Del Rosario v.

CA

Facts:
 In selling to the public roofing materials known as "Banawe" shingles, Metal Forming Corporation (MFC)
made representations on the durability of the product and the sturdiness of its installation, characterizing
the shingles as "STRUCTURALLY SAFE AND STRONG" and that the "BANAWE METAL TILE structure acts as a
single unit against wind and storm pressure due to the strong hook action on its overlaps". It prompted the
Del Rosarios to buy the "Banawe" shingles and have them installed at their residence.
 Two months after installation, portions of the roof of the Del Rosarios were blown away by the typhoon
"Ruping", and the same acted in parts (instead of as a single unit) when strong winds blew, a part remaining
while another part was blown off.
 The Del Rosarios' filed a complaint on November 21, 1990, charging MFC with a violation of Section 3 of Act
No. 3740, "An Act to Penalize Fraudulent Advertising, Mislabeling or Misbranding of Any Product, Stocks,
Bonds, etc." After due proceedings, the DTI rendered judgment sentencing MFC to pay an "administrative
fine of P10,000.00".
 MFC however declined to concede liability for the other damages claimed by the Del Rosario Spouses to
have been caused to the interior of their home. The spouses sought to recover from MFC, damages resulting
from the events just narrated, contending that aside from the destruction of the roof of their house, injury
was also caused to its electrical wiring, ceiling, fixtures, walls, wall paper, wood parquet flooring and
furniture. They reckoned their actual damages at P1,008,003.00 and prayed for an award to them of moral
damages in the sum of P3,000,000,00, exemplary damages in the amount of P1,000,000.00, and
attorney's fees in the sum of P1,000,000.00.
 MFC moved to dismiss the complaint for lack of cause of action, alleging that it had no contractual
relationship with the Del Rosarios since the contract for the purchase and installation of the roofing, upon
which the latter's claims were based, was actually entered into between it and another person, Jesus M.
Puno (an engineer identified as the Del Rosarios' contractor).
o Judgment was rendered in favor of the Del Rosarios.

Issue & Ruling

WON Spouses are entitled to moral damages. YES.
 It is indisputable that (1) the tiles were delivered to the Del Rosarios and used in fabricating the roof of their
home, and (2) that it was the employees and workers of MFC who (a) delivered the shingles or metal tiles to
the construction site of the Del Rosarios' home, and (b) undertook and completed the installation thereof.
These they did in bad faith, using inferior materials and assembling them in a manner contrary to MFC's
express representations in its brochures and advertisements circulated and broadcast to the general public
— which representations had, in the first place, induced the Del Rosarios to choose the metal tiles in
question for their roofing. In fine, since MFC, in bad faith and with gross negligence, infringed the express
warranty made by it to the general public in connection with the "Banawe" tiles brought to and set up in the
house of the Del Rosarios who had relied on the warranty, and thereby caused them considerable injury, the
identity of the individual who actually dealt with MFC and asked the latter to make such delivery and
installation is of little moment.
 That MFC did in truth act with bad faith, in flagrant breach of its express warranties made to the general
public and in wanton disregard of the rights of the Del Rosarios who relied on those warranties, is
adequately demonstrated by the recorded proofs. The law explicitly authorizes the award of moral damages
"in breaches of contract where the defendant acted fraudulently or in bad faith." There being, moreover,
satisfactory evidence of the psychological and mental trauma actually suffered by the Del Rosarios, the grant
to them of moral damages is warranted. In Makabili v. Court of Appeals, the court held that:
o It is essential. . . . in the award of damages that the claimant must have satisfactorily proven during
the trial the existence of the factual basis of the damages and its causal connection to defendant's
acts. This is so because moral damages though incapable of pecuniary estimation, are in the
category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer (Enervida v. De la Torre, 55 SCRA 340 [1974.] and are allowable
only when specifically prayed for in the complaint. (San Miguel Brewery, Inc. v. Magno, 21 SCRA 292
[1968])
 It is the Del Rosarios’ contention that the pecuniary detriment to their home amounted to P1,008,003.00,
covering not only the destruction of the roof, but also substantial harm to the electrical wiring, ceiling,
 fixtures, walls, wallpaper, wood parquet flooring and furniture. They rely on the Report of the Esteban
Adjusters and Valuers, Inc., to which the Regional Trial Court accorded full credit.
o But that report contains no statement whatever of the amount of the damage. Indeed, the testimony
of Engineer Abril, the representative of the Esteban Adjusters and Valuers, Inc., is that his firm had
been retained only to determine the cause of the damage, not to estimate and assess it.
o There is therefore no evidentiary foundation upon which to lay an award of actual damages.

Damages Amount Ratio

Actual deleted Actual or compensatory damages cannot be presumed, but must be duly
proved and proved with reasonable degree of certainty. 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 and on evidence of the actual amount thereof. There is
therefore no evidentiary foundation upon which to lay an award of actual
damages.
Exemplary Reduced While exemplary damages cannot be recovered as a matter of right, they
from 300k need not be proved, although plaintiff must show that he is entitled to
to 50k moral, temperate or compensatory damages before the court may
consider the question of whether or not exemplary damages should be
awarded. Here, moral damages are awarded. “Exemplary damages are
imposed not to enrich one party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb socially deleterious
actions."
Moral Reduced There is, to be sure, no hard and fast rule for determining what would be
from 500k a fair amount of moral (or exemplary) damages, each case having to be
to 100k governed by its attendant particulars. Generally, the amount of moral
damages should be commensurate with the actual loss or injury
suffered. 500k however is too excessive and must be reduced to an
equitable level.
Atty’s fees deleted Since the judgment does not say why attorney’s fees are awarded,
there is no basis for such award, which should consequently be
removed. The power of the court to award attorney’s fees under Article
2208 of the Civil Code demands factual, legal, and equitable
justification; its basis cannot be left to speculation or conjecture. Where
granted, the court must explicitly state in the body of the decision, and
not only in the dispositive portion thereof, the legal reason for the
award of attorney’s fees.