G.R. Nos.

L-51171-72 June 4, 1990

MARIA
G.
FORD,
Substituted
by
PATRICK
vs.
COURT OF APPEALS and SULPICIA FABRIGAR, respondents.

G.

FORD, petitioner,**

G.R. No. L-51273 June 4, 1990

VICENTE
F.
vs.
COURT OF APPEALS and SULPICIA FABRIGAR, respondents.

UY, petitioner,

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 opportunity of observing 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 Court 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 Facura, upon the request of the
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:
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.
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 to be seen by the barrio
folks being slapped in her face. 8

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.
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. 15Attorney's fees are also recoverable. 16
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
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.
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.
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.
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 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.

Singapore Airlines Limited vs. Pao, No. L-47739, 122 SCRA 671 , June 22, 1983
Posted by Alchemy Business Center and Marketing Consultancy at 11:54 PM Labels: 122
SCRA 671, 1983, Civil Law Review, June 22, No. L-47739,Singapore Airlines Limited vs. Pao
Singapore Airlines Limited vs. Pao, No. L-47739, 122 SCRA 671 , June 22, 1983
G.R. No. L-47739 June 22, 1983
SINGAPORE
AIRLINES
LIMITED, 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 commencement of such aforesaid 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 Company for reasons other than 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 co-respondent, 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 petitioner-plaintiff.
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 employer-employee
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 employeremployee 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 employer-employee
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 employeeemployer 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 antisocially 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
question is beyond the field of 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.
Footnotes
1 Annex "B ", p. 12, CFI Records.
2 p. 112, Ibid.
3 Article 217. Jurisdiction of Labor Arbiters and the Commission.
(a) The labor Arbiters shall have the original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that involve wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment of
wages, overtime compensation, separation pay and other benefits provided by law or
appropriate agreement, except claims for employees compensation, social security, medicare
and maternity benefits;
4. Cases involving household services and
5. All other claims arising from employer-employee relations, unless expressly excluded by this
Code.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.
4 68 SCRA 771 (1974).

SECOND DIVISION
[G.R. No. 120706. January 31, 2000]
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 observe 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
According to petitioner, private 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 pecuniary 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
SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.
SECOND DIVISION

[G.R. No. 116100. February 9, 1996]

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 1Santoses 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 court 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 defendants-appellees 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 denied petitioners motion for
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 passageway after payment of the 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
isdamnum 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]

HEIRS OF SIMEON BORLADO, namely, ADELAIDA BORLADO, LORETO BORLADO,

REYNALDO BORLADO, RICARDO BORLADO, FRANCISCO BORLADO and
ALADINO DORADO, petitioners, vs. COURT OF APPEALS, and SALVACION VDA.
DE BULAN, 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 plaintiffs-appellants[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 vendees-spouses 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 for taxation
purposes under Tax 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.). Salvacion and her co-defendants-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.

The Courts Ruling

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]
Nevertheless, as a matter of law, the trial court and the Court of Appeals erred in holding
petitioners liable to pay respondents one hundred (100) cavans of palay every year from 1972
until they vacate the premises of the land in question.
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.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.

G.R. No. 8385, Algarra v. Sandejas, 27 Phil. 284

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
March 24, 1914
G.R. No. 8385
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,
and which may be a necessary 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.
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."
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 unfulfilled and to the reasonable 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
seven-year 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 lower courts was affirmed with the following statement;

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.
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 Anglo-Saxon 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 are of the opinion that the 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 court 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 courts 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 so-called "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 Anglo-Saxon 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 under any enlightened system
of 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 oversight and superintendence in 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]

PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner, vs. 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 compensatory 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 reasonable determination thereof. Furthermore, on
account of the sinking of the vessel, private respondent supposedly incurred unrealized profits
and lost business opportunities 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 co-defendant 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 1965 with
128.23 gross tonnage. 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 of fourteen (14) vessels,
he was 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 documentary 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 XVsustained 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 costP140,000.00; 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 acceptance fee of P5,000.00, per
appearance fee ofP400.00, 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.[16] Petitioner likewise filed 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 judge should declare in favor of admissibility rather
than of non-admissibility (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 documentary 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
toP4,336,215.00; (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 awarded
in satisfaction of, or in 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 self-interest 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 hisvaluation 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 private respondents exhibits as commercial lists. It added, however, that
these exhibits should be admitted in evidence until such time as the Supreme Court
categorically rules on the admissibility or inadmissibility of this class of evidence because the
reception of these documentary exhibits (price quotations) as evidence rests on the sound
discretion of the trial court.[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-05/87-NAV
MARIA EFIGINIA FISHING CORPORATION
Navotas, Metro Manila
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, keel-cooled,
electric starting coupled with Twin-Disc Marine gearbox model MG509, 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 :

60-90 days from date of order.

VALIDITY

Subject to our final confirmation.

WARRANTY :

One (1) full year against factory defect.

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 party 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:

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 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]
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:
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.
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
respondent paid the docket fee 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.
Kapunan, and Purisima, JJ., concur.
Narvasa, C.J., (Chairman), on leave.

[1]

Kierulf v. Court of Appeals, 269 SCRA 433 (1997); Article 2199, Civil Code.
Bernardo v. Court of Appeals [Special Sixth Division], 275 SCRA 413 (1997); Development
Bank of the Philippines v. Court of Appeals, 249 SCRA 331 (1995); Lufthansa German
Airlines v. Court of Appeals, 243 SCRA 600 (1995); Sumalpong v. Court of Appeals, G. R. No.
123404, February 26, 1997; Del Rosario v. Court of Appeals, G. R. No. 118325, January 29,
1997; People v. Fabrigas, Jr., 261 SCRA 436 (1996).
[2]

[3]

Southeastern College, Inc. V. Court of Appeals, et al., G. R. No. 126389, July 10, 1998.
Development Bank of the Philippines v. Court of Appeals and Lydia Cuba, G. R. No. 118367,
January 5, 1998; Barzaga v. Court of Appeals, 268 SCRA 105 (1997).
[5]
People v. Gutierrez, 258 SCRA 70 (1996).
[6]
Baliwag Transit, Inc. v. Court of Appeals, 256 SCRA 746 (1996).
[7]
Rollo, pp. 49-52.
[8]
Ibid., p. 53.
[9]
Ibid., pp. 54-55.
[10]
Ibid., p. 56.
[11]
Ibid., pp. 58-61.
[12]
Ibid., pp. 62-66.
[13]
Ibid., p. 67.
[14]
Ibid., p. 71.
[4]

[15]

Presided by Judge Adoracion G. Angeles.

[16]

Record of Civil Case No. C-9457, p. 408.

Ibid., p. 464.

[17]
[18]

Ibid., p. 477.

[19]

Ibid., p. 478.
Ibid., p. 486.
[21]
Penned by Associate Justices Ricardo J. Francisco; Sempio-Diy and Galvez, JJ, concurring.
[20]

[22]

170 SCRA 274 (1989).

[23]

Petition, pp. 2-3.

[24]

TOLENTINO, CIVIL CODE OF THE PHILIPPINES, Vol. V, 1992 ed., p. 633.

[25]

Art. 2202, Civil Code; Europa v. Hunter Garments Mfg. (Phil.), Inc., G.R. No. 72827, July 18,
1989, 175 SCRA 394, 397.
[26]
TOLENTINO, supra, at p. 636 citing 8 Manresa 100.
[27]
CLERK & LINDSELL ON TORTS, 17th ed., pp. 1489-1490.
[28]
Fuentes, Jr. v. Court of Appeals, 323 Phil. 508, 519 (1996).
[29]
Summa Insurance Corporation v. Court of Appeals, 323 Phil. 214, 227 (1996).
[30]
Del Mundo v. Court of Appeals, 310 Phil 367, 376 (1995).
[31]
Rollo, pp. 170-173.
[32]
CA Decision, p. 4.
[33]
Ibid.
[34]
On this point, the Court of Appeals said: Contrary to appellants asseverations, Mr. Del
Rosario need not be qualified as an expert witness, and at the same time on board the `M/V
Maria Efigenia, in order to ascertain what cargoes and equipment were on board the sunken
vessel. Being the owner of appellee-corporation which in turn owned the ill-fated vessel, it was
well within his knowledge and competency to identify and determine the equipment installed and
the cargoes loaded on appellee' vessel. His testimony on these matters commands great
weight and cannot be undermined or excluded by the simple fact of his absence at the time of
actual collision, nor by his apparent relationship with herein appellee corporation. The mere fact
that a witness is related to any of the parties does not necessarily indicate that said witness has
falsely testified, if the witness testimony is found to be reasonable, consistent, and not
contradicted by evidence from any reliable source, and where it does not appear that the
witness was guided by such relationship, or any ill-motive when he gave his testimony
(People v. Maboab, 44 Off. Gaz. 564). Besides, appellee presented documentary exhibits in the

form of price quotations from suppliers and pro-forma invoices to establish the current
replacement value of the sunken vessel and the cargoes and equipment on board, whose
admissibility were likewise challenged by appellant as being hearsay. x x x.
[35]

People v. Narciso, 330 Phil. 527, 536 (1996).

[36]

Philippine Home Assurance Corporation v. Court of Appeals, 327 Phil. 255, 267-268 (1996)
citing Baguio v. Court of Appeals, G.R. No. 93417, September 14, 1993, 226 SCRA 366, 370.
[37]

These are: dying declaration, declaration against interest, act or declaration about pedigree,
family reputation or tradition regarding pedigree; common reputation, part of the res gestae,
entries in the course of business, entries in official records, commercial lists and the like,
learned treatises and testimony or deposition at a former proceeding.
[38]

CA Decision, p. 5.

[39]

Exh. A is the certified true copy of the certificate of ownership of the vessel while Exh. G is
the retainer agreement between Del Rosario and F. Sumulong Associates Law Offices.
[40]

Republic v. Migrio, G.R. No. 89483, August 30, 1990, 189 SCRA 289, 296-297.

[41]

FRANCISCO, supra.

[42]

32 C. J. S. 970.
Bates v. General Steel Tank Co., Ala., App., 55 So.2d 213 (1951).
[44]
CA Decision, p. 5.
[45]
2A WORDS AND PHRASES 8 citing Pickard v. Berryman, 142 S.W.2d 764, 768, 24
Tenn.App. 263.
[46]
34 WORDS AND PHRASES 116 citing State v. Scott, 175 P.2d 1016, 1021, 111 Utah 9.
[47]
FRANCISCO, supra, at p. 529.
[48]
See note 5.
[43]

[49]

See note 2 for citation. Cf. Also Japan Airlines v. Court of Appeals, et al., G. R. No. 118664,
August 7, 1998.
[50]

Arts. 2222 & 1157, Civil Code.

[51]

Robes-Francisco Realty & Development Corporation v. Court of First Instance of Rizal

(Branch XXXIV), L-41093, October 30, 1978, 86 SCRA 59, 65 citing Fouraker v. Kidd Springs
Boating and Fishing Club, 65 S.W.2d 796-797, citing C.J. 720, and a number of authorities.
[52]

China Air Lines, Ltd. v. Court of Appeals, G.R. No. 459985, May 18, 1990, 185 SCRA 449,
460.
[53]
Robes-Francisco Realty & Development Corporation v. Court of First Instance of Rizal
(Branch XXXIV), supra, citing Northwest Airlines, Inc. v. Cuenca, 122 Phil. 403 (1965).
[54]
See Villalon v. Buendia, 315 Phil. 663, 666-667 (1995).
[55]
See note 22 for citation.
[56]

G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491.

[57]

Record of Civil Case No. C-9457, p. 217.

[58]

Ibid., p. 408.

[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 exemplary 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]

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 pre-trial 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;
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;

8.

After the Deed of Conditional Sale was executed in favor of plaintiff Lydia Cuba, a
new Fishpond Lease Agreement No. 2083-A 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
dated June 24, 1984, to dispose of the property;
14. That the DBP thereafter executed a Deed of Conditional Sale in favor of defendant
Agripina Caperal on August 16, 1984;
15. Thereafter, defendant Caperal was awarded Fishpond Lease Agreement No. 2083A 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 pre-trial
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
because the DBP representatives 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 CUBAs leasehold rights. 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 extra-judicial 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 SIXTY-SEVEN 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 THIRTYTWO THOUSAND SIX HUNDRED TEN PESOS AND SEVENTY-FIVE CENTAVOS
(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 ofP1,067,500. 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
mortgaged properties; 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 Attorney-in-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.
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 proceedings,
whether judicial or extrajudicial, appropriated the [l]easehold [r]ights of plaintiff Lydia Cuba
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:
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.
Even in cases where foreclosure 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.