Re Digests

8/11/2019 Re Digests

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273. POLYTRADE CORP. V. BLANCO (SET 17)G.R. No. L-27033 | October 31, 1969

ISSUE:Whether the award of attorneys' fees which totals P51,961.63, i.e. 25% of the total principalindebtedness of P207,846.51 (exclusive of interest) is exorbitant and unconscionable.

HELD:To be borne in mind is that the attorneys' fees here provided is not, strictly speaking, the attorneys' feesrecoverable as between attorney and client spoken of and regulated by the Rules of Court. Rather, theattorneys' fees here are in the nature of liquidated damages and the stipulation therefor is aptly called apenal clause. It has been said that so long as such stipulation does not contravene law, morals, or publicorder, it is strictly binding upon defendant. The attorneys' fees so provided are awarded in favor of thelitigant, not his counsel. It is the litigant, not counsel, who is the judgment creditor entitled to enforcethe judgment by execution.

The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages, whether intended as

an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable." For thisreason, we do not really have to strictly view the reasonableness of the attorneys' fees in the light ofsuch factors as the amount and character of the services rendered, the nature and importance of thelitigation, and the professional character and the social standing of the attorney. We do concede,however, that these factors may be an aid in the determination of the iniquity or unconscionableness ofattorneys' fees as liquidated damages.

May the attorneys' fees (P51,961.63) here granted be tagged as iniquitous or unconscionable? Upon thecircumstances, our answer is in the negative. Plaintiff's lawyers concededly are of high standing. Moreimportant is that this case should not have gone to court. It could have been easily avoided haddefendant been faithful in complying with his obligations. It is not denied that the rawhide was

converted into leather and sold by defendant. He raises no defense. In fact, he did not even answer thecomplaint in the lower court, and was thus declared in default. Nor does he deny the principal liability.Add to all these the fact that the writ of attachment issued below upon defendant's properties yieldedno more than P400 and the picture is complete. The continued maintenance by defendant of the suit isplainly intended for delay. The attorneys' fees awarded cannot be called iniquitous or unconscionable.

In the very recent case of Universal Motors Corporation vs. Dy Hian Tat (1969), 28 SCRA 161, 170, weallowed attorneys' fees in the form of liquidated damages at the rate of 25% of the total amount of theindebtedness. Here, the trial court has already reduced the attorneys' fees from the stipulated 25% "ofthe total amount involved, principal and interest, then unpaid" to only 25% of the principal amount due.There is no reason why such judgment should be disturbed.

283. NEW SAMPAGUITA BUILDERS CONSTRUCTION, INC. (NSBCI) v. PHILIPPINE NATIONAL BANK (SET18) G.R. NO. 148753 | JULY 30, 2004

The attorneys fees were equitably reduced from 10% to 1% of the total indebtedness. Since these arenot integral part of the cost of borrowing, but arise only when collecting upon the Notes becomesnecessary. The purpose of these fees is not to give respondent a larger compensation for the loan thanthe law already allows, but to protect it against any future loss or damage by being compelled to retain


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counsel- in-house or not, to institute judicial proceedings for the collection of its credit. As such Courthas the power to determine their reasonableness based on quantum meruit and to reduce the amountthereof is excessive. Since there was overcollection, PNB was ordered to refund the spouses instead.

286. LIGUTAN v. COURT OF APPEALS (SET 18)G.R. NO. 138677 | FEBRUARY 12, 2002

The trial court held, among others, the borrowers were liable for a 3% per month penalty (instead of5%) and 10% of the total amount of the indebtedness for attorneys fee, in addition to the principalloan. Petitioners appealed stating that such amount is unconscionable

HELD:ATTORNEYS FEES: Petitioners next assail the award of 10% of the total amount of indebtedness by wayof attorneys fees for being grossly excessive, exorbitant and unconscionable vis -a-vis the time spent andthe extent of services rendered by counsel for the bank and the nature of the case. Bearing in mind thatthe rate of attorneys fees has been agreed to by the parties and intended to answer not only forlitigation expenses but also for collection efforts as well, the Court, like the appellate court, deems the

award of 10% attorneys fees to be reasonable.

287. TRADE & INVESTMENT DEV. CORP. v. ROBLETT INDUSTRIAL CONS. CORP (SET 18)G.R. NO. 139290 | NOVEMBER 11, 2005

ISSUE:Whether it was improper for the appellate court to have d eleted the award of attorneys fees topetitioner despite the express stipulation therefor contained in the Deed.

HELD:Yes. The award of attorneys fees is the exception rather than the rule, and it must have some factual,

legal and equitable bases. The stipulation on attorneys fees contained in the Deed constitutes what isknown as a penal clause. The award of attorneys fees by the lower court, therefore, is not in the natureof an indemnity but rather a penalty in the form of liquidated damages in accordance with the contractbetween petitioner and Roblett. Such a stipulation has been upheld by this Court as binding betweenthe parties so long as it does not contravene the law, morals, public order or public policy. Hence, it wasimproper for the appellate court to have deleted the award of attorneys fees to petitioner despite theexpress stipulation therefor contained in the Deed. Nevertheless, the courts still have the power toeduce the amount of attorneys fees whether intended as an indemnity or a penalty, if the same isiniquitous or unconscionable.

The penalty in this case was in a form of attorneys fees. While the Court has upheld the reasonablenessof penalties in the form of attorneys fees consisting of ten percent (10%) of the principal debt plusinterest, it has to make an exception in the instant case since interest alone is already thrice as much asthe princi pal debt, and which attorneys fees would now exceed the principal amount, thus making theattorneys fees manifestly exorbitant. The principal amount in the case at bar is P11,775,611.35. At thetime the complaint was filed in 1990, the amount had already ballooned to P29,804,831.03 inclusive ofinterest and penalty charges. Today, the interest alone runs roughly to P37 million, which is thrice asmuch as the principal debt. Consequently, ten percent (10%) of the principal debt plus interest andpenalty ch arges would definitely exceed the principal amount, thus making the attorneys feesmanifestly exorbitant. Accordingly, we reduce the same to ten percent (10%) of the principal debt only.


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288. GOBONSENG v. UNIBANCARD CORP. (SET 18)G.R. NO. 160026 | DECEMBER 10, 2007

ISSUE:Whether the CA erred in failing to reduce the attorneys fees to below 10%.

HELD:With regard to the award of attorneys fees, the same is recoverable because petitioners signified theiradherence to such an arrangement when they availed of the Unicard credit card. The 25% attorneysfees was, however, excessive, thus, the reduction of the amount was appropriate. Thus, the attorneysfees should be fixed below 10%.

297. PHIL. PHOSPHATE FERTILIZER CORP. V. KAMALIG RESOURCES, INC. (SET 18)G.R. No. 165608 | December 13, 2007

ISSUE:

Whether there was basis for the imposition of the award of attorneys fees.

HELD:Philphos claims attorneys fees under Article 2208 of the Civil Code which provides that attorneys feesmay be granted where the defendant acted in gross and evident bad faith in refusing to satisfy theplaintiffs plainly valid, just and demandable claim. Suffice it to say the evidence does not bear out anygross and evident bad faith on the part of Kamalig.

As to the Court of Appeals award of attorneys fees to Kamalig, it appears that the award was grantedunder the aus pices of Art. 2208, par. (4) which provides that attorneys fees may be recovered in caseof a clearly unfounded civil action or proceeding against the plaintiff or in this case, against then

defendant Kamalig since the appellate court reasoned that Kamalig was compelled to hire the servicesof a lawyer to defend itself. In this case, overwithdrawals of fertilizer products in Iloilo had been proven,showing that indeed there was cause for filing of a complaint against Kamalig.

Kamalig is thus not entitle d to attorneys fees. The general rule is that attorneys fees cannot berecovered as part of damages because no premium should be placed on the right to litigate. In short, thegrant of attorneys fees as part of damages is the exception rather than the rule, and counsels fees arenot awarded every time a party prevails in a suit.

345. MCC INDUSTRIAL SALES CORP. V. SSANGYONG CORP. (SET 20)G.R. No. 170633 | October 17, 2007

ISSUE:Whether the award of attorneys fees is proper

HELD:Yes. Attorney's fees in the sum of P50,000.00 plus P2,000.00 per counsel's appearance in court, thesame being deemed just and equitable considering that by reason of defendants' breach of theirobligation under the subject contract, plaintiff was constrained to litigate to enforce its rights andrecover for the damages it sustained, and therefore had to engage the services of a lawyer.


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It is well-settled that no premium should be placed on the right to litigate and not every winning party isentitled to an automatic grant of attorneys fees. The party must show that he falls under one of theinstances enumerated in Article 2208 of the Civil Code. In the instant case, however, the Court finds theaward of attorneys fees proper, considering that petitioner MCCs unjustified refusal to pay hascompelled respondent Ssangyong to litigate and to incur expenses to protect its rights.

360. CONSOLIDATED PLYWOOD INDUSTRIES V. CA (SET 20)G.R. No. 101706 | September 23, 1992

ISSUE:Whether plaintiff is entitled to attorneys fees

HELD:The award for attorneys fees in the amount of P20,000.00 is likewise proper. Petitioner was forced tolitigate in court for the recovery of actual damages incurred by him because the private respondentignored petitioners letters demanding that they return to the area and perform their obligations.

361. LAZATIN v. TWANO (SET 21)G.R. NO. L-12736 | JULY 31, 1961

ISSUE:Whether the award for attorneys fees was proper

HELD:Yes. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs,cannot be covered, except: . . .

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff.x x x x x x x x x(11) In any other case where the court deems it just and equitable that attorney's fees andexpenses of litigation should be recovered." (Art. 2208, Civil Code).

Defendants' counterclaim for the recovery of attorney's fees is based on paragraph 4 of the citedprovision, for legal services rendered in defending the main suit. There is no showing in the decisionappealed from that plaintiffs' action is "clearly unfounded". Plaintiffs-appellants' complaint was notdismissed because the facts alleged therein were found untrue, but on purely technical grounds; thespecial defenses of prescription of the action and res adjudicata . While it may be hard to believe thatthe plaintiff had labored under the impression that the matters involved in his complaint had not beenadjudicated in the previous litigation between the same parties (Civil Case No. 213 CFI Manila), becauseplaintiff himself was a lawyer such error of judgment on his part would not justify the inference that theaction was "clearly unfounded". As aptly observed by appellants' counsel, defenses as the oneinterposed by appellee in their counterclaim "raise questions of law not always of obvious and easysolution." While it may appear also that the move was a scheme to prevent the defendants-appelleesfrom reaping the benefits of the final judgment rendered in their favor in said case CA- G.R. No. 5433-R,still one cannot nullify, without cause, the good and honest motive, which should be presumed, when alitigant goes to court for the determination of his alleged right.


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Withal, and considering the fact that defendants-appellant lees were drawn into this litigation byplaintiff-appellant and were compelled to hire an attorney to protect and defend them, and taking intoaccount the work done by said attorney, as reflected in the record, throughout the proceedings, wedeem it just and equitable to award at attorney's fees for defendants-appellees. The sum of P3,000.00adjudicated by the trial court, is reasonable under the circumstances (par. 11 Art. 2208, Civil Code).

362. BRIGHT MARITIME CORP. V. FANTONIAL (SET 21)G.R. NO. 165935 | FEBRUARY 8, 2012

ISSUE:1. Whether the award for exemplary damages was proper2. Whether the responden t is entitled to attorneys fees in the concept of damages and expenses oflitigation.

HELD:1. Yes. The Court agrees with the Court of Appeals that petitioner BMC is liable to respondent forexemplary damages, which are imposed by way of example or correction for the public good in view of

petitioners act of preventing respondent from being deployed on the ground that he was not yetdeclared fit to work on the date of his departure, despite evidence to the contrary. Such act, iftolerated, would prejudice the employment opportunities of our seafarers who are qualified to bedeployed, but prevented to do so by a manning agency for unjustified reasons. Exemplary damages areimposed not to enrich one party or impoverish another, but to serve as a deterrent against or as anegative incentive to curb socially deleterious actions. In this case, petitioner should be held liable torespondent for exemplary damages in the amount of P50,000.00, following the recent case of Claudio S.Yap v. Thenamaris Ships Management , et al. , instead of P10,000.00

2. Yes. The Court also holds that respondent is entitled to attorneys fees in the concept of damages andexpenses of litigation. Attorney's fees are recoverable when the defendant's act or omission has

compelled the plaintiff to incur expenses to protect his interest. Petitioners failure to deployrespondent based on an unjustified ground forced respondent to file this case, warranting the award ofattorneys fees equivalent to ten percent (10%) of the re coverable amount.

364. ENERVIDA V. DE LA TORREG.R. NO. L-38037 | JANUARY 28, 1974

Enervida filed a complaint against de la Torre over ownership of a parcel of land without a cause ofaction or capacity to sue. Whether Enervida is liable for attorneys fees

ATTORNEYS FEES As the case at bar is clearly an unfounded civil action, the respondents may recover attorney's fees. InDeogracias Malonzo vs. Gregoria Galang , this Court, applying the above doctrine, said:

As to attorney's fees, the award is correct and proper, in view of the finding of the trial court andof the Court of Appeals that petitioner's action against respondents is clearly unfounded, sinceArticle 2208, par. (4), of the New Civil Code authorizes the recovery of attorney's fees "in case of aclearly unfounded civil action or proceeding against the plaintiff." This provision applies equally infavor of a defendant under a counter-claim for attorney's fees (as in this case), considering that acounter-claim is a complaint by the defendant against the original plaintiff (Pongos vs. Hidalgo


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Enterprises, Inc., et al., 84 Phil. 499) wherein the defendant is the plaintiff and the original plaintiffthe defendant.

365. SOBERANO V. MANILA RAILROADG.R. NO. L-19407 | NOVEMBER 23, 1966

Soberano was a passenger of a bus owned by Manila Railroad and which met an accident, causing herinjuries. Whether Manila Railroad is liable for attorneys fees

HELD:No. Attorney's fees are not recoverable if claimants refuse settlement of case. It will be observed thatthe defendant companies offered to settle the case by offering to the appellants the sum of P5,000.Appellants however, rejected the offer and proceeded to court to recover damages in the total sum ofP76,757.76. It was not, therefore, the defendant companies that compelled appellants to litigate or toincur expenses in connection with the litigation instituted by them. Appellants went to court afterrejecting the defendant companies' offer of settlement. The latter cannot likewise be considered tohave acted in gross and evident bad faith in not satisfying the claim of the appellants, because, as the

lower court puts it, the appellants "have asked for too much", and the "defendant was justified inresisting this action."

366. SAN MIGUEL BREWERY V. MAGNOG.R. NO. L-21879 | SEPTEMBER 29, 1967

In a case where there is failure to pay tax, a warrant for distraint and levy was issued against thetaxpayer. In turn, TP sued the collector in his personal capacity. Whether the taxpayer is liable to thecollector for damages

ATTORNEYS FEES

The amount of attorney's fees, on the other hand, is addressed to the sound discretion of the court. Itmay be awarded along with expenses of litigation, other than judicial costs, in cases where the courtdeems it just and equitable under the circumstances of the case. And when as in this case, thedefendant public officer was sued in his private capacity for acts done in the performance of official dutyrequired by law, and was forced to employ the services of private counsel to defend his rights, it is butproper that attorney's fees be charged against the plaintiff.

Nominal damages may also be adjudicated. We believe the award of P2,000.00 attorney's fees andP100.00 nominal damages, is just and equitable in the premises.

368. MAMBULAO LUMBER v. PNBG.R. NO. L-22973 | JANUARY 30, 1968

In a foreclosure and subsequent sale in utter disregard of the agreement, whether or not PNB may beheld liable to plaintiff Corporation for damages and attorneys fees

HELD:MORAL AND EXEMPLARY DAMAGESHerein appellant's claim for moral damages, however, seems to have no legal or factual basis. Obviously,an artificial person like herein appellant corporation cannot experience physical sufferings, mental


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anguish, fright, serious anxiety, wounded feelings, moral shock or social humiliation which are basis ofmoral damages. A corporation may have a good reputation which, if besmirched, may also be a groundfor the award of moral damages. The same cannot be considered under the facts of this case, however,not only because it is admitted that herein appellant had already ceased in its business operation at thetime of the foreclosure sale of the chattels, but also for the reason that whatever adverse effects of theforeclosure sale of the chattels could have upon its reputation or business standing would undoubtedlybe the same whether the sale was conducted at Jose Panganiban, Camarines Norte, or in Manila whichis the place agreed upon by the parties in the mortgage contract.

But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte inproceeding with the sale in utter disregard of the agreement to have the chattels sold in Manila asprovided for in the mortgage contract, to which their attentions were timely called by herein appellant,and in disposing of the chattels in gross for the miserable amount of P4,200.00, herein appellant shouldbe awarded exemplary damages in the sum of P10,000.00.

The circumstances of the case also warrant the award of P3,000.00 as attorney's fees for hereinappellant (Mambulao).

ATTORNEYS FEES The principle that courts should reduce stipulated attorney's fees whenever it is found under thecircumstances of the case that the same is unreasonable, is now deeply rooted in this jurisdiction toentertain any serious objection to it.

Since then this Court has invariably fixed counsel fees on a quantum meruit basis whenever the feesstipulated appear excessive, unconscionable, or unreasonable, because a lawyer is primarily a courtofficer charged with the duty of assisting the court in administering impartial justice between theparties, and hence, the fees should be subject to judicial control. Nor should it be ignored that soundpublic policy demands that courts disregard stipulations for counsel fees, whenever they appear to be a

source of speculative profit at the expense of the debtor or mortgagor.

And it is not material that thepresent action is between the debtor and the creditor, and not between attorney and client. As courthave power to fix the fee as between attorney and client, it must necessarily have the right to saywhether a stipulation like this, inserted in a mortgage contract, is valid.

In determining the compensation of an attorney, the following circumstances should be considered: theamount and character of the services rendered; the responsibility imposed; the amount of money or thevalue of the property affected by the controversy, or involved in the employment; the skill andexperience called for in the performance of the service; the professional standing of the attorney; theresults secured; and whether or not the fee is contingent or absolute, it being a recognized rule that anattorney may properly charge a much larger fee when it is to be contingent than when it is not. Fromthe stipulation in the mortgage contract earlier quoted, it appears that the agreed fee is 10% of the totalindebtedness, irrespective of the manner the foreclosure of the mortgage is to be effected. Theagreement is perhaps fair enough in case the foreclosure proceedings is prosecuted judicially but,surely, it is unreasonable when, as in this case, the mortgage was foreclosed extra-judicially, and all thatthe attorney did was to file a petition for foreclosure with the sheriff concerned. It is to be assumedthough, that the said branch attorney of the PNB made a study of the case before deciding to file thepetition for foreclosure; but even with this in mind, we believe the amount of P5,821.35 is far tooexcessive a fee for such services. Considering the above circumstances mentioned, it is our considered


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opinion that the amount of P1,000.00 in favor of PNB would be more than sufficient to compensate thework aforementioned.

370. JARDINE DAVIES v CA GR No. 128066 | June 19, 2000

ISSUE:Breach of contract due to a 3 rd party, whether Purefoods is liable for damages

HELD:YES. Purefoods was found to have acted in bad faith. This Court has awarded in the past moraldamages to a corporation whose reputation has been besmirched. In the instant case, respondentFEMSCO has sufficiently shown that its reputation was tarnished after it immediately orderedequipment from its suppliers on account of the urgency of the project, only to be canceled later. SChowever reduced the award from 2M to 1M as moral damages are never intended to enrich therecipient. Likewise, the award of exemplary damages by way of example for the public good isexcessive and should be reduced to 100k.

The attorneys fees equivalent to 20% of the total amount due is likewise awarded to FEMSCO. (Courtdid not explain why, though.)

399. BUENAVENTURA v CAGR No. 127358 | GR No. 127449 | March 31, 2005

ISSUES:Whether in this case of declaration of nullity on grounds of psychological incapacity, moral andexemplary damages and attorneys fees are entitled to petitioner

HELD:NO. The award by the trial court of moral damages is based on Articles 2217 of the Civil Code, whichstates that moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirchedreputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable ofpecuniary computation, moral damages may be recovered if they are the proximate result of thedefendants wrongful act or omissio n. Article 2219 enumerates the cases in which moral damages maybe recovered, one of them Article 21, which states that any person who wilfully causes loss or injury toanother in a manner that is contrary to morals, good customs or public policy shall compensate thelatter for the damage.

By declaring the petitioner as psychologically incapacitated, the possibility of awarding moral damageson the same set of facts was negated. The award of moral damages should be predicated, not on themere act of entering into the marriage, but on specific evidence that it was done deliberately and withmalice by a party who had knowledge of his or her disability and yet willfully concealed the same. Nosuch evidence appears to have been adduced in this case. Since the grant of moral damages was notproper, it follows that the grant of exemplary damages cannot stand since the Civil Code provides thatexemplary damages are imposed in addition to moral, temperate, liquidated or compensatorydamages.


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Regarding Attorneys f ees , Art. 2208 of the Civil Code authorizes an award of attorneys fees andexpenses of litigation, other than judicial costs, when as in this case the plaintiffs act or omission hascompelled the defendant to litigate and to incur expenses of litigation to protect her interest and wherethe Court deems it just and equitable that attorneys fees and expenses of litigation should berecovered.

The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity, andhis act in filing the complaint for the annulment of his marriage cannot be considered as undulycompelling the private respondent to litigate, since both are grounded on petitioners psychologicalincapacity, is a mental incapacity causing an utter inability to comply with the obligations of marriage.Hence, neither can be a ground for attorneys fees and litigation expenses. Furthermore, since theaward of moral and exemplary damages is no longer justified, the award of attorneys fees and expensesof litigation is left without basis.

406. MIRANDA RIBAYA & CARBONELL V. BAUTISTAG.R. No. L-49390 | January 28, 1980

Mrs. Ribaya, sold jewelry to Bautista, who paid in check that were subsequently dishonored. WhetherMrs. Ribaya is entitled to moral and exemplary damages

HELD:Yes. The respondent court is incorrect in its narrow view that Mrs. Ribayas failure to use in hertestimony the precise legal terms or "sacramental phrases" of "mental anguish, fright, serious anxiety,wounded feelings or moral shock" and the like justifies the denial of the claim for damages. It issufficient that these exact terms have been pleaded in the complaint and evidence has been adduced,as cited above, amply supporting the averments of the complaint. Indeed, Mrs. Ribaya vividly portrayedin simple terms the moral shock and suffering she underwent as a result of respondents' wanton abuseof her good faith and confidence. Her testimonial evidence to the effect that she suffered "extremely"

and that for three months she could not sleep was a clear demonstration of her physical suffering,mental anguish and serious anxiety and similar injury, resulting from respondents' malevolent acts thatshow her to be clearly entitled to moral damages.

Petitioners having established the moral damages, are entitled in addition thereto, to exemplarydamages. The wantonness and malevolence through which respondents defrauded petitioners,deceitfully incurring and then evading settlement of their just liability certainly justifies the award ofexemplary damages by way of example and correction for the public good and also to serve as adeterrent to the commission of similar misdeeds by others, even if the transaction were viewed as abreach of civil contract.

In Pan Pacific Company (Phil.) vs. Phil. Advertising Corporation, the Court awarded moral and exemplarydamages, in addition to other kinds of damages, to the plaintiff upon ample demonstration that thedefendant therein, in utter disregard of the contractual rights of therein plaintiff, had refuseddeliberately and wantonly to pay the latter what was justly due under their contract for installation ofbowling alleys and for taking advantage of the plaintiff's good faith, "notwithstanding that thedefendant had promised to pay the balance of the price of the bowling alleys. Defendant, takingadvantage of the plaintiff's good faith, requested a deferment of the payment until the installation shallhave been completed; but the installation having been completed, defendants under one pretext oranother, refused without just cause to pay what is due the plaintiff." Here, of course, there was more


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than wanton refusal to pay a plainly valid and just contractual debt, but a malicious defraudation andgross abuse of petitioners' good faith, whereby petitioners were wantonly "paid" with bouncingpostdated checks and besides not being paid what was due them, had to undergo trauma and travail toredeem with their own and borrowed funds from the pawnshops some of the jewelries in order toreturn them to their owners.

Mrs. Ribaya is awarded moral and exemplary damages equivalent to 25% of the principal sum ofP125,460.79 adjudged in her favor by the lower court. With costs.

408. PEOPLE V. MEDROSO, JR.G.R. No. L-37633 | January 31, 1975

In a case of negligence where a vehicular collision caused the death of a person, whether the damageswere correctly awarded

HELD:Yes. Moral damages compensate for mental anguish, serious anxiety and moral shock suffered by the

victim or his family as the proximate result of the wrongful act, and they are expressly recoverablewhere a criminal offense result in physical injuries as in the instant case before, which in fact culminatedin the death of the victim.

The determination of the amount which would adequately compensate the victim or his family in acriminal case of this nature is left to the discretion of the trial judge whose assessment will not bedisturbed on appeal unless there is a manifest showing that the same is arbitrary or excessive, for ithas been said that "(T)here can be no exact or uniform rule for measuring the value of a human lifeand the measure of damages cannot be arrived at by precise mathematical calculation, but theamount recoverable depends on the particular facts and circumstances of each case."

With respect to the exemplary damages awarded by the trial court, the same are justified by the factthat the herein appellant without having been issued by competent authority a license to drive a motorvehicle, willfully operated a BHP dump truck and drove it in a negligent and careless manner as a resultof which he hit a pedestrian who died from the injuries sustained by him. Exemplary damages arecorrective in nature and are imposed by way of example or correction for the public good (Art. 2229,Civil Code), and the situation before us calls for the imposition of this kind of damages to deter othersfrom taking into their hands a motor vehicle without being qualified to operate it on the highwaysthereby converting the vehicle into an instrument of death.

409. TAN KAPOC V. MESA 134 SCRA 231*Missing

410. MUNSAYAC V. DE LARA G.R. No. L-21151 | June 26, 1968

In a case where injuries were inflicted upon a passenger of a jeepney, whether the owner and operatorof the jeepney is liable for exemplary damages and attorneys fees

HELD:


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No only as to the exemplary damages. The Civil Code provides that "exemplary or corrective damagesare imposed, by way of example or correction for the public good" (Art. 2229); and that in contracts "theCourt may award exemplary damages if the defendant acted in wanton, fraudulent, reckless, oppressiveor malevolent manner" (Art. 2232).

Appellant is correct in pointing out that the act referred to in Art. 2232 must be one which iscoetaneous with and characterizes the breach of the contract on which the suit is based, and not onewhich is subsequent to such breach and therefore has no causal relation thereto, such as the hereindefendant's failure to placate the sufferings of the plaintiff.

Appellant relies on the case of Rotea vs. Halili , where this Court held: According to the rule adopted bymany courts, a principal or master can be held liable for exemplary or punitive damages based uponthe wrongful act of his agent or servant only where he participated in the doing of such wrongful actor has previously authorized or subsequently ratified it with full knowledge of the facts. Reasons given

for this rule are that since damages are penal in character, the motive authorizing their infliction willnot be imputed by presumption to the principal when the act is committed by an agent or servant, andthat since they are awarded not by way of compensation, but as a warning to others, they can only be

awarded against one who has participated in the offense, and the principal therefore cannot be heldliable for them merely by reason of wanton, oppressive or malicious intent on the part of the agent.

It is difficult to conceive how the defendant in a breach of contract case could be held to have acted in awanton, fraudulent, reckless, oppressive or violent manner within the meaning of Article 2232 forsomething he did or did not do after the breach, which had no causal connection therewith. The lawdoes not contemplate a vicarious liability on his part: the breach is his as party to the contract, and so ifhe is to be held liable at all for exemplary damages by reason of the wrongful act of his agent, it must beshown that he had previously authorized or knowingly ratified it thereafter, in effect making him a co-participant. In this case, however, there is nothing to show previous authority or subsequent ratificationby appellant insofar as the recklessness of the driver was concerned. The mere statement that the

defendant failed, even refused, to placate the suffering of the plaintiff, necessitating the filing of theaction, is too tenuous a basis to warrant the conclusion that the defendant approved of the wrongful actof his servant with full knowledge of the facts.

It is not enough to say that an example should be made, or corrective measures employed, for thepublic good, especially in accident cases where public carriers are involved. For the causativenegligence in such cases is personal to the employees actually in charge of the vehicles, and it is theywho should be made to pay this kind of damages by way of example or correction, unless by thedemonstrated tolerance or approval of the owners they themselves can be held at fault and their faultis of the character described in Art.2232. Otherwise there would be practically no difference betweentheir liability for exemplary damages and their liability for compensatory damages, which needs noproof of their negligence since the suit is predicated on breach of contract and due diligence on theirpart does not constitute a defense.

The award for exemplary damages is deleted and the attorney's fees affirmed.

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