1. MEA Builders, Inc. vs. CA, Metrobank G.R. No.

121484, January 31,2005

MEA entered into a contract with Capital Resources Corp. (CRC), for the construction of housing units for CRC’s
residential subdv in Multinat’l Village, Parañ. (₱39M) payable in cash and negotiable securities. MEA, CRC and
Metrobank entered into a tripartite agreement in which it agreed to issue the whereby stand-by LC. It later amended
the construction agreement, by increasing the contract price to ₱45M.

Metrobank expressed its willingness to finance the construction project up to the amount of ₱190M thru LC in a
letter addressed to Home Financing Corp (HFC). When MEA completed construction of several housing units
entitling it to ₱3M from Metrobank, it executed a new PN in favor of Metrobank for the remaining ₱1.5M balance out
of the original ₱3M. Metrobank advised MEA to hold off construction work until after CRC would have sold a
substantial number of the completed units. MEA objected to the indefinite suspension and demanded payment for
all their work accomplishments. In the meantime, MEA defaulted on the ₱1.5 M PN so Metrobank instituted Civil
Case for the recovery of the amount covered by PN.

RTC

The trial court decided in favor of MEA and ordered Metrobank to pay 18.2M for the actual fair market value of
construction work already performed by MEA including the cost of filling materials advanced by it at the CRC
Multinational Village minus the amount of P1.5M covered by the PN and the sum of ₱9M as actual and
consequential damages suffered by MEA.

CA

CA held that the bank should only be held answerable for an amount of ₱6M representing the value of the town-
houses units less ₱3.2M representing payment and less the loan of ₱1.5M PN. CA deleted the award of ₱9M actual
compensatory damages. MEA assail the CA decision which reduced the amount awarded to them.

ISSUE: Is MEA Builders entitled to 9M actual and compensatory damages despite the fact that there is no
document presented by Llave to prove such claim?

HELD: NO

In legal contemplation, the term "damages" is the sum of money which the law awards or imposes as a pecuniary
compensation, a 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 tortuous act. Here, aside from the fact that we find neither breach of
contractual obligation nor bad faith on the part of Metrobank when it suggested the suspension of construction work
for the protection of the parties’ mutual interests, petitioners failed to establish actual or compensatory damages with
a reasonable degree of certainty. The trial court’s sole basis for the award of compensatory damages was the
testimony of petitioner Llave who made a sweeping statement that the ₱9M represents unrealized profits plus 3%
monthly interests. This is was not sufficient. The award of actual or compensatory damages could not be sustained
without any tangible document any proof to support such claim.

Regarding the award of attorney’s fees, suffice it to state that we find no sufficient justification for such an award.
The grant of award of attorney’s fees is the exception rather than the rule, hence, it is necessary for the trial court to
make findings of fact and law, which would bring the case within the exception and justify the grant of the award.

2. Sps. Custodio Vs. CA, Pacifico Mabasa G.R. No. 116100, February 9, 1996

A Civil Case for the grant of an easement of right of way was filed by Pacifico Mabasa against Custodio et al. before
the RTC. He was able to acquire said property through a contract of sale. It was surrounded by other immovables
and a Septic Tank. As an access to P. Burgos Street, there are two possible passageways. The first passageway is
approximately one meter wide and is about 20 meters. The second passageway is about 3 meters in width and
length. Defendant constructed a fence. She also mentioned some other inconveniences of having the front of her
house a pathway such as when some of the tenants were drunk and would bang their doors and windows.

RTC

The trial court rendered a decision in favor of the plaintiff ordering defendants Custodios and Santoses to give
plaintiff permanent access ingress and egress, to the public street and ordering the plaintiff to pay defendants
Custodios and Santoses the 8K as indemnity for the permanent use of the passageway. Plaintiff went to the CA
raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. CA rendered its
decision affirming the judgment of the trial court with modification, ordering petitioners to pay respondent 65k as
Actual Damages, 30k as Moral Damages, and 10k as Exemplary Damages.
ISSUE: WHETHER OR NOT RESPONDENTS ARE ENTITLED FOR AWARD OF DAMAGES

HELD: NO

The award of damages has no substantial legal basis. It was based solely on the fact that the original plaintiff,
Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by
reason of the closure of the passageway. The mere fact that the plaintiff suffered losses does not give rise to a
right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal
wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed
for the injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is
the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for
the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not
the result of a violation of a legal duty. These situations are often called damnum absque injuria.

In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such
injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the
premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and
the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there
should be tort liability merely because the plaintiff suffered some pain and suffering.

There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm
or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does
not deem an injury, the damage is regarded as damnum absque injuria.

In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private
respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle
of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites
concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy;
(2) The acts should be willful; and (3) There was damage or injury to the plaintiff.

The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not
contrary to morals, good customs or public policy. At the time of the construction of the fence, the lot was not subject
to any servitudes. Prior to the decision granting right of way to respondents, petitioners had an absolute right over
their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the
employment and exercise of said right. To repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria. The courts can
give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful means. 

3. Borlado vs. CA, Bulan G.R. No. 114118, August 28, 2001

3 Petitioners are the heirs of Borlado. The original owner of the lot was Serapio, grandfather of
petitioners. Serapio sold the lot to Bacero for 300P. After Bacero died, his heirs sold it to spouses
Bulan. Bulan filed a complaint for ejectment case against petitioners which the court favored them.
Instead of appealing, petitioners filed the present case with the RTC but was dismissed for lack of
cause of action. They assail the decision that they are to be jointly and solidarily liable to defendants
the quantity of 100 cavans of palay every year from 1972 until plaintiffs vacate the premises of the
land in question. The court declare defendants as owner of the land and entitled to possession and
ordered them to pay defendants the sum of 5K attorney’s fees and the sum of P5k as litigation
expenses; and To pay the costs of the suit.

ISSUE: WHETHER OR NOT trial court and the CA erred in holding petitioners liable to pay
respondents one hundred (100) cavans of palay every year from 1972 until they vacate
the premises of the land in question. chanrob1

HELD; YES

The trial court and the CA erred in holding petitioners liable to pay respondents one hundred (100)
cavans of palay every year from 1972 until they vacate the premises of the land in question. chanrob1es virtua1 1aw 1ibrary
The one hundred cavans of palay was awarded as a form of damages. We cannot sustain the award.
"Palay" is not legal tender currency in the Philippines. SC DENIES the petition and AFFIRMS the
decision of the CA with modification that petitioners’ liability to pay respondents one hundred (100)
cavans of palay every year from 1972 until petitioners vacate the land in question is deleted, for lack
of basis.

4. Farolan Vs. Solmac G.R. No. 83589, March 13, 1991

Solmac Marketing Corp. was the assignee, transferee, and owner of an importation of Clojus Recycling Plastic
Products of polypropylene film. SOLMAC prayed for the unconditional release of the subject importation. Ramon
Farolan was then the Acting Commissioner of Customs while Parayno was then the Acting Chief, Customs
Intelligence and Investigation Division. They were thus sued in their official capacities as officers in the government
in a petition for mandamus filed by SOLMAC. They were both held personally liable for the awarded damages since
their act of detention of the goods was irregular and devoid of legal basis, hence, not done in the regular
performance of official duty.

RTC rendered a decision ordering to release the subject importation immediately without drilling of holes, subject
only to the normal requirements of the customs processing for such release to be done with utmost dispatch as time
is of the essence; and the preliminary injunction hereto issued is hereby made permanent until actual physical
release of the merchandise and without pronouncement as to costs.

SOLMAC appealed to the CA only insofar as to the denial of the award of damages is concerned. CA ordered
public officers to pay solidarily and in their private personal capacities respondent Solmac Marketing Corp.
temperate damages in the sum of P100K, exemplary damages in the sum of P50K, and P25K, as attorney's fees
and expenses of litigation. This challenged resolution of the respondent court modified its decision by reducing into
halves the original awards for exemplary damages and attorney's fees and litigation expenses, respectively, keeping
intact the original grant of P1000K in the concept of temperate damages.

ISSUE: WHETHER OR NOT PETITIONERS ARE LIABLE TO PAY FOR DAMAGES.

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: NO/YES

With reference to the claim of plaintiff to damages, actual and exemplary, and attorney's fees, 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. There is no clear and convincing proof
showing the alleged bad faith of the petitioners. On the contraryi, the record is replete with evidence bolstering the
petitioners' claim of good faith. First, there was the report of the National Institute of Science and Technology (NIST)
that, contrary to what the respondent claimed, the subject importation was not OPP film scraps but oriented
polypropylene, a plastic product of stronger material, whose importation to the Phil was restricted, if not prohibited.  It
was on the strength of this finding that the petitioners withheld the release of the subject importation for being
contrary to law. Second, the petitioners testified that, on many occasions, the Bureau of Customs sought the advice
of the BOI on whether the subject importation might be released. Third, petitioner Parayno also testified during the
trial that up to that time (of the trial) there was no clear-cut policy on the part of the BOI regarding the entry into the
Phil. of oriented polypropylene (OPP).

But even granting that the petitioners committed a mistake in withholding the release of the subject, 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.  Omnia
praesumuntur rite et solemniter esse acta. (All things are presumed to be correctly and solemnly done.) It was
private respondent's burden to overcome this juris tantum presumption.

5. Chiang Kai Shek School vs. CA, Fausta Oh, G.R. no. 58028, April 28, 1989
Fausta Oh reported for work at the Chiang Kai Shek School on the first week of July, 1968. She was told she had no
assignment for the next semester. Oh was shocked. She had been teaching in the school since 1932 for a
continuous period of almost 33 years. She demanded separation pay, social security benefits, salary differentials,
maternity benefits and moral and exemplary damages.

ISSUE: Whether or not Oh is entitled for awards of damages.

HELD: YES

The Court holds, after considering the particular circumstance of Oh's employment, that she had become a
permanent employee of the school and entitled to security of tenure at the time of her dismissal. Since no cause
was shown and established at an appropriate hearing, and the notice then required by law had not been given, such
dismissal was invalid.

Hence, for the wrongful act of the petitioner, the private respondent is entitled to moral damages. As a proximate
result of her illegal dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even
besmirched reputation as an experienced teacher for more than three decades. We also find that the respondent
court did not err in awarding her exemplary damages because the petitioner acted in a wanton and oppressive
manner when it dismissed her. 

The Court takes this opportunity to pay a sincere tribute to the grade school teachers, who are always at the forefront in
the battle against illiteracy and ignorance. If only because it is they who open the minds of their pupils to an unexplored
world awash with the magic of letters and numbers, which is an extraordinary feat indeed, these humble mentors
deserve all our respect and appreciation.

6. Suario vs. BPI, G.R. No. 404059 August 25 1989

Leonardo Suario filed a complaint for separation pay, damages and attorney’s fees against the BPI,
Davao Branch alleging that he has been a loyal employee of the respondent bank since March, 1969,
now as Credit Investigator-Appraiser-Credit Analyst. He requested VP for a 6-month leave of absence
without pay purposely to take the 1976 pre-bar review in Manila. Later, he received a verbal notice
from the new Branch Manager that the respondent’s Head Office approved only a 30-day leave of
absence without pay. He never suspected that his application would be disapproved.

During his leave, he was ordered to report back for work since his request was allegedly disapproved
and that failure to report back for work would be a conclusive proof that the complainant is no longer
interested to continue working and therefore considered resigned. Later, he received another letter
attaching a xerox copy of the application for a Clearance to terminate on the ground of resignation/or
abandonment. He failed to file his opposition since he was already in Manila taking up the review and
was then very busy since the bar examination was only two months shy. When he went to BPI, he
was verbally informed that he was already dismissed. He filed an illegal dismissal case in which BPI
was ordered to pay him for separation pay in the amount of P11.8k. His claim for moral, actual, and
exemplary damages and attorney s fees are hereby dismissed for lack of merit.

The petitioner, with himself as his own counsel, filed this petition for review of the decision of the
National Labor Relations Commission (NLRC) which denied his claim for damages arising from an
alleged illegal dismissal. In addition to the separation pay already awarded to him, the petitioner
asks for P9,995.00 actual damages, P300,000.00 moral damages, P200,000.00 exemplary damages,
and attorney’s fees to be determined by the Court.

ISSUE: Whether or not the NLRC committed grave abuse of discretion in denying the
petitioner’s claim for actual, moral and exemplary damages plus attorney’s fees in addition
to his separation pay.

HELD: NO

On the matter of NLRC jurisdiction over claims for damages:

"ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have
exclusive jurisdiction to hear and decide the following cases involving all workers, whether
agricultural or non-agricultural: chanrob1es virtual 1aw library

‘(3) All money claims of workers involving non-payment or underpayment of wages, overtime or
premium compensation, maternity or service incentive leave, separation pay and other money claims
arising from employer-employee relation, except claims for employee’s compensation, social security
and medicare benefits and as otherwise provided in Article 128 of this Code;

The contention of private respondent that the NLRC is not clothed with authority to entertain claims
for moral and other forms of damages is based on PD 1367 which took effect on May 1, 1979 and
which amended Article 217 by specifically providing that "Regional Directors shall not indorse and
Labor Arbiters shall not entertain claims for moral or other forms of damages." cralaw virtua1aw library

This limitation on jurisdiction did not last long. Evidently, the lawmaking authority had second
.p

thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in
labor cases because that set up would mean duplicity of suits, splitting the cause of action and
possible conflicting findings and conclusions by two tribunals on one and the same claim. PD 1691
nullified PD 1367 and restored to the LA and the NLRC their jurisdiction to award all kinds of
damages in cases arising from employer-employee relations.

LA has jurisdiction to award to the dismissed employee not only the reliefs specifically provided by
labor laws, but also moral and the forms of damages governed by the Civil Code. Moral damages
would be recoverable, for example, where the dismissal of the employee was not only effected
without authorized cause and/or due process — for which relief is granted by the Labor Code — but
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 — for which the obtainable relief is
determined by ‘the Civil Code (not the Labor Code). Stated otherwise, if the evidence adduced by the
employee before the LA should establish that the employer did indeed terminate the employee’s
services without just cause or without according him due process, the LA’s judgment shall be for the
employer to reinstate the employee and pay him his back wages, or exceptionally, for the employee
simply to receive separation pay. These are reliefs explicitly prescribed by the Labor Code. But any
award of moral damages by the LA obviously cannot be based on the Labor Code but
should be grounded on the Civil Code. Such an award cannot be justified solely upon the
premise (otherwise sufficient for redress under the Labor Code) that the employer fired
his employee without just cause or due process. Additional facts must be pleaded and proven to
warrant the grant of moral damages under the Civil Code, these being, to repeat, that the act of
dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy; and, of course, that social
humiliation, wounded feelings, grave anxiety, etc., resulted therefrom.

In addressing the first issue (separation pay etc.), the Labor Arbiter applies the Labor Code; in
addressing the second, (moral damages) the Civil Code.

"Moral damages may be awarded to compensate one for diverse injuries such as mental anguish,
besmirched reputation, wounded feelings and social humiliation. It is however not enough that such
injuries have arisen; it is essential that they have sprung from a wrongful act or omission of
the defendant which was the proximate cause thereof.

‘Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the
defendant’s wrongful act or omission.’ (Civil Code, Article 2217).

In this case, there was no bad faith or fraud on the part of the bank officials who denied the
petitioner’s request for a six months’ leave of absence without pay. There is no evidence to show that
they meant to deceive the petitioner. The fact that the petitioner’s request for six months’ leave of
absence was denied does not ipso facto entitle him to damages.

7. Pantranco North Express, Inc. vs. Baesa, G.R. No. 7905051 November 14, 1989

Spouses Baesa and their children were aboard a passenger jeepney on their way to a picnic at
Malalam River, Isabela, to celebrate their 5 th wedding anniversary. 15 of them rode in the passenger
jeepney driven by David Ico, who was also the registered owner. While they were proceeding
towards Malalam River, a speeding PANTRANCO bus from Aparri, on its regular route to Manila,
encroached on the jeepney’s lane while negotiating a curve, and collided with it. As a result of the
accident, they died while the rest of the passengers suffered injuries. The jeepney was extensively
damaged. After the accident the driver of the PANTRANCO Bus boarded a car and remained in hiding.
Maricar Baesa through her guardian filed separate actions for damages arising from quasi-delict
against PANTRANCO/ PANTRANCO invoked the defense of due diligence in the selection and
supervision of its driver. CFI of Pangasinan rendered a decision against PANTRANCO awarding the
total amount 2.3M as damages, plus 10% thereof as attorney’s fees and costs to Maricar Baesa and
the total 662K as damages, plus 10% thereof as attorney’s fees and costs to Fe Ico and her children.
On appeal, the cases were consolidated and the CA, it modified the decision of the trial court by
ordering PANTRANCO to pay 1.189M as damages, plus 29K as attorney’s fees to Maricar Baesa, and
P344K plus 10K as attorney’s fees to Fe Ico and her children, and to pay the costs in both cases.

Petitioner assails court’s findings because no documentary evidence in support thereof, such as
income tax returns, pay-rolls, pay slips or invoices obtained in the usual course of business, were
presented. Petitioner argues that the "bare and self-serving testimonies of the wife of the deceased
David Ico and the mother of the deceased Marilyn Baesa have no probative value to sustain in law
the CA’s conclusion on the respective earnings of the deceased victims." It is petitioner’s contention
that the evidence presented by the PR does not meet the requirements of clear and satisfactory
evidence to prove actual and compensatory damages.

ISSUE: WHETHER OR NOT THE LACK OF documentary evidence in support claim of

damages would not warrant the court to award damages.

HELD: NO.

While it is true that PR should have presented documentary evidence to support their claim for
damages for loss of earning capacity of the deceased victims, the absence thereof does not
necessarily bar the recovery of the damages in question. The testimony of Fe Ico and Francisca
Bascos as to the earning capacity of David Ico, and the spouses Baesa, respectively, are sufficient to
establish a basis from which the court can make a fair and reasonable estimate of the damages for
the loss of earning capacity of the three deceased victims. Moreover, in fixing the damages for loss of
earning capacity of a deceased victim, the court can consider the nature of his occupation, his
educational attainment and the state of his health at the time of death.

In the instant case, David Ico was 38 years old at the time of his death in 1981 and was driving his
own passenger jeepney. The spouses Baesa were both 30 yo at the time of their death. Ceasar was a
commerce degree holder and the proprietor of the Cauayan Press, printer of the Cauayan Valley
Newspaper and the Valley Times at Cauayan, Isabela. Marilyn graduated as a nurse in 1976 and at
the time of her death, was the company nurse, personnel manager, treasurer and cashier of the
Ilagan Press. Respondent court duly considered these factors, together with the uncontradicted
testimonies of Fe Ico and Francisca Bascos, in fixing the amount of damages for the loss of earning
capacity of David Ico and the spouses Baesa. chanrobles.com:cralaw:red

However, CA committed error in fixing the compensatory damages for the death of Harold Jim Baesa
and Marcelino Baesa. The indemnity for the death of a person was fixed by this Court at 30K. Maricar
Baesa should therefore be awarded 60K as indemnity for the death of her brothers, Harold and
Marcelino or 30K for the death of each brother.

8. Mercenas vs. Court of Appeals, G.R. No. 88052 December 14 1989

AThe M/T "Tacloban City," a barge-type oil tanker, having unloaded its cargo of petroleum products, left Amlan,
Negros and headed towards Bataan. M/V "Don Juan," an interisland vessel, left Manila bound for Bacolod with 750
passengers. In the evening, the two collided at the Talbas Strait near in the vicinity of the island of Mindoro. When
the collision occurred, the sea was calm, the weather fair and visibility good. As a result of this collision, the M/V
"Don Juan" sank and hundreds of its passengers perished. Among the ill-fated passengers were the parents of
petitioners, the spouses Mecenas, whose bodies were never found despite intensive search by petitioners.
Petitioners filed a complaint against Negros Navigation and Capt. Roger Santisteban, the captain of the "Don Juan"
without, however, impleading either PNOC or PNOC Shipping. Petitioners were the 7 surviving children of Mecenas
alleging negligence of Negros Navigation and Capt. Santisteban based on quasi delict. Petitioners prayed for actual
damages of not less than P100K as well as moral and exemplary damages in such amount as the Court may deem
reasonable to award to them. Another complaint was filed in the same court by Lilia Ciocon claiming damages
against Negros Navigation, PNOC and PNOC Shipping for the death of her husband Manuel Ciocon, another of the
luckless passengers of the "Don Juan." Manuel Ciocon's body, too, was never found.

The two (2) cases were consolidated and heard jointly by the RTC ordering the defendant Negros Navigation Co.,
Inc. and Capt. Roger Santisteban jointly and severally liable to pay plaintiffs the sum of P400k for the death of
plaintiffs' parents, Perfecto and Sofia Mecenas and to pay said plaintiff's the sum of P15k attorney's fees; plus costs
of the suit. Each of the defendants Negros Navigation Co Inc. and Philippine National Oil Company/PNOC Shipping
and Transportation Company, to pay the plaintiff the sum of P100K for the death of Manuel Ciocon, to pay said
plaintiff jointly and severally, the sum of P15Kas and for attorney's fees, plus costs of the suit. 
1

CA held defendants to pay plaintiffs by reducing from 400k to P100K as actual and compensatory damages and
P15K as attorney's fees and the cost of the suit.

ISSUE: Whether or not such reduction of the damages awarded was proper.

Whether petitioners were entitled to an award of damages other than actual or compensatory

damages, that is, whether they were entitled to award of moral and exemplary damages.

HELD: No/Yes.

The action is more appropriately regarded as grounded on contract, the contract of carriage between the Mecenas
spouses as regular passengers who paid for their boat tickets and Negros Navigation; the surviving children while
not themselves passengers are in effect suing the carrier in representation of their deceased parents.  Thus, the suit
filed by the widow Lilia Ciocon was correctly treated by the trial and appellate courts as based on contract and as
well on quasi-delict (vis-a-vis PNOC and PNOC Shipping). In an action based upon a breach of the contract of
carriage, the carrier under our civil law is liable for the death of passengers arising from the negligence or willful act
of the carrier's employees although such employees may have acted beyond the scope of their authority or even in
violation of the instructions of the carrier, which liability may include liability for moral damages.  It follows that
petitioners would be entitled to moral damages so long as the collision with the "Tacloban City" and the sinking of
the "Don Juan" were caused or attended by negligence on the part of private respondents.

In respect of the petitioners' claim for exemplary damages, it is only necessary to refer to Article 2232 of the Civil
Code:

Article 2332. In contracts and quasi-contracts, the court may exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. 

Thus, whether petitioners are entitled to exemplary damages as claimed must depend upon whether or not PR
acted recklessly, that is, with gross negligence. The trial court, after a review of the evidence submitted during the
trial, arrived at the same conclusion that the Minister of National Defense had reached that both the "Tacloban City"
and the "Don Juan" were at fault in the collision. The Court is of the considered view that the defendants are equally
negligent and are liable for damages.

The behaviour of the captain of the "Don Juan" in tills instance-playing mahjong "before and up to the time of
collision constitutes behaviour that is simply unacceptable on the part of the master of a vessel to whose hands the
lives and welfare of at least seven hundred fifty (750) passengers had been entrusted. There is also evidence that
the "Don Juan" was carrying more passengers than she had been certified as allowed to carry. Passengers
allowed : 810 - Total Persons Allowed : 864

It will be recalled that the trial court had rendered a lump sum of P400,000.00 to petitioners for the death of their
parents in the "Don Juan" tragedy. Clearly, the trial court should have included a breakdown of the lump sum award
into its component parts: compensatory damages, moral damages and exemplary damages.

The original award of the trial court of P400,000.00 could well have been disaggregated by the trial court and the
Court of Appeals in the following manner:

1. actual or compensatory damages proved in the course of trial consisting of actual expenses incurred by
petitioners in their search for their parents' bodies- -P126,000.00

2. actual or compensatory damages in case of wrongful death

(P30,000.00 x 2) -P60,000.00

(3) moral damages -P107,000.00

(4) exemplary damages -P107,000.00

Total -P400,000.00

Considering that petitioners, legitimate children of the deceased spouses Mecenas, are seven (7) in number and
that they lost both father and mother in one fell blow of fate, and considering the pain and anxiety they doubtless
experienced while searching for their parents among the survivors and the corpses recovered from the sea or
washed ashore, we believe that an additional amount of P200K for moral damages, making a total of P307K for
moral damages would be quite reasonable.

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially
deleterious in its consequence by creating negative incentives or deterrents against such behaviour. One of
those instruments is the institution of exemplary damages; one of those ends, of special importance in an
archipelagic state like the Philippines, is the safe and reliable carriage of people and goods by sea. Considering the
foregoing, we believe that an additional award in the amount of P200K as exmplary damages, is quite modest.

REVERSED and SET ASIDE CA decision. The award granted by the trial court is hereby RESTORED and
AUGMENTED as follows:

(a) P 126,000.00 for actual damages;

(b) P 60,000.00 as compensatory damages for wrongful death;

(c) P 307,000.00 as moral damages;

(d) P 307,000.00 as exemplary damages making a total of P 800,000.00; and

(e) P 15,000.00 as attorney's fees.

9. Simex International (Manila) Inc. vs. CA, Traders Royal Bank G.R. No. 88013 March 19, 1990

Petitioner is a private corp engaged in the exportation of food products. It buys these products from various local
suppliers and then sells them abroad, particularly in US, Canada and the M.E. It deposited to its account in the bank
the amount of P100K, thus increasing its balance as of that date to P190K.  Subsequently, it issued several checks
1

against its deposit but was suprised to learn later that they had been dishonored for insufficient funds. As a
consequence, the California Manuf. Corp. sent a letter of demand to the petitioner, threatening prosecution if the
dishonored check issued to it was not made good. It also withheld delivery of the order made by the petitioner. The
petitioner complained to the bank. P100K deposit had not been credited to it. It demanded reparation from the bank
for its "gross and wanton negligence." It then filed a complaint in the then CFI claiming from bank moral damages in
the sum of 1M and exemplary damages in the sum of 500K plus 25% attorney's fees, and costs.

Observing that the plaintiff's right had been violated, he ordered the defendant to pay nominal damages in the
amount of P20K plus P5K attorney's fees and costs. CA affirmed. It found that PR was guilty of negligence but
agreed that the petitioner was nevertheless not entitled to moral damages.

The essential ingredient of moral damages is proof of bad faith. Indeed, there was the
omission by the bank to credit appellant's deposit of P100K. But the bank rectified its
records. It credited the said amount in favor of petitioner in less than a month. The
dishonored checks were eventually paid. These circumstances negate any imputation or
insinuation of malicious, fraudulent, wanton and gross bad faith and negligence on the part
of the defendant-appellant.

ISSUE: Whether the petitioner is entitled to the said damages and, if so, in what amounts.

HELD:

The bank has not even explained why it was committed at all. It is true that the dishonored checks were, as the CA
put it, "eventually" paid. However, this took almost a month when, properly, the checks should have been paid
immediately upon presentment. The initial carelessness of the bank, aggravated by the lack of promptitude in
repairing its error, justifies the grant of moral damages. This rather lackadaisical attitude toward the
complaining depositor constituted the gross negligence, if not wanton bad faith, that the respondent court said had
not been established by the petitioner.

The fact is that the petitioner's credit line was canceled and its orders were not acted upon pending receipt of actual
payment by the suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced in the
business community. All this was due to the fault of the respondent bank which was undeniably remiss in its duty to
the petitioner.

Article 2205 of the Civil Code provides that actual or compensatory damages may be receive"(2) for injury
to the plaintiff s business standing or commercial credit." There is no question that the petitioner did
sustain actual injury as a result of the dishonored checks and that the existence of the loss having been
established "absolute certainty as to its amount is not required."   Such injury should bolster all the more
the demand of the petitioner for moral damages and justifies the examination by this Court of the validity
and reasonableness of the said claim.

Moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may
have suffered. 

In the case at bar, the petitioner is seeking such damages for the prejudice sustained by it as a result of the PR’s
fault. Moral damages are not susceptible of pecuniary estimation. Article 2216 of the Civil Code specifically provides
that "no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary
damages may be adjudicated." That is why the determination of the amount to be awarded (except liquidated
damages) is left to the sound discretion of the court, according to "the circumstances of each case."

Moral damages of 1M is nothing short of preposterous. Its business certainly is not that big, or its name that
prestigious, to sustain such an extravagant pretense. Moreover, a corporation is not as a rule entitled to moral
damages because, not being a natural person, it cannot experience physical suffering or such sentiments as
wounded feelings, serious anxiety, mental anguish and moral shock. The only exception to this rule is where the
corporation has a good reputation that is debased, resulting in its social humiliation.  Petitioner did suffer
injury because of the PR’s negligence that caused the dishonor of the checks issued by it. It is an unsavory and
disreputable entity that has no good name to protect.

Award of nominal damages of P20K was not the proper relief to which the petitioner was entitled. Under Article
2221 of the Civil Code, "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." As we have found that the petitioner has indeed incurred loss through the fault
of the private respondent, the proper remedy is the award to it of moral damages, which we impose, in our
discretion, in the same amount of P20,000.00.

Now for the exemplary damages.

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

The ordinary person, with equal faith, usually maintains a modest checking account for security and convenience in
the settling of his monthly bills and the payment of ordinary expenses. As for business entities like the petitioner, the
bank is a trusted and active associate that can help in the running of their affairs, not only in the form of loans when
needed but more often in the conduct of their day-to-day transactions like the issuance or encashment of checks. In
this case, having been informed of its error in not crediting the deposit in question to the petitioner, the PR did not
immediately correct it but did so only 23 days after the deposit was made. It bears repeating that the record does not
contain any satisfactory explanation of why the error was made. Such ineptness comes under the concept of the
wanton manner contemplated in the Civil Code that calls for the imposition of exemplary damages.

Exemplary damages OF 50K "by way of example or correction for the public good," in the words of the law. It is
expected that this ruling will serve as a warning and deterrent against the repetition of the ineptness and
indefference that has been displayed here, lest the confidence of the public in the banking system be further
impaired.

PR is ordered to pay the petitioner, in lieu of nominal damages, moral damages in the amount of P20K and
exemplary damages in the amount of P50K plus the original award of attorney's fees in the amount of P5K, and
costs.

10. Radio Communications vs. Rodriguez, G.R. No. 83768, February 28, 1990

Rodriguez, as President of the World Association of Law Students (WALS), sent two cablegrams overseas through
RCPI, a domestic corporation engaged in the business of receiving and transmitting messages. The cablegram
were in turn, relayed to GLOBE for transmission to their foreign destination. The telegram to Taha advised him of
Rodriguez's pending arrival in Khartoum, while the telegram to Merger advised her of the scheduled WALS
conference in Khartoum. Rodriguez left the Phil and arrived in Khartoum, Sudan at night. He was forced to sleep at
the airport. Because of the non-receipt of the cablegram, Taha was not able to meet him. Worse all preparations for
the international conference had to be cancelled. It turned out that the wire sent by Rodriguez to Merger was
delivered to the address on the message but the person who delivered it was told that the address was no longer
staying there. This fact was not accordingly reported to Rodriguez in Metro Manila. The undelivered cablegram was
not returned by the correspondent abroad to Globe for disposition in the Philippines.

Rodriguez filed a complaint for compensatory damages in the amount of P45K, moral damages in the amount of
P200K and exemplary damages in the amount of P50Kagainst RCPI and GLOBE. RTC decision which CA affirmed
ordered RCPI and their co-defendant jointly and severally to pay the plaintiff, PR herein, 218K -- a) P100K as moral
damages; b) P50K as exemplary damages; c) P43K as actual damages; and d) P20K as attorney's fees by way of
damages. The trial court ordered to pay "Moral damages consequent to the humiliation and embarrassment that the
plaintiff suffered under the two causes of action in the amount of P100K are adequate.

ISSUE: 1) whether or not petitioner RCPI is responsible for the non-delivery of the two (2) telegrams
notwithstanding the fact that RCPI relayed said telegrams to Globe Mackay and

2) whether or not under the attendant facts and circumstances petitioner RCPI is liable for moral
damages in the amount of P100K; exemplary damages in the amount of P50K; actual damages in the
amount of P43K and attorney's fees in the amount of P20K.

HELD:

RCPI cannot escape liability for damages by passing off the blame for negligence to Globe Mackay. It has an inter-
connecting agreement with Globe Mackay. RCPI receives messages for overseas destinations and conducts its
business to transmit foreign messages only through Globe Mackay.

For recovery of damages, Article 2217 of the New Civil Code applies. It is provided therein that: "Moral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feeling, moral
shock, social humiliation, and similar injury. Though incapable of pecuniary computation moral damages may be
recovered if they are the proximate result of the defendant's wrongful act or omission." 

There is no doubt that RCPI's failure to deliver the two questioned telegrams resulted in the suffering that
respondent Rodriguez, had to undergo. Respondent Rodriguez left Manila for Khartoum, Sudan believing that Taha
received his telegram and would meet him at the airport.

The 100K as moral damages in favor of Rodriguez excessive and unconscionable. Trial courts are given discretion
to determine the amount of moral damages, CA can only modify or change the amount awarded when they are
palpably and scandalously excessive 'so as to indicate that it was the result of passion, prejudice or corruption on
the part of the trial court'. But in more recent cases where the awards of moral and exemplary damages are far too
excessive compared to the actual losses sustained by the aggrieved party, SC ruled that they should be reduced to
more reasonable amounts.

In any case the Court held that 'moral damages are emphatically not intended to enrich a
complainant at the expense of a defendant. They are awarded only to enable the injured party
to obtain means, diversion or amusements that will serve to alleviate the moral suffering he
has undergone, by reason of the defendants' culpable action.' The award of moral damages
must be proportionate to the suffering inflicted.

The amount of P10K as moral damages in favor of the respondent would be reasonable considering the facts and
circumstances surrounding the petitioner's liability.

The award of exemplary damages is not proper considering that there is no showing that RCPI acted in "a
wanton, fraudulent, reckless, oppressive, or malevolent manner." (Article 2232, New Civil Code).

Respondent Rodriguez was awarded the total amount of P43,148.00 as actual or compensatory damages broken
down as follows: (a) P10,000.00 for the preparation of the trip; (b) P20,000.00 for plane fare; (c) P5,000.00 for
respondent's stay in transit in Pakistan; (d) P4,000.00 for hotel bills in Khartoum; (e) P78.00 for the telegraphic toll,
and P70.00 for the cost of the cablegram sent to Diane Merger. The trial court rejected the expenses allegedly
incurred by the respondent for a dinner he tendered for the officers, organizers and students at Khartoum for
insufficiency of evidence.

As for Attorney’s fees, the trial court failed to justify the payment of attorney's by RCPI, therefore, the award of
attorney's fees as part of its liability should be disallowed and deleted.

P100,000J damages is reduced to P10K. The award ordering it to pay exemplary damages and attorney's fees is
DELETED.
11. Zenith Insurance Corp. vs. CA, Fernandez, G.R. No. 85296 May 14, 1990

PR Lawrence Fernandez insured his car for "own damage" with petitioner Zenith Insurance Corp. The car figured in
an accident and suffered actual damages in the amount of P3,640. After allegedly being given a run around by
Zenith for 2 months, Fernandez filed a complaint with RTC of Cebu for sum of money and damages resulting from
the refusal of Zenith to pay the amount claimed. Aside from actual damages and interests, Fernandez also prayed
for moral damages in the amount of P10K , exemplary damages of P5K, attorney's fees of P3K and litigation
expenses of P3K.

Zenith contended that it offered to pay the claim but PR rejected. It then later filed a petition for certiorari with the CA
assailing the order of the trial court submitting the case for decision without petitioner's evidence but denied.

The trial court ruled in favor of PR Fernandez which CA affirmed. Petitioner assailed the decision arguing that there
is no legal basis on CA in awarding moral damages, exemplary damages and attorney's fees in an amount more
than that prayed for in the complaint. It contended that while the complaint of PR prayed for P10K moral
damages, the lower court awarded twice the amount, or P20K without factual or legal basis; while PR
prayed for P5K exemplary damages to 20K; and while PR prayed for P3K attorney's fees to 5K.

Under the Insurance Code, in case of unreasonable delay in the payment of the proceeds of an insurance policy,
the damages that may be awarded are: 1) attorney's fees; 2) other expenses incurred by the insured person by
reason of such unreasonable denial or withholding of payment; 3) interest at twice the ceiling prescribed by the
Monetary Board of the amount of the claim due the injured; and 4) the amount of the claim.

As regards the award of moral and exemplary damages, the rules under the Civil Code of the Philippines shall
govern.

ISSUE: WHETHER OR NOT PR IS ENTITLED FOR EXEMPLARY DAMAGES AND MORAL DAMAGES TWICE
AS WHAT IT HAD PRAYED FOR.

HELD: NO

"The purpose of moral damages is essentially indemnity or reparation, not punishment or correction. Moral damages
are emphatically not intended to enrich a complainant at the expense of a defendant, they are awarded only to
enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he
has undergone by reason of the defendant's culpable action. While it is true that no proof of pecuniary loss is
necessary in order that moral damages may be adjudicated, the assessment of which is left to the discretion of the
court according to the circumstances of each case (Art. 2216, New Civil Code)

It is equally true that in awarding moral damages in case of breach of contract, there must be a showing that the
breach was wanton and deliberately injurious or the one responsible acted fraudently or in bad faith.

In the instant case, there was a finding that PR was given a "run-around" for two months, which is the basis for the
award of the damages granted under the Insurance Code for unreasonable delay in the payment of the claim.
However, the act of petitioner of delaying payment for two months cannot be considered as so wanton or malevolent
to justify an award of P20K as moral damages, taking into consideration also the fact that the actual damage on the
car was only P3,460. The reason for petitioner's failure to indemnify PR within the two-month period was that the
parties could not come to an agreement as regards the amount of the actual damage on the car. The amount of
P10K prayed for by private respondent as moral damages is equitable.

On the other hand, exemplary or corrective damages are imposed by way of example or correction for the public
good (Art. 2229, New Civil Code of the Philippines). Exemplary damages were not awarded as the insurance
company had not acted in wanton, oppressive or malevolent manner. The same is true in the case at bar.

The amount of P5K awarded as attorney's fees is justified under the circumstances of this case considering that
there were other petitions filed and defended by PR in connection with this case.

As regards the actual damages incurred by private respondent, the amount of P3,640.00 had been established
before the trial court and affirmed by the appellate court. Respondent appellate court correctly ruled that the
deductions of P250.00 and P274.00 as deductible franchise and 20% depreciation on parts, respectively claimed by
petitioners as agreed upon in the contract, had no basis. Respondent court ruled:
Therefore, the award of moral damages is reduced to P10K and the award of exemplary damages is hereby
deleted.

1) P3,640.00 as actual claim plus interest of twice the ceiling prescribed by the Monetary Board
computed from the time of submission of proof of loss;

2) P10,000.00 as moral damages;

3) P5,000.00 as attorney's fees;

4) P3,000.00 as litigation expenses; and

5) Costs.

12. Northwest Orient Airlines vs. Court of Appeals G.R. No. 83033 June 30, 1990

FACTS:  Northwest Airlines and Sharp, through its Japan branch, entered into an International Passenger
Sales Agency Agreement, whereby the former authorized the latter to sell its air transportation tickets. Unable to
remit the proceeds of the ticket sales made by defendant on behalf of the plaintiff under the said agreement,
plaintiff sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim
for damages.
After the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the
complaint and the writs of summons served at the head office of the defendant in Manila. The Director of the
Tokyo District Court requested the Supreme Court of Japan to serve the summons through diplomatic channels
upon the defendant’s head office in Manila.
On August 28, 1980, defendant received from Deputy Balingit the writ of summons.  Despite receipt of the
same, defendant failed to appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the
plaintiff’s complaint and, rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195
Yen and damages for delay. Defendant  received from Deputy Sheriff Balingit copy of the judgment. Defendant
not having appealed the judgment, the same became final and executory.

Plaintiff was unable to execute the decision in Japan, hence, a suit for enforcement of the judgment was filed by
plaintiff before the Regional Trial Court of Manila Branch 54.

Defendant filed its answer averring that the judgment of the Japanese Court: (1) the foreign judgment sought to
be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to Philippine law and
public policy and rendered without due process of law.

ISSUE: Whether a Japanese court can acquire jurisdiction over a Philippine Corporation doing business in
Japan by serving summons through diplomatic channels on the Philippine corporation at its principal office in
Manila after prior attempts to serve summons in Japan had failed.
HELD: YES
A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary
is shown. It is also proper to presume the regularity of the proceedings and the giving of due notice therein. 6
The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.

Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate
the invalidity of such judgment. It was then incumbent upon SHARP to present evidence as to what that
Japanese procedural law is and to show that under it, the assailed extraterritorial service is invalid. It did not.
Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter
rendered by the Japanese court must stand.
Section 14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing business
in the Philippines, service may be made: (1) on its resident agent designated in accordance with law for that
purpose, or, (2) if there is no such resident agent, on the government official designated by law to that effect; or
(3) on any of its officers or agents within the Philippines.

Where the corporation has no such agent, service shall be made on the government official designated by law,
to wit: (a) the Insurance Commissioner in the case of a foreign insurance company; (b) the Superintendent of
Banks, in the case of a foreign banking corporation; and (c) the Securities and Exchange Commission, in the
case of other foreign corporations duly licensed to do business in the Philippines.
Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court
processes in Japan.

13. People vs. Ereo G.R. No. 124706 February 22, 2000

14. Philippine Hawk Corporation vs. Vivian Tan Lee G.R. No. 166869 February 16, 2010

15. Libcap Marketing Corp. vs. Baquial G.R. No. 192011 June 30, 2014

FACTS:

 
Petitioner Libcap Marketing Corporation (Libcap) is engaged in the freight forwarding business with offices in Iloilo City.
Petitioner Celiz is Libcap’s Human Resources Division Head, and petitioner Mondragon is Libcap’s Vice
-President for Administration.

 
Respondent Baquial was employed by  Libcap as ac
counting clerk for Libcap’s Super Express branch in Cagayan de Oro City.Her functions included depositing Libcap’s daily
sales and collections in Libcap’s bank account with Global Bank.

 
Sometime in March 2003, an audit of Libcap’s Super Express branch in
 Cagayan de Oro City was conducted, and the resultingaudit report showed that respondent made a double reporting of a
single deposit made on April 2,2001.

 
Celiz required respondent to explain why the cash sales of
₱
1,437.00 each for March 31, 2001 and April 1, 2001
 –
 as reportedin the daily collection reports
 –
 were covered by a single April 2, 2001 validated bank deposit slip for only
₱
1,437.00.

 
Respondent claimed that on April 2, 2001, she deposited with the bank two separate amounts of
₱
1,437.00 each, but that itappears that both separate deposits were covered by a single bank validation, which defect
should not be blamed on her buton the bank. Respondent then forwarded to Libcap
’
s head office two bank deposit slips to show that she deposited twoamounts of
₱
1,437.00 each on April 2,2001 with Global Bank.

 
Libcap discovered that only one
₱
1,437.00 deposit was made on April 2, 2001. On verification with PS Bank, its branch headconfirmed in an August 7, 2003
letter that only a single deposit of
₱
1,437.00 was posted on April 2, 2001, and that there wasno misposting or deposits to other accounts of the same amount
made on such date. The two bank deposit slips forwardedby respondent revealed that only one of them was validated by
the bank.

 
Finally, Libcap
’
s Global Bank bank statement covering April 1
 –
30, 2001 showed that only one cash deposit of
₱
1,437.00 wasmade on April 2, 2001.

 
Meanwhile, the amount of
₱
1,437.00 was deducted from respondent
’
s salary each payday on a staggered basis
 –
 or on April30, June 15, and June 30, 2003, respectively.

 
On July 26, 2003, respondent received a Notice of Administrative Investigation requiring her to attend investigation at
Libca
p’s
Iloilo office. Respondent was unable to attend due to lack of financial resources subsequently, respondent received a
2ndNotice of Administrative Investigation requiring her to attend another investigation in Iloilo City. Again, respondent
failed toattend.

 
Respondent was placed on preventive suspension from July 29, 2003 to August 12, 2003.

 
On August 16, 2003, respondent received a Notice of Termination, stating that she was terminated from employment
effective
 August 12, 2003 for dishonesty, embezzlement, inefficiency, and for commission of acts inconsistent with Libcap’s work
standards.

 
Respondent filed a labor complaint for illegal dismissal against petitioners
 

 
Ruling of LA:
 Respondents are jointly and severally ordered to pay the complainant, Lanny Jean Baquial, her backwagesfrom August
12, 2003 to November 30, 2005
 

 
The LA held that respondent was dismissed for just cause, but the dismissal was ineffectual as she was deprived
ofprocedural due process; it was error for Libcap to schedule the investigation at its Iloilo office when it could very
wellhave held it in CDO.

 
In awarding backwages, the Labor Arbiter relied on the ruling in
Serrano v. National Labor Relations Commissio
n, whichheld that an employee dismissed for just cause but without notice need not be reinstated, but must be paid
backwagesfrom the time of termination until it is determined that his termination was for a just cause.

 
Ruling of NLRC
: The assailed decision of the Labor Arbiter is hereby AFFIRMED in toto.
 

 
Ruling of CA
: The CA upheld the labor tribunals’ findings that while there was just cause to dismiss respo
ndent for dishonestyand embezzlement, petitioners failed to comply with procedural due process in effecting her
dismissal.
 ISSUE/s:
1.
 
W/N the court of appeals erred when it ruled that there was non-compliance with the procedural due process
requirementwhen the records show that the respondent was given full opportunity to explain the charges against her. -
NO

16. Sulpicio Lines vs. Sesante G.R. No. 172682 July 27, 2016

Facts:
On September 18, 1998, at around 12:55 p.m., the M/V Princess of the Orient, a passenger vessel owned
and operated by the petitioner, sank near Fortune Island in Batangas. Of the 388 recorded passengers, 150
were lost.[3] Napoleon Sesante, then a member of the Philippine National Police (PNP) and a lawyer, was
one of the passengers who survived the sinking. He sued the petitioner for breach of contract and
damages.[4]
Sesante alleged in his complaint that the M/V Princess of the Orient left the Port of Manila while Metro
Manila was experiencing stormy weather; that at around 11:00 p.m., he had noticed the vessel listing
starboard, so he had gone to the uppermost deck where he witnessed the strong winds and big waves
pounding the vessel; that at the same time, he had seen how the passengers had been panicking, crying for
help and frantically scrambling for life jackets in the absence of the vessel's officers and crew; that sensing
danger, he had called a certain Vency Ceballos through his cellphone to request him to inform the proper
authorities of the situation; that thereafter, big waves had rocked the vessel, tossing him to the floor where
he was pinned by a long steel bar; that he had freed himself only after another wave had hit the vessel;[5]
that he had managed to stay afloat after the vessel had sunk, and had been carried by the waves to the
coastline of Cavite and Batangas until he had been rescued; that he had suffered tremendous hunger,
thirst, pain, fear, shock, serious anxiety and mental anguish; that he had sustained injuries,[6] and had lost
money, jewelry, important documents, police uniforms and the .45 caliber pistol issued to him by the PNP;
and that because it had committed bad faith in allowing the vessel to sail despite the storm signal, the
petitioner should pay him actual and moral damages
In its defense, the petitioner insisted on the seaworthiness of the M/V Princess of the Orient due to its
having been cleared to sail from the Port of Manila by the proper authorities; that the sinking had been due
to force majeure; that it had not been negligent; and that its officers and crew had also not been negligent
because they had made preparations to abandon the vessel because they had launched life rafts and had
provided the passengers assistance in that regard.
On October 12, 2001, the RTC rendered its judgment in favor of the respondent,... The petitioner sought
reconsideration, but the RTC only partly granted its motion by reducing the temperate damages from
P500,000.00 to P300,000.00
Dissatisfied, the petitioner appealed.[12] It was pending the appeal in the CA when Sesante passed away.
He was substituted by his heirs.
On June 27, 2005, the CA promulgated its assailed decision. It lowered the temperate damages to
P120,000.00, which approximated the cost of Sesante's lost personal belongings; and held that despite the
seaworthiness of the vessel, the petitioner remained civilly liable because its officers and crew had been
negligent in performing their duties
Issues:
(1) Is the complaint for breach of contract and damages a personal action that does not survive the death
of the plaintiff?; (2) Is the petitioner liable for damages under Article 1759 of the Civil Code?; and (3) Is
there sufficient basis for awarding moral and temperate damages?
Ruling:
The appeal lacks merit.
An action for breach of contract of carriage survives the death of the plaintiff
Section 16, Rule 3 of the Rules of Court lays down the proper procedure in the event of the death of a
litigant, viz.:Section 16. Death of party; duty of counsel. - Whenever a party to a pending action dies, and
the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty
(30) days after such death of the fact thereof, and to give the name and address of his legal representative
or representatives. Failure of counsel to comply with his duty shall be a ground for disciplinary action.The
heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor
heirs.
A contract of carriage generates a relation attended with public duty, neglect or malfeasance of the
carrier's employees and gives ground for an action for damages.[19] Sesante's claim against the petitioner
involved his personal injury caused by the breach of the contract of carriage. Pursuant to the aforecited
rules, the complaint survived his death, and could be continued by his heirs following the rule on
substitution.
The petitioner is liable for breach of contract of carriage
The petitioner submits that an action for damages based on breach of contract of carriage under Article
1759 of the Civil Code should be read in conjunction with Article 2201 of the same code; that although
Article 1759 only provides for a presumption of negligence, it does not envision automatic liability; and
that it was not guilty of bad faith considering that the sinking of M/V Princess of the Orient had been due
to a fortuitous event, an exempting circumstance under Article 1174 of the Civil Code.
Article 1759 of the Civil Code does not establish a presumption of negligence because it explicitly makes
the common carrier liable in the event of death or injury to passengers due to the negligence or fault of the
common carrier's employees. It reads:Article 1759. Common carriers are liable for the death or injuries to
passengers through the negligence or willful acts of the former's employees, although such employees may
have acted beyond the scope of their authority or in violation of the orders of the common carriers.This
liability of the common carriers does not cease upon proof that they exercised all the diligence of a good
father of a family in the selection and supervision of their employees.The liability of common carriers under
Article 1759 is demanded by the duty of extraordinary diligence required of common carriers in safely
carrying their passengers.[
On the other hand, Article 1756 of the Civil Code lays down the presumption of negligence against the
common carrier in the event of death or injury of its passenger, viz.:Article 1756. 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.
Clearly, the trial court is not required to make an express finding of the common carrier's fault or
negligence.[21] Even the mere proof of injury relieves the passengers from establishing the fault or
negligence of the carrier or its employees.[22] The presumption of negligence applies so long as there is
evidence showing that: (a) a contract exists between the passenger and the common carrier; and (b) the
injury or death took place during the existence of such contract.[23] In such event, the burden shifts to the
common carrier to prove its observance of extraordinary diligence, and that an unforeseen event or force
majeure had caused the injury.
Sesante sustained injuries due to the buffeting by the waves and consequent sinking of M/V Princess of
the Orient where he was a passenger. To exculpate itself from liability, the common carrier vouched for the
seaworthiness of M/V Princess of the Orient, and referred to the BMI report to the effect that the severe
weather condition - a force majeure - had brought about the sinking of the vessel.
A common carrier may be relieved of any liability arising from a fortuitous event pursuant to Article
1174[25] of the Civil Code. But while it may free a common carrier from liability, the provision still requires
exclusion of human agency from the cause of injury or loss.[26] Else stated, for a common carrier to be
absolved from liability in case of force majeure, it is not enough that the accident was caused by a
fortuitous event. The common carrier must still prove that it did not contribute to the occurrence of the
incident due to its own or its employees' negligence.
The petitioner has attributed the sinking of the vessel to the storm notwithstanding its position on the
seaworthiness of M/V Princess of the Orient. Yet, the findings of the BMI directly contradicted the
petitioner's attribution,... The Captain's erroneous maneuvers of the M/V Princess of the Orient minutes
before she sunk [sic] had caused the accident. It should be noted that during the first two hours when the
ship left North Harbor, she was navigating smoothly towards Limbones Point. During the same period, the
ship was only subjected to the normal weather stress prevailing at the time. She was then inside Manila
Bar. The waves were observed to be relatively small to endanger the safety of the ship. It was only when
the MV Princess of the Orient had cleared Limbones Pt. while navigating towards the direction of the
Fortune Island when this agonizing misfortune struck the ship.
Initially, a list of three degrees was observed. The listing of the ship to her portside had continuously
increased. It was at this point that the captain had misjudged the situation. While the ship continuously
listed to her portside and was battered by big waves, strong southwesterly winds, prudent judgement [sic]
would dictate that the Captain should have considerably reduced the ship's speed. He could have
immediately ordered the Chief Engineer to slacken down the speed. Meanwhile, the winds and waves
continuously hit the ship on her starboard side. The waves were at least seven to eight meters in height
and the wind velocity was a[t] 25 knots. The MV Princess of the Orient being a close-type ship (seven
decks, wide and high superstructure) was vulnerable and exposed to the howling winds and ravaging seas.
Because of the excessive movement, the solid and liquid cargo below the decks must have shifted its
weight to port, which could have contributed to the tilted position of the ship.
Even assuming the seaworthiness of the MA/ Princess of the Orient, the petitioner could not escape
liability considering that, as borne out by the aforequoted findings of the BMI, the immediate and
proximate cause of the sinking of the vessel had been the gross negligence of its captain in maneuvering
the vessel
The Court also notes that Metro Manila was experiencing Storm Signal No. 1 during the time of the
sinking.[31] The BMI observed that a vessel like the M/V Princess of the Orient, which had a volume of
13.734 gross tons, should have been capable of withstanding a Storm Signal No. 1 considering that the
responding fishing boats of less than 500 gross tons had been able to weather through the same waves
and winds to go to the succor of the sinking vessel and had actually rescued several of the latter's
distressed passengers
We agree with the petitioner that moral damages may be recovered in an action upon breach of contract
of carriage only when: (a) death of a passenger results, or (b) it is proved that the carrier was guilty of fraud
and bad faith, even if death does not result.[33] However, moral damages may be awarded if the
contractual breach is found to be wanton and deliberately injurious, or if the one responsible acted
fraudulently or with malice or bad faith.
Principles:
In order to be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligation, must be independent of human will;
(2) it must be impossible to foresee the event which constitute the caso fortuito, or if it can be foreseen it
must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to
fulfill his obligation in any manner; and (4) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.
[T]he principle embodied in the act of God doctrine strictly requires that the act must be occasioned solely
by the violence of nature. Human intervention is to be excluded from creating or entering into the cause of
the mischief. When the effect is found to be in part the result of the participation of man, whether due to
his active intervention or neglect or failure to act, the whole occurrence is then humanized and removed
from the rules applicable to the acts of God.

17. Samson vs. Bank of the Philippine Islands G.R. No. 150487 July 10, 2003

FACTS:

Gerardo F. Samson, Jr. deposited a Prudential Bank check worth P3,500.00 to his savings account. Subsequently, he
asked his daughter to withdraw P2,000, but the request for withdrawal was denied due to insufficient funds.

Samson had a valued creditor who was waiting at his residence. The creditor was waiting for Samson to pay an
obligation that was due at that time. Unable to pay, Samson's credit line was severed. He also suffered humiliation and
besmirched reputation.

Following this incident, Samson deposited P5,500.00. Here, he discovered that his balance remained P342.38, and that
the earlier deposit of P3,500.00 had not been credited. When he inquired about what happened, BPI confirmed
the deposited check but could not account for it.

Upon further investigation, it was found out that their security guard had encashed the check and that, despite
knowledge of the irregularity, BPI had not informed Samson. Samson also claimed that while probing the incident, BPI
manager Cayanga allegedly displayed arrogance, indifference, and discourtesy towards him, prompting him to file a
complaint for damages against BPI.

The trial court rendered a decision in favor of Samson, including an award for moral damages amounting to P200,000.
CA affirmed the trial court's ruling but reduced the amount of moral damages to P50,000.00.

ISSUE:

Whether the CA was correct in reducing the amount for moral damages awarded to Samson. -- NO.

HELD:
The award for moral damages should be increased to P100,000.00 because Samson was a businessman and the highest
lay person in the United Methodist Church. It was proven that he was regarded with arrogance and a condescending
manner, and that BPI had successfully postponed compensating him for more than a decade.

Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused.
Moreover, although incapable of pecuniary estimation, the amount must somehow be proportional to and in
approximation of the suffering inflicted. Moral damages arenot punitive in nature and were never intended to enrich
the claimant at the expense of the defendant.

There is no hard-and-fast rule in determining moral damages; each case must be governed by its own peculiar facts.
Trial courts are given discretion in determining the amount, with the limitation that it “should not be palpably and
scandalously excessive.”

Moral damages are awarded to restore the spirit quo ante (actual damages compensate tangible damages, moral
damages restore the damages in spirit). Compensation is made by uplifting the morale, spirit, mental, and emotional
state of the victim.

18. Tan vs. OMC Carriers Inc. G.R. No. 190521 January 12, 2011

FACTS: Respondent OMC Carriers owned a truck, driven by respondent Arambala, which crashed into the home of
petitioners Tan when its braking mechanism failed. This caused the death of the head of the family, Celedonio Tan. The
Tans went to court to demand damages due to the negligence of OMC. OMC counters that the truck went out of control
because of motor oil spilled on the road. The RTC found OMC to be liable, that the brake of the truck malfunctioned, and
that there was no motor oil which caused the accident. The driver, Aramballa, abandoned the truck when the brakes did
not work which caused the truck to slam into the home of the Tans. The RTC awarded actual damages, both on the loss of
property and earning capacity of Celedonio. Exemplary damages were also awarded. Upon appeal to the Court of
Appeals, the actual damages for loss of property was reduced as they were insufficiently substantiated. The damages for
loss of earning capacity was deleted for being totally unsubstantiated. The Tans were unable to present documents to
ascertain the amount of earning capacity lost. Exemplary damages were also reduced.

ISSUES: Whether or not: a) the reduction of actual damages for loss of property was proper; b) the removal of
actual damages for loss of earning capacity was proper; and c) whether or not the reduction of exemplary damages
was proper.

HELD: The petition is partly meritorious. Civil Law: Temperate damages are awarded when the exact amount of
damages is unknown. The petitioners clearly suffered damages. Their home and property were damaged. The provider of
the family passed away. It is clear and undisputed that they did suffer losses. However, since the value of the properties
damaged could not be determined with certainty because of the nature of the property, temperate damages are in order.
Also, even if there are no documents supporting the earning capacity of the deceased, the damage caused is still
undisputed. Temperate damages must be awarded. The reduction of exemplary damages are proper as exemplary damages
are not meant to enrich or reduce another party to poverty. Consistent with pertinent jurisprudence, the interest on these
awards must be computed from the date when the RTC rendered its decision in the civil case, or on June 17, 2008, as it
was at this time that a quantification of the damages may be deemed to have been reasonably ascertained.

19. Sps. Estrada vs. Philippine Bus Rabbit Lines Inc. G.R. No. 203902 July 19, 2017

FACTS: On April 9, 2002, a passenger bus owned by Philippine Rabbit Bus, Lines, Inc. [PRBL] had a collision
with another vehicle along the national highway in Barangay Alipangpang, Pozorrubio, Pangasinan. Dionisio
Estrada [Petitioner] was a passenger of the said bus, and due to the accident, his right arm was amputated.
Petitioner sued PRBL and its driver Eduardo Saylan for damages before the Regional Trial Court [RTC] of
Urdaneta City, Pangasinan. Dionisio argued that pursuant to the contract of carriage between him and
Philippine Rabbit, respondents were duty-bound to carry him safely as far as human care and foresight can
provide, with utmost diligence of a very cautious person, and with due regard for all the circumstances from the
point of his origin in Urdaneta City to his destination in Pugo, La Union. However, through the fault and
negligence of Philippine Rabbit's driver, Eduardo, and without human care, foresight, and due regard for all
circumstances, respondents failed to transport him safely by reason of the aforementioned collision, which
resulted in the amputation of Dionisio's right arm. And since demands for Philippine Rabbit to pay him
damages for the injury he sustained remained unheeded, Dionisio filed the said complaint wherein he prayed for
the following awards: moral damages of ₱500,000.00 actual damages of ₱60,000.00, and attorney's fees of
₱25,000.00. RTC, treating the complaint of the petitioner as one predicated on breach of contract of carriage,
found respondent to be jointly and severally liable with Eduardo. Upon appeal the Court of Appeals [CA]
modified the RTC decision and held PRBL to be solely and exclusively liable to petitioner for actual damages
and deleted the award for moral damages and attorney’s fees. Petitioner raised the issue before the SC, stating
that their claim for moral damages is based purely on the fact that Dionisio lost his right arm. They argue that
while in a strict sense, Dionisio incurred actual damages through the amputation of his right arm, such loss may
rightly be considered as falling under moral damages. This is because a right arm is beyond the commerce of
man and loss thereof necessarily brings physical suffering, mental anguish, besmirched reputation, social
humiliation and similar injury to a person. At any rate, should this Court award the amount of ₱500,000.00 as
actual damages due to the loss of Dionisio's right arm, petitioners also find the same proper and appropriate
under the circumstances.

ISSUE: Whether the petitioner’s claim of moral damages should be granted based on the fact that the
Dionisio lost his right arm by reason of the accident.

HELD: Moral damages; Instances when moral damages can be awarded in an action for breach of contract.
Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act
or omission. Under Article 2219 of the Civil Code, moral damages are recoverable in the following and
analogous cases: (1) a criminal offense resulting in physical injuries; (2) quasi-delicts causing physical injuries;
(3) seduction, abduction, rape or other lascivious acts; (4) adultery or concubinage; (5) illegal or arbitrary
detention or arrest; (6) illegal search; (7) libel, slander, or any other form of defamation; (8) malicious
prosecution; (9) acts mentioned in Article 309; and (1) acts and actions referred to in Articles 21, 26, 27, 28, 29,
30, 32, 34, and 35. x x x [C]ase law establishes the following requisites for the award of moral damages: (1)
there must be an injury clearly sustained by the claimant, whether physical, mental or psychological; (2) there
must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and (4) the award for damages is predicated on any of
the cases stated in Article 2219 of the Civil Code. Since breach of contract is not one of the items enumerated
under Article 2219, moral damages, as a general rule, are not recoverable in actions for damages predicated on
breach of contract. x x x As an exception, such damages are recoverable [in an action for breach of contract:]
(1) in cases in which the mishap results in the death of a passenger, as provided in Article 1764, in relation to
Article 2206(3) of the Civil Code; and (2) in x x x cases in which the carrier is guilty of fraud or bad faith, as
provided in Article 2220. Moral damages are not recoverable in this case.

It is obvious that this case does not come under the first of the abovementioned exceptions since Dionisio did
not die in the mishap but merely suffered an injury. Nevertheless, petitioners contend that it falls under the
second category since they aver that Philippine Rabbit is guilty of fraud or bad faith. It has been held, however,
that "allegations of bad faith and fraud must be proved by clear and convincing evidence." They are never
presumed considering that they are serious accusations that can be so conveniently and casually invoked. And
unless convincingly substantiated by whoever is alleging them, they amount to mere slogans or mudslinging. In
this case, the fraud or bad faith that must be convincingly proved by petitioners should be one which was
committed by Philippine Rabbit in breaching its contract of carriage with Dionisio. Unfortunately for
petitioners, the Court finds no persuasive proof of such fraud or bad faith. Fraud has been defined to include an
inducement through insidious machination. Insidious machination refers to a deceitful scheme or plot with an
evil or devious purpose. Deceit exists where the party, with intent to deceive, conceals or omits to state material
facts and, by reason of such omission or concealment, the other party was induced to give consent that would
not otherwise have been given. Bad faith, on the other hand, "does not simply connote bad judgment or
negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of
a known duty through some motive or interest or ill will that partakes of the nature of fraud." There is no
showing here that Philippine Rabbit induced Dionisio to enter into a contract of carriage with the former
through insidious machination. Neither is there any indication or even an allegation of deceit or concealment or
omission of material facts by reason of which Dionisio boarded the bus owned by Philippine Rabbit. Likewise,
it was not shown that Philippine Rabbit's breach of its known duty, which was to transport Dionisio from
Urdaneta to La Union, was attended by some motive, interest, or ill will. From these, no fraud or bad faith can
be attributed to Philippine Rabbit. Still, petitioners insist that since the defenses it pleaded in its Answer were
designed to evade liability, Philippine Rabbit is guilty of fraud or bad faith. Suffice it to state, however, that the
allegations which made up Philippine Rabbit's defenses are hardly the kind of fraud or bad faith contemplated
by law. Again, it bears to mention that the fraud or bad faith must be one which attended the contractual breach
or one which induced Dionisio to enter into contract in the first place. Clearly, moral damages are not
recoverable in this case. The CA, therefore, did not err in deleting the award for moral damages.

20. Tan vs. Bantegui G.R. No. 154027 October 24, 2005

Facts:
"The subject matter of the controversy is a 232 square-meter lot situated at No. 37-E Calavite St. La Loma,
Quezon City, Metro Manila. Said piece of property was registered in the name of [Respondent] Gorgonia
Bantegui (Bantegui for brevity), married to Jesus Bayot,... under Transfer Certificate of Title [(TCT)] No.
47163 of the Register of Deeds of Quezon City, issued on May 6, 1959, and later reconstituted under
[TCT] No. 28458.
"Bantegui acquired the property sometime in 1954 and rented it to spouses Florante B. Caedo and
Florencia B. Caedo (Caedos for brevity), who resided therein until 1994. In 1970, she left for the United
States of America. She returned to the Philippines in January 1988 and... executed her special power of
attorney[,] making Guadalupe B. Bautista (Bautista for brevity) her representative, [after which], she went
back to the United States.
"For failure of Bantegui to pay said taxes, the [c]ity [t]reasurer of Quezon City sold said property at public
auction held on November 21, 1984, to the spouses Edilberto and Josefina Capistrano (Capistranos for
brevity), for the sum of P10,000.00. The Certificate of Sale of
Delinquent Property was subsequently issued in their favor on November 26, 1984.
"Since the property was not redeemed within the one (1) year redemption period, title to said property was
consolidated to the Capistranos and [TCT] No. 361851 was issued in their names on June 4, 1987. The
Capistranos, however, did not take possession of the land [or inform]... the Caedos about the sale or
collected any rent from them. They[,] likewise[,] did not pay real property taxes thereon.
"The property was later sold on June 20, 1988 by the Capistranos to spouses Evelyn and Jesse Pereyra
(Pereyras for brevity) for P60,000.00. Their TCT was cancelled and a new [TCT] No. 2059 was issued on
January 10, 1989 in the name of the Pereyras, who also did not take... possession of the property in
question. They, however, mortgaged the same to the Rural Bank of Imus, Cavite, which [mortgage] was
annotated on the title of the property.
"These transfers were unknown to Bantegui and the Caedos[,] despite the fact that Evelyn Pereyra is the
daughter of the Caedos, as the latter did not inform them about anything concerning these transactions. All
this time[,] the actual occupants, the Caedos, considered... themselves as tenants of Bantegui, such that
they paid rent to her until December 1993, when they handed the water pump as payment of their arrears.
"Meanwhile, on May 3, 1990, said property was again sold by the Pereyras to the spouses Ramon and
Rosita Tan (Tans for brevity) for P350,000.00, with the latter paying the amount of P300,000.00 to the
Rural Bank of Imus, Cavite for the release of the mortgage per agreement by... the parties. They likewise
paid the overdue taxes and other expenses incurred by the Pereyras pertaining to said mortgage.
"The Tans, like their predecessors, did not take immediate possession of the property [or inform] the
occupants (Caedos) of their title to the land. Towards the latter part of 1990, however, the Tans, thru their
lawyer, informed the Caedos of their ownership over the property... and demanded that the Caedos vacate
the property. They subsequently filed an action for ejectment against the Caedos before the Municipal
Trial Court of Quezon City on January 18, 1991. On October 31, 1991, the Court ruled in favor of the
Tans. The Caedos then interposed an... appeal on February 2, 1992[,] which was remanded to the same
Court for further proceedings, and for failure of the Caedos to appear during the hearing of the case, they
were declared in default and were subsequently ejected from the property on February 20, 1994, when
the house... that they erected thereon was demolished.
"On February 11, 1992, Bantegui, thru her sister Guadalupe Bautista, and joined by the spouses Caedo[,]
filed a Complaint for Annulment of Sale, Quieting of Title, Injunction and Damages with the Regional Trial
Court of Quezon City. The complaint was later amended on May 14,... 1992, impleading the spouses
Capistrano and the [c]ity [t]reasurer of Quezon City as co-defendants, and deleting "quieting of title" from
the prayer and inserting "reconveyance.'"[5]
Ruling of the Court of Appeals
In declaring that petitioners were not purchasers in good faith and had no better right to the subject
property than that of any of their predecessors-in-interest, the appellate court gave the following reasons.
First, the auction sale was tainted with... irregularities: no notices of delinquency and of sale were sent to
the owner. Second, the owner continued to pay realty taxes on the property, even after the date of the
sale. She would not have done so had she been aware that it had already been auctioned off.
Third, the selling price was grossly inadequate and, when viewed together with the other facts and
circumstances, would render the sale itself void. Fourth, the purchasers failed to take possession of the
property, pay the real taxes, and inform the... lessees of the purchase. As a result, the latter continued to
pay rent to the owner. As stated earlier, the CA affirmed the trial court's Decision.
Issues:
Whether the Auction Sale Was Valid
Ruling:
The Petition has no merit.
Principles:
The tax sale did not conform to the requirements prescribed under Presidential Decree (PD) No. 464,
otherwise known as the Real Property Tax Code.[9]
First, no notice of delinquency or of sale was given to either Gorgonia Bantegui, the delinquent owner; or
to her representative.
On the one hand, Section 65 of PD 464 provides:
"SECTION 65. Notice of delinquency in the payment of the real property tax. -
"Upon the real property tax or any installment thereof becoming delinquent, the x x x city treasurer shall
immediately cause notice of the fact to be posted at the main entrance of the x x x city hall and in a public
and conspicuous place in each barrio of the x x x city as the... case may be. The notice of delinquency shall
also be published once a week for three consecutive weeks, in a newspaper of general circulation in the x x
x city, if any there be, and announced by a crier at the market place for at least three market days.
"Such notice shall specify the date upon which tax became delinquent, and shall state that personal
property may be seized to effect payment. It shall also state that, at any time, before the seizure of
personal property, payment may be made with penalty in accordance with the... next following section, and
further, that unless the tax and penalties be paid before the expiration of the year for which the tax is due,
or the tax shall have been judicially set aside, the entire delinquent real property will be sold at public
auction, and that thereafter the... full title to the property will be and remain with the purchaser, subject
only to the right of delinquent taxpayer or any other person in his behalf to redeem the sold property
within one year from the date of sale."
On the other hand, Section 73 of PD 464 states:
"SECTION 73. Advertisement of sale of real property at public auction. -
"After the expiration of the year for which the tax is due, the x x x city treasurer shall advertise the sale at
public auction of the entire delinquent real property, except real property mentioned in subsection (a) of
Section forty hereof, to satisfy all the taxes and... penalties due and the costs of sale. Such advertisement
shall be made by posting a notice for three consecutive weeks at the main entrance of the x x x city or x x
x hall in the case of cities, and in a public and conspicuous place in barrio or district wherein the property
is... situated, in English, Spanish and the local dialect commonly used, and by announcement at least three
market days at the market by crier, and, in the discretion of the x x x city treasurer, by publication once a
week for three consecutive weeks in a newspaper of general... circulation published in the x x x city.
"The notice, publication, and announcement by crier shall state the amount of the taxes, penalties and
costs of sale; the date, hour, and place of sale, the name of the taxpayer against whom the tax was
assessed; and the kind or nature of property and, if land, its approximate... areas, lot number, and location
stating the street and block number, district or barrio, municipality and the province or city where the
property to be sold is situated. Copy of the notice shall forthwith be sent either by registered mail or by
messenger, or through the barrio... captain, to the delinquent taxpayer, at his address as shown in the tax
rolls or property tax record cards of the x x x city where the property is located, or at his residence, if
known to said treasurer or barrio captain: Provided, however, That a return of the proof of service... under
oath shall be filed by the person making the service with the x x x city treasurer concerned."
The auction sale of real property for the collection of delinquent taxes is in personam, not in rem.[10]
Although sufficient in proceedings in rem like land registration, mere notice by publication will not satisfy
the... requirements of proceedings in personam.[11] "[P]ublication of the notice of delinquency [will] not
suffice, considering that the procedure in tax sales is in personam."[12] It is still incumbent upon the city...
treasurer to send the notice directly to the taxpayer -- the registered owner of the property -- in order to
protect the latter's interests. Although preceded by proper advertisement and publication, an auction sale
is void absent an actual notice to a delinquent... taxpayer.[13]
The sale of land "for tax delinquency is in derogation of property rights and due process[;] the prescribed
steps must be followed strictly."[14] In the present case, notices either of delinquency or of sale were not
given to the delinquent taxpayer. Those... notices are mandatory, and failure to issue them invalidates a
sale.[15] Because it was clearly in contravention of the requirements under the law and jurisprudence, the
subsequent sale of the real property did not make its purchaser the new owner.
A certificate of title under the Torrens system serves as evidence of an indefeasible title to the property in
favor of the person whose name appears on it.[16] While it is true that Transfer Certificates of Title have
already been issued in the names of... the subsequent purchasers, they should nonetheless be invalidated.
Considering the failure to abide by the mandatory requirements of a proceeding in personam, no better
title than that of the original owner can be assumed by the transferees.
Besides, the incontrovertible nature of a certificate of title applies only when the issue involved is the
validity of the original and not of the transfer. Subsequent titles issued to the prejudice of the rightful
owner will produce no legal effects whatsoever.[17] Quod nullum est, nullum producit effectum. That
which is a nullity produces no effect.[18]
A gross inadequacy in the price is of no moment either. It is true that the lower the price, the easier it will
be for the owner to effect redemption;[19] but the fact remains that without the mandatory notices, the
registered owner will never be given the... opportunity to redeem the property, despite the lapse of one
year from the date the sale is registered.[20]
Moreover, failure to assert ownership over a property is indicative of the doubtful validity of its sale. The
immediate purchasers in the present case neither took possession nor informed the occupants (the
Caedos) of the former's alleged acquisition of the property. The... purchasers did not even demand rent or
ask them to vacate, as a result of which the Caedos continued to pay rent to Respondent Bantegui. Indeed,
registered owners have the right to enjoy the property that they own,[21] including the jus utendi... or the
right to receive from it whatever it produces,[22] like civil fruits.[23]
Second, only a copy of the Resolution of Branch 85 of the Regional Trial Court of Quezon City, confirming
the final bill of sale to the Capistranos, has been submitted by the city treasurer to show the validity of the
sale.[24]
This Resolution is, however, inconclusive. With greater significance is the categorical and unrefuted
statement in it that the "[s]ealed envelope containing a copy of the petition addressed to Gorgonia
Bantegui x x x was returned to sender unclaimed x x x."[25] That statement definitely confirms the lack of
notices, without which the subsequent proceeding to sell the property produces no legal effect. "Notice of
sale to the delinquent landowners and to the public[,] in general[,] is an essential and indispensable...
requirement of law, the non-fulfillment of which vitiates the sale."[26]
Third, Section 80 of PD 464 provides that "any balance of the proceeds of the sale left after deducting the
amount of the taxes and penalties due and the costs of sale, shall be returned to the owner or his
representative." Again contrary to the mandate of the law,... the balance of the proceeds from the tax sale
was not even returned to Respondent Bantegui or her representative after the issuance of the final bill of
sale. The failure to return the proceeds reinforced the apparent irregularity not only in the conduct of the
tax sale, but... also in its subsequent disposition.
Fourth, petitioners were not innocent purchasers for value. Despite their awareness of defects in their
title, they still failed to investigate or take the necessary precaution.
Good faith is a question of intention.[27] It consists in the possessor's belief that the person from whom a
thing has been received is its owner and can convey title.[28] It is determined by outward acts and proven
conduct.[29]
"A purchaser of real estate at the tax sale obtains only such title as that held by the taxpayer[;] the
principle of caveat emptor applies."[30] Purchasers cannot close their eyes to facts that should have put
any reasonable person upon guard, and then... claim that they "acted in good faith under the belief that
there was no defect in the title."[31] If petitioners do not investigate or take precaution despite knowing
certain facts, they cannot be considered in good faith. The defense of indefeasibility of... a Torrens title
does not extend to a transferee who takes the title despite a notice of the flaw in it.[32] From a vendor
who does not have any title to begin with, no right is passed to a transferee.
In the present case, the exercise of the right of possession over the property was attempted by none of the
purchasers, except petitioners.[33] The latter's predecessors-in-interest did not deny the fact that
respondent spouses had continued to stay in and... rent the property from Respondent Bantegui, its
registered owner. Information about the purchase was not at all relayed by Evelyn Pereyra, a subsequent
purchaser and former resident, to the Caedos who were her very own parents.[34] When "the land sold is
in... the possession of a person other than the vendor, the purchaser is required to go beyond the
certificate of title and make inquiries concerning the rights of the actual possessor."[35]
Furthermore, nothing on the record shows that, aside from Respondent Bantegui, the purchasers paid real
property taxes, as required of every registered property owner. The tax on real property for any year shall
attach to, become due and payable[36] from,... and be the personal liability of its "owner at the beginning
of the year."[37] Curiously, the city government allowed Respondent Bantegui to continue paying real
property taxes even after the redemption period and the confirmation of the final bill of sale.
Moreover, the records mention no payment of real property taxes from 1984 to 1986.
Finally, Respondent Bantegui remained in continuous possession of the owner's duplicate copy of the
Certificate of Title. She was even allowed to undertake an administrative reconstitution of her file copy
after its destruction by fire. Accordingly, the Register of
Deeds issued a reconstituted title in her name, in which the property had been registered as early as 1959.
For reasons known only to the alleged purchasers, no attempt was even made to have the title immediately
cancelled. It is basic that registration does not vest title,... which is a mere evidence of title to a property.
More important, the reconstituted title was allowed despite the fact that several TCTs had already been
previously issued in favor of petitioners' predecessors-in-interest. Although reconstitution alone neither
confirms nor adjudicates ownership,[38]... considering the surrounding circumstances of this case, the
Court hereby confirms Respondent Bantegui's rightful ownership of the property.

21. People vs. Manero G.R. Nos. 86883-85 January 29 1993

FACTS:
In 1985, around 10:00 o’clock in the morning, the accused-appellants Norberto Jr., Edilberto,
Elpidio, Rodrigo, Severino, Rudy, Efren, and Roger, were inside the eatery of one Deocades. They
were conferring with Arsenio their plans to liquidate a number of suspected communist
sympathizers. Arsenio scribbled on a cigarette wrapper the following “NPA v. NPA, starring Fr.
Peter, Domingo Gomez, Bantil, Fred Gapate, Rene alias Tabagac and Villaning.” “Fr. Peter” is Fr.
Peter Geremias, an Italian priest suspected of having links with the communist movement;
“Bantil” is Rufino Robles, a Catholic lay leader who is the complaining witness in the Attempted
Murder; Domingo Gomez is another lay leader, while the others are simply “messengers”. On the
same occasion, the conspirators agreed to Edilberto’s proposal that should they fail to kill Fr.
Peter, another Italian priest would be killed in his stead.

Later, at 4:00 o’clock, accused-appellants, all with firearms, proceeded to the house of “Bantil”,
their first intended victim. Upon meeting “Bantil”, Edilberto drew his revolver and fired at the
forehead of “Bantil”. “Bantil” was able to parry the gun, albeit his right finger and the lower
portion of his right ear were hit. Then they grappled for its possession until “Bantil” was
extricated from the fray. But, as he was running away, he was again fired upon by Edilberto.
“Bantil” however managed to seek refuge in the house of a certain Gomez. Norberto ordered his
men to surround the house and not to allow anyone to get out so that “Bantil” would die of
hemorrhage. Then Edilberto went back to the restaurant of Deocades and pistol-whipped him
on the face and accused him of being a communist coddler. Edilberto strewed him with a burst
of gunfire. Deocades cowered in fear as he knelt with both hands clenched at the back of his
head. This again drew boisterous laughter and ridicule from other accused-appellants.

At 5:00 o’clock, Fr. Favali arrived on board his motorcycle. He entered the house of Gomez. While
inside, Norberto, and his co-accused Pleñago towed the motorcycle outside to the center of the
highway. Norberto opened the gasoline tank, spilled some fuel, lit a fire and burned the
motorcycle. As the vehicle was ablaze, accused-appellants raved and rejoiced. Upon seeing his
motorcycle on fire, Fr. Favali accosted Norberto. At this point, Edilberto asked the priest: “What is
it you want, Father? Do you want me, Father, to break your head?” Thereafter, Edilberto fired at
the head of the priest. As Fr. Favali dropped to the ground, Norberto taunted Edilberto if that
was the only way he knew to kill a priest. Slighted over the remark, Edilberto jumped over the
prostrate body three (3) times, kicked it twice, and fired anew. The burst of gunfire virtually
shattered the head of Fr. Favali, causing his brain to scatter on the road. As Norberto flaunted
the brain to the terrified onlookers, his brothers danced and sang “Mutya Ka Baleleng” to the
delight of the accused-appellants who now took guarded positions to isolate the victim from
possible assistance. Informations for Murder, Attempted Murder and Arson were accordingly
filed against accused-appellants.

ISSUE:
Are the accused-appellants liable for all the crimes committed by Norberto and Edilberto
although they have not directly participated in the commission of those crimes?

HELD:
YES. Under Article of the Revised Penal Code, there is conspiracy when two or more persons
come to an agreement to commit a crime and decide to commit it. It is not essential that all the
accused commit together each and every act constitutive of the offense. It is enough that an
accused participates in an act or deed where there is singularity of purpose and unity in its
execution is present.

From the foregoing narration of facts, it is clear that accused-appellants were not merely
innocent bystanders but were in fact vital cogs in perpetrating the savage murder of Fr. Favali
and the attempted murder of Robles. For sure, they all assumed a fighting stance to discourage
if not prevent any attempt to provide assistance to the fallen priest. They surrounded the house
of Gomez to stop Robles and the other occupants from leaving so that the wounded Robles may
die of hemorrhage. Undoubtedly, these were overt acts to ensure success of the commission of
the crimes and in furtherance of the aims of the conspiracy. The accused-appellants acted in
concert in the murder of Fr. Favali and in the attempted murder of Robles. While accused-
appellants may not have delivered the fatal shots themselves, their collective action showed a
common intent to commit the criminal acts. Conspiracy or action in concert to achieve a criminal
design being sufficiently shown, the act of one is the act of all the other conspirators, and the
precise extent or modality of participation of each of them becomes secondary. Therefore, all of
the accused-appellants are liable collectively for the individual acts of their co-accused.

22. GSIS vs. Labung-Deang G.R. No. 135644 September 17 2001

The petitioner in the case is the Government Service Insurance System (hereafter, GSIS). Having
lost the case in the trial court and the Court of Appeals, it now comes to this Court for redress.

At the onset, we state that the issue is not suability or whether GSIS may be sued despite the
doctrine of state immunity from suit, but liability, whether or not GSIS may be liable to pay damages
to respondent spouses given the applicable law and the circumstances of the case. 1

The Case

The case is a petition 2 for review on certiorari of the decision of the Court of Appeals 3 affirming the
decision of the Regional Trial Court, Angeles City 4 ordering GSIS to pay respondents Gonzalo (now
deceased) 5 and Matilde Labung-Deang (hereafter, spouses Deang) temperate damages, attorneys
fees, legal interests an d costs of suit for the loss of their title to real property mortgaged to the
GSIS.

The Facts
Sometime in December 1969, the spouses Deang obtained a housing loan from the GSIS in the
amount of eight thousand five hundred pesos (P8,500.00). Under the agreement, the loan was to
mature on December 23, 1979. The loan was secured by a real estate mortgage constituted over the
spouses property covered by Transfer Certificate of Title No. 14926-R issued by the Register of Deeds
of Pampanga. 6 As required by the mortgage deed, the spouses Daeng deposited the owners
duplicate copy of the title with the GSIS. 7 cräläwvirtualibräry

On January 19, 1979, eleven (11) months before the maturity of the loan, the spouses Deang settled
their debt with the GSIS 8 and requested for the release of the owners duplicate copy of the title
since they intended to secure a loan from a private lender and use the land covered by it as collateral
security for the loan of fifty thousand pesos (P50,000.00) 9 which they applied for with one Milagros
Runes. 10 They would use the proceeds of the loan applied for the renovation of the spouses
residential house and for business. 11 cräläwvirtualibräry

However, personnel of the GSIS were not able to release the owners duplicate of the title as it could
not be found despite diligent search. 12 As stated earlier, the spouses as mortgagors deposited the
owners duplicate copy of the title with the GSIS located at its office in San Fernando, Pampanga. 13 cräläwvirtualibräry

Satisfied that the owners duplicate copy of the title was really lost, in 1979, GSIS commenced the
reconstitution proceedings with the Court of First Instance of Pampanga for the issuance of a new
owners copy of the same. 14 cräläwvirtualibräry

On June 22, 1979, GSIS issued a certificate of release of mortgage. 15 cräläwvirtualibräry

On June 26, 1979, after the completion of judicial proceedings, GSIS finally secured and released the
reconstituted copy of the owners duplicate of Transfer Certificate of Title No. 14926-R to the spouses
Deang. 16cräläwvirtualibräry

On July 6, 1979, the spouses Deang filed with the Court of First Instance, Angeles City a complaint
against GSIS for damages, claiming that as result of the delay in releasing the duplicate copy of the
owners title, they were unable to secure a loan from Milagros Runes, the proceeds of which could
have been used in defraying the estimated cost of the renovation of their residential house and which
could have been invested in some profitable business undertaking. 17 cräläwvirtualibräry

In its defense, GSIS explained that the owners duplicate copy of the title was released within a
reasonable time since it had to conduct standard pre-audit and post-audit procedures to verify if the
spouses Deangs account had been fully settled. 18 cräläwvirtualibräry

On July 31, 1995, the trial court rendered a decision ruling for the spouses Deang. The trial court
reasoned that the loss of the owners duplicate copy of the title in the possession of GSIS as security
for the mortgage... without justifiable cause constitutes negligence on the part of the employee of
GSIS who lost it, making GSIS liable for damages. 19 We quote the dispositive portion of the
decision: 20 cräläwvirtualibräry

IN VIEW OF THE FOREGOING, the Court renders judgment ordering the GSIS:

a) To pay the plaintiffs-spouses the amount of P20,000.00 as temperate damages;

b) To pay plaintiffs-spouses the amount of P15,000.00 as attorneys fees;

c) To pay legal interest on the award in paragraphs a) and b) from the filing of the complaint; and,

d) To pay cost of the suit.

SO ORDERED.

On August 30, 1995, GSIS appealed the decision to the Court of Appeals. 21 cräläwvirtualibräry

On September 21, 1998, the Court of Appeals promulgated a decision affirming the appealed
judgment, ruling: First, since government owned and controlled corporations (hereafter, GOCCs)
whose charters provide that they can sue and be sued have a legal personality separate and distinct
from the government, GSIS is not covered by Article 2180 22 of the Civil Code, and it is liable for
damages caused by their employees acting within the scope of their assigned tasks. Second, the
GSIS is liable to pay a reasonable amount of damages and attorneys fees, which the appellate court
will not disturb. We quote the dispositive portion: 23 cräläwvirtualibräry
WHEREFORE, finding no reversible error in the appealed judgment, the same is hereby AFFIRMED.

SO ORDERED.

Hence, this appeal. 24

The Issue

Whether the GSIS, as a GOCC primarily performing governmental functions, is liable for a negligent
act of its employee acting within the scope of his assigned tasks. 25

The Courts Ruling

We rule that the GSIS is liable for damages. We deny the petition for lack of merit.

GSIS, citing the sixth paragraph of Article 2180 of the Civil Code argues that as a GOCC, it falls
within the term State and cannot be held vicariously liable for negligence committed by its employee
acting within his functions. 26
cräläwvirtualibräry

Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.

xxx

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business of
industry.

The State is responsible in like manner when it acts though a special agent, but not when the
damage has been caused by the official to whom the task was done properly pertains , in which case
what is provided in Article 2176 shall be applicable.

xxx (underscoring ours)

The argument is untenable. The cited provision of the Civil Code is not applicable to the case at bar.
However, the trial court and the Court of Appeals erred in citing it as the applicable law. Nonetheless,
the conclusion is the same. As heretofore stated, we find that GSIS is liable for damages.

The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-
delict. 27 We do not agree. Article 2176 of the Civil Code defines quasi-delict as follows:

Whoever by act or omission causes damages to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter
(underscoring ours).

Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang
had a loan agreement secured by a real estate mortgage. The duty to return the owners duplicate
copy of title arose as soon as the mortgage was released. 28 GSIS insists that it was under no
obligation to return the owners duplicate copy of the title immediately. This insistence is not
warranted. Negligence is obvious as the owners duplicate copy could not be returned to the owners.
Thus, the more applicable provisions of the Civil Code are:

Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or
delay and those who in any manner contravene the tenor thereof are liable for damages.

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good
faith is liable shall be those that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted xxx.

Since good faith is presumed and bad faith is a matter of fact which should be proved,  29 we shall
treat GSIS as a party who defaulted in its obligation to return the owners duplicate copy of the title.
As an obligor in good faith, GSIS is liable for all the natural and probable consequences of the breach
of the obligation. The inability of the spouses Deang to secure another loan and the damages they
suffered thereby has its roots in the failure of the GSIS to return the owners duplicate copy of the
title.

We come now to the amount of damages. In a breach of contract, moral damages are not awarded if
the defendant is not shown to have acted fraudulently or with malice or bad faith. 30 The fact that the
complainant suffered economic hardship 31 or worries and mental anxiety 32 is not enough.

There is likewise no factual basis for an award of actual damages. Actual damages to be compensable
must be proven by clear evidence. 33 A court can not rely on speculation, conjecture or guess work as
to the fact and amount of damages, but must depend on actual proof. [34 cräläwvirtualibräry

However, it is also apparent that the spouses Deang suffered financial damage because of the loss of
the owners duplicate copy of the title. Temperate damages may be granted.

Article 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.

GSIS submits that there must be proof of pecuniary loss. This is untenable. The rationale behind
temperate damages is precisely that from the nature of the case, definite proof of pecuniary loss
cannot be offered. When the court is convinced that there has been such loss, the judge is
empowered to calculate moderate damages, rather than let the complainant suffer without redress
from the defendants wrongful act. 35 cräläwvirtualibräry

The award of twenty thousand pesos (P20,000.00) in temperate damages is reasonable considering
that GSIS spent for the reconstitution of the owners duplicate copy of the title.

Next, the attorneys fees. Attorneys fees which are granted as an item of damages are generally not
recoverable. 36 The award of attorneys fees is the exception rather than the rule and counsels fees
are not to be awarded every time a party wins a suit. The award of attorneys fees demands factual,
legal and equitable justification; its basis cannot be left to speculation or conjecture. 37 cräläwvirtualibräry

We find no circumstance to justify the award of attorneys fees. We delete the same.

The Fallo

WHEREFORE , we DENY the petition. We AFFIRM the decision of the Court of Appeals in CA-G.R. CV
No. 51240 with the MODIFICATION that award of attorneys fees is DELETED.

No costs.

SO ORDERED.

23. Philtranco Service Enterprises vs. Para G.R. No. 161909 April 25 2012

FACTS: Plaintiff-appellant [respondent] Felix Paras (Paras for brevity), who hails from Cainta, Rizal is engaged in the
buy and sell of fish products. Sometime on 08 February 1987, on his way home to Manila from Bicol Region, he boarded
a bus, owned and operated by Inland Trailways, Inc. and driven by its driver Calvin Coner. While the said bus was
travelling, it was bumped at the rear by another bus, owned and operated by Philtranco. As a result of the strong and
violent impact, the Inland bus was pushed forward and smashed into a cargo truck parked along the outer right portion of
the highway and the shoulder thereof. Consequently, the said accident bought considerable damage to the vehicles
involved and caused physical injuries to the passengers and crew of the two buses, including the death of Coner who was
the driver of the Inland Bus at the time of the incident. Paras was not spared from the pernicious effects of the accident.
Paras underwent two (2) operations affecting the fractured portions of his body. Paras filed a complaint for damages based
on breach of contract of carriage against Inland. In its answer, defendant Inland denied responsibility, by alleging , among
others, that its driver Coner had observed an utmost and extraordinary care and diligence that the Philtranco bus driver of
[sic] Apolinar Miralles was the one which violently bumped the rear portion of the Inland bus, and therefore, the direct
and proximate cause of Paras’ injuries. Inland filed a third-party complaint against Philtranco and Apolinar Miralles
(Third Party defendants) RTC rendered its judgment on July 18, 1997,1 viz: WHEREFORE, third-party defendant
Philtranco and Apolinar Miralles are hereby ordered to pay plaintiff jointly and severally, the following amounts:
1.₱54,000.00 as actual damages; 2.₱50,000.00 as moral damages; 3.₱20,000.00 as attorney’s fees and costs. CA Paras:
that the RCT erred in not holding Inland as liable Inland: that the RTC erred in not awarding damages to them
Philtranco: that the RTC erred in awarding actual damages greater than what is alleged in the complaint WHEREFORE,
in consideration of the foregoing premises, the assailed decision dated 18 July 19(9)7 is perforce affirmed with the
following modifications: 1. Third party defendants-appellants Philtranco and Apolinar Miralles are ordered to pay
plaintiffappellant Felix Paras jointly and severally the following amounts: a) ₱1,397.95 as actual damages; b) ₱50,000.00
as temperate damages; c) ₱50,000.00 as moral damages; and d) ₱20,000.00 as attorney’s fees and costs of suit. 2. On the
third party plaintiff-appellant Inland’s claims, the third party defendant-appellants Philtranco and Apolinar Miralles are
hereby ordered to pay the former (Inland) jointly and severally the amount of ₱250,000.00 as and by way of temperate
damages

ISSUES 1. WON Paras is entitled to moral damages despite the fact that the complaint had been anchored on
breach of contract- YES 2. WON CA can award temperate dames despite the fact that it was not raised by the
claimants – YES HELD

1. Although this action does not fall under either of the exceptions, the award of moral damages to Paras was nonetheless
proper and valid on the theory of liability that the proximate cause of the collision between Inland’s bus and Philtranco’s
bus had been "the negligent, reckless and imprudent manner defendant Apolinar Miralles drove and operated his driven
unit, the Philtranco Bus Impleading Philtranco and its driver through the third-party complaint filed on March 2, 1990 was
correct. The device of the third-party action, also known as impleader, was in accord with Section 12, Rule 6 of the
Revised Rules of Court Paras’ cause of action against Inland (breach of contract of carriage) did not need to be the same
as the cause of action of Inland against Philtranco and its driver (tort or quasi-delict) in the impleader. It is settled that a
defendant in a contract action may join as third-party defendants those who may be liable to him in tort for the plaintiff’s
claim against him, or even directly to the plaintiff.

2. In awarding temperate damages in lieu of actual damages, the CA did not err, because Paras and Inland were definitely
shown to have sustained substantial pecuniary losses. There is no question that Article 2224 of the Civil Code expressly
authorizes the courts to award temperate damages despite the lack of certain proof of actual damages, to wit:
Article 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. 3. Paras’ loss of earning capacity must be compensated The omission should be rectified,
for there was credible proof of Paras’ loss of income during his disability. According to Article 2205, (1), of the Civil
Code, damages may be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal
injury. 4. Increase in award of attorney’s fees having been compelled to litigate or to incur expenses to protect their
interests, 35 as well as by virtue of the Court now further deeming attorney’s fees to be just and equitable. 36

24. Titan vs. Uni-Field G.R. No. 153874 March 1, 2007

Facts:

Petitioner Titan Construction Corporation is engaged in the construction business, while respondent Uni-Field Enterprises, Inc.
(respondent) is engaged in the business of selling various construction materials.

From 1990 to 1993, petitioner purchased on credit various construction supplies and materials from respondent. Petitioner’s purchases
amounted to P7,620,433.12 but petitioner was only able to pay P6,215,795.70, leaving a balance of P1,404,637.42. On 19 October
1994, respondent sent a demand letter to petitioner. But the balance remained unpaid.

On 26 June 1995, respondent filed with the trial court a complaint for collection of sum of money with damages against petitioner.

In its Answer dated 18 August 1995, petitioner admitted the purchases but disputed the amount claimed by respondent. Petitioner also
interposed a counterclaim and sought to recover P204,527.99 from respondent based on damaged vinyl tiles, non-delivery of materials,
and advances for utility expenses, dues, and insurance premiums on the condominium unit turned over by petitioner to respondent.

On 9 September 1997, the trial court rendered judgment in favor of respondent, based on the following grounds: 1) The principal
amount of P1,404,114.00; 2) Interest Charges in the amount of P504,114.00 plus accrued interest charges at 24% per annum
compounded yearly reckoned from July, 1995 up to the time of full payment; 3) Liquidated Damages in the amount of P324,147.94; 4)
Attorney’s Fees equivalent to 25% of whatever amount is due and payable and accumulated appearance fees at P1,000.00 per
hearing; and 5) Costs of suits.

Petitioner asks the Court to review the records of the case and re-examine the evidence presented before the trial court and the Court
of Appeals.

As a rule, only questions of law may be appealed to the Court by petition for review. The Court is not a trier of facts, its jurisdiction being
limited to errors of law. Moreover, factual findings of the trial court, particularly when affirmed by the Court of Appeals, are generally
binding on this Court. In this case, the factual findings of the trial court and the Court of Appeals were based on substantial evidence
which were not refuted with contrary proof by petitioner. We thus find no reason to disturb the factual findings of the trial court and the
Court of Appeals.

Issues:

a) W/N the CA erred in finding legal basis for [awarding] liquidated damages, attorney’s fees and Interest in favor of respondent?

b) W/N the CA erred by overlooking certain facts or circumstances of weight and influence which if considered would alter the results of
the case?

Held:

Petitioner insists that the trial court and the Court of Appeals had no legal basis to award interest, liquidated damages, and attorney’s
fees because the delivery receipts and sales invoices, which served as the basis for the award, were not formally offered as evidence
by respondent. Petitioner also alleges that the delivery receipts and sales invoices were in the nature of contracts of adhesion and
petitioner had no option but to accept the conditions imposed by respondent.

On the allegation that the delivery receipts and sales invoices are in the nature of contracts of adhesion, the Court has repeatedly held
that contracts of adhesion are as binding as ordinary contracts. Those who adhere to the contract are in reality free to reject it entirely
and if they adhere, they give their consent. It is true that on some occasions the Court struck down such contract as void when the
weaker party is imposed upon in dealing with the dominant party and is reduced to the alternative of accepting the contract or leaving it,
completely deprived of the opportunity to bargain on equal footing.

Considering that petitioner and respondent have been doing business from 1990 to 1993 and that petitioner is not a small time
construction company, petitioner is "presumed to have full knowledge and to have acted with due care or, at the very least, to have
been aware of the terms and conditions of the contract.” The Court, therefore, upholds the validity of the contract between petitioner
and respondent.

However, the Court will reduce the amount of attorney’s fees awarded by the trial court and the Court of Appeals. In this case, aside
from the award of P324,147.94 as liquidated damages, the trial court and the Court of Appeals also ordered petitioner to pay
respondent attorney’s fees "equivalent to 25% of whatever amount is due and payable."

Articles 1229 and 2227 of the Civil Code empower the courts to reduce the penalty if it is iniquitous or unconscionable. The
determination of whether the penalty is iniquitous or unconscionable is addressed to the sound discretion of the court and depends on
several factors such as the type, extent, and purpose of the penalty, the nature of the obligation, the mode of breach and its
consequences.

The Court notes that respondent had more than adequately protected itself from a possible breach of contract because of the
stipulations on the payment of interest, liquidated damages, and attorney’s fees. The Court finds the award of attorney’s fees
"equivalent to 25% of whatever amount is due and payable" to be exorbitant because it includes (1) the principal of P1,404,114.00; (2)
the interest charges of P504,114.00 plus accrued interest charges at 24% per annum compounded yearly reckoned from July 1995 up
to the time of full payment; and (3) liquidated damages of P324,147.94. Moreover, the liquidated damages and the attorney’s fees
serve the same purpose, that is, as penalty for breach of the contract. Therefore, we reduce the award of attorney’s fees to 25% of the
principal obligation, or P351,028.50.

WHEREFORE, we AFFIRM the appealed Decision dated 7 January 2002 of the Court of Appeals in CA-G.R. CV No. 56816 with
MODIFICATION as regards the award of attorney’s fees. Petitioner Titan Construction Corporation is ordered to pay respondent Uni-
Field Enterprises, Inc. attorney’s fees of P351,028.50. SO ORDERED.

25. People vs. Dadulla G.R. No. 172321 February 9, 2011

A rapacious father who vented his lust on his own daughter without any qualms is allowed to suffer the lesser
penalty because of the failure of the criminal information to aver his relationship with the victim. Even so, the Court
condemns his most despicable crime.

The father is now before the Court to assail the decision promulgated on January 20, 2006 in C.A.-G.R. CR.-H.C.
No. 01021, whereby the Court of Appeals (CA) pronounced him guilty beyond reasonable doubt of simple rape in
Criminal Case No. 98-2304, imposing reclusion perpetua, and of acts of lasciviousness in Criminal Case No. 98-
2305, thereby modifying the sentences handed down by the Regional Trial Court, Branch 272 (RTC), in Marikina
City.1

The Charges

On January 28, 1998, the accused was charged in the RTC with rape and attempted rape through separate
informations, as follows:

Criminal Case No. 98-2304-MK

That on or about the 15th day of January, 1998 in the City of Marikina, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, by means of threats, force and intimidation, did then and there
willfully, unlawfully and feloniously have carnal knowledge with AAA, 2 against her will and consent.3

Criminal Case No. 98-2305-MK

That on or about the 22nd day of January, 1998 in the City of Marikina, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, by means of force, violence and intimidation and with lewd design, did
then and there willfully, unlawfully and feloniously try and attempt to have carnal knowledge of herein complainant
one AAA, thus commencing the commission of the crime of rape directly by overt acts but did not perform all the
acts of execution that could have produced the crime of rape by reason of cause or causes other than his own
spontaneous desistance.4

Evidence of the Prosecution

In the evening of January 15, 1998, AAA, then sleeping in the bedroom that she and her five younger siblings
shared with their father, was roused from sleep by someone undressing her. 5 It was her father. AAA resisted, but the
accused, wielding a bladed weapon, 6 threatened to kill her if she shouted. 7 The accused then forcibly kissed her on
the lips, mashed her breasts, touched her private parts, and had carnal knowledge of her. After her ordeal, she put
on her garments and just cried.8 She recalled that her father had first sexually abused her on February 14, 1992. 9

On January 22, 1998, AAA was again roused from sleep by her father touching her body. Noticing that her shorts
were already unzipped and unbuttoned, she zipped and buttoned them up and covered herself with a blanket. But
her father pulled the blanket away and tried to unzip her shorts. However, she was able to go under the wooden bed
to evade him. She resisted his attempts to pull her out from under the bed by firmly holding on to the bed. She told
him that she would not get out from under the bed because what he was doing to her was bad. 10 Upon hearing her,
he stopped and withdrew, telling her to leave the house. He then went to sleep. 11 In the meanwhile, BBB, AAA’s
younger sister, was awakened by what she thought was an argument between her father and AAA. She heard him
tell AAA: Tumigil ka na nang kaiiyak, wala ka nang pakinabang. AAA just cried under the bed and did not say
anything. BBB soon fell asleep, 12 but AAA could not sleep and remained under the bed until morning when the
accused left to ply his jeepney route.13

Upon waking up, BBB saw her father as he was about to leave the house. She heard him telling AAA to leave the
house.14 As soon as he had left, BBB approached the crying AAA and asked what had happened to her. AAA related
her ordeal and pleaded with BBB to help her. 15 Together, they went to their uncle, CCC, to report the incident. CCC
queried AAA whether she wanted her father to be thrown in jail, and she replied in the affirmative. Thus, CCC
requested his wife to accompany AAA to the barangay to file a complaint. Later, AAA and CCC’s wife went to Camp
Crame for the physical and genital examinations, which established that AAA had a deep healed hymenal laceration
at 5:00 o’clock position.16

Evidence of the Defense

The accused denied molesting AAA. He narrated that on January 15, 1998, AAA and BBB left the house at around
6:30 p.m. to watch television elsewhere and returned only at around 11:00 p.m.; that on January 22, 1998, he
scolded AAA for her failure to cook on time; that at around 4:00 a.m. of January 23, 1998, he struck AAA’s face with
his fist (dinunggol sa mukha) and told her to leave the house because he was slighted by AAA’s laughing instead of
answering his query of whether she had understood why he had scolded her the previous night; and that AAA was
no longer a virgin due to her having been raped by Joel Cloma in 1992, and by another man in 1993. 17

The RTC Decision

On March 24, 1999, the RTC found the accused guilty of rape in Criminal Case No. 98-2304-MK, and imposed the
death penalty, ordering him to pay to AAA ₱50,000.00 as civil indemnity and ₱20,000.00 as moral damages; and of
attempted rape in Criminal Case No. 98-2305-MK, and imposed the indeterminate penalty of four years, nine
months, and eleven days of prision correccional, as minimum, to five years, four months, and twenty days, as
maximum, ordering him to pay to AAA ₱20,000.00 as moral damages.

The CA Decision

On appeal, the accused assigned the following errors, to wit:

I.

THE TRIAL COURT ERRED IN IMPOSING THE DEATH PENALTY IN CRIMINAL CASE NO. 98-2304
DESPITE THAT ACCUSED WAS NOT PROPERLY INFORMED OF THE NATURE AND CAUSE OF
ACCUSATION AGAINST HIM WHICH IS IN VIOLATION OF HIS CONSTITUTIONAL RIGHT.

II.
 THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ATTEMPTED RAPE
DOCKETED AS CRIMINAL CASE NO. 98-2305.

Nonetheless, the CA disposed in its decision promulgated on January 20, 2006:

WHEREFORE, the Decision appealed from is AFFIRMED with the following MODIFICATION:

In Criminal Case No. 98-2304-MK, accused-appellant Renato Dadulla y Capanas is found guilty beyond reasonable
doubt of simple rape and is sentenced to suffer the penalty of reclusion perpetua. Accused-appellant is also ordered
to pay AAA moral damages in the amount of ₱50,000.00, in addition to civil indemnity in the amount of ₱50,000.00.

In Criminal Case No. 98-2305-MK, accused-appellant Renato Dadulla y Capanas, is found guilty beyond reasonable
doubt of the crime of acts of lasciviousness and is sentenced to suffer an indeterminate penalty of six (6) months of
arresto mayor, as minimum, to four (4) years and two (2) months of prision correccional, as maximum, and to pay
AAA the amount of ₱30,000.00 as moral damages.

SO ORDERED.

The CA held that the correct penalty in Criminal Case No. 98-2304-MK was reclusion perpetua because the
accused was liable only for simple rape by virtue of the information not alleging any qualifying circumstances; and
that in Criminal Case No. 98-2305-MK the accused was guilty only of acts of lasciviousness, not attempted rape,
because his act of opening the zipper and buttons of AAA’s shorts, touching her, and pulling her from under the bed
constituted only acts of lasciviousness.

Ruling of the Court

We sustain the conviction but correct the award of civil liability.

Criminal Liabilities

The CA correctly determined the criminal liabilities in both cases.

To begin with, the finding and conclusion of the RTC that the totality of the evidence presented by the State painted
a convincing tale of AAA’s harrowing experience at the hands of the accused are well founded and supported by the
records. Her unwavering testimonial account of the bestiality of her own father towards her reflected her singular
reliability. The CA’s holding that a woman would think twice before concocting a story of rape unless she was
motivated by a desire to seek justice for the wrong committed against her 18 was apt and valid. Indeed, her revelation
of being sexually assaulted by her own father several times could only proceed from innate sincerity, and was
entitled to credence in the absence of strong showing by the accused of grounds to disbelieve her. Also, her
immediate willingness to report to and face the police investigation and to undergo the trouble and humiliation of a
public trial was a badge of trustworthiness.

Secondly, the failure to allege the qualifying circumstance of relationship in the information in Criminal Case No. 98-
2304-MK precluded a finding of qualified rape against the accused. Section 8, 19 Rule 110 of the Rules of Court has
expressly required that qualifying and aggravating circumstances be specifically alleged in the information. Due to
such requirement being pro reo, the Court has authorized its retroactive application in favor of even those charged
with felonies committed prior to December 1, 2000 (i.e., the date of the effectivity of the 2000 revision of the Rules of
Criminal Procedure that embodied the requirement). 20

The term "aggravating circumstance" is strictly construed when the appreciation of the modifying circumstance can
lead to the imposition of the maximum penalty of death. 21 Consequently, the qualifying circumstance of relationship,
even if established during trial, could not affect the criminal penalty of the accused by virtue of its non-allegation in
the information. The accused could not be convicted of the graver offense of qualified rape, although proven,
because relationship was neither alleged nor necessarily included in the information. 22 Accordingly, the accused was
properly convicted by the CA for simple rape and justly punished with reclusion perpetua.

Thirdly, it is notable that the RTC outrightly concluded that the crime committed on January 22, 1998 constituted
attempted rape, after quoting the testimony of AAA and BBB. It offered no analysis or discussion of why the accused
was criminally liable for attempted rape. The omission contravened Section 14, 23 Article VIII of the Constitution, as
reiterated in Section 1,24 Rule 120 of the Rules of Court, which enjoined that decisions should state clearly and
distinctly the facts and the law on which they are based. 25

Nonetheless, the omission did not invalidate or render ineffectual the conviction, for the CA in due course reformed
the RTC’s error. In its disquisition on why the accused should be held liable for acts of lasciviousness, instead of
attempted rape, the CA explained the true nature of the crime of the accused thus:
We likewise agree with accused-appellant that the court a quo erred in convicting him of attempted rape in Criminal
Case No. 98-2305-MK. In connection with the incident that transpired on January 22, 1998, Liza testified as follows:

Pros. Dela Peña:

Q: While you were sleeping in the evening on January 22, 1998, do you recall of any instance (sic) or incident which
awakened you?

Witness:

A: Yes, sir.

Q: Again Miss Witness, tell us this incident that you are referring to?

A: While I was sleeping, I was awakened that my zipper was already opened and my buttons were already
loosened.

Q: And upon noticing that the zipper and the buttons of your short[s] are already loosened or opened, what did you
do?

A: I zipped it again and unbuttoned it.

Q: Was your father there on that night?

A: Yes, sir.

Q: What about your brother and sisters?

A: They were already asleep.

Q: Like on January 15, 1998, you slept, on January 22, 1998, you slept side by side with your brothers and sisters
and your father?

A: Yes, sir.

Q: Did you notice the presence of your father when you said you were awakened on that night?

A: Yes, sir.

Q: What was he doing?

A: He was sitting and touching me, sir.

Q: How far was he from you?

A: He was near me.

Q: And upon seeing your father near you and the button and zipper of your short[s] was open, what did you
do?

A: I zipped and unbuttoned my short[s] and covered myself with blanket.

Q: Why did you cover yourself with blanket?

A: Because I do not want to see him beside me.

Q: Did you not ask your father to leave because you do not want to see him?

A: I told him.

Q: Did your father leave?

A: No, sir.

Q: Why don’t you like your father beside you?

A: Because of these things he was doing to me.

Q: And after covering yourself with blanket, what transpired next?

A: He removed the blanket from me, sir.

Q: And after that, what happened?

A: He was forcibly opening my short[s].

Q: What did you do when your father was forcibly opening your short[s]?

A: I covered myself under the wooden bed.

Q: How wide is this wooden bed?

A: From that wall up to the rostrum.

Pros. Dela Peña:

About a distance of two meters in width. Why did you hide yourself under the wooden bed?

A: In order not to repeat what he was doing to me.

Q: After you hi[d] yourself under the wooden bed, what did your father did [sic] to you?

A: He held me on my hands and tried to pull me out under the wooden bed.

Q: And was your father able to pull you out under the wooden bed?

A: No sir.

The act of accused-appellant in opening the zipper and buttons of the shorts of Liza, touching her and
pulling her when she hid under the bed showed that he employed force on Liza and was motivated by lewd
designs. The word "lewd" is defined as obscene, lustful, indecent, and lecherous. It signifies that form of
immorality which has relation to moral impurity; or that which is carried in a wanton manner. Thus, the
crime committed by accused-appellant is merely acts of lasciviousness, which is included in rape. The
elements of the crime of acts of lasciviousness are: (1) that the offender commits any act of lasciviousness or
lewdness; (2) that it is done: (a) by using force and intimidation, or (b) when the offended party is deprived of reason
or otherwise unconscious, or (c) when the offended party is under 12 years of age; and (3) that the offended party is
another person of either sex.26

According to People v. Collado,27 the difference between attempted rape and acts of lasciviousness lies in the intent
of the perpetrator as deduced from his external acts. The intent referred to is the intent to lie with a
woman.28 Attempted rape is committed when the "touching" of the vagina by the penis is coupled with the intent to
penetrate; otherwise, there can only be acts of lasciviousness. 29 Thus, the accused’s act of opening the zipper and
buttons of AAA’s shorts, touching her, and trying to pull her from under the bed manifested lewd designs, not intent
to lie with her. The evidence to prove that a definite intent to lie with AAA motivated the accused was plainly
wanting, therefore, rendering him guilty only of acts of lasciviousness in Criminal Case No. 98-2305-MK.

And, fourthly, the indeterminate penalty imposed by the RTC was erroneous for not being in accord with the
Indeterminate Sentence Law. This impelled the CA to revise the indeterminate penalty, rationalizing:

Under Article 336 of the Revised Penal Code, the penalty for acts of lasciviousness is prision correccional. We
impose the penalty in its medium period, there being no aggravating or mitigating circumstance alleged and proved.
Applying the Indeterminate Sentence Law, the proper penalty imposable is from six months of arresto mayor, as
minimum, to four years and two months of prision correccional, as maximum. 30

We uphold the revision by the CA. The RTC fixed the minimum of the indeterminate penalty from within prision
correccional, when Section 131 of the Indeterminate Sentence Law expressly required that the minimum "shall be
within the range of the penalty next lower to that prescribed by the Code for the offense." The penalty next lower is
arresto mayor.

II

Civil liability must be modified

Under Article 2230 of the Civil Code, 32 the attendance of any aggravating circumstance (generic, qualifying, or
attendant) entitles the offended party to recover exemplary damages. Here, relationship was the aggravating
circumstance attendant in both cases. We need to award ₱30,000.00 as exemplary damages in rape and of
₱10,000.00 as exemplary damages in acts of lasciviousness.

Although, as earlier mentioned, an aggravating circumstance not specifically alleged in the information (albeit
established at trial) cannot be appreciated to increase the criminal liability of the accused, the established presence
of one or two aggravating circumstances of any kind or nature

entitles the offended party to exemplary damages under Article 2230 of the Civil Code because the requirement of
specificity in the information affected only the criminal liability of the accused, not his civil liability. The Court has well
explained this in People v. Catubig:33

The term "aggravating circumstances" used by the Civil Code, the law not having specified otherwise, is to be
understood in its broad or generic sense. The commission of an offense has a two-pronged effect, one on the public
as it breaches the social order and the other upon the private victim as it causes personal sufferings, each of which
is addressed by, respectively, the prescription of heavier punishment for the accused and by an award of additional
damages to the victim. The increase of the penalty or a shift to a graver felony underscores the exacerbation of the
offense by the attendance of aggravating circumstances, whether ordinary or qualifying, in its commission. Unlike
the criminal liability which is basically a State concern, the award of damages, however, is likewise, if not primarily,
intended for the offended party who suffers thereby. It would make little sense for an award of exemplary damages
to be due the private offended party when the aggravating circumstance is ordinary but to be withheld when it is
qualifying. Withal, the ordinary or qualifying nature of an aggravating circumstance is a distinction that should only
be of consequence to the criminal, rather than to the civil, liability of the offender. In fine, relative to the civil aspect
of the case, an aggravating circumstance, whether ordinary or qualifying, should entitle the offended party to an
award of exemplary damages within the unbridled meaning of Article 2230 of the Civil Code. lavvphil

That People v. Catubig was subsequent to the dates of the commission of the crimes charged did not matter. Like
any other judicial interpretation of an existing law, the ruling in People v. Catubig settled the circumstances when
Article 2230 of the Civil Code applied, thereby reflecting the meaning and state of that legal provision. The
retroactivity of the ruling vis-à-vis the accused could not be challenged or be barred by virtue of its being civil, not
penal, in effect.

WHEREFORE, the Decision promulgated on January 20, 2006 in CA-G.R. CR-H.C. No. 01021 is affirmed in all
respects, subject to the modification that the civil liabilities include ₱30,000.00 as exemplary damages for the rape
(Criminal Case No. 98-2034-MK), and ₱10,000.00 as exemplary damages for the acts of lasciviousness (Criminal
Case No. 98-2035-MK).

SO ORDERED.