PUBLIC HUMILIATION

1. G.R. Nos. L-51171-72

June 4, 1990

MARIA G. FORD, Substituted by PATRICK

G. FORD, petitioner,**
vs.
COURT OF APPEALS and SULPICIA
FABRIGAR, respondents.
G.R. No. L-51273 June 4, 1990
VICENTE F. UY, petitioner,
vs.
COURT OF APPEALS and SULPICIA
FABRIGAR, respondents.
Quiason, Makalintal, Barot, Torres & Ibarra
for petitioner in 51171-72.
Charlito F. Fantilanan for petitioner in
51273.
Ricardo C. Castro, Jr. and Teodulfo L.C.
Castro for private respondents.

REGALADO, J.:
The generally accepted rule m our
jurisprudence is that the findings of fact of
a trial court carry great weight since it had
the oppor tunity of obser ving the
demeanor of the witnesses on the stand as
a further aid in determining their credibility.
The rule, however, admits of exceptions,
both in the factual findings of the trial
court and the conclusions drawn by it
therefrom, and, as respondent court holds,
the decision of the court a qou in these
cases exemplifies a warranted departure
from the aforesaid jurisprudential rule.
These consolidated petitions seek the
review of the decision of respondent court

1 in CA-G.R. Nos.59402-03-R entitled

"Sulpicia F. Fabrigar, Plaintiff-Appellant vs.
Vicente F. Uy and Maria G. Ford,
Defendants-Appellees," together with its
resolution denying petitioners' motions for
recondsideration, which reversed the
decision of the trial court in Civil Cases
Nos. M-282 and M-283 of the then the
Cour t of First Instance of Capiz,
Mambusao Branch, filed herein private
respondent Sulpicia Fabrigar against
spouses Vicente Uy and Paciencia Uy and
spouses Thomas J. Ford and Maria G. Ford,
respectively.
From the nature of the issues raised in the
present appeals, we are constrained to set
out and analyze the facts involved which
we are told do not sustain the conclusions
drawn by the court. below. The decision of
respondent court presents the two sides
of the incident as follows:
On July 27, 1973, at about 7:00 o'clock in
the morning, Sulpicia Fabrigar, being a
public school teacher of Barrio Sta. Cruz.
Dumalag, Capiz reported to the precinct of
her assignment particularly at the
Elementary School of Sta. Cruz, Dumalag,
Capiz, by reason of the deputization of all
public school teachers to assist the
COMELEC in the conduct of the National
Referendum.
Between 3:00 and 3:30 P.M. of that day,
while she was inside Precinct No. 11-a, she
saw Elmo Uy, son of the barrio captain of
Sta. Cruz, Vicente Uy, get the remark sheet
of voter Regalado Firmalino and began to
write on said remark sheet of the latter.
She called the attention of the Referendum
Committee composed of Leandra Fagtanac,
Chairwoman; Concepcion Fale and Benito
Facura, Members, to these acts of Elmo Uy
but the Committee did not mind her. So,
she took the initiative of going to and
advising Elmo Uy not to write anything on
the remark sheet of the voter Firmalino.

Elmo Uy asked Sulpicia what business of

hers (sic) in so doing to which she
answered that she was merely advising him.
Elmo Uy stood up, pulled out his
appointment paper as an observer in the
referendum and tore it to pieces saying
that it was useless and not respected
anyway. Thereafter, Elmo Uy went out of
the precinct reported the matter to his
father, Vicente Uy, the barrio captain of Sta.
Cruz. A few minutes later, barrio captain
Vicente Uy, father of Elmo, entered
Precinct No. 11-A and shouted at Sulpicia
Fabrigar, 'Hijo de puta, why do you
interfere with what my son is doing? Why
are you pretending to be somebody here
in Sta. Cruz? You are a no good
headteacher. I do not send my children to
this school because of your enviousness.'
Sulpicia Fabrigar answered that she was
merely advising Elmo Uy not to write on
the remark sheet of Regalado Firmalino
and she did not pretend to be somebody.
While Vicente Uy was leaving the precinct,
he further said that he would report
Sulpicia Fabrigar to Mrs. Maria Ford.
Thirty minutes after Vicente Uy had left the
precinct, Maria Ford, owner of the Asturias
Sugar Central, arrived very angry, saying,
'Where is Suping, where is Suping?' Sulpicia
Fabrigar immediately presented herself to
Maria Ford, and the latter said, 'Why did
you campaign for 'No' according to the
barrio captain?' Sulpicia Fabrigar answered,
'I did not campaign for 'No' I even wanted
a zero 'No' because you promised to
provide electricity in this barrio if nobody
votes 'No'. 'Elmo Uy then interrupted their
conversation and said that Sulpicia Fabrigar
really campaigned for ''No' votes. Maria
Ford said, 'Its true you campaigned for 'No'
and why do you still insist on reasoning?
and then, Maria Ford slapped Sulpicia
Fabrigar on the left face. She wanted to
retaliate but her sister, Fidelina Frias, held
her back and pulled her away. Maria Ford
further said, 'Ill have you transferred to a

far place. You are ungrateful to me. You are

always rebelling against me. Get out and go
home.' , Sulpicia Fabrigar reported this
particular incident to the police authorities
of Dumalag, Capiz (Exhibit 'A'/'1'). She also
sent telegrams to the President (Exhibits 'I'
and 'H'), to the COMELEC (Exhibit 'J') and
to the Secretary of National Defense
(Exhibit 'U') in connection with this
incident. 2
Respondent court observes that, on his
part, Vicente Uy presented his version of
the incident thus:
At about 2 p.m. on referendum day, Benito
F a c u r a , u p o n t h e re q u e s t o f t h e
chairwoman of the Referendum
Committee, Leandra Fagtanac, went to the
house of Vicente Uy to inform him that
there was trouble in the barrio center.
Vicente Uy went to said place and he had a
talk with Leandra Fagtanac about what
happened thereat. Leandra Fagtanac
informed Vicente Uy that Sulpicia Fabrigar
shouted at Elmo Uy; that she requested
Sulpicia Fabrigar to keep quiet but the
latter continued to shout at Elmo Uy that
he should not teach the voters because
they were more intelligent than him; that
when Elmo Uy showed his appointment
papers as referendum observer, Sulpicia
Fabrigar tore it to pieces and threw it on
the floor; and that as a result of the
commotion created by the quarrel of
Sulpicia Fabrigar and Elmo Uy, the people
scattered away from the precinct.
Upon getting this information from
Leandra Fagtanac, Vicente Uy asked her
where was Sulpicia Fabrigar and he was
told that she had just left the room. When
Vicente Uy was about to leave the precinct,
Sulpicia Fabrigar came in. Vicente Uy then
addressed her, 'Mrs. Fabrigar, what
happened here? Can you not settle this
since this is our affair? Sulpicia Fabrigar
answered, 'I told Elmo not to teach the

voters because they also know what

they're doing and why are you inquiring?'
Vicente Uy said: 'Why did you humiliate
Elmo when we have a chairwoman to refer
this matter?' (sic) Sulpicia Fabrigar
countered, 'You think you are still a
barangay captain inside this precinct. It's
the headteacher who is powerful in this
building. 'Vicente Uy said, 'I'm not trying to
be somebody here. If you won't believe me,
I'd report this matter at the poblacion.'
Sulpicia Fabrigar said, 'I don't care to whom
you'd report, I'm not afraid, go ahead. 'So,
Vicente Uy left with-his jeep. The people
were no longer voting, and on the way to
the poblacion Vicente Uy thought of asking
Maria Ford to pacify Sulpicia Fabrigar, to
stop her from molesting and disturbing the
people so they could vote. Vicente Uy then
believed that Maria Ford, being the
godmother of Sulpicia Fabrigar, could pacify
her.
Maria Ford asked Vicente Uy how the
voting was going along, and the latter told
her that Sulpicia Fabrigar was getting
uncontrollable in the precinct, that she tore
the appointment as observer of his son
Elmo, and that the people were not voting
anymore. Vicente Uy asked Maria Ford to
stop Sulpicia Fabrigar from molesting and
disturbing the people. Thereafter, Vicente
Uy left to report the matter to the
COMELEC Registrar but he did not meet
him because he was out. On his way home,
he met the Mayor and the Governor and
to whom he narrated this incident. The
following day, Vicente Uy reported this
incident to the police authorities of
Dumalag, Capiz and it was entered in the
Police Blotter (Exhibit '3'-Uy). 3
Said decision continues with an account of
the incident this time by Maria Ford:
At about 1:30 p.m. on referendum day,
some people reported to Maria Ford that
Sulpicia Fabrigar was screaming at the

polling place, and they asked her to stop

Sulpicia Fabrigar as she is her (a)hijada and
relative because people were going away
and not voting anymore. Then came Vicente
Uy, the barrio captain, who also asked
Maria Ford to intercede with Sulpicia
Fabrigar because she was creating trouble,
fighting with his son, and many people were
leaving the polling place.
Maria Ford went to the polling place to
find out the truth of the report and also to
make the people vote. Upon her arrival at
the polling place, Sulpicia Fabrigar
immediately shouted, 'Why did you come
here, you're helping the barrio captain
Maria Ford answered, 'I came here because
the people and the barrio captain asked me
to make you keep quiet and stop this
trouble.' Then Sulpicia Fabrigar screamed,
'I'm the headteacher here!' Maria Ford told
Sulpicia Fabrigar to keep quiet and go
home and not to scream, but she answered
that she was the headteacher and she was
supposed to be there and she would not
go home. Then Maria Ford started to
inquire from the people around whether
or not Sulpicia Fabrigar has some trouble
with Elmo Uy and whether or not she tore
his appointment paper as referendum
observer. Suddenly, Sulpicia Fabrigar
screamed again saying that Elmo Uy was
insulting her. Maria Ford told Elmo Uy to
go home, and when Elmo Uy passed
between her and Sulpicia Fabrigar, the
latter continued to scream insulting words
at Elmo Uy. 'Sulpicia Fabrigar even wanted
to beat Elmo Uy, and she was trembling. So,
laboring under the belief that Sulpicia
Fabrigar had already become hysterical,
Maria Ford slapped her on the face to calm
her down. After this, Sulpicia Fabrigar
quieted down momentarily, and then she
said to Maria Ford, 'If you're not only old,
I'd beat you!' Maria Ford held out her face
to Sulpicia Fabrigar and ordered her to hit
it, but she did not. 4

After trial in the Court of First Instance of

Capiz, Mambusao Branch, presided over by
Judge Tomas R. Leonidas, judgment was
rendered dismissing Sulpicia Fabrigar's
complaint and further ordering her to pay
Maria Ford P2,000.00 as moral damages,
P2,000.00 as exemplary damages, P1,000.00
for attorney's fees and P5,000.00 for
expenses of litigation; and also to pay
Vicente Uy P2,000.00 as moral damages,
P2,000.00 as exemplary damages, P2,000.00
for attorney's fees and P1,000.00 for
expenses of litigation, said amounts to bear
interest from the date of judgment. 5
In dismissing said complaint for damages of
herein private respondent, the lower court
arrived at the following conclusions:
According Sulpicia Fabrigar, upon entering
the precinct, Vicente Uy immediately
shouted at her, 'Hijo de puta why do you
interfere with what my son is doing here?
Why are you pretending to be somebody
here in Sta. Cruz? You are a no good
headteacher. I do not send my children to
this school because of your enviousness. ...
It clearly appears that from among the
statements of Vicente Uy, only 'Why are
you pretending to be somebody in Sta.
Cruz' called for comment or action from
Sulpicia Fabrigar which, to the mind of the
court, is an innocuous expression or
statement merely showing disgust,
displeasure of, at its worst, anger, and not
to slander. It is of a lesser degree and
intensity than the words 'putang ina mo"
Which the Supreme Court in Reyes v.
People, L-21528, March 28, 1969, 27 SCRA
686, has stated to be a common expression
in the dialect that is often employed not
really to slander but rather to express
anger or displeasure. With respect to the
other statements of Vicente Uy which did
not call for any comment from Sulpicia
Fabrigar, her silence should be deemed to
be an admission of their truth and truth

can not hurt or insult. Thus, an act or

declaration made in the presence and
within the observation of a party who does
or says nothing when the act or
declaration is such as naturally to call for
action or comment if not true, may be
given in evidence against him. (See. 23, Rule
130 Rules of Court). . . .
xxx

xxx

xxx

Maria Ford admitted that she slapped

Sulpicia Fabrigar because the latter became
hysterical and the former was then
laboring under the belief that the only way
to stop a hysteric is to slap and jolt him
There is speciousness in this assertion.
Sulpicia Fabrigar even admitted on the
witness stand that Maria Ford slapped her
so that she would stop with Elmo Uy, but
she failed to positively state that by this
one slap she was, dishonored, defamed or
shamed. She merely felt a deafening
sensation, and nothing more. Sulpicia
Fabrigar, by her ravings and rantings against
Elmo Uy, was already disturbing the peace
of mind of the people and scaring them
from participating in the referendum
process. There was then an emergency,
absent any police officer, and as godmother
and second cousin by affinity of Sulpicia
Fabrigar, Maria Ford thought it her duty to
do what she did which nobody would have
dared done. In this setting, this court finds
that Maria Ford acted within her legal and
moral right and duty, for her own peace of
mind, to arrest the shameful act of an
(a)hijada and relative. To restore peace and
order in the polling place and to prevent
Sulpicia Fabrigar from further eroding and
invading the right of suffrage of others. In
so doing, Maria Ford could not have been
actuated with malice aforethought of
putting Sulpicia Fabrigar into disrepute, but
rather to restore her to normal self and
bring back order to the referendum
process. . . 6

Respondent court, however, rejected said

conclusions on the following ratiocinations:

to be seen by the barrio folks being

slapped in her face. 8

As we appreciate the facts of the case, We

believe that Vicente Uy was very much
offended by the action of Mrs. Fabrigar in
admonishing former's son, Elmo, who has
been shown to have interfered in the
voting in Sta. Cruz, Dumalag, Capiz. Unable
to swallow the fact that someone has
questioned his 'power' as barrio captain,
Vicente Uy immediately rushed to the
barrio school and there began insulting the
lowly school headteacher, Sulpicia Fabrigar.

Setting aside the decision of the trial court,

respondent court ordered Vicente Uy to
pay Sulpicia Fabrigar the sum of P5,000.00
as moral damages, P2,000.00 as exemplary
damages, and P2,000.00, as attorney's fees;
and also ordered Maria Ford to pay Sulpicia
Fabrigar the sum of P10,000.00, as moral
damages, P2,000.00 as exemplary damages
and P2,000.00 as attorney's fees, with costs
against both defendants-appellees.

We cannot clearly see Our way through

when in disregarding other slanderous
remarks of Vicente Uy, the lower court said
that "her silence (to those facts) should be
deemed an admission of their truth and
truth cannot hurt or insult.' The trial court
most certainly is in error in this regard. 7
xxx

xxx

xxx

It further observed that. . . It is not for Maria Ford to say whether

her acts did or-did not place the offended
party Sulpicia Fabrigar in contempt of the
spectators. The facts obtaining in this case
indicate that appellee Ford in performing
the act of slapping the school teacher in
front of the people was motivated by
personal animosity because Maria Ford has
been misinformed that Sulpicia Fabrigar has
been campaigning for 'No' votes in the
National. Referendum of July 27, 1973
which was against the wishes of Maria
Ford. And taking into account the position
held by the victim and the circumstances
surrounding the incidents in question, we
believe that Maria Ford has by deed
slandered plaintiff Sulpicia Fabrigar which
would entitle the latter to damages. There
can be no circumstance more humiliating
for a headteacher of a barrio school than

In her petition at bar, the late Maria Ford

contends that respondent court erred in
holding that she acted with malice and ill
will when she slapped private respondent,
and in awarding damages and attorney's
fees to the latter. 9 Along the same vein,
petitioner Uy submits that the Court of
Appeals should not have, reversed, the trial
court's decision nor should it have
awarded damages, attorney's fees, litigation
expenses and costs to private respondent.
10
Petitioner Ford contends that the act of
slapping, standing alone and unexplained,
would not speak well of the intent of the
actor and that to determine the intent, the
surrounding stances, particularly those
preceding the slapping, should be taken
into consideration. It is submitted that this
is so since malice, which is an essential
element in this type of an offense, is a state
of mind and can only be proven by
extrinsic evidence. She declares that her
act of slapping Sulpicia Fabrigar was not
actuated by malice but engendered by a
legitimate motive prompted by her desire
to calm down a person who appeared to
be hysterical and to stop a goddaughter
and relative from further creating a scandal.
She also assails as exorbitant the award of
moral damages and, for alleged lack of legal
basis, the awards of exemplary damages
and attorney's fees. 11

On the other hand, petitioner Uy maintains

that he has not slandered Sulpicia Fabrigar;
and that the contents of Exhibits
"A"/"1" (police blotter of the incident in
question), "I" and "K", (telegram of Fabrigar
to the President), "J" (Telegram of Fabrigar
to the Commission on Elections) and
"L"(telegram Fabrigar to the Secretary of
National Defense) constitute admissions
against Fabrigar's interest under Section 22,
Rule 130 and also judicial admissions under
Section 2, Rule 129, both of the 1964 Rules
of court, which would have barred
respondent court from reversing the lower
court's finding that he did not utter the
words imputed to him and did not insult
Fabrigar. 12
We find both appeals devoid of merit.
The decision of the trial court proceeds
from misapprehensions and patently
erroneous conclusions of fact. A slap on
the face is an unlawful aggression. The face
personifies one's dignity and slapping it is a
serious personal affront. It is a physical
assault coupled with a willful disregard of
the integrity of one's person. This is
especially true if the aggrieved party is a
school teacher who, in penal law, is a
person in authority. Respect for a teacher
is required of all, if we are to uphold and
enhance the dignity of the teaching
profession. The demeaning act of
respondent Ford is virtually inexpiable
when done, as in this case, in the presence
of the public inside a polling precinct
during an electoral exercise. This certainly
is one of the extreme circumstances under
which ridicule, discredit and contempt
could be cast upon the aggrieved party in
the community where she performs her
functions as a mentor of their children.
As discerningly observed by respondent
court, considering the position of private
respondent, nothing but shame, humiliation

and dishonor could have been heaped

upon her by the indignities she had to
suffer at the hands of petitioner Ford.
Furthermore, there is ample reason to
believe that said petitioner's displeasure
over the rumor that private respondent
was campaigning for "No" votes was
sufficient motive for her to deliberately
confront private respondent and maltreat
the latter.
The act of petitioner Ford in slapping
private respondent on the face in public is
contrary to morals and good customs and
under the circumstances, could not but
have caused the latter mental anguish,
moral shock, wounded feelings and social
humiliation. 13 Full responsibility attached
to said act of the late petitioner Ford and
the corresponding sanctions should be
imposed. Her excuse that she was
prompted by her desire to calm down
private respondent and prevent her from
becoming hysterical is too lame a
subterfuge upon which to premise a plea
for exoneration. We are not persuaded by
such pretense. Private respondent was in
the performance of her duty when the
incident took place and she had every right
to stay in her post. On the other hand,
petitioner Ford had no legitimate business
inside the polling precinct. Definitely, she
barged into the premises in response to
the report and importuning of petitioner
Uy.
The award of moral damages is allowed in
cases specified or analogous to those
provided in Article 2219 of the Civil Code.
14 Under Article 21 of said Code, in
relation to Paragraph (10), Article 2219
thereof, any person who willfully causes
loss or injury to another in a manner that
is contrary to morals, good customs or
public policy shall compensate the latter
for moral damages. By way of example or
correction for the public good, exemplary

damages may also be awarded. 15

Attorney's fees are also recoverable. 16

Suffice it to say that the imputations

uttered by petitioner Uy against private
respondent also cast further dishonor,
discredit and contempt on the latter.
Petitioner Uy was a barrio captain. His
proven actuations do not speak well of a,
public officer, especially when done in the
presence of the public during said
referendum.

We are satisfied with private respondent's

explanation. Her initiative in promptly
instituting her complaint clearly manifests
her honest intention to vindicate the
wrong committed against her. She
explained that shortly after the incident
between her and petitioner Uy, petitioner
Ford came and slapped her. Thus, when the
report was made by private respondent to
the police authorities of Dumalag Capiz,
the immediate hurt and humiliation being
felt by her was not only the slander
committed by petitioner Uy but, primarily
and foremost, the slapping by petitioner
Ford. Hence, the police report of private
respondent which focused on her being
slapped by petitioner Ford, although
inadvertently omitting the incident with
petitioner Uy in view of her emotional
state then, should not be construed to
mean that private respondent was not
slandered by petitioner Uy.

Petitioner Uy claims that private

respondent should be bound by her
statement appearing in the police blotter
where, she made no mention that she was
slandered by the former. This is fallacious
reasoning. The entry in the police blotter,
even if admitted as an exception to the
hearsay rule, is not necessarily entitled to
full credit as the, entrant did not have
personal knowledge of the facts stated and
the police agent who prepared the same
did not testify in court. 18 Admissibility of
evidence is one thing; the weight thereof is
another. The court below also declared
that an entry in the police blotter is an
entry in an official record made in the
performance of duty by a public officer and
as such, its trustworthiness arises and its
correctness cannot be impugned, there
being a presumption of regularity in its
execution. This is not entirely correct.
Entries in official records are only prima
facie evidence of the facts therein stated.
They are not conclusive.

Like an affidavit, a police blotter is taken ex

parte hence, in the same manner, it could
be just as incomplete and inaccurate,
sometimes from either partial suggestions
or for want of suggestion or inquiries,
without the aid of which the witness may
be unable to recall the connected collateral
circumstances necessary for the correction
of the first suggestion of his memory and
for his accurate recollection of all that
pertains to the subject. 19 It is
understandable that the testimony during
the trial would be more lengthy and
detailed than the matters stated in the
police blotter. Petitioner Uy's disquisition
on the omission of his intemperate and
slanderous outburst in the entries made in
the police blotter, or in the telegrams sent
by private respondent, cannot outweigh
the evidence on -which respondent court
based its factual findings and conclusions
that he did commit said act. Further, the
testimony thereon of private respondent in
open court, in our view, has not been

With respect to petitioner Uy, the gravity

of the defamatory words uttered by him
depends not only upon their sense and
grammatical meaning, judging them
separately, but also upon the special
circumstances of the case and the
'antecedents or relationship between the
offended party and the offender which
might tend to prove the intention of the
offender at the time. 17

successfully rebutted and we have no

reason to doubt the veracity thereof.
WHEREFORE, the instant petitions are
hereby DENIED for lack of merit. The
decision of respondent court is hereby
AFFIRMED in toto.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla
and Sarmiento, JJ., concur.

UNJUST DISMISSAL
2. Singapore Airlines Limited vs. Pao, No.
L-47739, 122 SCRA 671 , June 22, 1983
G.R. No. L-47739 June 22, 1983
S I N G A P O R E A I R L I N E S L I M I T E D,
petitioner,
vs.
HON. ERNANI CRUZ PAO as Presiding
Judge of Branch XVIII, Court of First
Instance of Rizal, CARLOS E. CRUZ and B.
E.VILLANUEVA, respondents.
Bengzon, Zarraga, Narciso, Cudala Pecson,
Azucena & Bengzon Law Offices for
petitioner.
Celso P. Mariano Law Office for private
respondent Carlos Cruz.
Romeo Comia for private respondent B. E.
Villanueva.
MELENCIO-HERRERA, J.:
On the basic issue of lack of jurisdiction,
petitioner company has elevated to us for
review the two Orders of respondent
Judge dated October 28, 1977 and January
24, 1978 dismissing petitioner's complaint
for damages in the first Order, and denying
its Motion for Reconsideration in the
second.
On August 21, 1974, private respondent
Carlos E. Cruz was offered employment by
petitioner as Engineer Officer with the

opportunity to undergo a B-707 I

conversion training course," which he
accepted on August 30, 1974. An express
stipulation in the letter-offer read:
3. BONDING. As you win be provided with
conversion training you are required to
enter into a bond with SIA for a period of
5 years. For this purpose, please inform me
of the names and addresses of your
sureties as soon as possible.
Twenty six days thereafter, or on October
26, 1974, Cruz entered into an "Agreement
for a Course of Conversion Training at the
Expense of Singapore Airlines Limited"
wherein it was stipulated among others:
4. The Engineer Officer shall agree to
remain in the service of the Company for a
period of five years from the date of
c o m m e n c e m e n t o f s u c h a fo re s a i d
conversion training if so required by the
Company.
5. In the event of the Engineer Officer:
1. Leaving the service of the company
during the period of five years referred to
in Clause 4 above, or
2. Being dismissed or having his services
terminated by the company for
misconduct,
the Engineer Officer and the Sureties
hereby bind themselves jointly and
severally to pay to the Company as
liquidated damages such sums of money as
are set out hereunder:
(a) during the first year of the period of
five years referred to in Clause 4
above ....................................................................
.................. $ 67,460/
(b) during the second year of the period of
five years referred to in Clause 4
above ....................................................................
............. $ 53,968/
(c) during the third year of the period of
five years referred to in Clause 4
above ....................................................................
.................. $ 40,476/
(d) during the fourth year of the period of
five years referred to in Clause 4

above ....................................................................
.............. $ 26,984/
(e) during the fifth year of the period of
five years referred to in Clause 4
above ....................................................................
................... $ 13,492/
6. The provisions of Clause 5 above shall
not apply in a case where an Engineer
Officer has his training terminated by the
C o m p a ny fo r re a s o n s o t h e r t h a n
misconduct or where, subsequent to the
completion of training, he 1. loses his license to operate as a Flight
Engineer due to medical reasons which can
in no way be attributable to any act or
omission on his part;
2. is unable to continue in employment
with the Company because his
employment pass or work permit, as the
case may be, has been withdrawn or has
not been renewed due to no act or
omission on his part;
3. has his services terminated by the
Company as a result of being replaced by a
national Flight Engineer;
4. has to leave the service of the Company
on valid compassionate grounds stated to
and accepted by the Company in writing. 1
Cruz signed the Agreement with his corespondent, B. E.Villanueva, as surety.
Claiming that Cruz had applied for "leave
without pay" and had gone on leave
without approval of the application during
the second year of the Period of five years,
petitioner filed suit for damages against
Cruz and his surety, Villanueva, for violation
of the terms and conditions of the
aforesaid Agreement. Petitioner sought the
payment of the following sums: liquidated
damages of $53,968.00 or its equivalent of
P161,904.00 (lst cause of action); $883.91
or about P2,651.73 as overpayment in
salary (2nd clause of action); $61.00 or
about P183.00 for cost of uniforms and
accessories supplied by the company plus
$230.00, or roughly P690.00, for the cost
of a flight manual (3rd cause of action); and
$1,533.71, or approximately P4,601.13

corresponding to the vacation leave he had

availed of but to which he was no longer
entitled (4th cause Of action); exemplary
damages attorney's fees; and costs.
In his Answer, Cruz denied any breach of
contract contending that at no time had he
been required by petitioner to agree to a
straight service of five years under Clause
4 of the Agreement (supra) and that he left
the service on "valid compassionate
grounds stated to and accepted by the
company so that no damages may be
awarded against him. And because of
petitioner-plaintiff's alleged ungrounded
causes of action, Cruz counterclaimed for
attorney's fees of P7,000.00.
The surety, Villanueva, in his own Answer,
contended that his undertaking was merely
that of one of two guarantors not that of
surety and claimed the benefit of
excussion, if at an found liable. He then
filed a cross-claim against Cruz for
damages and for whatever amount he may
be held liable to petitioner-plaintiff, and a
counterclaim for actual, exemplary, moral
and other damages plus attorney's fees and
litigation expenses against petitionerplaintiff.
The issue of jurisdiction having been raised
at the pre-trial conference, the parties
were directed to submit their respective
memoranda on that question, which they
complied with in due time. On October 28,
1977, respondent Judge issued the assailed
Order dismissing the complaint,
counterclaim and cross-claim for lack of
jurisdiction stating.
2. The present case therefore involves a
money claim arising from an employeremployee relation or at the very least a
case arising from employer-employee
relations, which under Art. 216 of the
Labor Code is vested exclusively with the
Labor Arbiters of the National Labor
Relations Commission. 2
Reconsideration thereof having been
denied in the Order of January 24, 1978,

petitioner availed of the present recourse.

We gave due course.
We are here confronted with the issue of
whether or not this case is properly
cognizable by Courts of justice or by the
Labor Arbiters of the National Labor
Relations Commission.
Upon the facts and issues involved,
jurisdiction over the present controversy
must be held to belong to the civil Courts.
While seemingly petitioner's claim for
damages arises from employer-employee
relations, and the latest amendment to
Article 217 of the Labor Code under PD
No. 1691 and BP Blg. 130 provides that all
other claims arising from employeremployee relationship are cognizable by
Labor Arbiters, 3 in essence, petitioner's
claim for damages is grounded on the
"wanton failure and refusal" without just
cause of private respondent Cruz to
report for duty despite repeated notices
served upon him of the disapproval of his
application for leave of absence without
pay. This, coupled with the further
averment that Cruz "maliciously and with
bad faith" violated the terms and
conditions of the conversion training
course agreement to the damage of
petitioner removes the present
controversy from the coverage of the
Labor Code and brings it within the
purview of Civil Law.
Clearly, the complaint was anchored not on
the abandonment per se by private
respondent Cruz of his job as the latter
was not required in the Complaint to
report back to work but on the manner
and consequent effects of such
abandonment of work translated in terms
of the damages which petitioner had to
suffer.
Squarely in point is the ruling enunciated in
the case of Quisaba vs. Sta. Ines Melale
Veneer & Plywood, Inc.4 the pertinent
portion of which reads:
Although the acts complied of seemingly
appear to constitute "matter involving

employee employer" relations as Quisaba's

dismiss was the severance of a pre-existing
employee-employer relations, his complaint
is grounded not on his dismissal per se, as
in fact he does not ask for reinstatement
or backwages, but on the manner of his
dismiss and the consequent effects of such
Civil law consists of that 'mass of precepts
that determine or regulate the relations ...
that exist between members of a society
for the protection of private interest (1
Sanchez Roman 3).
The "right" of the respondents to dismiss
Quisaba should not be confused with the
manner in which the right was exercised
and the effects flowing therefrom. If the
dismiss was done anti-socially or
oppressively, as the complaint alleges, then
the respondents violated article 1701 of
the Civil Code which prohibits acts of
oppression by either capital or labor
against the other, and article 21, which
makers a person liable for damages if he
wilfully causes loss or injury to another in
a manner that is contrary to morals, good
customs or public policy, the sanction for
which, by way of moral damages, is
provided in article 2219, No. 10 (Cf,
Philippine Refining Co. vs. Garcia, L-21962,
Sept. 27, 1966, 18 SCRA 107).
Stated differently, petitioner seeks
protection under the civil laws and claims
no benefits under the labor Code. The
primary relief sought is for liquidated
damages for breach of a contractual
obligation. The other items demanded are
not labor benefits demanded by workers
generally taken cognizance of in labor
disputes, such as payment of wages,
overtime compensation or separation pay.
The items claimed are the natural
consequences flowing from breach of an
obligation, intrinsically a civil dispute.
Additionally, there is a secondary issue
involved that is outside the pale of
competence of Labor Arbiters. Is the
liability of Villanueva one of suretyship or
one of guaranty? Unquestionably, this

q u e s t i o n i s b e y o n d t h e fi e l d o f
specialization of Labor Arbiters.
WHEREFORE, the assailed Orders of
respondent Judge are hereby set aside. The
records are hereby ordered remanded to
the proper Branch of the Regional Trial
Court of Quezon City, to which this case
belongs, for further proceedings. No costs.
SO ORDERED.
Teehankee (Chairman), Plana, Vasquez,
Relova and Gutierrez, Jr., JJ., concur.

VIOLATION OF HUMAN DIGNITY AND

PRIVACY

SECOND DIVISION
[G.R. No. 120706. January 31, 2000]
3. RODRIGO CONCEPCION, petitioner,
vs. COURT OF APPEALS and SPS.
NESTOR NICOLAS and ALLEM NICOLAS,
respondents.
DECISION
BELLOSILLO, J.:
Petitioner Rodrigo Concepcion assails in
this petition for review on certiorari the
Decision of the Court of Appeals dated 12
December 1994 which affirmed the
decision of the Regional Trial Court of
Pasig City ordering him to pay respondent
spouses Nestor Nicolas and Allem Nicolas
the sums of P50,000.00 for moral damages,
P25,000.00 for exemplary damages and
P10,000.00 for attorneys fees, plus the
costs of suit.* Petitioner claims absence of
factual and legal basis for the award of
damages. h Y
The courts a quo found that sometime in
1985 the spouses Nestor Nicolas and

Allem Nicolas resided at No. 51 M.

Concepcion St., San Joaquin, Pasig City, in
an apartment leased to them by the owner
thereof, Florence "Bing" Concepcion, who
also resided in the same compound where
the apartment was located. Nestor Nicolas
was then engaged in the business of
supplying government agencies and private
entities with office equipment, appliances
and other fixtures on a cash purchase or
credit basis. Florence Concepcion joined
this venture by contributing capital on
condition that after her capital investment
was returned to her, any profit earned
would be divided equally between her and
Nestor. Jksm
Sometime in the second week of July 1985
Rodrigo Concepcion, brother of the
deceased husband of Florence, angrily
accosted Nestor at the latters apartment
and accused him of conducting an
adulterous relationship with Florence. He
shouted, "Hoy Nestor, kabit ka ni Bing! x x
x Binigyan ka pa pala ni Bing Concepcion
ng P100,000.00 para umakyat ng Baguio.
Pagkaakyat mo at ng asawa mo doon ay
bababa ka uli para magkasarilinan kayo ni
Bing."[1]
To clarify matters, Nestor went with
Rodrigo, upon the latters dare, to see
some relatives of the Concepcion family
who allegedly knew about the relationship.
However, those whom they were able to
see denied knowledge of the alleged affair.
The same accusation was hurled by
Rodrigo against Nestor when the two (2)
confronted Florence at the terrace of her
residence. Florence denied the imputations
and Rodrigo backtracked saying that he just
heard the rumor from a relative. Thereafter,
however, Rodrigo called Florence over the
telephone reiterating his accusation and
threatening her that should something
happen to his sick mother, in case the
latter learned about the affair, he would kill
Florence. Chief

As a result of this incident, Nestor Nicolas

felt extreme embarrassment and shame to
the extent that he could no longer face his
neighbors. Florence Concepcion also
ceased to do business with him by not
contributing capital anymore so much so
that the business venture of the Nicolas
spouses declined as they could no longer
cope with their commitments to their
clients and customers. To make matters
worse, Allem Nicolas started to doubt
Nestors fidelity resulting in frequent
bickerings and quarrels during which Allem
even expressed her desire to leave her
husband. Consequently, Nestor was forced
to write Rodrigo demanding public apology
and payment of damages. Rodrigo pointedly
ignored the demand, for which reason the
Nicolas spouses filed a civil suit against him
for damages.
In his defense, Rodrigo denied that he
maligned Nestor by accusing him publicly
of being Florence's lover. He reasoned out
that he only desired to protect the name
and reputation of the Concepcion family
which was why he sought an appointment
with Nestor through Florence's son
Roncali to ventilate his feelings about the
matter. Initially, he discussed with Nestor
certain aspects of the joint venture in a
friendly and amiable manner, and then only
casually asked the latter about his rumored
affair with his sister-in-law.
In contesting the decision of the appellate
court, petitioner Rodrigo Concepcion
raises the following issues: (a) whether
there is basis in law for the award of
damages to private respondents, the
Nicolas spouses; and, (b) whether there is
basis to review the facts which are of
weight and influence but which were
overlooked and misapplied by the
respondent appellate court. Esm

Petitioner argues that in awarding damages

to private respondents, the Court of
Appeals was without legal basis to justify
its verdict. The alleged act imputed to him
by respondent spouses does not fall under
Arts. 26[2] and 2219[3] of the Civil Code
since it does not constitute libel, slander, or
any other form of defamation. Neither
does it involve prying into the privacy of
anothers residence or meddling with or
disturbing the private life or family relation
of another. Petitioner also insists that
certain facts and circumstances of the case
were manifestly overlooked,
misunderstood or glossed over by
respondent court which, if considered,
would change the verdict. Impugning the
credibility of the witnesses for private
respondents and the manner by which the
testimonial evidence was analyzed and
evaluated by the trial court, petitioner
criticized the appellate court for not taking
into account the fact that the trial judge
who penned the decision was in no
position to obser ve first-hand the
demeanor of the witnesses of respondent
spouses as he was not the original judge
who heard the case. Thus, his decision
rendered was flawed. Esmsc
The Court has ruled often enough that its
jurisdiction in a petition for review on
certiorari under Rule 45 of the Revised
Rules of Court is limited to reviewing only
errors of law, not of fact, unless the factual
findings complained of are devoid of
support by the evidence on record or the
assailed judgment is based on
misapprehension of facts.[4] The reason
behind this is that the Supreme Court
respects the findings of the trial court on
the issue of credibility of witnesses,
considering that it is in a better position to
decide the question, having heard the
witnesses themselves and observed their
deportment and manner of testifying
during the trial.[5] Thus it accords the
highest respect, even finality, to the

evaluation made by the lower court of the

testimonies of the witnesses presented
before it. Esmmis
The Court is also aware of the long settled
rule that when the issue is on the
credibility of witnesses, appellate courts
will not generally disturb the findings of the
trial court; however, its factual findings may
nonetheless be reversed if by the evidence
on record or lack of it, it appears that the
trial court erred.[6] In this respect, the
Court is not generally inclined to review
the findings of fact of the Court of Appeals
unless its findings are erroneous, absurd,
speculative, conjectural, conflicting, tainted
with grave abuse of discretion, or contrary
to the findings culled by the trial court of
origin.[7] This rule of course cannot be
unqualifiedly applied to a case where the
judge who penned the decision was not
the one who heard the case, because not
having heard the testimonies himself, the
judge would not be in a better position
than the appellate courts to make such
determination.[8]
However, it is also axiomatic that the fact
alone that the judge who heard the
evidence was not the one who rendered
the judgment but merely relied on the
record of the case does not render his
judgment erroneous or irregular. This is so
even if the judge did not have the fullest
opportunity to weigh the testimonies not
having heard all the witnesses speak nor
observed their deportment and manner of
testifying. Thus the Court generally will not
find any misapprehension of facts as it can
be fairly assumed under the principle of
regularity of performance of duties of
public officers that the transcripts of
stenographic notes were thoroughly
scrutinized and evaluated by the judge
himself.
Has sufficient reason then been laid before
us by petitioner to engender doubt as to

the factual findings of the court a quo? We

find none. A painstaking review of the
evidence on record convinces us not to
disturb the judgment appealed from. The
fact that the case was handled by different
judges brooks no consideration at all, for
preponderant evidence consistent with
their claim for damages has been adduced
by private respondents as to foreclose a
reversal. Otherwise, everytime a Judge who
heard a case, wholly or partially, dies or
lives the service, the case cannot be
decided and a new trial will have to be
conducted. That would be absurb;
inconceivable. Esmso
A c c o r d i n g t o p e t i t i o n e r, p r i v a t e
respondents evidence is inconsistent as to
time, place and persons who heard the
alleged defamatory statement. We find this
to be a gratuitous observation, for the
testimonies of all the witnesses for the
respondents are unanimous that the
defamatory incident happened in the
afternoon at the front door of the
apartment of the Nicolas spouses in the
presence of some friends and neighbors,
and later on, with the accusation being
repeated in the presence of Florence, at
the terrace of her house. That this finding
appears to be in conflict with the allegation
in the complaint as to the time of the
incident bears no momentous significance
since an allegation in a pleading is not
evidence; it is a declaration that has to be
proved by evidence. If evidence contrary to
the allegation is presented, such evidence
controls, not the allegation in the pleading
itself, although admittedly it may dent the
credibility of the witnesses. But not in the
instant case. Msesm
It is also argued by petitioner that private
respondents failed to present as witnesses
the persons they named as eyewitnesses to
the incident and that they presented
instead one Romeo Villaruel who was not
named as a possible witness during the

pre-trial proceedings. Charging that

Villaruels testimony is not credible and
should never have been accorded any
weight at all, petitioner capitalizes on the
fact that a great distance separates
Villaruels residence and that of private
respondents as reflected in their house
numbers, the formers number being No.
223 M. Concepcion St., while that of the
Nicolas spouses, No. 51 along the same
street. This being so, petitioner concludes,
Villaruel could not have witnessed the ugly
confrontation between Rodrigo and
Nestor. It appears however from Villaruels
testimony that at the time of the incident
complained of, he was staying in an
apartment inside the compound adjacent
to that of the Nicolas spouses. Whether his
apartment was then numbered 223 is not
stated. What is definite and clear is his
statement that he and Nestor Nicolas
were neighbors on 14 July 1985.
There are other inconsistencies pointed
out by petitioner in the testimonial
evidence of private respondents but these
are not of such significance as to alter the
finding of facts of the lower court. Minor
inconsistencies even guarantee truthfulness
and candor, for they erase any suspicion of
a rehearsed testimony.[9] Inconsistencies
in the testimonies of witnesses with on
minor details and collateral matters do not
affect the substance of their testimonies.
[10]
All told, these factual findings provide
enough basis in law for the award of
damages by the Court of Appeals in favor
of respondents. We reject petitioners
posture that no legal provision supports
such award, the incident complained of
neither falling under Art. 2219 nor Art. 26
of the Civil Code. It does not need further
elucidation that the incident charged of
petitioner was no less than an invasion on
the right of respondent Nestor as a
person. The philosophy behind Art. 26

underscores the necessity for its inclusion

in our civil law. The Code Commission
stressed in no uncertain terms that the
human personality must be exalted. The
sacredness of human personality is a
concomitant consideration of every plan
for human amelioration. The touchstone of
every system of law, of the culture and
civilization of every country, is how far it
dignifies man. If the statutes insufficiently
protect a person from being unjustly
humiliated, in short, if human personality is
not exalted - then the laws are indeed
defective.[11] Thus, under this article, the
rights of persons are amply protected, and
damages are provided for violations of a
persons dignity, personality, privacy and
peace of mind. Exsm
It is petitioners position that the act
imputed to him does not constitute any of
those enumerated in Arts 26 and 2219. In
this respect, the law is clear. The violations
mentioned in the codal provisions are not
exclusive but are merely examples and do
not preclude other similar or analogous
acts. Damages therefore are allowable for
actions against a persons dignity, such as
profane, insulting, humiliating, scandalous or
abusive language.[12] Under Art. 2217 of
the Civil Code, moral damages which
include physical suffering, mental anguish,
fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock,
social humiliation, and similar injury,
although incapable of pecuniar y
computation, may be recovered if they are
the proximate result of the defendants
wrongful act or omission.
There is no question that private
respondent Nestor Nicolas suffered
mental anguish, besmirched reputation,
wounded feelings and social humiliation as
a proximate result of petitioners abusive,
scandalous and insulting language .
Petitioner attempted to exculpate himself
by claiming that he made an appointment

to see Nestor through a nephew, Roncali,

the son of Florence, so he could talk with
Nestor to find out the truth about his
rumored illicit relationship with Florence.
He said that he wanted to protect his
nephews and nieces and the name of his
late brother (Florences husband).[13] How
he could be convinced by some way other
than a denial by Nestor, and how he would
protect his nephews and nieces and his
familys name if the rumor were true, he
did not say. Petitioner admitted that he had
already talked with Florence herself over
the telephone about the issue, with the
latter vehemently denying the alleged
immoral relationship. Yet, he could not let
the matter rest on the strength of the
denial of his sister-in-law. He had to go and
confront Nestor, even in public, to the
latter's humiliation. Kyle
Testifying that until that very afternoon of
his meeting with Nestor he never knew
respondent, had never seen him before,
and was unaware of his business
partnership with Florence, his subsequent
declarations on the witness stand however
belie this lack of knowledge about the
business venture for in that alleged
encounter he asked Nestor how the
business was going, what were the
collection problems, and how was the
money being spent. He even knew that the
name of the business, Floral Enterprises,
was coined by combining the first syllables
of the name Florence and Allem, the name
of Nestors wife. He said that he casually
asked Nestor about the rumor between
him and Florence which Nestor denied.
Not content with such denial, he dared
Nestor to go with him to speak to his
relatives who were the source of his
information. Nestor went with him and
those they were able to talk to denied the
rumor. Kycalr
We cannot help noting this inordinate
interest of petitioner to know the truth

about the rumor and why he was not

satisfied with the separate denials made by
Florence and Nestor. He had to confront
Nestor face to face, invade the latters
privacy and hurl defamatory words at him
in the presence of his wife and children,
neighbors and friends, accusing him - a
married man - of having an adulterous
relationship with Florence. This definitely
caused private respondent much shame
and embarrassment that he could no
longer show himself in his neighborhood
without feeling distraught and debased. This
brought dissension and distrust in his
family where before there was none. This is
why a few days after the incident, he
communicated with petitioner demanding
public apology and payment of damages,
which petitioner ignored. Calrky
If indeed the confrontation as described by
private respondents did not actually
happen, then there would have been no
cause or motive at all for them to consult
with their lawyer, immediately demand an
apology, and not obtaining a response from
petitioner, file an action for damages
against the latter. That they decided to go
to court to seek redress bespeaks of the
validity of their claim. On the other hand, it
is interesting to note that while explaining
at great length why Florence Concepcion
testified against him, petitioner never
advanced any reason why the Nicolas
spouses, persons he never knew and with
whom he had no dealings in the past,
would sue him for damages. It also has not
escaped our attention that, faced with a
lawsuit by private respondents, petitioner
sent his lawyer, a certain Atty. Causapin, to
talk not to the Nicolas spouses but to
Florence, asking her not to be involved in
the case, otherwise her name would be
messily dragged into it. Quite succinctly,
Florence told the lawyer that it was not for
her to decide and that she could not do
anything about it as she was not a party to
the court case.

WHEREFORE, in light of the foregoing

premises, the assailed Decision of the
Court of Appeals affirming the judgment of
the Regional Trial Court of Pasig City, Br.
167, holding Rodrigo Concepcion liable to
the spouses Nestor Nicolas and Allem
Nicolas for P50,000.00 as moral damages,
P25,000.00 for exemplary damages,
P10,000.00 for attorney's fees, plus costs of
suit, is AFFIRMED. Mesm

detention or arrest; (6) Illegal search; (7)

Libel, slander or any other form of
defamation; (8) Malicious prosecution; (9)
Acts mentioned in Art. 309 (referring to
disrespect for the dead or wrongfully
interfering in a funeral); (10) Acts or
actions referred to in Arts. 21, 26, 27, 28,
29, 30, 32, 34, and 35 x x x x

DAMAGES + ARTICLES 2195, 2197

SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon,
Jr., JJ., concur.
* Decision penned by Judge Alfredo C.
Flores, RTC-Br. 167, Pasig City.
[1] Translation: " Nestor, you are Bings
paramour! So she gave you P100,000.00
which you, together with your wife,
brought to Baguio and you came back
leaving your wife behind so that you and
Bing could spend all the time together for
your immoral purposes."
[2] Art. 26. - Every person shall respect the
dignity, personality, privacy and peace of
mind of his neighbors and other persons.
The following and similar acts, though they
may not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief: (1) Prying into
the privacy of anothers residence; (2)
Meddling with or disturbing the private life
or family relations of another; (3) Intriguing
or humiliating another on account of his
religious beliefs, lowly station in life, place
of birth, physical defect, or other personal
condition.
[3] Art. 2219. Moral damages may be
recovered in the following and analogous
cases: (1) A criminal offense resulting in
physical injuries; (2) Quasi-delicts causing
physical injuries; (3) Seduction, abduction,
rape or other lascivious acts; (4) Adultery
or concubinage; (5) Illegal or arbitrary

SECOND DIVISION
[G.R. No. 116100. February 9, 1996]
4. SPOUSES CRISTINO and BRIGIDA
CUSTODIO and SPOUSES LITO and
MARIA CRISTINA SANTOS, petitioners,
vs. COURT OF APPEALS, HEIRS OF
PACIFICO C. MABASA and REGIONAL
TRIAL COURT OF PASIG, METRO
MANILA, BRANCH 181, respondents.
DECISION
REGALADO, J.:
This petition for review on certiorari
assails the decision of respondent Court of
Appeals in CA-G.R. CV No. 29115,
promulgated on November 10, 1993, which
affirmed with modification the decision of
the trial court, as well as its resolution
dated July 8, 1994 denying petitioners
motion for reconsideration.[1]
On August 26, 1982, Civil Case No. 47466
for the grant of an easement of right of
way was filed by Pacifico Mabasa against
Cristino Custodio, Brigida R. Custodio,
Rosalina R. Morato, Lito Santos and Maria
Cristina C. Santos before the Regional Trial
Court of Pasig and assigned to Branch 22
thereof.[2]
The generative facts of the case, as
synthesized by the trial court and adopted
by the Court of Appeals, are as follows:

Perusing the record, this Court finds that

the original plaintiff Pacifico Mabasa died
during the pendency of this case and was
substituted by Ofelia Mabasa, his surviving
spouse [and children].
The plaintiff owns a parcel of land with a
two-door apartment erected thereon
situated at Interior P. Burgos St., Palingon,
Tipas, Taguig, Metro Manila. The plaintiff
was able to acquire said property through
a contract of sale with spouses Mamerto
Rayos and Teodora Quintero as vendors
last September 1981. Said property may be
described to be surrounded by other
immovables pertaining to defendants
herein. Taking P. Burgos Street as the point
of reference, on the left side, going to
plaintiffs property, the row of houses will
be as follows: That of defendants Cristino
and Brigido Custodio, then that of Lito and
Maria Cristina Santos and then that of
Ofelia Mabasa. On the right side (is) that of
defendant Rosalina Morato and then a
Septic Tank (Exhibit D). As an access to P.
Burgos Street from plaintiffs property,
there are two possible passageways. The
first passageway is approximately one
meter wide and is about 20 meters
distan(t) from Mabasas residence to P.
Burgos Street. Such path is passing in
between the previously mentioned row of
houses. The second passageway is about 3
meters in width and length from plaintiff
Mabasas residence to P. Burgos Street; it is
about 26 meters. In passing thru said
passageway, a less than a meter wide path
through the septic tank and with 5-6
meters in length has to be traversed.
When said property was purchased by
Mabasa, there were tenants occupying the
premises and who were acknowledged by
plaintiff Mabasa as tenants.
However,
sometime in February, 1982. one of said
tenants vacated the apartment and when
plaintiff Mabasa went to see the premises,

he saw that there had been built an adobe

fence in the first passageway making it
narrower in width. Said adobe fence was
first constructed by defendants Santoses
along their property which is also along the
first passageway. Defendant Morato
constructed her adobe fence and even
extended said fence in such a way that the
entire passageway was enclosed (Exhibit
1-Santoses and Custodios, Exh. D for
plaintiff, Exhs. 1-C, 1-D and I -E) And
it was then that the remaining tenants of
said apartment vacated the area. Defendant
Ma. Cristina Santos testified that she
constructed said fence because there was
an incident when her daughter was
dragged by a bicycle pedalled by a son of
one of the tenants in said apartment along
the first passageway. She also mentioned
some other inconveniences of having (at)
the front of her house a pathway such as
when some of the tenants were drunk and
would bang their doors and windows.
Some of their footwear were even lost. x x
x[3] (Italics in original text; corrections in
parentheses supplied)
On February 27, 1990, a decision was
rendered by the trial court, with this
dispositive part:
Accordingly, judgment is hereby rendered
as follows:
1) Ordering defendants Custodios and
Santoses to give plaintiff permanent access
- ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants
Custodios and Santoses the sum of Eight
Thousand Pesos (P8,000) as indemnity for
the permanent use of the passageway.
The parties to shoulder their respective
litigation expenses.[4]
Not satisfied therewith, therein plaintiff
represented by his heirs, herein private

respondents, went to the Court of Appeals

raising the sole issue of whether or not the
lower court erred in not awarding damages
in their favor. On November 10, 1993, as
earlier stated, the Court of Appeals
rendered its decision affirming the
judgment of the trial cour t with
modification, the decretal portion of which
disposes as follows:
WHEREFORE, the appealed decision of the
lower court is hereby AFFIRMED WITH
MODIFICATION only insofar as the herein
grant of damages to plaintiffs-appellants.
The Court hereby orders defendantsappellees to pay plaintiffs-appellants the
sum of Sixty Five Thousand (P65,000)
Pesos as Actual Damages, Thirty Thousand
(P30,000) Pesos as Moral Damages, and Ten
Thousand (P10,000) Pesos as Exemplary
Damages. The rest of the appealed decision
is affirmed to all respects.[5]
On July 8, 1994, the Court of Appeals
d e n i e d p e t i t i o n e r s m o t i o n f o r
reconsideration.[6] Petitioners then took
the present recourse to us, raising two
issues, namely, whether or not the grant of
right of way to herein private respondents
is proper, and whether or not the award of
damages is in order.
With respect to the first issue, herein
petitioners are already barred from raising
the same. Petitioners did not appeal from
the decision of the court a quo granting
private respondents the right of way, hence
they are presumed to be satisfied with the
adjudication therein. With the finality of the
judgment of the trial court as to
petitioners, the issue of propriety of the
grant of right of way has already been laid
to rest.
For failure to appeal the decision of the
trial court to the Court of Appeals,
petitioners cannot obtain any affirmative
relief other than those granted in the

decision of the trial court. That decision of

the court below has become final as
against them and can no longer be
reviewed, much less reversed, by this
Court. The rule in this jurisdiction is that
whenever an appeal is taken in a civil case,
an appellee who has not himself appealed
may not obtain from the appellate court
any affirmative relief other than what was
granted in the decision of the lower court.
The appellee can only advance any
argument that he may deem necessary to
defeat the appellants claim or to uphold
the decision that is being disputed, and he
can assign errors in his brief if such is
required to strengthen the views
expressed by the court a quo. These
assigned errors, in turn, may be considered
by the appellate court solely to maintain
the appealed decision on other grounds,
but not for the purpose of reversing or
modifying the judgment in the appellees
favor and giving him other affirmative
reliefs.[7]
However, with respect to the second issue,
we agree with petitioners that the Court
of Appeals erred in awarding damages in
favor of private respondents. The award of
damages has no substantial legal basis. A
reading of the decision of the Court of
Appeals will show that the award of
damages 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.
However, 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.[8]
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.[9]
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.
[10] 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)[11]
Many accidents occur and many injuries are
inflicted by acts or omissions which cause
damage or loss to another but which
violate no legal duty to such other person,
and consequently create no cause of action
in his favor. In such cases, the consequences
must be borne by the injured person alone.
The law affords no remedy for damages
resulting from an act which does not
amount to a legal injury or wrong. [12]
In other words, in order that the law will
give redress for an act causing damage, that
act must be not only hurtful, but wrongful.
There must be damnum et injuria.[13] 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.[14]
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.[15]
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.
The law recognizes in the owner the right
to enjoy and dispose of a thing, without
other limitations than those established by
law.[16] It is within the right of petitioners,
as owners, to enclose and fence their
property. Article 430 of the Civil Code
provides that (e)very owner may enclose
or fence his land or tenements by means of
walls, ditches, live or dead hedges, or by
any other means without detriment to
servitudes constituted thereon.
At the time of the construction of the
fence, the lot was not subject to any
servitudes. There was no easement of way
existing in favor of private respondents,
either by law or by contract. The fact that
private respondents had no existing right
over the said passageway is confirmed by
the very decision of the trial court granting
a compulsory right of way in their favor

after payment of just compensation. It was

only that decision which gave private
respondents the right to use the said
p a s s a g ew ay a f t e r p ay m e n t o f t h e
compensation and imposed a
corresponding duty on petitioners not to
interfere in the exercise of said right.
Hence, prior to said decision, 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.[17]
A person has a right to the natural use and
enjoyment of his own property, according
to his pleasure, for all the purposes to
which such property is usually applied. As
a general rule, therefore, there is no cause
of action for acts done by one person
upon his own property in a lawful and
proper manner, although such acts
incidentally cause damage or an
unavoidable loss to another, as such
damage or loss is damnum absque injuria.
[18] When the owner of property makes
use thereof in the general and ordinary
manner in which the property is used, such
as fencing or enclosing the same as in this
case, nobody can complain of having been
injured, because the inconvenience arising
from said use can be considered as a mere
consequence of community life.[19]
The proper exercise of a lawful right
cannot constitute a legal wrong for which
an action will lie,[20] although the act may
result in damage to another, for no legal
right has been invaded[21] One may use
any lawful means to accomplish a lawful
purpose and though the means adopted
may cause damage to another, no cause of
action arises in the latters favor. Any injury

or damage occasioned thereby is damnum

absque injuria. The courts can give no
redress for hardship to an individual
resulting from action reasonably calculated
to achieve a lawful end by lawful means.
[22]
WHEREFORE, under the compulsion of
the foregoing premises, the appealed
decision of respondent Court of Appeals is
hereby REVERSED and SET ASIDE and the
judgment of the trial court is
correspondingly REINSTATED.
SO ORDERED.
Romero and Puno, JJ., concur.
Mendoza, J., took no part.

FIRST DIVISION
[G.R. No. 114118. August 28, 2001]
5. HEIRS OF SIMEON BORLADO, namely,
A D E L A I DA B O R L A D O, L O R E TO
BORLADO, REYNALDO BORLADO,
RICARDO BORLADO, FRANCISCO
BORLADO and ALADINO DORADO,
petitioners, vs. COURT OF APPEALS, and
S A LV A C I O N V D A . D E B U L A N ,
BIENVENIDO BULAN, JR., NORMA B.
CLARITO and THE PROVINCIAL SHERIFF
OF CAPIZ, respondents.
DECISION
PARDO, J.:
The case is an appeal via certiorari from a
decision[1] of the Court of Appeals
affirming the decision of the trial court, the
dispositive portion of which reads:
WHEREFORE, judgment is rendered
dismissing plaintiffs complaint for lack of
cause of action and ordering as vacated the
restraining order and writ of preliminary
injunction issued in this case; and

1. Plaintiffs to be jointly and solidarily

liable to defendants the quantity of one
hundred (100) cavans of palay every year
from 1972 until plaintiffs vacate the
premises of the land in question;
2. Declaring defendants as owner of the
land and entitled to possession;
3. Ordering plaintiffs to pay defendants
the sum of P5,000.00 as attorneys fees and
the sum of P5,000.00 as litigation expenses;
and
4. To pay the costs of the suit.
SO ORDERED.
Roxas City, Philippines, March 18, 1988.
(Sgd.) JONAS A. ABELLAR
J u d g e[2]
The Facts
The facts, as found by the Court of
Appeals, are as follows:
The records show that plaintiffsappellants[3] (petitioners) are the heirs of
Simeon Borlado whose parents were
Serapio Borlado and Balbina Bulan. The
original owner of the lot in question, Lot
No. 2097 of the Pontevedra Cadastre,
Maayon, Capiz, was Serapio Borlado,
grandfather of petitioners.
On 15 April 1942, Serapio sold the lot to
Francisco Bacero (Exh. C, p. 247, MTC
Record) for Three Hundred Pesos
(P300.00). After the death of Francsico on
26 February 1948, his widow Amparo
Dionisio Vda. de Bacero, in her capacity as
legal guardian of her minor children,
namely: Nicolas, Valentin and Luzviminda, all

surnamed Bacero and forced heirs of

Francisco Bacero sold it (the lot) to the
Spouses Bienvenido Bulan and Salvacion
Borbon, through a Deed of Absolute Sale
dated 27 August 1954 (Exh. 65, pp. 243-245,
id.).
Upon the execution of the Deed of Sale
and even prior thereto, actual possession
of Lot No. 2057 was with the vendeesspouses Bulans in view of a loan obtained
by Francisco Bacero from them in
December 1947 (Exh. 65, supra).
Exercising their right of ownership under
the Deed of Sale, Salvacion Borbon Vda. de
Bulan declared the lot in her name in 1900
f o r t a x a t i o n p u r p o s e s u n d e r Ta x
Declaration No. 2232 (Exh. F, p. 254,
Record [MTC]).
She paid the
corresponding taxes as evidenced by the
Tax Receipts marked as Exhibits K, J, I,
G, F and H (pp. 248-253, Record, id.).
S a l v a c i o n a n d h e r c o - d e fe n d a n t s appellees[4] possession of the lot was
continuous, peaceful, uninterrupted,
adverse and exclusive until November 4,
1972, when petitioners forcibly entered
and wrested physical possession thereof
from them.
On 23 November 1972, respondents filed
with the Municipal Court of Maayon, Capiz
a complaint for ejectment docketed as
Civil Case No. A-1, against petitioners (p. 1,
id.). The ejectment case was decided in
favor of the respondents whereby the
petitioners, their agents, tenants, privies
and members of their families were
ordered to vacate Lot No. 2079 and
deliver possession to the respondents
together with all improvements and
standing crops; to pay said respondents
One Hundred (100) cavans of palay
annually from 1972 to the present or in the
total amount of One Thousand One
Hundred (1,100) cavans of palay; and to pay
the sum of Five Thousand (P5,000.00)
Pesos as reimbursement for the amount

respondents had paid their lawyer to

protect their rights; and, the costs of suit
(Exh. 57, pp. 256-261, id.). Instead of
appealing the adverse decision to the
Court of First Instance (now RTC), on 8
November 1983, petitioners filed the
present case with the Regional Trial Court,
Branch 18, Roxas City, docketed as Civil
Case No. V-4887. This case was dismissed
for lack of cause of action in a decision, the
decretal portion of which was quoted
earlier.[5]
On 24 November 1993, the Court of
Appeals promulgated its decision affirming
in toto the appealed decision.[6]
Hence, this appeal.[7]
The Issue
The issue raised is whether the Court of
Appeals erred in ruling that respondents
were the owners of the lot in question.

Nevertheless, as a matter of law, the trial

court and the Court of Appeals erred in
h o l d i n g p e t i t i o n e r s l i a b l e t o p ay
respondents one hundred (100) cavans of
palay every year from 1972 until they
vacate the premises of the land in question.
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.
El Fallo del Tribunal
WHEREFORE, the Court DENIES the
petition and AFFIRMS the decision of the
Court of Appeals in CA-G. R. CV No.
18980 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.
No costs.

The Courts Ruling

SO ORDERED.
We deny the petition. The issue is factual.
In an appeal via certiorari, we may not
review the findings of fact of the Court of
Appeals.[8] When supported by substantial
evidence, the findings of fact of the Court
of Appeals are conclusive and binding on
the parties and are not reviewable by this
Court,[9] unless the case falls under any of
the exceptions to the rule.[10]
Petitioner failed to prove that the case falls
within the exceptions.[11] The Supreme
Court is not a trier of facts.[12] It is not
our function to review, examine and
evaluate or weigh the probative value of
the evidence presented.[13] A question of
fact would arise in such event.[14]
Questions of fact cannot be raised in an
appeal via certiorari before the Supreme
Court and are not proper for its
consideration.[15]

Davide, Jr., C.J., (Chairman), Puno, Kapunan,

and Ynares-Santiago, JJ., concur.

KINDS OF DAMAGES:
ACTUAL DAMAGES ARTS. 2216, 2199,
2200, 2205
EN BANC
March 24, 1914
G.R. No. 8385
6. LUCIO ALGARRA, plaintiff-appellant,
vs.
SIXTO SANDEJAS, defendant-appellee.

Southworth, Hargis & Springer for

appellant.
Rohde & Wright for appellee.
TRENT, J.:
This is a civil action for personal injuries
received from a collision with the
defendant's automobile due to the
negligence of the defendant, who was
driving the car. The negligence of the
defendant is not questioned and this case
involves only the amount of damages which
should be allowed.
As a result of the injuries received, plaintiff
was obliged to spend ten days in the
hospital, during the first four or five of
which he could not leave his bed. After
being discharged from the hospital, he
received medical attention from a private
practitioner for several days. The latter
testified that after the last treatment the
plaintiff described himself as being well. On
the trial the plaintiff testified that he had
done no work since the accident, which
occurred on July 9, 1912, and that he was
not yet entirely recovered. Plaintiff testified
that his earning capacity was P50 per
month. It is not clear at what time plaintiff
became entirely well again, but as to the
doctor to whom he described himself as
being well stated that this was about the
last of July, and the trial took place
September 19, two months' pay would
seem sufficient for the actual time lost
from his work. Plaintiff further testified that
he paid the doctor P8 and expended P2 for
medicines. This expenses, amounting in all
to P110 should also be allowed.
Plaintiff sold the products of a distillery on
a 10 per cent commission and made an
average of P50 per month. He had about
twenty regular customers who, it seems,
purchased in small quantities, necessitating
regular and frequent deliveries. Since the
accident his wife had done something in a

small way to keep up this business but the

total orders taken by her would not net
them over P15. He lost all his regular
customers but four, other agents filing their
orders since his accident. It took him about
four years to build up the business he had
at the time of the accident, and he could
not say how long it would take him to get
back the business he had lost.
Under this state of facts, the lower court,
while recognizing the justness of he claim,
refused to allow him anything for injury to
his business due to his enforced absence
therefrom, on the ground that the doctrine
of Marcelo vs. Velasco (11 Phil., Rep., 277) is
opposed t such allowance. The trial court's
opinion appears to be based upon the
following quotation from Viada (vol. 1 p.
539), quoted in that decision: ". . . with
regard to the offense of lesiones, for
example, the civil liability is almost always
limited to indemnity for damage to the
party aggrieved for the time during which
he was incapacitated for work; . . ."
This statement, however, derives its force,
not from any provision of the law
applicable to lesiones, but is a mere
deduction from the operation of the law
upon the cases arising under it. That the
interpretation placed upon this statement
of Viada by the lower court is either not
correct, or that it does not apply to actions
for personal injuries under article 1902 of
the Civil Code, is apparent from the
decisions of the supreme court of Spain of
January 8, 1906, January 15, 1902, and
October 19, 1909, to which a more
extended reference will be made further
on in this opinion. There is nothing said in
the decision in question prohibiting the
allowance of compensatory damages, nor
does there seem to be anything contained
therein opposed to the allowance of such
damages occurring subsequent to the
institution of the action. In fact, it appears
from the following quotation that the

court would have been disposed to

consider favorably the plaintiff's claim for
injury to her business had the evidence
presented it.
No evidence was then offered by the
plaintiff to show that this slight lameness in
any way interfered with the conduct of her
business or that she could make any less
amount therein than she could make if she
did not suffer from this direct. The court,
therefore, did not err in allowing her no
further damages on this account, because
there was no evidence that she had
suffered any.
The alleged damages which the court
refused to entertain in that case and under
the discussion of which appears the above
quotation from Viada, were for pain and
suffering the plaintiff may have experienced.
The court said: "For the profits which the
plaintiff failed to obtain, spoken of in the
latter part of this article, the plaintiff was
allowed to recover, and the question is,
whether the value of the loss which she
suffered can be extended to pain which she
experienced by reason of the accident."
Actions for damages such as the case at
bar are based upon article 1902 of the
Civil Code, which reads as follows: "A
person who, by act or omission, causes
damage to another where there is fault or
negligence shall be obliged to repair the
damage so done."
Of this article, the supreme court of Spain,
in its decision of February 7, 1900, in
considering the indemnity imposed by it,
said: "It is undisputed that said reparation,
to be efficacious and substantial, must
rationally include the generic idea of
complete indemnity, such as is defined and
explained in article 1106 of the said (Civil)
Code."

Articles 1106 and 1107 of the Civil Code

read as follows:
1106. Indemnity for losses and damages
includes not only the amount of the loss
which may have been suffered, but also that
of the profit which the creditor may have
failed to realize, reserving the provisions
contained in the following articles.
1107. The losses and damages for which a
debtor in good faith is liable, are those
foreseen or which may have been foreseen,
at the time of constituting the obligation,
a n d w h i c h m ay b e a n e c e s s a r y
consequence of its nonfulfillment.
In case of fraud, the debtor shall be liable
for all those which clearly may originate
from the nonfulfillment of the obligation.
Fraud is not an element of the present
case, and we are not therefore concerned
with it. The liability of the present
defendant includes only those damages
which were "foreseen or may have been
foreseen" at the time of the accident, and
which are the necessary and immediate
consequences of his fault. In discussing the
question of damages under the civil law,
Gutierrez (vol. 4, pp. 64, 65) says:
In the impossibility of laying down a surer
rule, the Code understands known
damages to be those which in the prudent
discernment of the judge merit such a
qualification, although their consequences
may not be direct, immediate inevitable.
If it is a question of losses occasioned
through other causes, except fraud, and the
contracting parties have not covenanted
any indemnity for the case of
nonfulfillment, then the reparation of the
losses or damages shall only comprise
those that fault. This rule may not be very
clear, but is the only one possible in a

matter more of the domain of prudence

than of law.

lower courts was affirmed with the

following statement;

In its decision of April 18, 1901, the

supreme court of Spain said: "Neither were
the errors incurred that are mentioned in
the third assignment, since the indemnity
for damages is understood to apply to
those caused the complainant directly, and
not to those which, indirectly and through
more or less logical deductions, may affect
the interests of the Ayuntamiento de Viana,
as occurs in the present case where the
increase of wealth concerns not only the
Ayuntamiento but also the provide and the
state, yet, not on this account does any
action lie in their behalf as derived from
the contracts with Urioste."

That in this sense aside from the fitness

of the judgment appealed from, inasmuch
as the acquittal of the defendant party
resolves all the issues argued at the trial, if
no counterclaim was made the
assignments of error in the appeal cannot
be sustained, because, while the act of
placing the stepladder against the tree in
the manner and for the purposes
aforestated, was not permissible it was
regularly allowed by the local authorities,
and that fact did not precisely determine
the injury, which was due first to the
abandonment of the child by his parents
and secondly to his own imprudence,
according to the findings of the trial court,
not legally objected to in the appeal; so it is
beyond peradventure that the
circumstances necessary for imposing the
obligations arising from guilt or negligence
do not concur in the present case.

This doctrine is also affirmed in the more

recent decision of March 18, 1909, in the
following words: "For the calculation of the
damages claimed, it is necessary, pursuant
to the provisions of article 924 of the Law
of Civil Procedure, to give due regard to
the nature of the obligation that was
u n f u l fi l l e d a n d t o t h e re a s o n a b l e
consequences of its nonfulfillment, because
the conviction sought can be imposed only
when there exists a natural and true
relation between such nonfulfillment and
damages, whatever, reason there may be to
demand them on another account."
In the case of Garcia Gamo vs. Compania
Madrilena de Alumbrado, etc. (101 Juris, p.,
662), it appeared that an employee of the
defendant company whose duty it was to
clean and light the street lamps left as
stepladder leaning against a tree which
stood in a public promenade. The sevenyear old son of the plaintiff climbed the
tree by means of the ladder, and while
endeavoring to cut some branches fell to
the ground, sustaining severe injuries which
eventually caused his death. The plaintiff
lost in the lower courts and on appeal to
the supreme court the decision of those

The court here simply held that the injury

to the child could not be considered as the
probable consequence of an injury which
could have been foreseen from the act of
the company's employee in leaving the
ladder leaning against the tree.
In De Alba vs. Sociedad Anonima de
Tranvias (102 Juris, p., 928), a passenger was
standing on the platform of a street car
while it was in motion when, on rounding a
curve, the plaintiff fell off and under the car,
thereby sustaining severe injuries which
took several months to heal. He was not
allowed to recover in the lower courts and
on appeal the supreme court sustained the
inferior tribunals saying:
Whereas, considering the circumstances of
the accident that happened to D. Antonio
Morales de Alba, such as they were held by
the trail court to have been proved, the
evidence does not disclose that any liability

whatever in the said accident, for acts or

omissions, may be charged against the
employees of the street car, as being guilty
through fault or negligence, since it was
shown that the car was not traveling at any
unusual speed nor was this increased on
rounding the curve, but that the accident
was solely due to the fact that the car in
turning made a movement which caused
the plaintiff to lose his balance; and
whereas no act whatever has been proved
of any violation of the regulations, nor can
it be required of street-car employees, who
have to attend to their respective duties,
that they should foresee and be on the
alert to notify the possibility of danger
when not greater than that which is more
or less inherent to this mode of travel;
therefore the appeal can not be upheld, and
with all the more reason since the
passenger who takes the risk of travelling
on the platform, especially when there is an
unoccupied seat in the car, should be on his
guard against a contingency so natural as
that of losing his balance to a greater or
less extent when the car rounds a curve.
In Crespo vs. Garcia (112 Jurisp., 796), the
plaintiff, a servant woman, 72 years old, was
injured in the performance of her duties by
the sudden and unexpected failure of the
upper floor of a house in which she was
working. The owner and the architect of
the building were made defendants and
after due trial it was held that no
responsibility attached to them for the
failure of the floor, consequently the
plaintiff was not allowed to recover. On her
appeal to the supreme court that tribunal
said:
Whereas the trial court held, in view of all
the evidence adduced, including the expert
and other testimony, that the act which
occasioned the injury suffered by Doa
Maria Alonso Crespo, was accidental,
without fault of anybody, and consequently
fortuitous, and that, in so considering it to

absolve the defendants, he did not incur

the second error assigned on the appeal,
because, without overlooking the import
and legal value of the affidavit adduced at
the trial, he held that the defendants in
their conduct were not liable for any
omission that might constitute such fault
or negligence as would oblige them to
indemnify the plaintiff; and to support the
error assigned no legal provision whatever
was cited such as would require a different
finding, nor was any other authentic
document produced than the aforesaid
affidavit which contained an account of the
ocular inspection and the expert's report,
which, as well as the testimony of the
witnesses, the trial court was able to pass
upon in accordance with its exclusive
power-all points of proof which do not
reveal any mistake on the part of the judge,
whose opinion the appellant would
substitute with his own by a different
interpretation.
These authorities are sufficient to show
that liability for acts ex delicto under the
Civil Code is precisely that embraced
within the "proximate cause" of the AngloSaxon law of torts.
The general rule, as frequently stated, is
that in order that an act omission may be
the proximate cause of an injury, the injury
must be the natural and probable
consequence of the act or omission and
such as might have been foreseen by an
ordinarily responsible and prudent man, in
the light of the attendant circumstances, as
likely to result therefrom . . .
According to the latter authorities
foreseeableness, as an element of
proximate cause, does not depend upon
whether an ordinarily reasonable and
prudent man would or ought in advance to
have anticipated the result which happened,
but whether, if such result and the chain of
events connecting it with the act

complained of had occurred to his mind,

the same would have seemed natural and
probable and according to the ordinary
course of nature. Thus, as said in one case,
"A person guilty of negligence, or an
unlawful act, should be held responsible for
all the consequences which a prudent and
experienced man, fully acquainted with all
the circumstances which in fact existed,
would at the time of the negligent or
unlawful act have thought reasonable to
follow, if they had occurred to his
mind." (Wabash R. etc. Co. vs. Coker, 81 Ill.
App. 660, 664; Cooley on Torts, sec. 15.)
The view which I shall endeavor to justify is
that, for the purpose of civil liability, those
consequences, and those only, are deemed
"immediate," "proximate," or, to anticipate
a little, "natural and probable," which a
person of average competence and
knowledge, being in the like case with the
person whose conduct is complained of,
and having the like opportunities of
observation, might be expected to foresees
as likely to follow upon such conduct. This
is only where the particular consequence is
not known to have been intended or
foreseen by the actor. If proof of that be
forthcoming, whether the consequence
was "immediate" or not does not matter.
That which a man actually foresees is to
him, at all events, natural and probable.
(Webb's Pollock on Torts, p. 32.)
There is another line of definitions which
have for their basis "the natural and
probable consequences" or "the direct and
immediate consequences" of the
defendant's act. (Joyce on Damages, sec.
82.)
It will be observed that the supreme court
of Spain, in the above decisions, has rather
inclined to this line of definitions of what
results a defendant is liable for as a
consequence of his wrongful acts, while the
Civil Code uses the phraseology, "those

foreseen or which may have been

foreseen." From either viewpoint the
method of arriving at the liability of the
wrongdoer under the Civil Code and
under the Anglo Saxon law is the same.
Such was the holding of this court in Taylor
vs. M. E. R. and L. Co. (16 Phil. Rep., 8, 15):
We agree with counsel for appellant that
under the Civil Code, as under the
generally accepted doctrine in the United
States, the plaintiff in an action such as that
under consideration, in order to establish
his right to a recovery, must establish by
competent evidence:
(1) Damages to the plaintiff.
(2) Negligence by act or omission of which
defendant personally, or some person for
whose acts it must respond, was guilty.
(3) The connection of cause and effect
between the negligence and the damages.
These propositions are, of course,
elementary, and do not admit of discussion,
the real difficulty arising in the application
of these principles to the particular facts
developed in the case under consideration.
Parenthetically it may be said that we are
not now dealing with the doctrine of
comparative (contributory) negligence
which was established by Rakes vs. A. G.
and P. Co. (7 Phil. Rep., 359), andEades vs. A.
G. and P. Co. (19 Phil., Rep., 561.)
The rules for the measure of damages,
once that liability is determined, are,
however, somewhat different. The Civil
Code requires that the defendant repair
the damage caused by his fault or
negligence. No distinction is made therein
between damage caused maliciously and
intentionally and damages caused through
mere negligence in so far as the civil
liability of the wrongdoer in concerned.

Nor is the defendant required to do more

than repair the damage done, or, in other
words, to put the plaintiff in the same
position, so far as pecuniary compensation
can do so, that he would have been in had
the damage not been inflicted. In this
respect there is a notable difference
between the two systems. Under the
Anglo-SAxon law, when malicious or willful
intention to cause the damage is an
element of the defendant's act, it is quite
generally regarded as an aggravating
circumstance for which the plaintiff is
entitled to more than mere compensation
for the injury inflicted. These are called
exemplary or punitive damages, and no
provision is made for them in article 1902
of the Civil Code.
Again it is quite common under the English
system to award what is called nominal
damages where there is only a technical
violation of the plaintiff's rights resulting in
no substantial injury to him. This branch of
damages is also unknown under the Civil
Code. If no damages have actually occurred
there can be none to repair and the
doctrine of nominal damages is not
applicable. Thus it has been often held by
the supreme court of Spain that a mere
noncompliance with the obligations of a
contract is not sufficient to sustain a
judgment for damages. It must be shown
that damages actually existed. (Decision of
February 10, 1904.) Again, in its decision of
January 9, 1897, that high tribunal said that
as a logical consequence of the
requirements of articles 1101, 1718, and
1902 that he who causes damages must
repair them, their existence must be
proved.
In at least one case decided by this court
we held in effect that nominal damages
could not be allowed. (Mercado vs.
Abangan, 10 Phil., Rep., 676.)

The purpose of the law in awarding actual

damages is to repair the wrong that has
been done, to compensate for the injury
inflicted, and not to impose a penalty.
Actual damages are not dependent on nor
graded by the intent with which the
wrongful act is done." (Field vs. Munster, 11
Tex. Civ., Appl., 341, 32 S. W., 417.) "The
words "actual damages" shall be construed
to include all damages that the plaintiff may
he has suffered in respect to his property,
business, trade, profession, or occupation,
and no other damages whatever." (Gen
Stat. Minn. 1894, sec., 5418.) "Actual
damages are compensatory only." (Lord,
Owen and Co. vs. Wood, 120 Iowa, 303, 94
N. W., 842.) " `Compensatory damages' as
indicated by the word employed to
characterize them, simply make good or
replace the loss caused by the wrong. They
proceed from a sense of natural justice,
and are designed to repair that of which
one has been deprived by the wrong of
another." (Reid vs. Terwilliger, 116 N. Y., 530;
22 N. E., 1091.) "Compensatory damages'
are such as awarded to compensate the
injured party for caused by the wrong, and
must be only such as make just and fair
compensation, and are due when the
wrong is established, whether it was
committed maliciously that is, with evil
intention or not. (Wimer vs.Allbaugh, 78
Iowa, 79; 42 N. W., 587; 16 Am. St. Rep.,
422.)
Finally, this court has itself held that actual
damages are the extent of the recovery
allowed to the plaintiff. In Marker vs. Garcia
(5 Phil., Rep., 557), which was an action for
damages for breach of contract, this court
said: "Except in those cases where the law
authorizes the imposition of punitive or
exemplary damages, the party claiming
damages must establish by competent
evidence the amount of such damages, and
courts can not give judgment for a greater
amount than those actually proven."

We a re o f t h e o p i n i o n t h a t t h e
requirements of article 1902, that the
defendant repair the damage done can only
mean what is set forth in the above
definitions, Anything short of that would
not repair the damages and anything
beyond that would be excessive. Actual
compensatory damages are those allowed
for tortious wrongs under the Civil Code;
nothing more, nothing less.
According to the text of article 1106 of
the Civil Code, which, according to the
decision of February 7, 1990 (referred to
above), is the generic conception of what
article 1902 embraces, actual damages
include not only loss already suffered, but
loss of profits which may not have been
realized. The allowance of loss of
prospective profits could hardly be more
explicitly provided for. But it may not be
amiss to refer to the decisions of the
supreme cour t of Spain for its
interpretation of this article. The decisions
are numerous upon this point. The
decisions are as epitomized by Sanchez
Roman (vol. 1, 0. 281), interprets article
1106 as follows:
Pursuant to articles 1106 and 1107 of the
same Code, which govern in general the
matter of indemnity due for the
nonfulfillment of obligations, the indemnity
comprises, not only the value of loss
suffered, but also that of the prospective
profit that was not realized, and the
obligation of the debtor in good faith is
limited to such losses and damages as were
foreseen or might have been foreseen at
the time the obligation was incurred and
which are a necessary consequence of his
failure of fulfillment. Losses and damages
under such limitations and frustrated
profits must, therefore, be proved directly
by means of the evidence the law
authorizes.

The decisions of January 8, 1906 (published

in 14 Jurisp. del Codigo Civil, 516) had to
do with the following case: The plaintiff, a
painter by occupation, was engaged to
paint the poles from which were
suspended the trolley wires of a traction
company. While at work on February 8,
1901, the electric current was negligently
turned on by the company, whereby
plaintiff received a severe shock, causing
him to fall to the ground. Plaintiff sustained
injuries which took several months to heal
and his right arm was permanently disabled
by the accident. The age of the plaintiff is
not stated. His daily wage was four pesetas.
He was awarded 25,000 pesetas by the
trial court and this judgment was affirmed
on appeal to the supreme court. This was
equivalent to approximately twenty year's
salary.
In its decision of January 15, 1902
(published in 10 Jurisp. del Codigo Civil.,
260), the supreme court had the following
case under consideration: Plaintiff's son was
a travelling salesman 48 years of age, who
received an annual salary of 2,500 pesetas
and expenses. While travelling on
defendant's train an accident occurred
which caused his death. The accident was
held to be due to the failure of the
defendant company to keep its track and
roadbed in good repair. Plaintiff was
allowed 35,000 pesetas for the death of
her son. this would be equivalent to about
fourteen years' salary.
in the case dated October 19, 1909
(published in 116 Jurisp. del Codigo Civil,
120), plaintiff as suing for the death of his
son caused from injuries inflicted by the
defendant's bull while plaintiff and his son
were travelling along a public road. The age
of the son is not given. Plaintiff was
awarded 3,000 pesetas damages.
In each of the above-mentioned cases the
supreme court refused to pass on the

amount of damages which had been

awarded. It appears to be the unvarying
rule of the supreme court of Spain to
accept the amount of damages awarded by
trial courts, its only inquiry being as to
whether damages have actually occurred as
the result of the defendant's fault or
negligence. (Decision of July 5, 1909.) The
reason why the supreme court of Spain
refuses to consider the amount of damages
awarded is to be found in the great
importance attached by it to the provision
of the Ley de Enjuiciamiento Civil, articles
659 and 1692, No. 7. In its auto of March
16, 1900 (published in 8 Jurisp. del Codigo
Civil, 503), the following comment is made
on these articles:
As this supreme court has repeatedly held,
the weight given by the trial judge to the
testimony, with good discernment or
otherwise, can not be a matter for reversal,
not even with the support of No. 7 of
article 1692 of the Ley de Enjuiciamiento
Civil, as it is exclusively submitted to him,
pursuant to the provisions of article 659 of
the said law and article 1248 of the Code.
The practice of this court, under our Code
of Civil Procedure , does not permit of our
going to such lengths in sustaining the
findings of fact in trial courts. We have
repeatedly held that due weight will be
given in this court to the findings of fact by
trial cour ts by reason of their
opportunities to see and hear the
witnesses testify, note their demeanor and
bearing upon the stand, etc., but when the
decision of the trial court, after permitting
due allowance for its superior advantages
in weighing the evidence of the case,
appears to us to be against the fair
preponderance of that evidence, it is our
duty to reverse or set aside the findings of
fact made by the trial court and render
such judgment as the facts of the same
deem to us to warrant. (Code of Civ.,
Proc., sec. 496.) We need go to no other

branch of law than that of damages to

support this statement. In the following
case the damages awarded by the lower
court were reduced after a consideration
of the evidence; Sparrevohn vs.Fisher (2
Phil. Rep., 676); Campbell and Go-Tauco vs.
Behn, Meyer and Co. (3 Phil., Rep., 590);
Causin vs. Jakosalem 95 Phil., Rep., 155);
Marker vs. Garcia (5 Phil., Rep., 557); Uy
Piaoco vs.Osmea (9 Phil., Rep., 299);
Macleod vs. Phil. Pub. Co. (12 Phil., Rep.,
427); Orense vs. Jaucian (18 Phil. Rep., 553).
In Rodriguez vs. Findlay and Co. (14 Phil.
Rep., 294); and Cordoba y Conde vs. Castle
Bros. (18 Phil. Rep., 317), the damages
awarded by the lower court were
increased on appeal after a consideration
of the evidence. In Brodek vs. Larson (18
Phil., Rep., 425), it was held that the
damages awarded by the lower court were
base on too uncertain evidence, and the
case was remanded for a new trial as to
the amount of damages sustained. Also in
Saldivar vs.Municipality of Talisay (18 Phil.,
Rep., 362), where the lower court
exonerated the defendant from liability, this
court, after a consideration of the
evidence, held that the defendant was liable
and remanded the case for the purpose of
a new trial in order to ascertain the
amount of damages sustained.
In this respect the law of damages under
article 1902, as laid down by the decisions
of the supreme court of Spain, has been
indirectly modified by the present Code of
Civil Procedure so that the finding of the
lower court as to the amount of damages
is not conclusive on appeal.
Actual damages, under the American
system, include pecuniary recompense for
pain and suffering, injured feelings, and the
like. Article 1902, as interpreted by this
court in Marcelo vs. Velasco (11 Phil., Rep.,
287), does not extend to such incidents.
Aside from this exception, actual damages,
in this jurisdiction, in the sense that they

mean just compensation for the loss

suffered, are practically synonymous with
actual damages under the American
system.
This court has already gone some distance
in incorporating into our jurisprudence
those principles of the American law of
actual damages which are of a general and
abstract nature. In Baer Senior and Co.'s
Successors vs. Compaia Maritima (6 Phil.
Rep., 215), the American principle of
admiralty law that the liability of the ship
for a tow is not so great as that for her
cargo was applied in determining the
responsibility of a ship, under the Code of
Commerce, for her tow. In Rodriguez, vs.
Findlay and Co. (14 Phil., Rep., 294), which
was an action for breach of contract of
warranty, the following principle, supported
entirely by American authority, was used in
computing the amount of damages due the
plaintiff:
The damages recoverable of a
manufacturer or dealer for the breach of
warranty of machinery, which he contracts
to furnish, or place in operation for a
known purpose are not confined to the
difference in value of the machinery as
warranted and as it proves to be, but
includes such consequential damages as are
the direct, immediate, and probable result
of the breach.
In Aldaz vs. Gay (7 Phil., Rep., 268), it was
held that the earnings or possible earnings
of a workman wrongfully discharged should
be considered in mitigation of his damages
for the breach of contract by his employer,
with the remark that nothing had been
brought to our attention to the contrary
under Spanish jurisprudence.
In Fernandez vs. M. E. R. and L. Co. (14 Phil.,
Rep., 274), a release or compromise for
personal injury sustained by negligence
attributed to the defendant company was

held a bar to an action for the recovery of

further damages, on the strength of
American precedents.
In Taylor vs. M. E. R. and L. Co., supra, in the
course of an extended reference to
American case law, the doctrine of the socalled "Turntable" and "Torpedo" cases was
adopted by this court as a factor in
determining the question of liability for
damages in such cases as the one the court
the then had under consideration.
In Martinez vs. Van Buskirk (18 Phil., 79),
this court, after remarking that the rules
under the Spanish law by which the fact of
negligence is determined are, generally
speaking, the same as they are in AngloSaxon countries, approved the following
well-known rule of the Anglo-Saxon law of
negligence, relying exclusively upon
American authorities: ". . . acts, the
performance of which has not proven
destructive or injurious and which have
been generally acquiesced in by society for
so long a time as to have ripened into a
custom, cannot be held to be unreasonable
or imprudent and that, under the
circumstances, the driver was not guilty of
negligence in so leaving his team while
assisting in unloading his wagon.
This court does not, as a rule, content itself
in the determination of cases brought
before it, with a mere reference to or
quotation of the articles of the codes or
laws applicable to the questions involved,
for the reason that it is committed to the
practice of citing precedents for its rulings
wherever practicable. (See Ocampo vs.
Cabangis, 15 Phil Rep., 626.) No better
example of the necessity of amplifying the
treatment of a subject given in the code is
afforded than article 1902 of the Civil
Code. That article requires that the
defendant repair the damage done. There
is, however, a world of difficulty in carrying
out the legislative will in this particular. The

measure of damages is an ultimate fact, to

be determined from the evidence
submitted to the court. The question is
sometimes a nice one to determine,
whether the offered evidence in such as
sought to be considered by the court in
fixing the quantum of damages; and while
the complexity of human affairs is such that
two cases are seldom exactly alike, a
thorough discussion of each case may
permit of their more or less definite
classification, and develop leading principles
which will be of great assistance to a court
in determining the question, not only of
damages, but of the prior one of
negligence. We are of the opinion that as
the Code is so indefinite (even though
from necessity) on the subject of damages
arising from fault or negligence, the bench
and bar should have access to and avail
themselves of those great, underlying
principles which have been gradually and
conservatively developed and thoroughly
tested in Anglo-Saxon courts. A careful and
intelligent application of these principles
should have a tendency to prevent
mistakes in the rulings of the court on the
evidence offered, and should assist in
determining damages, generally, with some
degree of uniformity.
The law of damages has not, for some
reason, proved as favorite a theme with the
civil-law writers as with those of the
common-law school. The decisions of the
supreme court of Spain, though numerous
on damages arising from contractual
obligations, are exceedingly few upon
damages for personal injuries arising ex
delicto. The reasons for this are not
important to the present discussion. It is
sufficient to say that the law of damages
has not received the elaborate treatment
that it has at the hands of the Anglo-Saxon
jurists. If we in this jurisdiction desire to
base our conclusions in damage cases upon
controlling principles, we may develop
those principles and incorporate them into

our jurisprudence by that difficult and

tedious process which constitutes the
centuries-old history of Anglo-Saxon
jurisprudence; or we may avail ourselves of
these principles in their present state of
development without further effort than it
costs to refer to the works and writings of
many eminent text-writers and jurists. We
shall not attempt to say that all these
principles will be applicable in this
jurisdiction. It must be constantly borne in
mind that the law of damages in this
jurisdiction was conceived in the womb of
the civil law and under an entirely different
form of government. These influences have
had their effect upon the customs and
institutions of the country. Nor are the
industrial and social conditions the same.
An Act which might constitute negligence
or damage here, and vice versa. As stated in
Story on Bailments, section 12, "It will
thence follow that, in different times and in
different countries, the standard (of
diligence) is necessary variable with
respect to the facts, although it may be
uniform with respect to the principle. So
that it may happen that the same acts
which in one country or in one age may be
deemed negligent acts, may at another time
or in another country be justly deemed an
exercise of ordinary diligence."
The abstract rules for determining
negligence and the measure of damages
are, however, rules of natural justice rather
than man-made law, and are applicable
u n d e r a ny e n l i g h t e n e d s y s t e m o f
jurisprudence. There is all the more reason
for our adopting the abstract principles of
the Anglo- Saxon law of damages, when we
consider that there are at least two
important laws o n our statute books of
American origin, in the application of which
we must necessarily be guided by American
authorities: they are the Libel Law (which,
by the way, allows damages for injured
feelings and reputation, as well as punitive

damages, in a proper case), and the

Employer's Liability Act.
The case at bar involves actual incapacity of
the plaintiff for two months, and loss of the
greater portion of his business. As to the
damages resulting from the actual
incapacity of the plaintiff to attend to his
business there is no question. They are, of
course, to be allowed on the basis of his
earning capacity, which in this case, is P50
per month. the difficult question in the
present case is to determine the damage
which has results to his business through
his enforced absence. In Sanz vs. Lavin Bros.
(6 Phil. Rep., 299), this court, citing
numerous decisions of the supreme court
of Spain, held that evidence of damages
"must rest upon satisfactory proof of the
existence in reality of the damages alleged
to have been suffered." But, while certainty
is an essential element of an award of
damages, it need not be a mathematical
certainty. That this is true is adduced not
only from the personal injury cases from
the supreme court of Spain which we have
discussed above, but by many cases
decided by this court, reference to which
has already been made. As stated in Joyce
on Damages, section 75, "But to deny the
injured party the right to recover any
actual damages in cases f torts because
they are of such a nature a cannot be thus
certainly measured, would be to enable
parties to profit by and speculate upon
their own wrongs; such is not the law."
As to the elements to be considered in
estimating the damage done to plaintiff's
business by reason of his accident, this
same author, citing numerous authorities,
has the following to say: It is proper to
consider the business the plaintiff is
engaged in, the nature and extent of such
business, the importance of his personal
ove r s i g h t a n d s u p e r i n t e n d e n c e i n
conducting it, and the consequent loss
arising from his inability to prosecure it.

The business of the present plaintiff

required his immediate supervision. All the
profits derived therefrom were wholly due
to his own exertions. Nor are his damages
confined to the actual time during which
he was physically incapacitated for work, as
is the case of a person working for a
stipulated daily or monthly or yearly salary.
As to persons whose labor is thus
compensated and who completely recover
from their injuries, the rule may be said to
be that their damages are confined to the
duration of their enforced absence from
their occupation. But the present plaintiff
could not resume his work at the same
profit he was making when the accident
occurred. He had built up an establishing
business which included some twenty
regular customers. These customers
represented to him a regular income. In
addition to this he made sales to other
people who were not so regular in their
purchases. But he could figure on making at
least some sales each month to others
besides his regular customers. Taken as a
whole his average monthly income from his
business was about P50. As a result of the
accident, he lost all but four of his regular
customers and his receipts dwindled down
to practically nothing. Other agents had
invaded his territory, and upon becoming
physically able to attend to his business, he
found that would be necessary to start
with practically no regular trade, and either
win back his old customers from his
competitors or else secure others. During
this process of reestablishing his patronage
his income would necessarily be less than
he was making at the time of the accident
and would continue to be so for some
time. Of course, if it could be
mathematically determined how much less
he will earn during this rebuilding process
than he would have earned if the accident
had not occurred, that would be the
amount he would be entitled to in this
action. But manifestly this ideal

compensation cannot be ascertained. The

question therefore resolves itself into
whether this damage to his business can be
so nearly ascertained as to justify a court
in awarding any amount whatever.
When it is shown that a plaintiff's business
is a going concern with a fairly steady
average profit on the investment, it may be
assumed that had the interruption to the
business through defendant's wrongful act
not occurred, it would have continued
producing this average income "so long as
is usual with things of that nature." When
in addition to the previous average income
of the business it is further shown what
the reduced receipts of the business are
immediately after the cause of the
interruption has been removed, there can
be no manner of doubt that a loss of
profits has resulted from the wrongful act
of the defendant. In the present case, we
not only have the value of plaintiff's
business to him just prior to the accident,
but we also have its value to him after the
accident. At the trial, he testified that his
wife had earned about fifteen pesos during
the two months that he was disabled. That
this almost total destruction of his business
was directly chargeable to defendant's
wrongful act, there can be no manner of
doubt; and the mere fact that the loss can
not be ascertained with absolute accuracy,
is no reason for denying plaintiff's claim
altogether. As stated in one case, it would
be a reproach to the law if he could not
recover damages at all. (Baldwin vs.
Marquez, 91 Ga., 404)
Profits are not excluded from recovery
because they are profits; but when
excluded, it is on the ground that there are
no criteria by which to estimate the
amount with the certainty on which the
adjudications of courts, and the findings of
juries, should be based. (Brigham vs.
Carlisle (Ala.), 56 Am. Rep., 28, as quoted in
Wilson vs. Wernwag, 217 Pa., 82.)

The leading English case on the subject is

Phillips vs. London and Southwestern Ry.
Co. (5 Q. B. D., 788; 41 L.T., 121; 8 Eng. Rul.
Cases, 447). The plaintiff was a physician
with a very lucrative practice. In one case
he had received a fee of 5,000 guineas; but
it appeared that his average income was
between 6,000 and 7,000 pounds sterling
per year. The report does not state
definitely how serious plaintiff's injuries
were, but apparently he was permanently
disabled. The following instruction to the
jury was approved, and we think should be
set out in this opinion as applicable to the
present case:
You cannot put the plaintiff back again into
his original position, but you must bring
your reasonable common sense to bear,
and you must always recollect that this is
the only occasion on which compensation
can be given. Dr. Philips can never sue again
for it. You have, therefore, not to give him
compensation a wrong at the hands of the
defendants, and you must take care o give
him full, fair compensation. for that which
he has suffered.
The jury's award was seven thousand
pounds. Upon a new trial, on the ground of
the insufficiency of the damages awarded,
plaintiff received 16,000 pounds. On the
second appeal, Bramwell, L. J., put the case
of a laborer earning 25 shillings a week,
who, on account of injury, was totally
incapacitated for work for twenty-six
weeks, and then for ten weeks could not
earn more than ten shillings a week, and
was not likely to get into full work for
another twenty weeks. The proper
measure of damages would be in that case
25 shillings a week twenty-six weeks, plus
15 shillings a week for the ten and twenty
weeks, and damages for bodily suffering
and medical expenses. Damages for bodily
suffering, of course, are not, for reasons
stated above, applicable to this jurisdiction;

otherwise we believe this example to be

the ideal compensation for loss of profits
which courts should strike to reach, in
cases like the present.
In Joslin vs. Grand Rapids Ice and Coal Co.
(53 Mich., 322), the court said: "The
plaintiff, in making proof of his damages,
offered testimony to the effect that he was
an attorney at law of ability and in good
standing, and the extent and value of his
practice, and that, in substance, the injury
had rendered him incapable of pursuing his
profession. This was objected to as
irrelevant, immaterial and incompetent. We
think this was competent. It was within the
declaration that his standing in his
profession was such as to command
respect, and was proper to be shown, and
his ability to earn, and the extent of his
practice, were a portion of the loss he had
sustained by the injury complained of.
There was no error in permitting this
proof, and we further think it was
competent, upon the question of damages
under the evidence in this case, for the
plaintiff to show, by Judge Hoyt, as was
done, that an interruption in his legal
business and practice for eight months was
a damage to him. It seems to have been a
part of the legitimate consequences of the
plaintiff's injury."
In Luck vs. City of Ripon (52 Wis., 196),
plaintiff was allowed to prevent that she
was a midwife and show the extent of her
earnings prior to the accident in order to
establish the damage done to her business.
The pioneer case of Gobel vs. Hough (26
Minn., 252) contains perhaps one of the
clearest statements of the rule and is
generally considered as one of the leading
cases on this subject. In that case the court
said:
When a regular and established business,
the value of which may be ascertained, has

been wrongfully interrupted, the true

general rule for compensating the party
injured is to ascertain how much less
valuable the business was by reason of the
interruption, and allow that as damages.
This gives him only what the wrongful act
deprived him of. The value of such a
business depends mainly on the ordinary
profits derived from it. Such value cannot
be ascertained without showing what the
usual profits are; nor are the ordinary
profits incident to such a business
contingent or speculative, in the sense that
excludes profits from consideration as an
element of damages. What they would have
been, in the ordinary course of the
business, for a period during which it was
interrupted, may be shown with reasonable
certainty. What effect extraordinary
circumstances would have had upon the
business might be contingent and
conjectural, and any profits anticipated
from such cause would be obnoxious to
the objection that they are merely
speculative; but a history of the business,
for a reasonable time prior to a period of
interruption, would enable the jury to
determine how much would be done
under ordinary circumstances, and in the
usual course, during the given period; and
the usual rate of profit being shown, of
course the aggregate becomes only a
matter of calculation.
In the very recent case of Wellington vs.
Spencer (Okla., 132 S. W., 675), plaintiff had
rented a building from the defendant and
used it as a hotel. Defendant sued out a
wrongful writ of attachment upon the
equipment of the plaintiff, which caused
him to abandon his hotel business. After
remarking that the earlier cases held that
no recovery could be had for prospective
profits, but that the later authorities have
held that such damages may be allowed
when the amount is capable of proof, the
court had the following to say:

Where the plaintiff has just made his

arrangements to begin business, and he is
prevented from beginning either by tort or
a breach of contract, or where the injury is
to a particular subject matter, profits of
which are uncertain, evidence as to
expected profits must be excluded from
the jury because of the uncertainty. There
is as much reason to believe that there will
be no profits as to believe that there will
be no profits, but no such argument can be
made against proving a usual profit of an
established business. In this case the
plaintiff, according to his testimony, had an
established business, and was earning a
profit in the business, and had been doing
that for a sufficient length of time that
evidence as to prospective profits was not
entirely speculative. Men who have been
engaged in business calculate with a
reasonable certainty the income from their
business, make their plans to live
accordingly, and the value of such business
is not a matter of speculation as to exclude
evidence from the jury.
A good example of a business not
established for which loss of profits will be
allowed may be found in the States vs.
Durkin (65 Kan., 101). Plaintiffs formed a
partnership, and entered the plumbing
business in the city of Topeka in April. In
July of the same year, they brought an
action against a plumbers' association on
the ground that the latter had formed an
unlawful combination in restraint of trade
and prevented them from securing supplies
for their business within a reasonable time.
The court said:
In the present case the plaintiffs had only
been in business a short time not so
long that it can be said that they had an
established business. they had contracted
three jobs of plumbing, had finished two,
and lost money on both; not, however,
because of any misconduct or wrongful
acts on the part of the defendants or

either of them. They carried no stock in

trade, and their manner of doing business
was to secure a contract and then
purchase the material necessary for its
completion. It is not shown that they had
any means or capital invested in the
business other than their tools. Neither of
them had prior thereto managed or
carried on a similar business. Nor was it
shown that they were capable of so
managing this business as to make it earn a
profit. There was little of that class of
business being done at the time, and little, if
any, profit derived therefrom. The plaintiffs'
business lacked duration, permanency, and
recognition. It was an adventure, as
distinguished from an established business.
Its profits were speculative and remote,
existing only in anticipation. The law, with
all its vigor and energy in its effort to right
or wrongs and damages for injuries
sustained, may not enter into a domain of
speculation or conjecture. In view of the
character and condition of the plaintiffs'
business, the jury had not sufficient
evidence from which to ascertain profits.
Other cases which hold that the profits of
an established business may be considered
in calculating the measure of damages for
an interruption of it are: Wilkinson vs.
Dunbar (149 N. C., 20); Kinneyvs. Crocker
(18 Wis., 80); Sachra vs. Manila (120 la.,
562); Kramer vs. City of Los Angeles (147
Cal., 668); Mugge vs. Erkman (161 Ill. App.,
180); Fredonia Gas Co. vs. Bailey 977 Kan.,
296); Morrow vs. Mo. Pac. R. Co. (140 Mo.
App., 200); City of Indianapolis vs. Gaston
(58 Ind., 24); National Fibre Board vs.
Auburn Electric Light Co. (95 Me., 318);
Sutherland on Damages, sec. 70.
We have now outlined the principles which
should govern the measure of damages in
this case. We are of the opinion that the
lower court had before it sufficient
evidence of the damage to plaintiff's
business in the way of prospective loss of

profits to justify it in calculating his

damages as to his item. That evidence has
been properly elevated to this court of
review. Under section 496 of the Code of
Civil Procedure, we are authorized to
enter final judgment or direct a new trial,
as may best subserve the ends of justice.
We are of the opinion that the evidence
presented as to the damage done to
plaintiff's business is credible and that it is
sufficient and clear enough upon which to
base a judgment for damages. Plaintiff
having had four years' experience in selling
goods on commission, it must be presumed
that he will be able to rebuild his business
to its former proportions; so that at some
time in the future his commissions will
equal those he was receiving when the
accident occurred. Aided by his experience,
he should be able to rebuild this business
to its former proportions in much less
time than it took to establish it as it stood
just prior to the accident. One year should
be sufficient time in which to do this. The
profits which plaintiff will receive from the
business in the course of its reconstruction
will gradually increase. The injury to
plaintiff's business begins where these
profits leave off, and, as a corollary, there is
where defendant's liability begins. Upon
this basis, we fix the damages to plaintiff's
business at P250.
The judgment of the lower court is set
aside, and the plaintiff is awarded the
following damages; ten pesos for medical
expenses; one hundred pesos for the two
months of his enforced absence from his
business; and two hundred and fifty pesos
for the damage done to his business in the
way of loss of profits, or a total of three
hundred and sixty pesos. No costs will be
allowed in this instance.
Arellano, C.J. and Araullo, J., concur.
Carson, J., concurs in the result.

THIRD DIVISION
[G.R. No. 107518. October 8, 1998]
7. PNOC SHIPPING AND TRANSPORT
C O R P O R AT I O N , p e t i t i o n e r, v s .
HONORABLE COURT OF APPEALS and
MARIA EFIGENIA FISHING
CORPORATION, respondents.
DECISION
ROMERO, J.:
A party is entitled to adequate
compensation only for such pecuniary loss
actually suffered and duly proved.[1]
Indeed, basic is the rule that to recover
actual damages, the amount of loss must
not only be capable of proof but must
actually be proven with a reasonable
degree of certainty, premised upon
competent proof or best evidence
obtainable of the actual amount thereof.[2]
The claimant is duty-bound to point out
specific facts that afford a basis for
measuring whatever compensator y
damages are borne.[3] A court cannot
merely rely on speculations, conjectures, or
guesswork as to the fact and amount of
damages[4] as well as hearsay[5] or
uncorroborated testimony whose truth is
suspect.[6] Such are the jurisprudential
precepts that the Court now applies in
resolving the instant petition.
The records disclose that in the early
morning of September 21, 1977, the M/V
Maria Efigenia XV, owned by private
respondent Maria Efigenia Fishing
Corporation, was navigating the waters
near Fortune Island in Nasugbu, Batangas
on its way to Navotas, Metro Manila when
it collided with the vessel Petroparcel
which at the time was owned by the Luzon
Stevedoring Corporation (LSC).

After investigation was conducted by the

Board of Marine Inquiry, Philippine Coast
Guard Commandant Simeon N. Alejandro
rendered a decision finding the Petroparcel
at fault. Based on this finding by the Board
and after unsuccessful demands on
petitioner,[7] private respondent sued the
LSC and the Petroparcel captain, Edgardo
Doruelo, before the then Court of First
Instance of Caloocan City, paying thereto
the docket fee of one thousand two
hundred fifty-two pesos (P1,252.00) and
the legal research fee of two pesos (P2.00).
[8] In particular, private respondent prayed
for an award of P692,680.00, allegedly
representing the value of the fishing nets,
boat equipment and cargoes of M/V Maria
Efigenia XV, with interest at the legal rate
plus 25% thereof as attorneys fees.
Meanwhile, during the pendency of the
case, petitioner PNOC Shipping and
Transport Corporation sought to be
substituted in place of LSC as it had
already acquired ownership of the
Petroparcel.[9]
For its part, private respondent later
sought the amendment of its complaint on
the ground that the original complaint
failed to plead for the recovery of the lost
value of the hull of M/V Maria Efigenia XV.
[10] Accordingly, in the amended complaint,
private respondent averred that M/V Maria
Efigenia XV had an actual value of
P800,000.00 and that, after deducting the
insurance payment of P200,000.00, the
amount of P600,000.00 should likewise be
claimed.
The amended complaint also
alleged that inflation resulting from the
devaluation of the Philippine peso had
affected the replacement value of the hull
of the vessel, its equipment and its lost
cargoes, such that there should be a
re ason ab l e de t e r m i n at i on t h e re of .
Furthermore, on account of the sinking of
the vessel, private respondent supposedly
incurred unrealized profits and lost

business oppor tunities that would

thereafter be proven.[11]
Subsequently, the complaint was further
amended to include petitioner as a
defendant[12] which the lower court
granted in its order of September 16, 1985.
[13] After petitioner had filed its answer to
the second amended complaint, on
February 5, 1987, the lower court issued a
pre-trial order[14] containing, among other
things, a stipulations of facts, to wit:
1.
On 21 September 1977, while the
fishing boat `M/V MARIA EFIGENIA
owned by plaintiff was navigating in the
vicinity of Fortune Island in Nasugbu,
Batangas, on its way to Navotas, Metro
Manila, said fishing boat was hit by the
LSCO tanker Petroparcel causing the
former to sink.
2.
The Board of Marine Inquiry
conducted an investigation of this marine
accident and on 21 November 1978, the
Commandant of the Philippine Coast
Guard, the Honorable Simeon N. Alejandro,
rendered a decision finding the cause of
the accident to be the reckless and
imprudent manner in which Edgardo
Doruelo navigated the LSCO Petroparcel
and declared the latter vessel at fault.
3.
On 2 April 1978, defendant Luzon
Stevedoring Corporation (LUSTEVECO),
executed in favor of PNOC Shipping and
Transport Corporation a Deed of Transfer
involving several tankers, tugboats, barges
and pumping stations, among which was
the LSCO Petroparcel.
4.
On the same date on 2 April 1979
(sic), defendant PNOC STC again entered
into an Agreement of Transfer with codefendant Lusteveco whereby all the
business properties and other assets
appertaining to the tanker and bulk oil
departments including the motor tanker
LSCO Petroparcel of defendant Lusteveco
were sold to PNOC STC.

5.
The aforesaid agreement stipulates,
among others, that PNOC-STC assumes,
without qualifications, all obligations arising
from and by virtue of all rights it obtained
over the LSCO `Petroparcel.
6.
On 6 July 1979, another agreement
between defendant LUSTEVECO and
PNOC-STC was executed wherein Board
of Marine Inquiry Case No. 332 (involving
the sea accident of 21 September 1977)
was specifically identified and assumed by
the latter.
7.
On 23 June 1979, the decision of
Board of Marine Inquiry was affirmed by
the Ministry of National Defense, in its
decision dismissing the appeal of Capt.
Edgardo Doruelo and Chief mate Anthony
Estenzo of LSCO `Petroparcel.
8.
LSCO `Petroparcel is presently
owned and operated by PNOC-STC and
likewise Capt. Edgardo Doruelo is still in
their employ.
9.
As a result of the sinking of M/V
Maria Efigenia caused by the reckless and
imprudent manner in which LSCO
Petroparcel was navigated by defendant
Doruelo, plaintiff suffered actual damages
by the loss of its fishing nets, boat
equipments (sic) and cargoes, which went
down with the ship when it sank the
replacement value of which should be left
to the sound discretion of this Honorable
Court.
After trial, the lower court[15] rendered
on November 18, 1989 its decision
disposing of Civil Case No. C-9457 as
follows:
WHEREFORE, and in view of the
foregoing, judgment is hereby rendered in
favor of the plaintiff and against the
defendant PNOC Shipping & Transport
Corporation, to pay the plaintiff:
a.
The sum of P6,438,048.00
representing the value of the fishing boat
with interest from the date of the filing of
the complaint at the rate of 6% per annum;

b.
The sum of P50,000.00 as and for
attorneys fees; and
c.

The costs of suit.

The counterclaim is hereby DISMISSED for

lack of merit. Likewise, the case against
defendant Edgardo Doruelo is hereby
DISMISSED, for lack of jurisdiction.
SO ORDERED.
In arriving at the above disposition, the
lower court cited the evidence presented
by private respondent consisting of the
testimony of its general manager and sole
witness, Edilberto del Rosario.
Private
respondents witness testified that M/V
Maria Efigenia XV was owned by private
respondent per Exhibit A, a certificate of
ownership issued by the Philippine Coast
Guard showing that M/V Maria Efigenia XV
was a wooden motor boat constructed in
1 9 6 5 w i t h 1 2 8 . 2 3 g ro s s t o n n a g e .
According to him, at the time the vessel
sank, it was then carrying 1,060 tubs
(baeras) of assorted fish the value of
which was never recovered. Also lost with
the vessel were two cummins engines (250
horsepower), radar, pathometer and
compass. He further added that with the
loss of his flagship vessel in his fishing fleet
o f fo u r t e e n ( 1 4 ) ve s s e l s , h e w a s
constrained to hire the services of counsel
whom he paid P10,000 to handle the case
at the Board of Marine Inquiry and
P50,000.00 for commencing suit for
damages in the lower court.
As to the award of P6,438,048.00 in actual
damages, the lower court took into
account the following pieces of
documentar y evidence that private
respondent proffered during trial:
(a)
Exhibit A certified xerox copy of
the certificate of ownership of M/V Maria
Efigenia XV;
(b)
Exhibit B a document titled
Marine Protest executed by Delfin

Villarosa, Jr. on September 22, 1977 stating

that as a result of the collision, the M/V
Maria Efigenia XV sustained a hole at its
left side that caused it to sink with its
cargo of 1,050 baeras valued at
P170,000.00;
(c)
Exhibit C a quotation for the
construction of a 95-footer trawler issued
by Isidoro A. Magalong of I. A. Magalong
Engineering and Construction on January
26, 1987 to Del Rosario showing that
construction of such trawler would cost
P2,250,000.00;
(d)
Exhibit D pro forma invoice No.
PSPI-05/87-NAV issued by E.D. Daclan of
Power Systems, Incorporated on January
20, 1987 to Del Rosario showing that two
(2) units of CUMMINS Marine Engine
model N855-M, 195 bhp. at 1800 rpm.
would cost P1,160,000.00;
(e) Exhibit E quotation of prices issued
by Scan Marine Inc. on January 20, 1987 to
Del Rosario showing that a unit of Furuno
Compact Daylight Radar, Model FR-604D,
would cost P100,000.00 while a unit of
Furuno Color Video Sounder, Model
FCV-501 would cost P45,000.00 so that
the two units would cost P145,000.00;
(f)
Exhibit F quotation of prices issued
by Seafgear Sales, Inc. on January 21, 1987
to Del Rosario showing that two (2) rolls
of nylon rope (5 cir. X 300fl.) would cost
P140,000.00; two (2) rolls of nylon rope
(3 cir. X 240fl.), P42,750.00; one (1)
binocular (7 x 50), P1,400.00, one (1)
compass (6), P4,000.00 and 50 pcs. of
floats, P9,000.00 or a total of P197, 150.00;
(g)
Exhibit G retainer agreement
between Del Rosario and F. Sumulong
Associates Law Offices stipulating an
a c c e p t a n c e fe e o f P 5 , 0 0 0 . 0 0 , p e r
appearance fee of P400.00, monthly
retainer of P500.00, contingent fee of 20%
of the total amount recovered and that
attorneys fee to be awarded by the court
should be given to Del Rosario; and
(h) Exhibit H price quotation issued by
Seafgear Sales, Inc. dated April 10, 1987 to

Del Rosario showing the cost of poly

nettings as: 50 rolls of 400/18 3kts. 100md
x 100mtrs., P70,000.00; 50 rolls of 400/18
5kts. 100md x 100mtrs., P81,500.00; 50
rolls of 400/18 8kts. 100md x 100mtrs.,
P116,000.00, and 50 rolls of 400/18 10kts.
100md x 100mtrs., P146,500 and banera
(tub) at P65.00 per piece or a total of
P414,065.00
The lower court held that the prevailing
replacement value of P6,438,048.00 of the
fishing boat and all its equipment would
regularly increase at 30% every year from
the date the quotations were given.
On the other hand, the lower court noted
that petitioner only presented Lorenzo
Lazaro, senior estimator at PNOC
Dockyard & Engineering Corporation, as
sole witness and it did not bother at all to
offer any documentary evidence to
support its position. Lazaro testified that
the price quotations submitted by private
respondent were excessive and that as
an expert witness, he used the quotations
of his suppliers in making his estimates.
However, he failed to present such
quotations of prices from his suppliers,
saying that he could not produce a
breakdown of the costs of his estimates as
it was a sort of secret scheme. For this
reason, the lower court concluded:
Evidently, the quotation of prices
submitted by the plaintiff relative to the
replacement value of the fishing boat and
its equipments in the tune of P6,438,048.00
which were lost due to the recklessness
and imprudence of the herein defendants
were not rebutted by the latter with
sufficient evidence.
The defendants
through their sole witness Lorenzo Lazaro
relied heavily on said witness bare claim
that the amount afore-said is excessive or
bloated, but they did not bother at all to
present any documentary evidence to
substantiate such claim. Evidence to be
believed, must not only proceed from the

mouth of the credible witness, but it must

be credible in itself. (Vda. de Bonifacio vs.
B. L. T. Bus Co., Inc. L-26810, August 31,
1970).
Aggrieved, petitioner filed a motion for the
reconsideration of the lower courts
decision contending that: (1) the lower
court erred in holding it liable for damages;
that the lower court did not acquire
jurisdiction over the case by paying only
P1,252.00 as docket fee; (2) assuming that
plaintiff was entitled to damages, the lower
court erred in awarding an amount greater
than that prayed for in the second
amended complaint; and (3) the lower
court erred when it failed to resolve the
issues it had raised in its memorandum.
[ 1 6 ] P e t i t i o n e r l i k e w i s e fi l e d a
supplemental motion for reconsideration
expounding on whether the lower court
acquired jurisdiction over the subject
matter of the case despite therein plaintiffs
failure to pay the prescribed docket fee.
[17]
On January 25, 1990, the lower court
declined reconsideration for lack of merit.
[18] Apparently not having received the
order denying its motion for
reconsideration, petitioner still filed a
motion for leave to file a reply to private
respondents opposition to said motion.
[19] Hence, on February 12, 1990, the
lower court denied said motion for leave
to file a reply on the ground that by the
issuance of the order of January 25, 1990,
said motion had become moot and
academic.[20]
Unsatisfied with the lower courts decision,
petitioner elevated the matter to the
Court of Appeals which, however, affirmed
the same in toto on October 14, 1992.[21]
On petitioners assertion that the award of
P6,438,048.00 was not convincingly proved
by competent and admissible evidence, the
Court of Appeals ruled that it was not
necessary to qualify Del Rosario as an

expert witness because as the owner of

the lost vessel, it was well within his
knowledge and competency to identify and
determine the equipment installed and the
cargoes loaded on the vessel.
Considering the documentary evidence
presented as in the nature of market
reports or quotations, trade journals, trade
circulars and price lists, the Court of
Appeals held, thus:
Consequently, until such time as the
Supreme Court categorically rules on the
admissibility or inadmissibility of this class
of evidence, the reception of these
documentary exhibits (price quotations) as
evidence rests on the sound discretion of
the trial court. In fact, where the lower
court is confronted with evidence which
appears to be of doubtful admissibility, the
j u d g e s h o u l d d e c l a re i n f avo r o f
admissibility rather than of nonadmissibility (The Collector of Palakadhari,
124 [1899], p. 43, cited in Francisco,
Revised Rules of Court, Evidence, Volume
VII, Part I, 1990 Edition, p. 18). Trial courts
are enjoined to observe the strict
enforcement of the rules of evidence which
crystallized through constant use and
practice and are very useful and effective
aids in the search for truth and for the
effective administration of justice. But in
connection with evidence which may
appear to be of doubtful relevancy or
incompetency or admissibility, it is the
safest policy to be liberal, not rejecting
them on doubtful or technical grounds, but
admitting them unless plainly irrelevant,
immaterial or incompetent, for the reason
that their rejection places them beyond the
consideration of the court. If they are
thereafter found relevant or competent,
can easily be remedied by completely
discarding or ignoring them. (Banaria vs.
Banaria, et al., C.A. No. 4142, May 31, 1950;
cited in Francisco, Supra). [Underscoring
supplied].

Stressing that the alleged inadmissible

documentar y exhibits were never
satisfactorily rebutted by appellants own
sole witness in the person of Lorenzo
Lazaro, the appellate court found that
petitioner ironically situated itself in an
inconsistent posture by the fact that its
own witness, admittedly an expert one,
heavily relies on the very same pieces of
evidence (price quotations) appellant has
so vigorously objected to as inadmissible
evidence. Hence, it concluded:
x x x. The amount of P6,438,048.00 was
duly established at the trial on the basis of
appellees documentary exhibits (price
quotations) which stood uncontroverted,
and which already included the amount by
way of adjustment as prayed for in the
amended complaint. There was therefore
no need for appellee to amend the second
amended complaint in so far as to the
claim for damages is concerned to conform
with the evidence presented at the trial.
The amount of P6,438,048.00 awarded is
clearly within the relief prayed for in
appellees second amended complaint.
On the issue of lack of jurisdiction, the
respondent court held that following the
ruling in Sun Insurance Ltd. v. Asuncion,[22]
the additional docket fee that may later on
be declared as still owing the court may be
enforced as a lien on the judgment.
Hence, the instant recourse.
In assailing the Court of Appeals decision,
petitioner posits the view that the award
of P6,438,048 as actual damages should
have been in light of these considerations,
namely: (1) the trial court did not base
such award on the actual value of the
vessel and its equipment at the time of loss
in 1977; (2) there was no evidence on
extraordinary inflation that would warrant
an adjustment of the replacement cost of
the lost vessel, equipment and cargo; (3)
the value of the lost cargo and the prices

quoted in respondents documentary

evidence only amount to P4,336,215.00; (4)
private respondents failure to adduce
evidence to support its claim for unrealized
profit and business opportunities; and (5)
private respondents failure to prove the
extent and actual value of damages
sustained as a result of the 1977 collision
of the vessels.[23]
Under Article 2199 of the Civil Code,
actual or compensatory damages are those
aw a rd e d i n s a t i s f a c t i o n o f , o r i n
recompense for, loss or injury sustained.
They proceed from a sense of natural
justice and are designed to repair the
wrong that has been done, to compensate
for the injury inflicted and not to impose a
penalty.[24] In actions based on torts or
quasi-delicts, actual damages include all the
natural and probable consequences of the
act or omission complained of.[25] There
are two kinds of actual or compensatory
damages: one is the loss of what a person
already possesses (dao emergente), and
the other is the failure to receive as a
benefit that which would have pertained to
him (lucro cesante).[26] Thus:
Where goods are destroyed by the
wrongful act of the defendant the plaintiff is
entitled to their value at the time of
destruction, that is, normally, the sum of
money which he would have to pay in the
market for identical or essentially similar
goods, plus in a proper case damages for
the loss of use during the period before
replacement. In other words, in the case of
profit-earning chattels, what has to be
assessed is the value of the chattel to its
owner as a going concern at the time and
place of the loss, and this means, at least in
the case of ships, that regard must be had
to existing and pending engagements.x x x.
x x x. If the market value of the ship
reflects the fact that it is in any case
virtually certain of profitable employment,
then nothing can be added to that value in

respect of charters actually lost, for to do

so would be pro tanto to compensate the
plaintiff twice over. On the other hand, if
the ship is valued without reference to its
actual future engagements and only in the
light of its profit-earning potentiality, then it
may be necessary to add to the value thus
assessed the anticipated profit on a charter
or other engagement which it was unable
to fulfill. What the court has to ascertain
in each case is the `capitalised value of the
vessel as a profit-earning machine not in
the abstract but in view of the actual
circumstances, without, of course, taking
into account considerations which were
too remote at the time of the loss.[27]
[Underscoring supplied].
As stated at the outset, to enable an
injured party to recover actual or
compensatory damages, he is required to
prove the actual amount of loss with
reasonable degree of certainty premised
upon competent proof and on the best
evidence available.[28] The burden of proof
is on the party who would be defeated if
no evidence would be presented on either
side. He must establish his case by a
preponderance of evidence which means
that the evidence, as a whole, adduced by
one side is superior to that of the other.
[29] In other words, damages cannot be
presumed and courts, in making an award
must point out specific facts that could
afford a basis for measuring whatever
compensatory or actual damages are
borne.[30]
In this case, actual damages were proven
through the sole testimony of private
respondents general manager and certain
pieces of documentary evidence. Except
for Exhibit B where the value of the 1,050
baeras of fish were pegged at their
September 1977 value when the collision
happened, the pieces of documentary
evidence proffered by private respondent
with respect to items and equipment lost
show similar items and equipment with

corresponding prices in early 1987 or

approximately ten (10) years after the
collision. Noticeably, petitioner did not
object to the exhibits in terms of the time
index for valuation of the lost goods and
equipment. In objecting to the same pieces
of evidence, petitioner commented that
these were not duly authenticated and that
the witness (Del Rosario) did not have
personal knowledge on the contents of the
writings and neither was he an expert on
the subjects thereof.[31] Clearly ignoring
petitioners objections to the exhibits, the
lower court admitted these pieces of
evidence and gave them due weight to
arrive at the award of P6,438,048.00 as
actual damages.
The exhibits were presented ostensibly in
the course of Del Rosarios testimony.
Private respondent did not present any
other witnesses especially those whose
signatures appear in the price quotations
that became the bases of the award. We
hold, however, that the price quotations are
ordinary private writings which under the
Revised Rules of Court should have been
proffered along with the testimony of the
authors thereof. Del Rosario could not
have testified on the veracity of the
contents of the writings even though he
was the seasoned owner of a fishing fleet
because he was not the one who issued
the price quotations. Section 36, Rule 130
of the Revised Rules of Court provides
that a witness can testify only to those
facts that he knows of his personal
knowledge.
For this reason, Del Rosarios claim that
private respondent incurred losses in the
total amount of P6,438,048.00 should be
admitted with extreme caution considering
that, because it was a bare assertion, it
should be supported by independent
evidence. Moreover, because he was the
owner of private respondent
corporation[32] whatever testimony he

would give with regard to the value of the

lost vessel, its equipment and cargoes
should be viewed in the light of his selfinterest therein. We agree with the Court
of Appeals that his testimony as to the
equipment installed and the cargoes loaded
on the vessel should be given credence[33]
considering his familiarity thereto.
However, we do not subscribe to the
conclusion that his valuation of such
equipment, cargo and the vessel itself
should be accepted as gospel truth.[34] We
must, therefore, examine the documentary
evidence presented to support Del
Rosarios claim as regards the amount of
losses.
The price quotations presented as exhibits
partake of the nature of hearsay evidence
considering that the persons who issued
them were not presented as witnesses.[35]
Any evidence , whether oral or
documentary, is hearsay if its probative
value is not based on the personal
knowledge of the witness but on the
knowledge of another person who is not
on the witness stand. Hearsay evidence,
whether objected to or not, has no
probative value unless the proponent can
show that the evidence falls within the
exceptions to the hearsay evidence rule.
[36] On this point, we believe that the
exhibits do not fall under any of the
exceptions provided under Sections 37 to
47 of Rule 130.[37]
It is true that one of the exceptions to the
hearsay rule pertains to commercial lists
and the like under Section 45, Rule 130 of
the Revised Rules on Evidence. In this
respect, the Court of Appeals considered
p r i v a t e r e s p o n d e n t s e x h i b i t s a s
commercial lists. It added, however, that
these exhibits should be admitted in
evidence until such time as the Supreme
C o u r t c a t e go r i c a l ly r u l e s o n t h e
admissibility or inadmissibility of this class
of evidence because the reception of

these documentar y exhibits (price

quotations) as evidence rests on the sound
discretion of the trial cour t.[38]
Reference to Section 45, Rule 130,
however, would show that the conclusion
of the Court of Appeals on the matter was
arbitrarily arrived at. This rule states:
Commercial lists and the like. Evidence
of statements of matters of interest to
persons engaged in an occupation
contained in a list, register, periodical, or
other published compilation is admissible
as tending to prove the truth of any
relevant matter so stated if that
compilation is published for use by persons
engaged in that occupation and is generally
used and relied upon by them there.
Under Section 45 of the aforesaid Rule, a
document is a commercial list if: (1) it is a
statement of matters of interest to
persons engaged in an occupation; (2) such
statement is contained in a list, register,
periodical or other published compilation;
(3) said compilation is published for the
use of persons engaged in that occupation,
and (4) it is generally used and relied upon
by persons in the same occupation.
Based on the above requisites, it is our
considered view that Exhibits B, C, D, E, F
and H[39] are not commercial lists for
these do not belong to the category of
other published compilations under
Section 45 aforequoted.
Under the
principle of ejusdem generis, (w)here
general words follow an enumeration of
persons or things, by words of a particular
and specific meaning, such general words
are not to be construed in their widest
extent, but are to be held as applying only
to persons or things of the same kind or
class as those specifically mentioned.[40]
The exhibits mentioned are mere price
quotations issued personally to Del
Rosario who requested for them from
dealers of equipment similar to the ones
lost at the collision of the two vessels.

These are not published in any list, register,

periodical or other compilation on the
relevant subject matter. Neither are these
market reports or quotations within the
purview of commercial lists as these are
not standard handbooks or periodicals,
containing data of everyday professional
need and relied upon in the work of the
occupation.[41] These are simply letters
responding to the queries of Del Rosario.
Thus, take for example Exhibit D which
reads:
January 20, 1987
PROFORMA INVOICE NO. PSPI-05/87NAV
MARIA EFIGINIA
CORPORATION
Navotas, Metro Manila

FISHING

Attention: MR. EDDIE DEL ROSARIO

Gentlemen:
In accordance to your request, we are
pleased to quote our Cummins Marine
Engine, to wit.
Two (2) units CUMMINS Marine Engine
model N855-M, 195 bhp.
at 1800 rpm., 6-cylinder in-line, 4-stroke
cycle, natural aspirated, 5 in. x 6 in. bore
and stroke, 855 cu. In. displacement, keelcooled, electric starting coupled with TwinDisc Marine gearbox model MG-509, 4.5:1
reduction ratio, includes oil cooler,
companion flange, manual and standard
accessories as per attached sheet.
Price FOB Manila - - - - - - - - - - - - - - - P
580,000.00/unit
Total FOB Manila - - - - - - - - - - - - - - - P
1,160,000.00
vvvvvvvvv
TERMS :

CASH

DELIVERY :
of order.
VALIDITY
:
confirmation.

60-90 days from date

Subject to our final

WARRANTY :
against factory defect.

One (1) full year

Very truly yours,

POWER SYSTEMS, INC.
(Sgd.)
E. D. Daclan
To be sure, letters and telegrams are
admissible in evidence but these are,
however, subject to the general principles
of evidence and to various rules relating to
documentary evidence.[42] Hence, in one
case, it was held that a letter from an
automobile dealer offering an allowance for
an automobile upon purchase of a new
automobile after repairs had been
completed, was not a price current or
commercial list within the statute which
made such items presumptive evidence of
the value of the article specified therein.
The letter was not admissible in evidence
as a commercial list even though the
clerk of the dealer testified that he had
written the letter in due course of business
upon instructions of the dealer.[43]
But even on the theory that the Court of
Appeals correctly ruled on the admissibility
of those letters or communications when
it held that unless plainly irrelevant,
immaterial or incompetent, evidence
should better be admitted rather than
rejected on doubtful or technical
grounds,[44] the same pieces of evidence,
however, should not have been given
probative weight. This is a distinction we
wish to point out. Admissibility of evidence
refers to the question of whether or not
the circumstance (or evidence) is to
considered at all.[45] On the other hand,
the probative value of evidence refers to

the question of whether or not it proves

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

evidence any probative value.

But
admissibility of evidence should not be
equated with weight of evidence. Hearsay
evidence whether objected to or not has
no probative value.[47]
Accordingly, as stated at the outset,
damages may not be awarded on the basis
of hearsay evidence.[48]

The courts differ as to the weight to be

given to hearsay evidence admitted without
objection. Some hold that when hearsay
has been admitted without objection, the
same may be considered as any other
properly admitted testimony.
Others
maintain that it is entitled to no more
consideration than if it had been excluded.
The rule prevailing in this jurisdiction is the
latter one. Our Supreme Court held that
although the question of admissibility of
evidence can not be raised for the first
time on appeal, yet if the evidence is
hearsay it has no probative value and
should be disregarded whether objected to
or not. `If no objection is made quoting
Jones on Evidence - `it (hearsay) becomes
evidence by reason of the want of such
objection even though its admission does
not confer upon it any new attribute in
point of weight. Its nature and quality
remain the same, so far as its intrinsic
weakness and incompetency to satisfy the
mind are concerned, and as opposed to
direct primary evidence, the latter always
prevails.
The failure of the defense counsel to
object to the presentation of incompetent
evidence, like hearsay evidence or evidence
that violates the rules of res inter alios
acta, or his failure to ask for the striking
out of the same does not give such

In the absence of competent proof on the

actual damage suffered, private respondent
is `entitled to nominal damages which, as
the law says, is adjudicated in order that a
right of the plaintiff, which has been
violated or invaded by defendant, may be
vindicated and recognized, and not for the
purpose of indemnifying the plaintiff for any
loss suffered. [Underscoring supplied].
Nominal damages are awarded in every
obligation arising from law, contracts, quasicontracts, acts or omissions punished by
law, and quasi-delicts, or in every case
where property right has been invaded.
[50] Under Article 2223 of the Civil Code,
(t)he adjudication of nominal damages
shall preclude further contest upon the
right involved and all accessory questions,
as between the parties to the suit, or their
respective heirs and assigns.

Nonetheless, the non-admissibility of said

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

Actually, nominal damages are damages in

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

damages to be awarded may also depend

on certain special reasons extant in the
case.[53]
Applying now such principles to the instant
case, we have on record the fact that
petitioners vessel Petroparcel was at fault
as well as private respondents complaint
claiming the amount of P692,680.00
representing the fishing nets, boat
equipment and cargoes that sunk with the
M/V Maria Efigenia XV. In its amended
complaint, private respondent alleged that
the vessel had an actual value of
P800,000.00 but it had been paid insurance
in the amount of P200,000.00 and,
therefore, it claimed only the amount of
P600,000.00. Ordinarily, the receipt of
insurance payments should diminish the
total value of the vessel quoted by private
respondent in his complaint considering
that such payment is causally related to the
loss for which it claimed compensation.
This Court believes that such allegations in
the original and amended complaints can
be the basis for determination of a fair
amount of nominal damages inasmuch as a
complaint alleges the ultimate facts
constituting the plaintiff's cause of action.
[54] Private respondent should be bound
by its allegations on the amount of its
claims.
With respect to petitioners contention
that the lower court did not acquire
jurisdiction over the amended complaint
increasing the amount of damages claimed
to P600,000.00, we agree with the Court
of Appeals that the lower court acquired
jurisdiction over the case when private
r e s p o n d e n t p a i d t h e d o c ke t f e e
corresponding to its claim in its original
complaint. Its failure to pay the docket fee
corresponding to its increased claim for
damages under the amended complaint
should not be considered as having
curtailed the lower courts jurisdiction.
Pursuant to the ruling in Sun Insurance

Office, Ltd. (SIOL) v. Asuncion,[55] the

unpaid docket fee should be considered as
a lien on the judgment even though private
respondent specified the amount of
P600,000.00 as its claim for damages in its
amended complaint.
Moreover, we note that petitioner did not
question at all the jurisdiction of the lower
court on the ground of insufficient docket
fees in its answers to both the amended
complaint and the second amended
complaint. It did so only in its motion for
reconsideration of the decision of the
lower court after it had received an
adverse decision. As this Court held in
Pantranco North Express, Inc. v. Court of
Appeals,[56] participation in all stages of
the case before the trial court, that
included invoking its authority in asking for
affirmative relief, effectively barred
petitioner by estoppel from challenging the
courts jurisdiction. Notably, from the time
it filed its answer to the second amended
complaint on April 16, 1985,[57] petitioner
did not question the lower courts
jurisdiction. It was only on December 29,
1989[58] when it filed its motion for
reconsideration of the lower courts
decision that petitioner raised the question
of the lower courts lack of jurisdiction.
Petitioner thus foreclosed its right to raise
the issue of jurisdiction by its own inaction.
WHEREFORE, the challenged decision of
the Court of Appeals dated October 14,
1992 in CA-G. R. CV No. 26680 affirming
that of the Regional Trial Court of
Caloocan City, Branch 121, is hereby
MODIFIED insofar as it awarded actual
damages to private respondent Maria
Efigenia Fishing Corporation in the amount
of P6,438,048.00 for lack of evidentiary
bases therefor.
Considering the fact,
however, that: (1) technically petitioner
sustained injury but which, unfortunately,
was not adequately and properly proved,
and (2) this case has dragged on for almost

two decades, we believe that an award of

Two Million (P2,000,000.00)[59] in favor of
private respondent as and for nominal
damages is in order.
No pronouncement as to costs.
SO ORDERED.
[59] Note that under Article 2216 of the
Civil Code, it is provided that the
assessment of such damages (i.e. moral,
nominal, temperate, and exemplar y
damages) is left to the discretion of the
court, according to the circumstances of
each case. [Underscoring supplied]

FIRST DIVISION
[G.R. No. 118342. January 5, 1998]
DEVELOPMENT BANK OF THE
PHILIPPINES, petitioner, vs. COURT OF
APPEALS and LYDIA CUBA, respondents.
[G.R. No. 118367. January 5, 1998]
8. LYDIA P. CUBA, petitioner, vs. COURT
OF APPEALS, DEVELOPMENT BANK OF
THE PHILIPPINES and AGRIPINA P.
CAPERAL, respondents.
DECISION
DAVIDE, JR., J.:
These two consolidated cases stemmed
from a complaint[1] filed against the
Development Bank of the Philippines
(hereafter DBP) and Agripina Caperal filed
by Lydia Cuba (hereafter CUBA) on 21
May 1985 with the Regional Trial Court of
Pangasinan, Branch 54. The said complaint
sought (1) the declaration of nullity of
DBPs appropriation of CUBAs rights, title,
and interests over a 44-hectare fishpond
located in Bolinao, Pangasinan, for being
violative of Article 2088 of the Civil Code;

(2) the annulment of the Deed of

Conditional Sale executed in her favor by
DBP; (3) the annulment of DBPs sale of
the subject fishpond to Caperal; (4) the
restoration of her rights, title, and interests
over the fishpond; and (5) the recovery of
damages, attorneys fees, and expenses of
litigation.
After the joinder of issues following the
filing by the parties of their respective
pleadings, the trial court conducted a pretrial where CUBA and DBP agreed on the
following facts, which were embodied in
the pre-trial order:[2]
1. Plaintiff Lydia P. Cuba is a grantee of a
Fishpond Lease Agreement No. 2083 (new)
dated May 13, 1974 from the Government;
2.
Plaintiff Lydia P. Cuba obtained loans
from the Development Bank of the
Philippines in the amounts of P109,000.00;
P109,000.00; and P98,700.00 under the
terms stated in the Promissory Notes
dated September 6, 1974; August 11, 1975;
and April 4, 1977;
3. As security for said loans, plaintiff Lydia
P. Cuba executed two Deeds of Assignment
of her Leasehold Rights;
4. Plaintiff failed to pay her loan on the
scheduled dates thereof in accordance with
the terms of the Promissory Notes;
5.
Without foreclosure proceedings,
whether judicial or extra-judicial, defendant
DBP appropriated the Leasehold Rights of
plaintiff Lydia Cuba over the fishpond in
question;
6. After defendant DBP has appropriated
the Leasehold Rights of plaintiff Lydia Cuba
over the fishpond in question, defendant
DBP, in turn, executed a Deed of
Conditional Sale of the Leasehold Rights in

favor of plaintiff Lydia Cuba over the same

fishpond in question;

dated June 24, 1984, to dispose of the

property;

7.
In the negotiation for repurchase,
plaintiff Lydia Cuba addressed two letters
to the Manager DBP, Dagupan City dated
November 6, 1979 and December 20,
1979. DBP thereafter accepted the offer
to repurchase in a letter addressed to
plaintiff dated February 1, 1982;

14. That the DBP thereafter executed a

Deed of Conditional Sale in favor of
defendant Agripina Caperal on August 16,
1984;

8. After the Deed of Conditional Sale was

executed in favor of plaintiff Lydia Cuba, a
new Fishpond Lease Agreement No. 2083A dated March 24, 1980 was issued by the
Ministry of Agriculture and Food in favor of
plaintiff Lydia Cuba only, excluding her
husband;
9.
Plaintiff Lydia Cuba failed to pay the
amortizations stipulated in the Deed of
Conditional Sale;
10. After plaintiff Lydia Cuba failed to pay
the amortization as stated in Deed of
Conditional Sale, she entered with the DBP
a temporary arrangement whereby in
consideration for the deferment of the
Notarial Rescission of Deed of Conditional
Sale, plaintiff Lydia Cuba promised to make
certain payments as stated in temporary
Arrangement dated February 23, 1982;
11.
Defendant DBP thereafter sent a
Notice of Rescission thru Notarial Act
dated March 13, 1984, and which was
received by plaintiff Lydia Cuba;
12.
After the Notice of Rescission,
defendant DBP took possession of the
Leasehold Rights of the fishpond in
question;
13.
That after defendant DBP took
possession of the Leasehold Rights over
the fishpond in question, DBP advertised in
the SUNDAY PUNCH the public bidding

15. Thereafter, defendant Caperal was

awarded Fishpond Lease Agreement No.
2083-A on December 28, 1984 by the
Ministry of Agriculture and Food.
Defendant Caperal admitted only the facts
stated in paragraphs 14 and 15 of the pretrial order. [3]
Trial was thereafter had on other matters.
The principal issue presented was whether
the act of DBP in appropriating to itself
CUBAs leasehold rights over the fishpond
in question without foreclosure
proceedings was contrary to Article 2088
of the Civil Code and, therefore, invalid.
CUBA insisted on an affirmative resolution.
DBP stressed that it merely exercised its
contractual right under the Assignments of
Leasehold Rights, which was not a contract
of mortgage. Defendant Caperal sided
with DBP.
The trial court resolved the issue in favor
of CUBA by declaring that DBPs taking
possession and ownership of the property
without foreclosure was plainly violative of
Article 2088 of the Civil Code which
provides as follows:
ART. 2088.
The creditor cannot
appropriate the things given by way of
pledge or mortgage, or dispose of them.
Any stipulation to the contrary is null and
void.
It disagreed with DBPs stand that the
Assignments of Leasehold Rights were not
contracts of mortgage because (1) they

were given as security for loans, (2)

although the fishpond land in question is
still a public land, CUBAs leasehold rights
and interest thereon are alienable rights
which can be the proper subject of a
mortgage; and (3) the intention of the
contracting parties to treat the Assignment
of Leasehold Rights as a mortgage was
obvious and unmistakable; hence, upon
CUBAs default, DBPs only right was to
foreclose the Assignment in accordance
with law.
The trial court also declared invalid
condition no. 12 of the Assignment of
Leasehold Rights for being a clear case of
pactum commissorium expressly
prohibited and declared null and void by
Article 2088 of the Civil Code. It then
concluded that since DBP never acquired
lawful ownership of CUBAs leasehold
rights, all acts of ownership and possession
by the said bank were void. Accordingly,
the Deed of Conditional Sale in favor of
CUBA, the notarial rescission of such sale,
and the Deed of Conditional Sale in favor
of defendant Caperal, as well as the
Assignment of Leasehold Rights executed
by Caperal in favor of DBP, were also void
and ineffective.
As to damages, the trial court found ample
evidence on record that in 1984 the
representatives of DBP ejected CUBA and
her caretakers not only from the fishpond
area but also from the adjoining big house;
and that when CUBAs son and caretaker
went there on 15 September 1985, they
found the said house unoccupied and
destroyed and CUBAs personal belongings,
machineries, equipment, tools, and other
articles used in fishpond operation which
were kept in the house were missing. The
missing items were valued at about
P550,000.
It further found that when
CUBA and her men were ejected by DBP
for the first time in 1979, CUBA had
stocked the fishpond with 250,000 pieces

of bangus fish (milkfish), all of which died

b e c a u s e t h e D B P re p re s e n t a t i ve s
prevented CUBAs men from feeding the
fish. At the conservative price of P3.00 per
fish, the gross value would have been
P690,000, and after deducting 25% of said
value as reasonable allowance for the cost
of feeds, CUBA suffered a loss of P517,500.
It then set the aggregate of the actual
damages sustained by CUBA at P1,067,500.
The trial court further found that DBP was
guilty of gross bad faith in falsely
representing to the Bureau of Fisheries
that it had foreclosed its mortgage on
C U B A s l e a s e h o l d r i g h t s .
Such
representation induced the said Bureau to
terminate CUBAs leasehold rights and to
approve the Deed of Conditional Sale in
favor of CUBA. And considering that by
reason of her unlawful ejectment by DBP,
CUBA suffered moral shock, degradation,
social humiliation, and serious anxieties for
which she became sick and had to be
hospitalized the trial court found her
entitled to moral and exemplary damages.
The trial court also held that CUBA was
entitled to P100,000 attorneys fees in view
of the considerable expenses she incurred
for lawyers fees and in view of the finding
that she was entitled to exemplary
damages.
In its decision of 31 January 1990, [4] the
trial court disposed as follows:
WHEREFORE,
judgment is hereby
rendered in favor of plaintiff:
1. DECLARING
null and void and
without any legal effect the act of
defendant Development Bank of the
Philippines in appropriating for its own
interest, without any judicial or extrajudicial foreclosure, plaintiffs leasehold
rights and interest over the fishpond land
in question under her Fishpond Lease
Agreement No. 2083 (new);

2. DECLARING the Deed of Conditional

Sale dated February 21, 1980 by and
between the defendant Development Bank
of the Philippines and plaintiff (Exh. E and
Exh. 1) and the acts of notarial rescission
of the Development Bank of the Philippines
relative to said sale (Exhs. 16 and 26) as
void and ineffective;
3. DECLARING the Deed of Conditional
Sale dated August 16, 1984 by and between
the Development Bank of the Philippines
and defendant Agripina Caperal (Exh. F and
Exh. 21), the Fishpond Lease Agreement
No. 2083-A dated December 28, 1984 of
defendant Agripina Caperal (Exh. 23) and
the Assignment of Leasehold Rights dated
February 12, 1985 executed by defendant
Agripina Caperal in favor of the defendant
Development Bank of the Philippines (Exh.
24) as void ab initio;
4. ORDERING defendant Development
Bank of the Philippines and defendant
Agripina Caperal, jointly and severally, to
restore to plaintiff the latters leasehold
rights and interests and right of possession
over the fishpond land in question, without
prejudice to the right of defendant
Development Bank of the Philippines to
foreclose the securities given by plaintiff;
5. ORDERING defendant Development
Bank of the Philippines to pay to plaintiff
the following amounts:
a) The sum of ONE MILLION SIXTYSEVEN THOUSAND FIVE HUNDRED
PESOS (P1,067,500.00), as and for actual
damages;
b) The sum of ONE HUNDRED
THOUSAND (P100,000.00) PESOS as
moral damages;

c) The sum of FIFTY THOUSAND

(P50,000.00) PESOS, as and for exemplary
damages;
d) And the sum of ONE HUNDRED
THOUSAND (P100,000.00) PESOS, as and
for attorneys fees;
6.
And ORDERING defendant
Development Bank of the Philippines to
reimburse and pay to defendant Agripina
Caperal the sum of ONE MILLION FIVE
HUNDRED THIRTY-TWO THOUSAND
SIX HUNDRED TEN PESOS AND
S E V E N T Y- F I V E C E N T A V O S
(P1,532,610.75) representing the amounts
paid by defendant Agripina Caperal to
defendant Development Bank of the
Philippines under their Deed of
Conditional Sale.
CUBA and DBP interposed separate
appeals from the decision to the Court of
Appeals. The former sought an increase in
the amount of damages, while the latter
questioned the findings of fact and law of
the lower court.
In its decision [5] of 25 May 1994, the
Court of Appeals ruled that (1) the trial
court erred in declaring that the deed of
assignment was null and void and that
defendant Caperal could not validly acquire
the leasehold rights from DBP; (2) contrary
to the claim of DBP, the assignment was
not a cession under Article 1255 of the
Civil Code because DBP appeared to be
the sole creditor to CUBA - cession
presupposes plurality of debts and
creditors; (3) the deeds of assignment
represented the voluntary act of CUBA in
assigning her property rights in payment of
her debts, which amounted to a novation
of the promissory notes executed by
CUBA in favor of DBP; (4) CUBA was
estopped from questioning the assignment
of the leasehold rights, since she agreed to
repurchase the said rights under a deed of

conditional sale; and (5) condition no. 12 of

the deed of assignment was an express
authority from CUBA for DBP to sell
whatever right she had over the fishpond.
It also ruled that CUBA was not entitled
to loss of profits for lack of evidence, but
agreed with the trial court as to the actual
damages of P1,067,500. It, however, deleted
the amount of exemplary damages and
reduced the award of moral damages from
P100,000 to P50,000 and attorneys fees,
from P100,000 to P50,000.
The Court of Appeals thus declared as
valid the following: (1) the act of DBP in
appropriating Cubas leasehold rights and
interest under Fishpond Lease Agreement
No. 2083; (2) the deeds of assignment
executed by Cuba in favor of DBP; (3) the
deed of conditional sale between CUBA
and DBP; and (4) the deed of conditional
sale between DBP and Caperal, the
Fishpond Lease Agreement in favor of
Caperal, and the assignment of leasehold
rights executed by Caperal in favor of DBP.
It then ordered DBP to turn over
possession of the property to Caperal as
lawful holder of the leasehold rights and to
pay CUBA the following amounts: (a)
P1,067,500 as actual damages; P50,000 as
moral damages; and P50,000 as attorneys
fees.
Since their motions for reconsideration
were denied,[6] DBP and CUBA filed
separate petitions for review.
In its petition (G.R. No. 118342), DBP
assails the award of actual and moral
damages and attorneys fees in favor of
CUBA.
Upon the other hand, in her petition (G.R.
No. 118367), CUBA contends that the
Court of Appeals erred (1) in not holding
that the questioned deed of assignment
was a pactum commissorium contrary to
Article 2088 of the Civil Code; (b) in

holding that the deed of assignment

effected a novation of the promissory
notes; (c) in holding that CUBA was
estopped from questioning the validity of
the deed of assignment when she agreed to
repurchase her leasehold rights under a
deed of conditional sale;
and (d) in
reducing the amounts of moral damages
and attorneys fees, in deleting the award of
exemplary damages, and in not increasing
the amount of damages.
We agree with CUBA that the assignment
of leasehold rights was a mortgage
contract.
It is undisputed that CUBA obtained from
DBP three separate loans totalling
P335,000, each of which was covered by a
promissory note. In all of these notes,
there was a provision that: In the event of
foreclosure of the mortgage securing this
notes, I/We further bind myself/ourselves,
jointly and severally, to pay the deficiency, if
any. [7]
Simultaneous with the execution of the
notes was the execution of Assignments
of Leasehold Rights [8] where CUBA
assigned her leasehold rights and interest
on a 44-hectare fishpond, together with
the improvements thereon. As pointed out
by CUBA, the deeds of assignment
constantly referred to the assignor
(CUBA) as borrower; the assigned rights,
as mor tgaged proper ties; and the
instrument itself, as mortgage contract.
Moreover, under condition no. 22 of the
deed, it was provided that failure to
comply with the terms and condition of
any of the loans shall cause all other loans
to become due and demandable and all
mortgages shall be foreclosed.
And,
condition no. 33 provided that if
foreclosure is actually accomplished, the
usual 10% attorneys fees and 10%
liquidated damages of the total obligation
shall be imposed. There is, therefore, no

shred of doubt that a mortgage was

intended.
Besides, in their stipulation of facts the
parties admitted that the assignment was
by way of security for the payment of the
loans; thus:
3. As security for said loans, plaintiff Lydia
P. Cuba executed two Deeds of Assignment
of her Leasehold Rights.
In Peoples Bank & Trust Co. vs. Odom,[9]
this Court had the occasion to rule that an
assignment to guarantee an obligation is in
effect a mortgage.
We find no merit in DBPs contention that
the assignment novated the promissory
notes in that the obligation to pay a sum of
money the loans (under the promissory
notes) was substituted by the assignment
of the rights over the fishpond (under the
deed of assignment). As correctly pointed
out by CUBA, the said assignment merely
complemented or supplemented the notes;
both could stand together. The former was
only an accessory to the latter. Contrary
to DBPs submission, the obligation to pay a
sum of money remained, and the
assignment merely served as security for
the loans covered by the promissory notes.
Significantly, both the deeds of assignment
and the promissory notes were executed
on the same dates the loans were granted.
Also, the last paragraph of the assignment
stated: The assignor further reiterates and
states all terms, covenants, and conditions
stipulated in the promissory note or notes
covering the proceeds of this loan, making
said promissory note or notes, to all intent
and purposes, an integral part hereof.
Neither did the assignment amount to
payment by cession under Article 1255 of
the Civil Code for the plain and simple
reason that there was only one creditor,
the DBP. Article 1255 contemplates the

existence of two or more creditors and

involves the assignment of all the debtors
property.
Nor did the assignment constitute dation
in payment under Article 1245 of the civil
Code, which reads: Dation in payment,
whereby property is alienated to the
creditor in satisfaction of a debt in money,
shall be governed by the law on sales. It
bears stressing that the assignment, being
in its essence a mortgage, was but a
security and not a satisfaction of
indebtedness.[10]
We do not, however, buy CUBAs
argument that condition no. 12 of the deed
of assignment constituted pactum
commissorium. Said condition reads:
12. That effective upon the breach of any
condition of this assignment, the Assignor
hereby appoints the Assignee his Attorneyin-fact with full power and authority to
take actual possession of the property
above-described, together with all
improvements thereon, subject to the
approval of the Secretary of Agriculture
and Natural Resources, to lease the same
or any portion thereof and collect rentals,
to make repairs or improvements thereon
and pay the same, to sell or otherwise
dispose of whatever rights the Assignor has
or might have over said property and/or its
improvements and perform any other act
which the Assignee may deem convenient
to protect its interest.
All expenses
advanced by the Assignee in connection
with purpose above indicated which shall
bear the same rate of interest
aforementioned are also guaranteed by this
Assignment. Any amount received from
rents, administration, sale or disposal of
said property may be supplied by the
Assignee to the payment of repairs,
improvements, taxes, assessments and
other incidental expenses and obligations
and the balance, if any, to the payment of

interest and then on the capital of the

indebtedness secured hereby.
If after
disposal or sale of said property and upon
application of total amounts received there
shall remain a deficiency, said Assignor
hereby binds himself to pay the same to
the Assignee upon demand, together with
all interest thereon until fully paid. The
power herein granted shall not be revoked
as long as the Assignor is indebted to the
Assignee and all acts that may be executed
by the Assignee by virtue of said power are
hereby ratified.

over the fishpond in question.

Its
contention that it limited itself to mere
administration by posting caretakers is
further belied by the deed of conditional
sale it executed in favor of CUBA. The
deed stated:

The elements of pactum commissorium

are as follows: (1) there should be a
property mortgaged by way of security for
the payment of the principal obligation, and
(2) there should be a stipulation for
automatic appropriation by the creditor of
the thing mortgaged in case of nonpayment of the principal obligation within
the stipulated period.[11]

Condition no. 12 did not provide that the

ownership over the leasehold rights would
automatically pass to DBP upon CUBAs
failure to pay the loan on time. It merely
provided for the appointment of DBP as
attorney-in-fact with authority, among
other things, to sell or otherwise dispose
of the said real rights, in case of default by
CUBA, and to apply the proceeds to the
payment of the loan. This provision is a
standard condition in mortgage contracts
and is in conformity with Article 2087 of
the Civil Code, which authorizes the
mortgagee to foreclose the mortgage and
alienate the mortgaged property for the
payment of the principal obligation.
DBP, however, exceeded the authority
vested by condition no. 12 of the deed of
assignment. As admitted by it during the
pre-trial, it had [w]ithout foreclosure
p ro c e e d i n g s , w h e t h e r j u d i c i a l o r
e x t r aj u di c i al , ap p rop r i at e d t h e
[l]easehold [r]ights of plaintiff Lydia Cuba

WHEREAS, the Vendor [DBP] by virtue of

a deed of assignment executed in its favor
by the herein vendees [Cuba spouses] the
former acquired all the rights and interest
of the latter over the above-described
property;

The title to the real estate property [sic]

and all improvements thereon shall remain
in the name of the Vendor until after the
purchase price, advances and interest shall
have been fully paid. (Emphasis supplied).
It is obvious from the above-quoted
paragraphs that DBP had appropriated and
taken ownership of CUBAs leasehold
rights merely on the strength of the deed
of assignment.
DBP cannot take refuge in condition no. 12
of the deed of assignment to justify its act
of appropriating the leasehold rights. As
stated earlier, condition no. 12 did not
provide that CUBAs default would operate
to vest in DBP ownership of the said rights.
Besides, an assignment to guarantee an
obligation, as in the present case, is virtually
a mortgage and not an absolute
conveyance of title which confers
ownership on the assignee.[12]
At any rate, DBPs act of appropriating
CUBAs leasehold rights was violative of
Article 2088 of the Civil Code, which
forbids a creditor from appropriating, or
disposing of, the thing given as security for
the payment of a debt.

The fact that CUBA offered and agreed to

repurchase her leasehold rights from DBP
did not estop her from questioning DBPs
act of appropriation. Estoppel is unavailing
in this case. As held by this Court in some
cases,[13] estoppel cannot give validity to
an act that is prohibited by law or against
public policy. Hence, the appropriation of
the leasehold rights, being contrary to
Article 2088 of the Civil Code and to
public policy, cannot be deemed validated
by estoppel.
Instead of taking ownership of the
questioned real rights upon default by
CUBA, DBP should have foreclosed the
mortgage, as has been stipulated in
condition no. 22 of the deed of assignment.
But, as admitted by DBP, there was no such
foreclosure. Yet, in its letter dated 26
October 1979, addressed to the Minister
of Agriculture and Natural Resources and
coursed through the Director of the
Bureau of Fisheries and Aquatic Resources,
DBP declared that it had foreclosed the
mortgage and enforced the assignment of
leasehold rights on March 21, 1979 for
failure of said spouses [Cuba spouces] to
pay their loan amortizations.[14] This only
goes to show that DBP was aware of the
necessity of foreclosure proceedings.
In view of the false representation of DBP
that it had already foreclosed the
mortgage, the Bureau of Fisheries cancelled
CUBAs original lease permit, approved the
deed of conditional sale, and issued a new
permit in favor of CUBA. Said acts which
were predicated on such false
representation, as well as the subsequent
acts emanating from DBPs appropriation
of the leasehold rights, should therefore be
set aside. To validate these acts would
open the floodgates to circumvention of
Article 2088 of the Civil Code.
E ve n i n c a s e s w h e re fo re c l o s u re
proceedings were had, this Court had not

hesitated to nullify the consequent auction

sale for failure to comply with the
requirements laid down by law, such as Act
No. 3135, as amended.[15] With more
reason that the sale of property given as
security for the payment of a debt be set
aside if there was no prior foreclosure
proceeding.
Hence, DBP should render an accounting
of the income derived from the operation
of the fishpond in question and apply the
said income in accordance with condition
no. 12 of the deed of assignment which
provided: Any amount received from rents,
administration, may be applied to the
payment of repairs, improvements, taxes,
assessment, and other incidental expenses
and obligations and the balance, if any, to
the payment of interest and then on the
capital of the indebtedness.
We shall now take up the issue of damages.
Article 2199 provides:
Except as
provided by law or by
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved.
Such compensation is referred to as actual
or compensatory damages.
Actual or compensatory damages cannot
be presumed, but must be proved with
reasonable degree of certainty.[16] A court
cannot rely on speculations, conjectures, or
guesswork as to the fact and amount of
damages, but must depend upon
competent proof that they have been
suffered by the injured party and on the
best obtainable evidence of the actual
amount thereof.[17] It must point out
specific facts which could afford a basis for
measuring whatever compensatory or
actual damages are borne.[18]

In the present case, the trial court awarded

in favor of CUBA P1,067,500 as actual
damages consisting of P550,000 which
represented the value of the alleged lost
articles of CUBA and P517,500 which
represented the value of the 230,000
pieces of bangus allegedly stocked in 1979
when DBP first ejected CUBA from the
fishpond and the adjoining house. This
award was affirmed by the Court of
Appeals.
We find that the alleged loss of personal
belongings and equipment was not proved
by clear evidence.
Other than the
testimony of CUBA and her caretaker,
there was no proof as to the existence of
those items before DBP took over the
fishpond in question. As pointed out by
DBP, there was not inventory of the
alleged lost items before the loss which is
normal in a project which sometimes, if not
most often, is left to the care of other
persons. Neither was a single receipt or
record of acquisition presented.
Curiously, in her complaint dated 17 May
1985, CUBA included losses of property
as among the damages resulting from
DBPs take-over of the fishpond. Yet, it was
only in September 1985 when her son and
a caretaker went to the fishpond and the
adjoining house that she came to know of
the alleged loss of several articles. Such
claim for losses of property, having been
made before knowledge of the alleged
actual loss, was therefore speculative. The
alleged loss could have been a mere
afterthought or subterfuge to justify her
claim for actual damages.
With regard to the award of P517,000
representing the value of the alleged
230,000 pieces of bangus which died when
DBP took possession of the fishpond in
March 1979, the same was not called for.
Such loss was not duly proved; besides, the
claim therefor was delayed unreasonably.

From 1979 until after the filing of her

complaint in court in May 1985, CUBA did
not bring to the attention of DBP the
alleged loss. In fact, in her letter dated 24
October 1979,[19] she declared:
1. That from February to May 1978, I was
then seriously ill in Manila and within the
same period I neglected the management
and supervision of the cultivation and
harvest of the produce of the aforesaid
fishpond thereby resulting to the
irreparable loss in the produce of the same
in the amount of about P500,000.00 to my
great damage and prejudice due to
fraudulent acts of some of my fishpond
workers.
Nowhere in the said letter, which was
written seven months after DBP took
possession of the fishpond, did CUBA
intimate that upon DBPs take-over there
was a total of 230,000 pieces of bangus, but
all of which died because of DBPs
representatives prevented her men from
feeding the fish.
The award of actual damages should,
therefore, be struck down for lack of
sufficient basis.
In view, however, of DBPs act of
appropriating CUBAs leasehold rights
which was contrary to law and public
policy, as well as its false representation to
the then Ministry of Agriculture and
Natural Resources that it had foreclosed
the mortgage, an award of moral damages
in the amount of P50,000 is in order
conformably with Article 2219(10), in
relation to Article 21, of the Civil Code.
Exemplary or corrective damages in the
amount of P25,000 should likewise be
awarded by way of example or correction
for the public good.[20] There being an
award of exemplary damages, attorneys
fees are also recoverable.[21]

WHEREFORE, the 25 May 1994 Decision

of the Court of Appeals in CA-G.R. CV No.
26535 is hereby REVERSED, except as to
the award of P50,000 as moral damages,
which is hereby sustained. The 31 January
1990 Decision of the Regional Trial Court
of Pangasinan, Branch 54, in Civil Case No.
A-1574 is MODIFIED setting aside the
finding that condition no. 12 of the deed of
assignment constituted pactum
commissorium and the award of actual
damages; and by reducing the amounts of
moral damages from P100,000 to P50,000;
the exemplary damages, from P50,000 to
P25,000; and the attorneys fees, from
P100,000 to P20,000. The Development
Bank of the Philippines is hereby ordered
to render an accounting of the income
derived from the operation of the fishpond
in question.
Let this case be REMANDED to the trial
court for the reception of the income
statement of DBP, as well as the statement
of the account of Lydia P. Cuba, and for the
determination of each partys financial
obligation to one another.
SO ORDERED.
Bellosillo,Vitug, and Kapunan, JJ., concur.