305. Lagon v CA and MenandroLapuz, 453 SCRA 616Facts:

On June 23, 1982, petitioner Jose Lagon purchased from the estate of Bai ToninaSepi, through an intestate court, two parcels of land located at Tacurong, Sultan Kudarat.A few months after the sale, private respondent MenandroLapuz filed a complaint for torts and damages against petitioner.

In the complaint, Lapuzalleged that he entered into a contract of lease with the late Bai ToninaSepiMengelenGuiabar over three parcels of land in Sultan Kudaratbeginning 1964. One of the provisions agreed upon was for Lapuz to put up commercial buildings which would, in turn, be leased to new tenants. The rentals to be paid by those tenants would answer for the rent Lapuz was obligated to pay Bai ToninaSepi for the lease of the land.

In 1974, the lease contract ended but since the construction of the commercial buildings had yet to be completed, the lease contract was allegedly renewed.

When Bai ToninaSepi died, Lapuzstarted remitting his rent to the court-appointed administrator of her estate. But when the administrator advised him to stop collecting rentals from the tenants of the buildings he constructed, he discovered that petitioner, representing himself as the new owner of the property, had been collecting rentals from the tenants.

He thus filed a complaint against Lagon, accusing petitioner of inducing the heirs of Bai ToninaSepi to sell the property to him, thereby violating his leasehold rights over it.

In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to sell the property to him, contending that the heirs were in dire need of money to pay off the obligations of the deceased. He also denied interfering with private respondent’s leasehold rights as there was no lease contract covering the property when he purchased it; that his personal investigation and inquiry revealed no claims or encumbrances on the subject lots.

Finding the complaint for tortuous interference to be unwarranted, petitioner filed his counterclaim and prayed for the payment of actual and moral damages.

Issue:Whether the purchase by petitioner of the subject property, during the supposed existence of private respondent’s lease contract with the late Bai ToninaSepi, constituted tortuous interference for which petitioner should be held liable for damages.

Held:No. Petition granted. Article 1314 of the Civil Code provides that any third person who induces another to violate his

contract shall be liable for damages to the other contracting party. The tort recognized in that provision is known as interference with contractual relations. The interference is penalized because it violates the property rights of a party in a contract to reap the benefits that should result therefrom.

The elements of tortuous interference with contractual relations are: o (a) existence of a valid contract; o (b) knowledge on the part of the third person of the existence of the contract and o (c) interference of the third person without legal justification or excuse.

As regards the first element, the existence of a valid contract must be duly established. o To prove this, private respondent presented in court a notarized copy of the purported

lease renewal. While the contract appeared as duly notarized, the notarization thereof, however, only proved its due execution and delivery but not the veracity of its contents.

o Nonetheless, after undergoing the rigid scrutiny of petitioner’s counsel and after the trial court declared it to be valid and subsisting, the notarized copy of the lease contract presented in court appeared to beincontestable proof that private respondent and the late Bai ToninaSepi actually renewed their lease contract.

o Settled is the rule that until overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the facts that gave rise to its execution and delivery.

The second element, on the other hand, requires that there be knowledge on the part of the interferer that the contract exists.

o Knowledge of the subsistence of the contract is an essential element to state a cause of action for tortuous interference. A defendant in such a case cannot be made liable for interfering with a contract he is unaware of.

o While it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if followed by a reasonable inquiry, will lead to a complete disclosure of the contractual relations and rights of the parties in the contract.

The Court found that the contention of petitioner is meritorious. Lagon conducted his own personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man probe deeper and watch out for any conflicting claim over the property. An examination of the entire property’s title bore no indication of the leasehold interest of private respondent. Even the registry of property had no record of the same.

Assuming ex gratia argumenti that petitioner knew of the contract, such knowledge alone was not sufficient to make him liable for tortuous interference.

As regards the third element, to sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impious reasons to injure the plaintiff. In other words, his act of interference cannot be justified.

The records show that the decision of the heirs of the late Bai ToninaSepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment. Private respondent himself did not proffer any evidence to support his claim.

In short, even assuming that private respondent was able to prove the renewal of his lease contract with Bai ToninaSepi, the fact was that he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Therefore, the claim of tortuous interference was never established.

In sum, we rule that, inasmuch as not all three elements to hold petitioner liable for tortuous interference are present, petitioner cannot be made to answer for private respondent’s losses.

This case is one of damnunabsque injuria or damage without injury. “Injury” is the legal invasion of a legal right while “damage” is the hurt, loss or harm which results from the injury.

There can be damage without injury where the loss or harm is not the result of a violation of a legal duty. In that instance, the consequences must be borne by the injured person alone since the law affords no remedy for damages resulting from an act which does not amount to legal injury or wrong. Indeed, lack of malice in the conduct complained of precludes recovery of damages.

306. Allan C. Go (doing business under the name and style “ACG Express Liner”) v. Mortimer F. CorderoGR No. 164703/164747May 4, 2010Villarama

DOCTRINE: The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of a contract; and (3) interference of the third person is without legal justification.

1. This case basically involves Mortimer Cordero (VP of Pamana Marketing Corporation) entered into an agreement with Tony Robinson (Australian Managing Director of Aluminum Fast Ferries Australia).

2. Robinson appointed Coredro as the exclusive distributor of AFFA catamaran and other fast ferry vessels in the Philippines.

3. At first, Cordero offered the sale of the 25meter Aluminum passenger catamaran or SEACAT 25 to ACG Express, owned by Allan C. Go. A deal was closed for the purchase of 2 seacat by the lawyers of Mr. Go, Felipe Landicho and Vincent Tecson.

4. Later on Cordero found out that ACG is directly dealing with Robinson. Because of that Cordero said that the direct dealing violated his exclusive distributorship.

5. Robinson answered saying that the agreement between him and Cordero is for one transaction only.

6. So the filing of this case against Robinson, Go, Tecson and Landicho for violation of the exclusive distributorship contract thus depriving Cordero of his commission.

7. TC – ruled in favor of Cordero

ISSUE: Whether there was a breach of exclusive distributorship contract and contractual interference of Go, et al.? YES

HELD:

In Yu v. Court of Appeals, this Court ruled that the right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are proprietary rights which a party may protect. Thus, injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable.

While it is true that a third person cannot possibly be sued for breach of contract because only parties can breach contractual provisions, a contracting party may sue a third person not for breach but for inducing another to commit such breach.

Article 1314 of the Civil Code provides:Art. 1314. Any third person who induces another to violate his contract shall be

liable for damages to the other contracting party.

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of a contract; and (3) interference of the third person is without legal justification. The presence of the first and second elements is not disputed. Through the letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA in the Philippines, respondents were clearly aware of the contract between Cordero and AFFA represented by Robinson. In fact, evidence on record showed that respondents initially dealt with and recognized Cordero as such exclusive dealer of AFFA high-speed catamaran vessels in the Philippines. In that capacity as exclusive distributor, petitioner Go entered into the Memorandum of Agreement and Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA.

As to the third element, our ruling in the case of So Ping Bun v. Court of Appeals is instructive, to wit:

A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, petitioner’s Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter’s property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort interference above-mentioned are present in the instant case.

Authorities debate on whether interference may be justified where the defendant

acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor’s motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer’s interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one’s financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives.

As early as Gilchrist vs. Cuddy, we held that where there was no malice in the

interference of a contract, and the impulse behind one’s conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler.

In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice in him.

x x x While we do not encourage tort interferers seeking their economic interest to

intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner’s interference.

Malice connotes ill will or spite, and speaks not in response to duty. It implies an intention to do

ulterior and unjustifiable harm. Malice is bad faith or bad motive. In the case of Lagon v. Court of Appeals, we held that to sustain a case for tortuous interference, the defendant must have acted with malice or must have been driven by purely impure reasons to injure the plaintiff; in other words, his act of interference cannot be justified. We further explained that the word “induce” refers to situations where a person causes another to choose one course of conduct by persuasion or intimidation.

The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFA’s breach of its contractual obligation to pay in full the commission due to Cordero and unceremonious termination of Cordero’s appointment as exclusive distributor. Following our pronouncement in Gilchrist v. Cuddy (supra), such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful motives. The attendant circumstances, however, demonstrated that respondents transgressed the bounds of permissible financial interest to benefit themselves at the expense of Cordero. Respondents furtively went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA two (2) SEACAT 25, closely monitored the progress of building the first vessel sold, attended to their concerns and spent no measly sum for the trip to Australia with Go, Landicho and Go’s family members. But what is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated with Robinson for the purchase of a second vessel, Landicho and Tecson continued to demand and receive from Cordero their “commission” or “cut” from Cordero’searned commission from the sale of the first SEACAT 25.

Cordero was practically excluded from the transaction when Go, Robinson, Tecson and Landicho suddenly ceased communicating with him, without giving him any explanation. While there was nothing objectionable in negotiating for a lower price in the second purchase of SEACAT 25, which is not prohibited by the Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived not only in ensuring that Cordero would have no participation in the contract for sale of the

second SEACAT 25, but also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25. This, despite their knowledge that it was commission already earned by and due to Cordero. Thus, the trial and appellate courts correctly ruled that the actuations of Go, Robinson, Tecson and Landicho were without legal justification and intended solely to prejudice Cordero.

The existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the trial court, when affirmed by the appellate court, are conclusive on this Court. We see no compelling reason to reverse the findings of the RTC and the CA that respondents acted in bad faith and in utter disregard of the rights of Cordero under the exclusive distributorship agreement.

The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty and good faith in securing better terms for the purchase of high-speed catamarans from AFFA, to the prejudice of Cordero as the duly appointed exclusive distributor, is further proscribed by Article 19 of the Civil Code:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. As we have expounded in another case:Elsewhere, we explained that when “a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.” The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties. These standards are the following: act with justice, give everyone his due and observe honesty and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of law x x x. Article 21, on the other hand, states:

Art. 21. 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 the damage.

Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to injure.

A common theme runs through Articles 19 and 21, and that is, the act complained of must be intentional.

The rule is that the defendant found guilty of interference with contractual relations cannot be held liable for more than the amount for which the party who was inducted to break the contract can be held liable. Respondents Go, Landicho and Tecson were therefore correctly held liable for the balance of petitioner Cordero’s commission from the sale of the first SEACAT 25, in the amount of US$31,522.09 or its peso equivalent, which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement, with interest at the rate of 6% per annum from June 24, 1998 until the same is fully paid.

307 Malvar vs. Kraft Food

Facts: 1. Kraft Foods (Phils.), Inc. (KFPI) hired CzarinaMalvar (Malvar) as its Corporate Planning Manager.

a. From then on, she gradually rose from the ranks, becoming in 1996 the Vice President for Finance in the Southeast Asia Region of Kraft Foods International (KFI),KFPI’s mother company.

2. On November 29, 1999, respondent Bienvenido S. Bautista, as Chairman of the Board of KFPI and concurrently the Vice President and Area Director for Southeast Asia of KFI, sent Malvar a memo directing her to explain why no administrative sanctions should be imposed on her for possible breach of trust and confidence and for willful violation of company rules and regulations.

3. Following the submission of her written explanation, an investigating body was formed. In due time, she was placed under preventive suspension with pay.

a. Ultimately, on March 16, 2000, she was served a notice of termination.4. Obviously aggrieved, Malvar filed a complaint for illegal suspension and illegal dismissal against

KFPI and Bautista in the National Labor Relations Commission (NLRC). In a decision dated April 30, 2001,1 the Labor Arbiter found and declared her suspension and dismissal illegal, and ordered her reinstatement, and the payment of her full backwages, inclusive of allowances and other benefits, plus attorney’s fees.

5. On October 22, 2001, the NLRC affirmed the decision of the Labor Arbiter but additionally ruled that Malvar was entitled to "any and all stock options and bonuses she was entitled to or would have been entitled to had she not been illegally dismissed from her employment," as well as to moral and exemplary damages.

6. Undaunted, KFPI and Bautista assailed the adverse outcome before the CA on certiorari (CA-G.R. SP No. 69660), contending that the NLRC thereby committed grave abuse of discretion. However, the petition for certiorari was dismissed by the CA on December 22, 2004, but with the CA reversing the order of reinstatement and instead directing the payment of separation pay to Malvar, and also reducing the amounts awarded as moral and exemplary damages.

7. After the judgment in her favor became final and executory on March14, 2006, Malvar moved for the issuance of a writ of execution.5 The Executive Labor Arbiter then referred the case to the Research and Computation Unit (RCU) of the NLRC for the computation of the monetary awards under the judgment. The RCU’s computation ultimately arrived at the total sum of P41,627,593.75.6

8. On November 9, 2006, however, Labor Arbiter Jaime M. Reyno issued an order,7 finding that the RCU’s computation lacked legal basis for including the salary increases that the decision promulgated in CA-G.R. SP No. 69660 did not include.

9. Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case, praying that the appeal be immediately dismissed/withdrawn in view of the compromise agreement, and that the case be considered closed and terminated.

10. Intervention11. Before the Court could act on Malvar’s Motion to Dismiss/Withdraw Case, the Court received on

February 15, 2011 a so-called Motion for Intervention to Protect Attorney’s Rights from The Law Firm of Dasal, Llasos and Associates, through its Of Counsel Retired Supreme Court Associate Justice Josue N. Bellosillo18 (Intervenor), whereby the Intervenor sought, among others, that both Malvar and KFPI be held and ordered to pay jointly and severally the Intervenor’s contingent fees.

Issue: Whether or not the Motion for Intervention to protect attorney’s rights can prosper, and, if so, how much could it recover as attorney’s fees.Held:YES!The respondents would be liable if they were shown to have connived with Malvar in the execution of the compromise agreement, with the intention of depriving the Intervenor of its attorney’s fees. Thereby, they would be solidarily liable with her for the attorney’s fees as stipulated in the written agreement under the theory that they unfairly and unjustly interfered with the Intervenor’s professional relationship with Malvar.The respondents insist that they were not bound by the written agreement, and should not be held liable under it.We disagree with the respondents’ insistence. The respondents were complicit in Malvar’s move to deprive the Intervenor of its duly earned contingent fees.First of all, the unusual timing of Malvar’s letter terminating the Intervenor’s legal representation of her, of her Motion to Dismiss/Withdraw Case, and of the execution of compromise agreement manifested her desire to evade her legal obligation to pay to the Intervenor its attorney’s fees for the legal services rendered. The objective of her withdrawal of the case was to release the respondents from all her claims and causes of action in consideration of the settlement in the stated amount of P40,000.000.00, a sum that was measly compared to what she was legally entitled to, which, to begin with, already included the P41,627,593.75 and the value of the stock option already awarded to her. In other words, she thereby waived more than what she was lawfully expected to receive from the respondents.Secondly, the respondents suddenly turned around from their strong stance of berating her demand as offensive to all precepts of justice and fair play and as a form of unjust enrichment for her to a surprisingly generous surrender to her demand, allowing to her through their compromise agreement the additional amount of P40,000,000.00 on top of theP14,252,192.12 already received by her in August 2008. The softening unavoidably gives the impression that they were now categorically conceding that Malvar deserved much more. Under those circumstances, it is plausible to conclude that her termination of the Intervenor’s services was instigated by their prodding in order to remove the Intervenor from the picture for being a solid obstruction to the settlement for a much lower liability, and thereby save for themselves and for her some more amount.Thirdly, the compromise agreement was silent on the Intervenor’s contingent fee, indicating that the objective of the compromise agreement was to secure a huge discount from its liability towards Malvar.Finally, contrary to the stipulation in the compromise agreement, only Malvar, minus the respondents, filed the Motion to Dismiss/Withdraw Case.At this juncture, the Court notes that the compromise agreement would have Malvar waive even the substantial stock options already awarded by the NLRC’s decision,52 which ordered the respondents to pay to her, among others, the value of the stock options and all other bonuses she was entitled to or would have been entitled to had she not been illegally dismissed from her employment. This ruling was affirmed by the CA.53 But the waiver could not negate the Intervenor’s right to 10% of the value of the stock options she was legally entitled to under the decisions of the NLRC and the CA, for that right was expressly stated in the written agreement between her and the Intervenor. Thus, the Intervenor should be declared entitled to recover full compensation in accordance with the written agreement because it did not assent to the waiver of the stock options, and did not waive its right to that part of its compensation.These circumstances show that Malvar and the respondents needed an escape from greater liability towards the Intervenor, and from the possible obstacle to their plan to settle to pay. It cannot be simply assumed that only Malvar would be liable towards the Intervenor at that point, considering that the Intervenor, had it joined the negotiations as her lawyer, would have tenaciously fought all the way for her to receive literally everything that she was entitled to, especially the benefits from the stock option.

Her rush to settle because of her financial concerns could have led her to accept the respondents’ offer, which offer could be further reduced by the Intervenor’s expected demand for compensation. Thereby, she and the respondents became joint tort-feasors who acted adversely against the interests of the Intervenor. Joint tort-feasors are those who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. They are also referred to as those who act together in committing wrong or whose acts, if independent of each other, unite in causing a single injury. Under Article 2194 of the Civil Code, joint tort-feasors are solidarily liable for the resulting damage. As regards the extent of their respective liabilities, the Court said in Far Eastern Shipping Company v. Court of Appeals:x xx. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not same. No actor’s negligence ceases to be a proximate cause merely because it does not exceed the negligence of other acts. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.There is no contribution between joint tort-feasors whose liability is solidary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury. x xxJoint tort-feasors are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. It is likewise not an excuse for any of the joint tort-feasors that individual participation in the tort was insignificant as compared to that of the other.57 To stress, joint tort-feasors are not liable pro rata. The damages cannot be apportioned among them, except by themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for the whole amount.58 Thus, as joint tort-feasors, Malvar and the respondents should be held solidarily liable to the Intervenor. There is no way of appreciating these circumstances except in this light.That the value of the stock options that Malvar waived under the compromise agreement has not been fixed as yet is no hindrance to the implementation of this decision in favor of the Intervenor. The valuation could be reliably made at a subsequent time from the finality of this adjudication. It is enough for the Court to hold the respondents and Malvarsolidarily liable for the 10% of that value of the stock options.As a final word, it is necessary to state that no court can shirk from enforcing the contractual stipulations in the manner they have agreed upon and written. As a rule, the courts, whether trial or appellate, have no power to make or modify contracts between the parties. Nor can the courts save the parties from disadvantageous provisions.59 The same precepts hold sway when it comes to enforcing fee arrangements entered into in writing between clients and attorneys. In the exercise of their supervisory authority over attorneys as officers of the Court, the courts are bound to respect and protect the attorney’s lien as a necessary means to preserve the decorum and respectability of the Law Profession.60 Hence, the Court must thwart any and every effort of clients already served by their attorneys’ worthy services to deprive them of their hard-earned compensation. Truly, the duty of the courts is not only to see to it that attorneys act in a proper and lawful manner, but also to see to it that attorneys are paid their just and lawful fees.

308 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.G.R. No. 116100 February 9, 1996TOPIC: DAMAGESREGALADO, J.:

FACTS: Pacifico Mabasa owned a parcel of land with a two-door apartment erected thereon in Tipas, Tagig. Said property was surrounded by other immovables owned by the Custodios and the Santoses. There were 2 passageways to Mabasa’s property. But sometime in February 1982, Mabasa saw that there had been built an adobe fence in the passageways by the Custodios and Santoses enclosing said passageways and leaving a very small space for Mabasa to pass through.

And so Mabasa filed a civil case for the grant of an easement of right of way against the Custodio spouses, Rosalina R. Morato, and the Santos spouses before the Pasig RTC.

Mabasa died during the pendency of the case and was substituted by Ofelia Mabasa, his surviving spouse, and children.

The RTC rule: (1) Ordering the Custodios and Santoses to give Mabasa permanent access ingress and egress to the public street; and (2) Ordering Mabasa to pay Custodios and Santoses P8,000 as indemnity for the permanent use of the passageway.

Not satisfied therewith, the Mabasa heirs went to the CA raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. The CA affirmed the RTC decision and rewarded damages to the Mabasas.

ISSUE: Whether the award of damages is in order.

HELD: NO.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.

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

In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is

essential that the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff.

The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. 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."

PETITION GRANTED. Judgment of the trial court is correspondingly REINSTATED.

309. People v VergaraG.R. No. 177763, July 3, 2013Topic: Torts; Damages, NCC 2195-2196, 2198

Facts:An Information for the crime of murder qualified by treachery was filed against accused-appellants.The prosecution established that at around midnight of February 10, 2001, accused-appellants were causing a ruckus on Libertad-Colayco Streets, Pasay City by throwing water bottles at passers-by. At around 2:00 a.m., the victim, MiguelitoAlfante, who was seemingly drunk, walked down the street. Vergara approached Alfante and told him: "Pare, mukhang high na high ka." Alfante retorted: "Anongpakialam mo?" At this juncture, Vergara threw his arm around Alfante’s shoulder, received a knife from Inocencio, and suddenly stabbed Alfante. Vergara then said "Tagaritoako." Thereafter, Vergara and Inocencio ran from the scene but were pursued by several witnesses. Alfante, meanwhile, was brought to the Pasay City General Hospital where he died.The common-law wife of the victim, Gina Alfante, testified that she incurred the following expenses in connection with the death and burial of Alfante:

a) P17,000.00 for the coffinb) P3,000.00 for the nichoc) P250.00 for the massd) P15,000.00 for food and drinks for the wake; ande) P16,000.00 for the burial lot.

Gina further testified that Alfante had been working as a mason prior to his death earning P500.00 a day.The RTC found accused-appellants guilty beyond reasonable doubt of the crime of murder. The Court of Appeals affirmed with modification as to the award of damages the Decision of the RTC. MODIFICATION in that the accused-appellants are jointly and severally held liable to pay the heirs of the victim, to the exclusion of his common-law-wife, the following amount, to wit:

a. P50,000.00 as civil indemnification;b. P50,000.00 as moral damages; andc. P51,250.00 as actual damages.

Issue: Whether or not the award of damages by the CA was proper.Held: (No) We affirm the March 30, 2007 decision of the Court of Appeals with modification respecting the award of damages. The Court must modify the amount of indemnity for death and exemplary damages awarded by the courts a quo.Anent the award of damages, when death occurs due to a crime, the following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney’s fees and expenses of litigation; and (6) interest, in proper cases. We agree with the Court of Appeals that the heirs of the victim was able to prove before the trial court, actual damages in the amount of P51,250.00 based on the receipts they submitted to the trial court.We also agree with the Court of Appeals when it removed the RTC’s award respecting the indemnity for the loss of earning capacity. As we have already previously ruled that:

Damages for loss of earning capacity is in the nature of actual damages, which as a rule must be duly proven by documentary evidence, not merely by the self-serving testimony of the widow.By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased is self-employed earning less than the minimum wage under current labor laws, and judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws. In this case, we are constrained to uphold the ruling of the Court of Appeals since no documentary evidence was presented to buttress the claim for the loss of earning capacity of the victim as claimed by his common-law wife. Neither was it shown that the victim was covered by the exceptions mentioned in the above-quoted case. The Court of Appeals stated:Settled is the rule that actual damages, inclusive of expected earnings lost caused by the crime, must be proved with a reasonable degree of certainty and on the best evidence to prove obtainable by the injured party. The prosecution failed to meet this criteria, no witness was presented to support the contention of the common-law-wife of the victim that the latter is a self-employed mason earning P500.00 a day. Hence, this Court cannot rely on the uncorroborated testimony of the common-law-wife of the victim which lacks specific details or particulars on the claimed loss earnings.Moreover, we deem it proper that an award for exemplary damages be made. We have ruled as follows:Unlike the criminal liability which is basically a State concern, the award of damages, however, is likewise, if not primarily, intended for the offended party who suffers thereby. It would make little sense for an award of exemplary damages to be due the private offended party when the aggravating circumstance is ordinary but to be withheld when it is qualifying. Withal, the ordinary or qualifying nature of an aggravating circumstance is a distinction that should only be of consequence to the criminal, rather than to the civil, liability of the offender. In fine, relative to the civil aspect of the case, an aggravating circumstance, whether ordinary or qualifying, should entitle the offended party to an award of exemplary damages within the unbridled meaning of Article 2230 of the Civil Code.We, thus, award exemplary damages in the amount of P30,000.00 to conform to existing jurisprudence.We increase the award for mandatory civil indemnity to P75,000.00 to conform to recent jurisprudence. Lastly, we sustain the RTC’s award for moral damages in the amount of P50,000.00 even in the absence of proof of mental and emotional suffering of the victim’s heirs. As borne out by human nature and experience, a violent death invariably and necessarily brings about emotional pain and anguish on the part of the victim’s family. While no amount of damages may totally compensate the sudden and tragic loss of a loved one it is nonetheless awarded to the heirs of the deceased to at least assuage them.In addition, and in conformity with current policy, we also impose on all the monetary awards for damages interest at the legal rate of 6% per annum from date of finality of this Decision until fully paid. WHEREFORE, the March 30, 2007 Decision of the Court of Appeals in CA-G.R. CR.-H.C. No. 02387 is AFFIRMED with MODIFICATION. Appellant Gary Vergara y Oriel alias "Gary" is found GUILTY beyond reasonable doubt of murder, and is sentenced to suffer the penalty of reclusion perpetua. Appellant is further ordered to pay the heirs of MiguelitoAlfante the amounts of P51 ,250.00 as actual damages, P75,000.00 as civil indemnity, P50,000.00 as moral damages, and P30,000.00 as exemplary damages. All monetary awards for damages shall earn interest at the legal rate of 6o/o per annum from date of finality of this Decision until fully paid.

310 Title: JOSE T. RAMIREZ v. THE MANILA BANKING CORPORATION

Topic: Others – Torts – Damages

Facts:1. Ramirez mortgaged two parcels of land located at Bayanbayanan, Marikina City in favor of

Manila Banking to secure his P265,000 loan. a. Paragraph “N” of the real estate mortgage provides that all correspondence relative to

the mortgage including notifications of extrajudicial actions shall be sent to Ramirez at his given address

2. Manila Banking filed a request for extrajudicial foreclosure of real estate mortgage on the ground that Ramirez failed to pay his loan despite demands.

3. Manila Banking was declared as highest bidder. A certificate of sale was issued in its favour.4. Ramirez sued Manila Banking for annulment of sale and prayed that the certificate of sale be

annulled on the ground, that Par. “N” of the real estate mortgage was violated for he was not notified of the foreclosure and auction sale.

5. TC ruling: extrajudicial foreclosure was null and void and the certificate of sale is invalid 6. CA ruling: reversed TC ruling

a. Absence of personal notice of foreclosure to Ramirez as required by Par. “N” of the real estate mortgage is not a ground to set aside the foreclosure sale

Issue:What is the legal effect of violating paragraph N of the deed of mortgage which requires personal notice to the petitioner–mortgagor by the respondent–mortgagee bank?

Held:When Manila Banking failed to send the notice of extrajudicial foreclosure sale to Ramirez, it committed a contractual breach of said paragraph N sufficient to render the extrajudicial foreclosure sale on September 8, 1994 null and void.

1. The following cases have emphasized that whenever there’s a stipulation between the parties’ contract that there should be a requirement for apprising the respondent of any action which petitioner might take on the subject property, accords the respondent opportunity to safeguard his rights.;

a. Metropolitan Bank v. Wongb. Global Holiday Ownership Corporation v. Metropolitan Bank and Trust Company c. Carlos Lim, et al. v. Development Bank of the Philippines

2. When Ramirez failed to send the notice of foreclosure sale to Manila Banking, he committed a contractual breach sufficient to render the foreclosure sale on November 23, 1981 null and void.

3. On another note, the SC discussed the damages: (I think the Court discussed damages because this is a case of contractual breach…)

a. Award of costs; when entitled. Costs shall be allowed to the prevailing party as a matter of course unless otherwise provided in the Rules of Court.

i. The costs Ramirez may recover are those stated in Section 10, Rule 142 of the Rules of Court.

ii. For instance, Ramirez may recover the lawful fees he paid in docketing his action for annulment of sale before the trial court. The court adds thereto the amount of P3,530 or the amount of docket and lawful fees paid by Ramirez for filing this petition before this Court.

iii. The court deleted the award of moral and exemplary damages; hence, the restriction under Section 7, Rule 142 of the Rules of Court would have prevented Ramirez to recover any cost of suit.

iv. But the court certifies, in accordance with said Section 7, that Ramirez’s action for annulment of sale involved a substantial and important right such that he is entitled to an award of costs of suit.

b. Damages; exemplary damages; when entitled. i. No exemplary damages can be awarded since there is no basis for the award of

moral damages and there is no award of temperate, liquidated or compensatory damages.

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

c. Damages; moral damages; when entitled. i. Nothing supports the trial court’s award of moral damages.

ii. There was no testimony of any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury suffered by Ramirez.

iii. The award of moral damages must be anchored on a clear showing that Ramirez actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings or similar injury. Ramirez’s testimony is also wanting as to the moral damages he suffered

311 METROPOLITAN BANK, Petitioner, vs.ANA GRACE ROSALES AND YO YUK TO, Respondents.G.R. No. 183204 January 13, 2014FACTS:1. Anna Grace Rosales (Rosales) and her mother Yo Yuk To opened a Joint Peso Account with

petitioner’s Pritil-Tondo Branch.As of August 4, 2004, respondents’ Joint Peso Account showed a balance of P2,515,693.52.

2. Rosales accompanied her client Liu Chiu Fang to open a bank account with petitioner. Since Liu Chiu Fang could speak only in Mandarin, respondent Rosales acted as an interpreter for her.

3. On March 3, 2003, respondents opened with petitioner’s Pritil-Tondo Branch a Joint Dollar Account with an initial deposit of US$14k.

4. On July 31, 2003, petitioner issued a "Hold Out" order against respondents’ accounts.5. Petitioner filed a criminal case of Estafa against respondent. Petitioner accused respondent Rosales

and an unidentified woman as the ones responsible for the unauthorized and fraudulent withdrawal of US$75,000.00 from Liu Chiu Fang’s dollar account with petitioner’s Escolta Branch.

6. Respondent denied the claims and further claimed that after Liu Chiu Fang opened an account with petitioner, she lost track of her.

7. The Office of City Prosecutor of Manila dismissed the complaint by Metropolitan Bank. Unfazed by this the Bank filed an MR.

8. Respondents, in the meantime, filed a complaint for breach of contract with damages with the RTC of Manila when the Bank placed their accounts under "Hold Out" status, thus preventing them from making any withdrawals of their account.

9. Bank alleged that respondents have no cause of action because it has a valid reason for issuing the "Hold Out" order. It averred that due to the fraudulent scheme of respondent Rosales, it was compelled to reimburse Liu Chiu Fang the amount of US$75,000.00 and to file a criminal complaint for Estafa against respondent Rosales.

10. While the case for breach of contract was being tried, the City Prosecutor of Manila issued a Resolution dated February 18, 2005, reversing the dismissal of the criminal complaint. An Informationwas then filed charging respondent Rosales with Estafa before the RTC of Manila.

11. RTC ruled in favor of the respondents. Petitioner appealed the decision with the CA but the same was affirmed. Hence this petition with the SC.

ISSUE:Whether petitioner breached its contract with respondents and if so, whether it is liable for

damages.

HELD:The "Hold Out" clause does not applyto the instant case.

Petitioner’s reliance on the "Hold Out" clause in the Application and Agreement for Deposit Account is misplaced.

The "Hold Out" clause applies only if there is a valid and existing obligation arising from any of the sources of obligation enumerated in Article 115779 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to show that respondents have an

obligation to it under any law, contract, quasi-contract, delict, or quasi-delict. And although a criminal case was filed by petitioner against respondent Rosales, this is not enough reason for petitioner to issue a "Hold Out" order as the case is still pending and no final judgment of conviction has been rendered against respondent Rosales. In fact, it is significant to note that at the time petitioner issued the "Hold Out" order, the criminal complaint had not yet been filed. Thus, considering that respondent Rosales is not liable under any of the five sources of obligation, there was no legal basis for petitioner to issue the "Hold Out" order. Accordingly, we agree with the findings of the RTC and the CA that the "Hold Out" clause does not apply in the instant case.

In view of the foregoing, we find that petitioner is guilty of breach of contract when it unjustifiably refused to release respondents’ deposit despite demand. Having breached its contract with respondents, petitioner is liable for damages.

Respondents are entitled to moral andexemplary damages and attorney’s fees.

In cases of breach of contract, moral damages may be recovered only if the defendant acted fraudulently or in bad faith, or is "guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations.”

In this case, a review of the circumstances surrounding the issuance of the "Hold Out" order reveals that petitioner issued the "Hold Out" order in bad faith. First of all, the order was issued without any legal basis. Second, petitioner did not inform respondents of the reason for the "Hold Out." 82 Third, the order was issued prior to the filing of the criminal complaint. Records show that the "Hold Out" order was issued on July 31, 2003, while the criminal complaint was filed only on September 3, 2003. 84

All these taken together lead us to conclude that petitioner acted in bad faith when it breached its contract with respondents. As we see it then, respondents are entitled to moral damages.

As to the award of exemplary damages, Article 2229 of the Civil Code provides that exemplary damages may be imposed "by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages." They are awarded only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

In this case, we find that petitioner indeed acted in a wanton, fraudulent, reckless, oppressive or malevolent manner when it refused to release the deposits of respondents without any legal basis. We need not belabor the fact that the banking industry is impressed with public interest. As such, "the highest degree of diligence is expected, and high standards of integrity and performance are even required of it." It must therefore "treat the accounts of its depositors with meticulous care and always to have in mind the fiduciary nature of its relationship with them." For failing to do this, an award of exemplary damages is justified to set an example.

The award of attorney's fees is likewise proper pursuant to paragraph 1, Article 2208 of the Civil Code.

In closing, it must be stressed that while we recognize that petitioner has the right to protect itself from fraud or suspicions of fraud, the exercise of his right should be done within the bounds of the law and in accordance with due process, and not in bad faith or in a wanton disregard of its contractual obligation to respondents.

312. Dr. Filoteo A. Alano, Petitioner, Vs.Zenaida Magud-Logmao, Respondent.G.R. No. 175540April 7, 2014Peralta, J.:

Doctrine: Verily, the Court cannot, in conscience, agree with the lower court. Finding petitioner liable for damages is improper. It should be emphasized that the internal organs of the deceased were removed only after he had been declared brain dead; thus, the emotional pain suffered by respondent due to the death of her son cannot in any way be attributed to petitioner. Neither can the Court find evidence on record to show that respondent's emotional suffering at the sight of the pitiful state in which she found her son's lifeless body be categorically attributed to petitioner's conduct.

Facts:

1. Arnelito Logmao was brought to the East Avenue Medical Center by 2 sidewalk vendors, who allegedly saw the former fall from the overpass near the Farmers’ Market.

2. The patient’s data sheet identified the patient as AngelitoLugmoso. However, the clinical abstract prepared by Dr. Paterno Cabrera, the surgical resident on-duty stated that the patient is AngelitoLogmao.

3. At the National Kidney Institute, the name AngelitoLogmaowas recorded as AngelitoLugmoso. Lugmoso was immediately attended to and given the necessary medical treatment.

4. As Lugmoso had no relatives around, Jennifer B. Misa, Transplant Coordinator, was asked to locate his family by enlisting police and media assistance.

5. Dr. Ona was informed that Lugmoso had been pronounced brain dead.6. Upon learning that Lugmoso was a suitable organ donor and that some NKI patients awaiting

organ donation had blood and tissue types compatible with Lugmoso, Dr. Ona inquired from Jennifer Misa whether the relatives of Lugmoso had been located so that the necessary consent for organ donation could be obtained.

7. As the extensive search for the relatives of Lugmoso yielded no positive result and time being of the essence in the success of organ transplantation, Dr. Ona requested Dr. Filoteo A. Alano, Executive Director of NKI, to authorize the removal of specific organs from the body of Lugmoso for transplantation purposes.

8. The NKI issued a press release announcing its successful double organ transplantation. Aida Doromal, a cousin of plaintiff, heard the news aired on television that the donor was an eighteen (18) year old boy whose remains were at La Funeraria Oro in Quezon City. As the name of the donor sounded like ArnelitoLogmao, Aida informed plaintiff of the news report.

9. Plaintiff filed with the court a quo a complaint for damages.10. Trial Court rendered judgment finding only Dr. FiloteoAlano liable for damages to plaintiff and

dismissing the complaint against the other defendants for lack of legal basis. Finding petitioner liable for quasi-delict. Pay respondent P188,740.90 as actual damages; P500,000.00 as moral

damages; P500,000.00 as exemplary damages; P300,000.00 as attorney's fees; and costs of suit.

11. CA decision of the trial court is affirmed with modification by deleting the award of P188,740.90 as actual damages and REDUCING the award of moral damages to P250,000.00, the award of exemplary damages to P200,000.00 and the award of attorney's fees to P100,000.00.

Issue:Whether respondent's sufferings were brought about by petitioner's alleged negligence in granting authorization for the removal or retrieval of the internal organs of respondent's son who had been declared brain dead?

Held:No. there is no negligence in granting authorization for the removal of the internal organ.

Rationale:

Petitioner maintains that when he gave authorization for the removal of some of the internal organs to be transplanted to other patients, he did so in accordance with the letter of the law, Republic Act (R.A.) No. 349, as amended by Presidential Decree (P.D.) 856, i.e., giving his subordinates instructions to exert all reasonable efforts to locate the relatives or next of kin of respondent's son. In fact, announcements were made through radio and television, the assistance of police authorities was sought, and the NBI Medico-Legal Section was notified. There can be no cavil that petitioner employed reasonable means to disseminate notifications intended to reach the relatives of the deceased. The only question that remains pertains to the sufficiency of time allowed for notices to reach the relatives of the deceased. If respondent failed to immediately receive notice of her son's death because the notices did not properly state the name or identity of the deceased, fault cannot be laid at petitioner's door. Verily, the Court cannot, in conscience, agree with the lower court. Finding petitioner liable for damages is improper. It should be emphasized that the internal organs of the deceased were removed only after he had been declared brain dead; thus, the emotional pain suffered by respondent due to the death of her son cannot in any way be attributed to petitioner. Neither can the Court find evidence on record to show that respondent's emotional suffering at the sight of the pitiful state in which she found her son's lifeless body be categorically attributed to petitioner's conduct.WHEREFORE, the petition is GRANTED.

313 OCEANEERING CONTRACTORS VS BARRETTOGR No. 184215, FEBRUARY 9, 2011TOPIC: ACTUAL OR COMPENSATORY DAMAGES PEREZ, J.:

FACTS: Doing business under the name and style of N.N. B. Lighterage, respondent Nestor N. Barretto (Barretto) is the owner of the Barge “Antonieta” which was last licensed and permitted to engage in coastwise trading for a period of one year expiring on 21 August 1998. On 27 November 1997, Barretto and petitioner Oceaneering Contractors (Phils.), Inc. (Oceaneering) entered into a Time Charter Agreement whereby, for the contract price of P306,000.00, the latter hired the aforesaid barge for a renewable period of thirty calendar days, for the purpose of transporting construction materials from Manila to Ayungon, Negros Oriental. Brokered by freelance ship broker Manuel Velasco, the agreement included Oceaneering’s acknowledgment of the seaworthiness of the barge as well as other stipulations.

However, Barretto’s Bargeman, Eddie La Chica, executed a Marine Protest, reporting that the “Antonieta” encountered rough sea at the vicinity of Cape Santiago, Batangas which made it roll and pitch causing the steel pipes and various construction materials to shift on the starboardside causing the breakdown of the steel stanchions welded on the deck of the barge leaving holes on the deck that caused water to enter the hold, and sinking the barge. On 6 October 1998, Barretto commenced the instant suit with the filing of his complaint for damages against Oceaneering, which was docketed as Civil Case No. LP-98-0244 before Branch 255 of the Regional Trial Court (RTC) of Las Piñas City. Contending that the accident was attributable to the incompetence and negligence which attended the loading of the cargo by Oceaneering’s hired employees, Barretto sought indemnities for expenses incurred and lost income in the aggregate sum of P2,750,792.50 and attorney’s fees equivalent to 25% of said sum Specifically denying the material allegations of the foregoing complaint in its 26 January 1999 answer, Oceaneering, on the other hand, averred that the accident was caused by the negligence of Barretto’s employees and the dilapidated hull of the barge which rendered it unseaworthy. As a consequence, Oceaneering prayed for the grant of its counterclaims for the value of its cargo in the sum of P4,055,700.00, salvaging expenses in the sum of P125,000.00, exemplary damages, attorney’s fees and litigation expenses. On 27 December 2005, the RTC rendered a decision, dismissing both Barretto’s complaint and Oceaneering’s counterclaims for lack of merit.

Dissatisfied, Oceaneering perfected its appeal. Applying the rule, however, that actual damages should be proved with a reasonable degree of certainty, the CA denied Oceaneering’s claim for the value of its lost cargo and merely ordered the refund of the P306,000.00 it paid for the time charter, with indemnity for attorney’s fees in the sum of P30,000.

ISSUE: Whether Oceaneering’s counterclaims for actual damages should be denied.

HELD: NO. We find the modification of the assailed decision in order.In finding Oceaneering’s petition impressed with partial merit, uppermost in our mind is the fact

that actual or compensatory damages are those damages which the injured party is entitled to recover for the wrong done and injuries received when none were intended. Pertaining as they do to such injuries or losses that are actually sustained and susceptible of measurement, they are intended to put the injured party in the position in which he was before he was injured. Insofar as actual or

compensatory damages are concerned, Article 2199 of the Civil Code of the Philippines provides as follows:

“Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages.”

Conformably with the foregoing provision, the rule is long and well settled that there must be pleading and proof of actual damages suffered for the same to be recovered. In addition to the fact that the amount of loss must be capable of proof, it must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable. The burden of proof of the damage suffered is, consequently, imposed on the party claiming the same who should adduce the best evidence available in support thereof, like sales and delivery receipts, cash and check vouchers and other pieces of documentary evidence of the same nature. In the absence of corroborative evidence, it has been held that self-serving statements of account are not sufficient basis for an award of actual damages. Corollary to the principle that a claim for actual damages cannot be predicated on flimsy, remote, speculative, and insubstantial proof, courts are, likewise, required to state the factual bases of the award. Applying the just discussed principles to the case at bench, we find that Oceaneering correctly fault the CA for not granting its claim for actual damages or, more specifically, the portions thereof which were duly pleaded and adequately proved before the RTC. While concededly not included in the demand letters dated 12 March 1998and 13 July 1998 Oceaneering served Barretto, the former’s counterclaims for the value of its lost cargo in the sum of P4,055,700.00 and salvaging expenses in the sum ofP125,000.00 were distinctly pleaded and prayed for in the 26 January 1999 answer it filed a quo. Rather than the entire P4,055,700.00 worth of construction materials reflected in the inventory which Engr. Oracion claims to have prepared on 29 November 1997, based on the delivery and official receipts from Oceaneering’s suppliers, we are, however, inclined to grant only the following items which were duly proved by the vouchers and receipts on record, viz.: (a) P1,720,850.00 worth of spiral welded pipes with coal tar epoxy procured on 22 November 1997; (b) P629,640.00 worth of spiral welded steel pipes procured on 28 October 1997; (c) P155,500.00 worth of various stainless steel materials procured on 27 November 1997; (d) P66,750.00 worth of gaskets and shackles procured on 20 November 1997; and, (e) P4,880.00 worth of anchor bolt procured on 27 November 1997. The foregoing sums all add up to of P2,577,620.00 from which should be deducted the sum of P351,000.00 representing the value of the nine steel pipes salvaged by Oceaneering, or a total of P2,226,620.00 in actual damages representing the value of the latter’s lost cargo. Excluded from the computation are the following items which, on account of the dates of their procurement, could not have possibly been included in the 29 November 1997 inventory prepared by Engr. Oracion, to wit: (a) P1,129,640.00 worth of WO#1995 and PO#OCPI-060-97 procured on 9 December 1997; and, (b) P128,000.00 worth of bollard procured on 16 December 1997. Likewise excluded are the anchor bolt with nut Oceaneering claims to have procured for an unspecified amount on 3 November 1997 and the P109,018.50 worth of Petron oil it procured on 28 November 1997 which does not fit into the categories of lost cargo and/or salvaging expenses for which it interposed counterclaims a quo. Although included in its demand letters as aforesaid and pleaded in its answer, Oceaneering’s claim for salvaging expenses in the sum of P125,000.00 cannot, likewise, be granted for lack of credible evidence to support the same.

Tested alongside the twin requirements of pleading and proof for the grant of actual damages,

on the other hand, we find that the CA also erred in awarding the full amount of P306,000.00 in favor of Oceaneering, as and by way of refund of the consideration it paid Barretto for the Time Charter Agreement. Aside from not being clearly pleaded in the answer it filed a quo, said refund was claimed in Oceaneering’s demand letters only to the extent of the unused charter payment in the reduced sum of P224,400.00which, to our mind, should be the correct measure of the award. Having breached an obligation which did not constitute a loan or forbearance of money, moreover, Barretto can only be held liable for interest at the rate of 6% per annum on said amount as well as the P2,226,620.00 value of the lost cargo instead of the 12% urged by Oceaneering. Although the lost cargo was not included in the demand letters the latter served the former, said interest rate of 6% per annum shall be imposed from the time of the filing of the complaint which is equivalent to a judicial demand. Upon the finality of this decision, said sums shall earn a further interest of 12% per annum until full payment. WHEREFORE, premises considered, the petition is PARTIALLY GRANTED.

314 International Container Terminal Services Inc vs ChuaG.R. No. 195031March 26, 2014Perez, J.:

FACTS:

1. On April 2, 1997, the twenty (20)-feet container van loaded with the personal effects of Chua arrived at the North Harbor, Manila, from Oakland, California, On even date, it was unloaded from the vessel and was placed in the depot belonging to petitioner for safekeeping pending the customs inspection.

2. The depot was gutted by fire and Chua’s container van, together with forty-four (44) others, were burned. Chua demanded reimbursement for the value of the goods. However, her demands fell on deaf ears.

3. Chua filed a case alleging that the proximate cause of the fire that engulfed Chua’s depot was the combustible chemicals stored thereat, that petitioner, in storing the said flammable chemicals in its depot, failed to exercise due diligence in the selection and supervision of its employees and/or of their work.a. She also claims that, while the value of the goods destroyed is x x x (US$87,667.00) she

has in her possession only the machine-copies of receipts showing an aggregate value of only (US$67,535.61) because, pursuant to [petitioner’s] request, she gave to the latter’s representative the original receipts.

4. Petitioner: Fortuitous event, because it exercised the due diligence required by law. It maintains that [respondent] is not entitled to her claim because she did not declare the true and correct value of the goods, as the Bill of Lading indicates that the contents of the van have no commercial value.

5. RTC: Ordering petitioner to pay respondent actual damages in the amount of US$67,535.6 and attorney’s fees.

6. CA: Affirmed. a. Applying the doctrine of res ipsa loquitur and in placing upon [petitioner] the burden of

proving lack of negligence. This is so because the fire that occurred would not have happened in the ordinary course of things if reasonable care and diligence had been exercised. Simply put, the fire started because some negligence must have occurred.

ISSUE: Whether or not respondent is entitled to US$67,535.6 as actual damages

HELD: No.

Both the trial court and the Court of Appeals found that the liability of petitioner to respondent amounts to US$67,535.61 as actual damages. This amount purportedly represents the value of respondent’s shipment that was lost or destroyed as a result of the fire in petitioner’s container yard where the van holding the said shipment was in storage at that time. The value was computed based on the receipts — marked as Exhibits “K” to “K-63” — submitted by respondent, which receipts allegedly cover the items that were in the container van.

A painstaking examination of Exhibits “K” to “K-63” (“the receipts”) reveals, however, that the items

specified therein do not exactly tally or coincide with the items listed in the respective inspection reports submitted by the different marine surveyors which conducted an inventory of the contents of respondent’s van after the fire. Thus, the receipts contain articles which consist of grocery items, including perishables which definitely could not have been included in the shipment to Manila. The inventoried items, on the other hand, primarily consist of electronics and electrical appliances, such as: electric fans, chandeliers, microwave ovens, jet skis, television sets, cassette players, speakers and computers.

It is also significant to note that Exhibits “K” to “K-63” include receipts covering baby products well as automobile oils/lubricants and other items— which items do not, however, appear in any of the inspection reports of the four marine surveyors which conducted the inventory of the burned container van. In the same way, the inspection reports include items which are not covered by the receipts submitted by respondent, including microwave ovens, intercom telephones and a coffee maker.

Also, some receipts are so poorly photocopied that the items listed therein can no longer be properly read and only the total amount paid is visible. Still, others were issued in the name of persons other than respondent. Exhibit “K-25,” on the other hand, appears to be a credit card billing statement but the name of the credit card holder does not appear thereon. More importantly, it includes a charge of US$338.97 for “BA auto repair” which, clearly, should not have been included in the computation of the amount of actual damages due respondent. Finally, Exhibit “K-40” shows a receipt for a total of 50 cartons of “commercial garlic” and “giant garlic” valued at US$877.50 with a total weight of 1,600 (unit of measure not specified). In the computation of the amount of actual damages, however, what was indicated as the value of the items was “$1,600.00” which is actually the weight of the garlics purchased, instead of US$877.50, which is the amount of the purchase.

Considering all the foregoing, this Court is, therefore, at a loss as to how the trial court and the Court of Appeals arrived at the conclusion that the items in both lists (Exhibits “K” to “K-63” and the inspection reports) are identical, so as to justify the award of US$67,535.61 — the alleged total value of the receipts — as actual damages. On the contrary, all the foregoing actually prove that the submitted receipts do not accurately reflect the items in the container van and, therefore, cannot be the basis for a grant of actual damages. Furthermore, the award of the trial court failed to take into consideration that since most of the contents of respondent’s container van are electronics or electrical items, the same are subject to depreciation.

Article 2199 of the Civil Code states that “[e]xcept 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 damages are compensation for an injury that will put the injured party in the position where it was before the injury. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. Except as provided by law or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as is duly proven. Basic is the rule that to recover actual damages, not only must the amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable.”

In the case before us, respondent failed to adduce evidence adequate enough to satisfactorily prove the amount of actual damages claimed. The receipts she submitted cannot be considered competent proof since she failed to prove that the items listed therein are indeed the items that were in her container van and vice versa. As pointed out above, there are discrepancies between the items listed in

the submitted receipts and those contained in the respective inspection reports of the marine surveyors. Hence, the said receipts cannot be made the basis for the grant of actual damages.

This Court has, time and again, emphasized that actual damages cannot be presumed and courts, in making an award, must point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne.

In the absence of competent proof on the amount of actual damages suffered, a party is entitled to receive temperate damages. Article 2224 of the New Civil Code provides that: “Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty.” The amount thereof is usually left to the sound discretion of the courts but the same should be reasonable, bearing in mind that temperate damages should be “more than nominal but less than compensatory.” Considering the concomitant circumstances prevailing in this case, temperate damages in the amount of P350,000.00 is deemed equitable.

315 Topic: Torts - Death by crime or quasi-delict, NCC 2206PEOPLE OF THE PHILIPPINES, Appellee, vs. ARMAN APACIBLE y RODRIGUEZ, Appellant.G.R. No. 189091 August 25, 2010 CARPIO MORALES, J.:Facts:

1. On May 23, 1999, starting at about 2:00 p.m., her husband, her uncle and appellant, who is her first cousin, had a drinking spree at a neighbor’s house. The spree lasted up to 8:30 p.m. following which her husband returned home and slept in their room. She thereupon placed their eight-month old child beside him and went to the kitchen to prepare milk for the child. Shortly thereafter, she, from a distance of about three to four meters, heard appellant utter "Putang ina mo, papatayin kita!" and then saw appellant, through the open door to the room, stab her husband several times.

2. She thus shouted for help and called appellant’s mother with whom he lives about "five (5) steps away." While appellant’s mother who heeded her call repaired to the house, the latter and appellant left as they saw the victim drenched in blood.

3. She then brought her child to a neighbor and sought help from the Tuy Police Station who responded and conducted an investigation with dispatch.

4. At the time of his death, the victim was 26 years old and was working at the National Power Corporation, earning P10,000 per month.

5. Mylene surmised that appellant killed her husband in view of his (her husband’s) refusal to amicably settle the malicious mischief case he had filed against appellant’s brother for breaking the glass windshield of his car.

6. Appellant, interposing alibi, claimed that after the victim whom he treated as a brother left, he too left with a friend for Cavite. He surmised that he is being charged because the alleged breaking by his brother of the windshield of the victim’s car was the subject of their conversation during the drinking spree.

7. RTC convicted Arman Apacible GUILTY beyond reasonable doubt of the crime of Murder, defined and penalized under Art. 248 of the Revised Penal Code, as amended by RA 7659, and hereby sentences him to suffer imprisonment of Reclusion Perpetua and to indemnify the heirs of victim Arnold Vizconde y Famoso the sum of FIFTY THOUSAND (P50,000.00) PESOS as death indemnity and FIFTY THOUSAND (P50,000.00) PESOS as moral damages.

8. Considering that accused Arman Apacible y Rodriguez is a detention prisoner he shall be credited with the period of his detention during his preventive imprisonment.

9. In his Brief filed before the Court of Appeals, appellant questioned, in the main, Mylene’s motive in identifying him as the assailant of her husband, the latter having allegedly refused appellant’s request to amicably settle the malicious mischief case filed against appellant’s brother. And appellant challenged Mylene’s alleged seeing him stab her husband, there being "no mention" if the locus criminis was well-lighted.

10. The appellate court, by Decision of June 23, 2009, affirmed with modification the trial court’s decision: the award of civil indemnity shall be increased from P50,000.00 to P75,000.00 and that he is further ordered to indemnify the heirs of the victim P25,000.00 as exemplary damages.

11. The appellate court increased the award of civil indemnity from P50,000 to P75,000 in light of recent jurisprudence, and awarded exemplary damages in the amount of P25,000 to the heirs of the victim in view of the attending qualifying circumstance of treachery.

12. Hence, the present appeal. Issue/Held:How much should the court award for civil indemnity - P50,000

The Court reduces the amount of civil indemnity awarded by the appellate court from P75,000 to P50,000, as determined by the trial court. People v. Anod explains why the award of P75,000 as civil indemnity lies only in cases where the proper imposable penalty is death, viz:

It is worth stressing that, at the outset, the appellant, together with Lumbayan, was sentenced by the RTC to suffer the penalty of reclusion perpetua. Thus, the CA’s reliance on our ruling in People v. dela Cruz was misplaced. In dela Cruz, this Court cited our ruling in People v. Tubongbanua, wherein we held that the civil indemnity imposed should be P75,000.00. However, the instant case does not share the same factual milieu as dela Cruz and Tubongbanua. In the said cases, at the outset, the accused were sentenced to suffer the penalty of death. However, in view of the enactment of Republic Act No. 9346 or the Act Prohibiting the Imposition of the Death Penalty on June 24, 2006, the penalty meted to the accused was reduced to reclusion perpetua. This jurisprudential trend was followed in the recent case of People of the Philippines v. Generoso Rolida y Moreno, etc., where this Court also increased the civil indemnity from P50,000.00 to P75,000.00. Based on the foregoing disquisitions and the current applicable jurisprudence, we hereby reduce the civil indemnity awarded herein to P50,000.00. As reflected earlier, appellant was sentenced by the trial court to reclusion perpetua.

WHEREFORE, the assailed Decision of the Court of Appeals is AFFIRMED with MODIFICATION in that, in accordance with the discussion in the immediately preceding paragraph, civil indemnity is reduced to P50,000.

316 Crisostomo v People, G.R. No. 171526, September 1, 2010The Information filed against petitioner and his two companions designated only as John Doe and Peter Doe contained the following accusatory allegations:That on or about the 12th day of February, 2001, in the municipality of San Miguel, province of Bulacan, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and helping one another, armed with a gun, did then and there willfully, unlawfully and feloniously, with intent [to] gain and by means of force, violence and intimidation upon person, enter the gasoline station owned by Jose Buencamino and once inside, take, rob and carry away with them P40,000.00, belonging to the said Jose Buencamino, to the damage and prejudice of the latter in the amount of P40,000.00, and on the occasion of the commission of the said robbery or by reason thereof, the herein accused, in furtherance of their conspiracy, did then and there willfully, unlawfully and feloniously, attack, assault and shoot Janet Ramos, cashier of said gasoline station, thereby inflicting on her serious physical injuries which directly caused her death.The lower court and CA found the accused guilty.Issue: Whether the convict is liable for damages.Yes. In robbery with homicide, civil indemnity and moral damages in the amount of P50,000.00 each is granted automatically in the absence of any qualifying aggravating circumstances.30 These awards are mandatory without need of allegation and evidence other than the death of the victim owing to the fact of the commission of the crime. In this case, the CA properly awarded the amount of P50,000.00 as civil indemnity. In addition, we also award the amount of P50,000.00 as moral damages.31

To be entitled to compensatory damages, it is necessary to prove the actual amount of loss with a reasonable degree of certainty, premised upon competent proof and the best evidence obtainable to the injured party. "[R]eceipts should support claims of actual damages."32 Thus, as correctly held by the trial court and affirmed by the CA, the amount of P14,500.00 incurred as funeral expenses can be sustained since these are expenditures supported by receipts. Also, the courts below correctly held petitioner liable to return the amount of P40,000.00 which was stolen.