilty and was sentenced to years in
prison with monetary damages for the death of the offended party. Accused
appealed.
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Held: Decision affirmed. What is pertinent is the modified award of damages by the
High Court: P50,000 indemnity for death citing prevailing jurisprudence (People vs.
Bartulay, 192 SCRA 621 (1990); P26,445.00 as actual damages/burial expenses was
not altered; P114,000 by way of loss of earnings after deducting approximateearnings during the years deceased was expected to live and earn income (1980
updated Mortality Table after the 1970 table from the Villa Rey case
572
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SUPREME COURT REPORTS ANNOTATED
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due to advances in medicine life expectancy has become longer); P10,000educational assistance to the heirs; and P20,000 as moral damages. These are
actually empty awards since the accused could not pay them. But these are set
forth as moral gesture and as guide for the courts.
l) People vs. Teehankee, Jr., 249 SCRA 54 (1995)
Finally, the High Court came up with damages awards which are somewhat in tune
with the times in People vs. Teehankee, Jr., 249 SCRA 54 (1995). This is not again abreach of contract of carriage case, but the fairly large amount of damages decreed
by the trial court and upheld by the High Court is worth mentioning. This was a
sensational case that hug the headlines in the early 1990s when the son and
namesake of a former Chief Justice of the Supreme Court shot to death 2 teenagers
and wounded another inside Forbes Park, Makati City, for no apparent reason in the
early morning of July, 1991. The dead were Maureen Hultman, a 17 year old girl and
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a Roland Chapman, a foreigner. The accused was tried for murders and frustrated
murder and found guilty. He was sentenced to 2 Reclusion Perpetua for the 2
murders and prison term for frustrated murder. The lower court awarded
considerable amounts of damages which award was basically upheld by the High
Court: For the death of Roland Chapman, P50,000 as civil indemnity and P1,000,000
for moral damages; for the death of Maureen Hultman, P50,000 as civil indemnityfor her death, P2,350, 461.83 as actual damages, P564,042.57 for loss of earning
capacity of the deceased, P1,000,000 for moral damages, and P2,000,000 for
exemplary damages; For the Frustrated Murder of Jussi Olavi Leino, P30,000 for his
injuries, P118,369.84 for actual damages, P1,000,000 for moral damages and
P2,000,000 for exemplary damages.
VIII. The Long and Hard Road to Decent Damages Awards
It is pathetic that our laws are a little unhurried in giving due recognition to thevalue of human life and limbs as well as human pain and sufferings. Indeed, how
much is the value
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of human life? A legal system that hardly accords appropriate importance to thevalue of human life is misdirected or bereft of noble purpose. After all law pertains
to people and to the protection of human worth and dignity. If law ignores the basic
value of a person it becomes ultimately a sham and a sophisticated pursuit of
emptiness. There is something even lopsided about the emphasis we place upon
safeguards to human rights mainly of the accused in crimes. There are so many of
them which the Constitution sets forth with eloquence and emphatic grace. Many
have asked, how about the rights of the victims? Yes, the rights of the victims of
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crime, breach of contract and tort which are not as well-defined. This lackadaisical
attitude is reflected in the way the courts have placed a value upon human life and
limb.
Let us retrace the long and arduous road to a more decent rate for wrongful death.
Before the war, the courts awarded the measly amount of P1,000 for wrongful
death. Then a ceiling for the value of human life was fixed in a law passed also
before the war, Com. Act No. 284. This law allowed the court to fix civil liability for
the death of a person at a reasonable sum taking into consideration the financial
standing of the person liable and related circumstances but the amount should not
exceed P2,000. Thus courts had followed these guidelines and ceiling until after
Liberation when the new Civil Code came into effect in 1950. The Code increased
somewhat the value of human life in Art. 2206, wherein it provides:
The amount of death caused by a crime or quasi-delict shall be at least Three
Thousand pesos even though there may have been mitigating circumstance.
Then, deaths arising from crime had been increased to P6,000 without necessity of
proof as decided in People vs. Amansec, 80 Phil. 424. (Alcantara vs. Surro &
Meralco, supra) This award of P6,000 for wrongful death was also sustained in M.
Ruiz Highway Transit vs. Court of Appeals, 11 SCRA 98.
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Thereafter, owing to inflation and increase in the standards of living, P6,000 was
doubled to P12,000 in the case of People vs. Pantoja, 25 SCRA 468. Then again this
amount was raised to P30,000 in De Lima vs. Laguna Tayabas Bus Co., supra,
decided in 1988 which should reflect the living standards of the 1980s. And finally,
this amount was increased to P50,000 in People vs. Quilaton, supra and People vs.
Teehankee, supra, cases decided in the 1990s. This award of P50,000 in the form ofcompensatory damages was again upheld in the case under annotation, wherein
heirs of the 3 passengers who died in the sinking of the vessel were awarded a total
of P150,000 or P50,000 for each.
This amount of P50,000 or perhaps more seems never sufficient since we can never
really peg a value to human life.
IX. Significance of Negros Navigation Co., Inc. vs. Court of Appeals, et al.
It would seem that the Negros Navigation Co., Inc. vs. CA, supra is just one of those
uneventful decisions of the High Court. Considering its reliance upon the Mecenas
case in the matter of negligence of the common carrier, the impression is that
nothing new has been added in our jurisprudence by this decision. But then, as
what we learned in law school, very rarely are there two (2) cases that are exactly
on all fours, in a manner of speaking. The Negros Navigation Co., Inc. vs. CA supra,
pertains to one of those suits filed by the heirs of some of the victims of that ill-
fated ship named M/V Don Juan that plied the ManilaBacolod run. After many
years of litigation and appeals, the plaintiffs (Atty. Ramon Mirandawho sued for hiswife and 2 children and his brother-in-law and sisterwho sued for their daughter)
were finally awarded damages for the deaths of their relatives: P23,075 for actual
damages; P109,038.96 as compensatory damages for loss of earning capacity of
wife; P150,000 compensatory damage for wrongful death of the 3 victims;
P300,000, as moral damages; P300,000 as exemplary damages, all in the total
amount of P882,113.96; and P40,000 as attorneys fees. Similar awards were
declared for the other plaintiffs.
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What is noteworthy about the awards is that the High Court sustained moral
damages of P100,000 for each of the victims, compensatory damages of P50,000
for each of the victims, and attorneys fees of P40,000. On the other hand, it
increased exemplary damages to P100,000 for each of the victims. Compared to
what the plaintiffs would be getting for these deaths in American courts, these
amounts as well as previous awards with the exception of the awards in the
Teehankee case, may be considered as measly and fleabite. But this is a marked
improvement from previous years.
There are other significant holdings, but they do not pertain to the field of damages.
There was this holding of the Court about the suggestion from the defense that the
plaintiffs could have concocted the death of their relatives because their bodies
were not found, just to collect damages. It bristled thus: it is improper for petitioner
to even suggest that private respondents relatives did not board the ill-fated vessel
and perish in the accident simply because their bodies were not recovered. Then
there is also this slight deviation from the principle of stare decisis. The common
carrier argued that since the Court of Appeals relied upon the Mecenas case, the
amount awarded in that case of only P43,857.14 for each victim should be followed
in this case. But the High Court was not persuaded. It explained thus:
Here is where the principle of stare decisis does not apply in view of differences in
the personal circumstances of the victims. For that matter, differentiation would be
justified even if private respondents had joined the private respondents in the
Mecenas case. The doctrine of stare decisis works as a bar only against issues
litigated to the court and not passed upon by the court in the previous case, the
decision in the previous case is not stare decisis of the question presently
presented. The decision I the Mecenas case relates to damages for which petitioner
was liable to the claimants in that case.
X. Conclusion
It is hoped that with the Negros Navigation case on deaths from breach of contract
of carriage and the Teehankee case on
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576
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deaths from crime, our courts will reexamine and reassess the value they put upon
human life.
This is not to say that courts can accurately fix the precise amount in pesos and
centavos as price for the life of a human being. There is a sacred assumption that
human life is beyond value. What the law has done is to provide the next best thing
compensation (which is never adequate) for those left behind who are forever
deprived of the moral and physical presence of the deceased, to help him movealong without the latter or as punitive imposition for the public good.
Indeed, it is high time that our courts should be attuned to the present economic
realities. The law to be an effective instrument of justice should be responsive to the
felt necessities of the times, to use the language of Justice Oliver Wendell Holmes,
Jr. Fleabite awards of damages, especially exemplary damages against erring
parties, especially, common carriers and other corporate defendants do not send
the strong signal needed for them to show more concern and respect towards
human lives and limbs. Yes, our courts are light-years behind American courts in thearea of damages awards. Contrast this with a $150 million verdict against Chevrolet
in favor of a certain Alex Hardy and his wife when he was paralyzed after being
thrown out of his Chevrolet Blazer in an accident due also to a defective door latch
(ABA Journal, September, 1996, p. 14). Even a claim which we would probably find
silly is awarded with millions of dollars. A Brooklyn, New York jury awarded the
unbelievable amount of $5.6 million to 3 plaintiffs who sued a computer keyboard
manufacturer (Digital Equipment Corp.) for repetitive stress injuries suffered by
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office workers. It was reported that: The injured women had experienced wrist and
spinal ailments after using the product (ABA Journal, February, 1997, p. 22).
It may be a journey of a thousand miles, but let us begin with the first step.
[Fleabite: Damages Awards in Philippine Jurisdiction, 281 SCRA 552(1997)]