1.

2.
3.
4.
5.
6.
7.
8.

PNOC vs CA 297 SCRA 402

DBP vs CA GR 118367 (1998)
Gatchalian vs 203 SCRA 126
Del Rosario vs CA 267 SCRA 58
Francisco vs GSIS 7 SCRA 577**
Armovit vs CA 148 SCRA 476**
People vs Sing 360 SCRA 404**
PNB vs 256 SCRA 44**
PNOC SHIPPING AND TRANSPORT CORPORATION vs.
HONORABLE COURT OF APPEALS and MARIA EFIGENIA
FISHING CORPORATION (1998)
-

FACTS:
- Early morning of September 21, 1977 M/V Maria Efigenia
XV (owned by private respondent Maria Efigenia Fishing
Corporation) was navigating the waters near Fortune Island
in Nasugbu, Batangas on its way to Navotas, Metro Manila
when it collided with the vessel Petroparcel [which at the
time was owned by the Luzon Stevedoring Corporation
(LSC)]
- After investigation of the Board of Marine Inquiry, Philippine
Coast Guard Commandant Simeon N. Alejandro rendered a
decision finding the Petroparcel at fault
- private respondent sued LSC and Petroparcel captain
Edgardo Doruelo for actual and compensatory damages
- During the pendency of the proceedings, PNOC Shipping
Transport Corporation acquired ownership of Petroparcel and
replaced LSC in the trial.
- CFI Caloocan ruled in favor of private respondent, awarding
it: the sum of P6,438,048.00 representing the value of the
fishing boat with interest of 6% per annum; P50,000
attorneys fees and the cost of suit.
o Private respondent averred that M/V Maria Efigenia
XVhad an actual value of P800,000.00 and that, after
deducting the insurance payment of P200,000.00,
theamount of P600,000.00 should likewise be
claimed. The amended complaint also alleged that
inflation resulting from the devaluation of the
Philippine peso had affected the replacement value
of the hull of the vessel, its equipment and its lost
cargoes, such that there should be a reasonable
determination thereof. Furthermore, on account of
the sinking of the vessel, private respondent
supposedly incurred unrealized profits and lost

business opportunities that would thereafter be

proven
o The basis of said amount was the testimony of the
general manager of Maria Efigenia Fishin
Corporation, Edilberto del Rosario and several
documentary evidence that included: ownership
certificate, price quotations, and invoices issued at
the request of Del Rosario.
o CFI ruled that PNOC-STC was unable to contest such
evidence with only the testimony of its senior
estimator Lorenzo Lazaro as sole witness and without
any documentary evidence.
On appeal, petitioner questioned the admissibility and
competency of private respondents documents as basis for
damages.
The Court of Appeals affirmed the CFI decision ruling that
where a lower court is confronted with evidence which
appears to be of doubtful admissibility, the judge should
declare in favor of admissibility rather than of nonadmissibility.
o Court of Appeals also ruled that it was not necessary
to qualify Del Rosario as an expert witness because
as the owner of the lost vessel, "it was well within his
knowledge and competency to identify and
determine the equipment installed and the cargoes
loaded" on the vessel.
On appeal to the SC, petitioner argued, among other things,
that the documents were not sufficient evidence to support
the extent and actual damages incurred by private
respondent. The price quotations were not duly
authenticated and that the witness (Del Rosario) did not
have personal knowledge on the contents of the writings
and neither was he an expert on the subjects thereof.
CA argued that the documents were sufficient and exempt
from the hearsay rule as they are part of commercial lists
defined in sec.45 Rule 130 of the Revised Rules on Evidence
in so far as they fall under the or other published
compilation phrase of the rule.
o Section 45. Commercial lists and the like. Evidence
of statements of matters of interest to persons
engaged in an occupation contained in a list,
register, periodical, or other published compilation is
admissible as tending to prove the truth of any
relevant matter so stated if that compilation is
published for use by persons engaged in that

occupation and is generally used and relied upon by

them therein
ISSUE: WON in the award of damages was appropriate
HELD: No.
A party is entitled to adequate compensation only for such
pecuniary loss actually suffered and duly proved. Indeed, basic is
the rule that to recover actual damages, the amount of loss must
not only be capable of proof but must actually be proven with a
reasonable degree of certainty, premised upon competent proof or
best evidence obtainable of the actual amount thereof. The
claimant is duty-bound to point out specific factst hat afford a basis
for measuring whateve rcompensatory damages are borne. A court
cannot merely rely on speculations, conjectures, or guesswork as to
the fact and amount of damages as well as hearsay or
uncorroborated testimony whose truth is suspect
Basis:
- Under Article 2199 of the Civil Code, actual or compensatory
damages are those awarded in satisfaction of, or in
recompense for, loss or injury sustained. They proceed from
a sense of natural justice and are designed to repair the
wrong that has been done, to compensate for the injury
inflicted and not to impose a penalty. In actions based on
torts or quasi-delicts, actual damages include all the natural
and probable consequences of the act or omission
complained of. There are two kinds of actual or
compensatory damages: one is the loss of what a person
already possesses (dao emergente), and the other is the
failure to receive as a benefit that which would have
pertained to him (lucrocesante).
Where goods are destroyed by the wrongful act of the
defendant the plaintiff is entitled to their value at the time
of destruction, that is, normally, the sum of money which he
would have to pay in the market for identical or essentially
similar goods, plus in a proper case damages for the loss of
use during the period before replacement. In other words, in
the case of profit-earning chattels, what has to be assessed
is the value of the chattel to its owner as a going concern at
the time and place of the loss and this means, at least in the
case of ships, that regard must be had to existing and
pending engagements,
If the market value of the ship reflects the fact that its in
any case virtually certain of profitable employment, then

nothing can be added to that value in respect of charters

actually lost, for to do so would-be pro tanto to compensate
the plaintiff twice over. On the other hand, if the ship is
valued without reference to its actual future engagements
and only in the light of its profit-earning potentiality, then it
may be necessary to add to the value thus assessed the
anticipated profit on a charter or other engagement which it
was unable to fulfill
What the court has to ascertain in each case is the
"capitalised value of the vessel as a profit-earning machine
not in the abstract but in view of the actual circumstances,"
without, of course, taking into account considerations which
were too remote at the time of the loss.
Del Rosario's claim that private respondent incurred losses
in the total amount of P6,438,048.00 should be admitted
with extreme caution considering that, because it was a
bare assertion, it should be supported by independent
evidence. Moreover, because he waste owner of private
respondent corporation whatever testimony he would give
with regard to the value of the lost vessel, its equipment
and cargoes should be viewed in the light of his self-interest
therein
Accordingly, as stated at the outset, damages may note
awarded on the basis of hearsay evidence.- Nonetheless,
the non-admissibility of said exhibits does not mean that it
totally deprives private respondent of any redress for the
loss of its vessel.
Nominal damages are awarded in every obligation arising
from law, contracts, quasi-contracts, acts or omissions
punished by law, and quasi-delict, or in every case where
property right has been invaded. Under Article 2223 of the
Civil Code, "(t)he adjudication of nominal damages shall
preclude further contest upon the right involved and all
accessory questions, as between the parties to the suit, or
their respective heirs and assigns."- Actually, nominal
damages are damages in name only and not in fact. Where
these are allowed, they are not treated as an equivalent of a
wrong inflicted but simply in recognition of the existence of
a technical injury. However, the amount to be awarded as
nominal damages shall be equal or at least commensurate
tithe injury sustained by private respondent considering the
concept and purpose of such damages. The amount of
nominal damages to be awarded may also depend on
certain special reasons extant in the case.
Applying now such principles to the instant case, weave on
record the fact that petitioner's vessel Petroparcel was at

fault as well as private respondents complaint claiming the

amount of P692,680.00representing the fishing nets, boat
equipment and cargoes that sunk with the M/V Maria
Efigenia XV.
In its amended complaint, private respondent alleged that
the vessel had an actual value of P800, 000.00 but it had
been paid insurance in the amount of P200, 000.00and,
therefore, it claimed only the amount of P600, 000.00.
Ordinarily, the receipt of insurance payments should
diminish the total value of the vessel quoted by private
respondent in his complaint considering that such payment
is causally related tithe loss for which it claimed
compensation. This Court believes that such allegations in
the original and amended complaints can be the basis for
determination of a fair amount of nominal damages
inasmuch as complaint alleges the ultimate facts
constituting the plaintiffs cause of action. Private respondent
should bedbound by its allegations on the amount of its
claims.

-Plaintiff CUBA is a grantee of a Fishpond Lease Agreement from the

Government;

THUS
the challenged decision of the Court of Appeals dated October 14,
1992 in CA-G.R. CV No.26680 affirming that of the Regional Trial
Court of Caloocan City, Branch 121, is hereby MODIFIED insofar as
it awarded actual damages to private respondent Maria Efigenia
Fishing Corporation in the amount of P6,438,048.00 for lack of
evidentiary bases therefor. Considering the fact, however, that: (1)
technically petitioner sustained injury but which, unfortunately, was
not adequately and properly proved, and (2) this case has dragged
on for almost two decades, we believe that an award of Two Million
(P2,000,000.00) inflator of private respondent as and for nominal
damages is in order.

-After the Deed of Conditional Sale was executed in favor of plaintiff

CUBA, a new Fishpond Lease Agreement was issued by the Ministry
of Agriculture and Food in favor of plaintiff CUBA but CUBA failed to
pay the amortizations stipulated in the Deed of Conditional Sale
and entered with the DBP a temporary arrangement whereby in
consideration for the deferment of the Notarial Rescission of Deed
of Conditional Sale, plaintiff CUBA promised to make certain
payments as stated in temporary Arrangement;

DBP vs. CA
DAVIDE, JR., January 5, 1998

- CUBA obtained from DBP three separate loans totalling P335,000,

each of which was covered by a promissory note and as security for
said loans, CUBA executed two Deeds of Assignment of her
Leasehold Rights;
-Plaintiff failed to pay her loan on the scheduled dates in
accordance with the terms of the Promissory Notes;
-Without foreclosure proceedings, whether judicial or extra-judicial,
defendant DBP appropriated the leasehold Rights of plaintiff CUBA
over the fishpond in question; then executed a Deed of Conditional
Sale of the Leasehold Rights in favor of plaintiff CUBA over the
same fishpond;
-In the negotiation for repurchase, plaintiff CUBA addressed two
letters (offers to repurchase the fishpond) to the Manager DBP,
which DBP accepted;

-Defendant DBP thereafter sent a Notice of Rescission thru Notarial

Act which CUBA received,a and thereafter, defendant DBP took
possession of the Leasehold Rights of the fishpond in question,
advertised the public bidding to dispose of the property; and
thereafter executed a Deed of Conditional Sale in favor of
defendant Agripina Caperal; defendant Caperal was awarded
Fishpond Lease Agreement by the Ministry of Agriculture and Food.
-CUBA filed complaint against DBP and Caperal

NATURE
Consoladated petition for review of the decision of the Court of
Appeals

FACTS

-RTC: sided with CUBA, holding that (1) DBP's taking possession
and ownership of the property without foreclosure was plainly
violative of Article 2088 of the Civil Code; (2) condition no. 12 of the
Assignment of Leasehold Rights is void for being a clear case of
pactum commissorium expressly prohibited and declared null and
void by Article 2088 of the Civil Code; (3) the Deed of Conditional
Sale in favor of CUBA, the notarial rescission of such sale, and the

Deed of Conditional Sale in favor of defendant Caperal, as well as

the Assignment of Leasehold Rights executed by Caperal in favor of
DBP, were also void and ineffective; awarding P1,067,500.00 for
actual damages.; P100,000.00as moral damages; P50,000.00 for
exemplary damages;
P100,000.00 for attorney's fees; and ordering DBP to reimburse and
pay to defendant Agripina Caperal P1,532,610.75 representing the
amounts paid by defendant Agripina Caperal to defendant
Development Bank of the Philippines under their Deed of
Conditional Sale;
-CA: declared valid the ff: (1) the act of DBP in appropriating Cuba's
leasehold rights and interest under Fishpond Lease Agreement No.
2083; (2) the deeds of assignment executed by Cuba in favor of
DBP; (3) the deed of conditional sale between CUBA and DBP; and
(4) the deed of conditional sale between DBP and Caperal, the
Fishpond Lease Agreement in favor of Caperal, and the assignment
of leasehold rights executed by Caperal in favor of DBP. It then
ordered DBP to turn over possession of the property to Caperal as
lawful holder of the leasehold rights and to pay CUBA the following
amounts: (a) P1,067,500 as actual damages; P50,000 as moral
damages; and P50,000 as attorney's fees.

ISSUE
1. WON the assignment of leasehold rights was a mortgage
contract, not amounting to novation, cession under Art. 1255 of
Civil Code, nor a Dation under Art. 1254
2. WON condition no. 12 of the deed of assignment constituted
pactum commissionrum, as was held by the trial court
3. WON the act of DBP of appropriating CUBAs leasehold rights was
violative of Art. 2088 of the Civil Code, and that DBP should have
just conducted a foreclosure proceeding, so that the execution of
the Deed of Conditional Sale in favor of Caperal was void
4. WON CUBA is estopped from questioning DBPs act of
appropriation
5. WON the award for the damages were correctly awarded
5.1 WON the award for actual damages was correctly awarded

5.2 WON the award for moral damages was correctly awarded,
and therefore the awarding of exemplary damages and attorneys
fees
HELD
1. YES, the assignment of leasehold rights was a mortgage
contract
Ratio An assignment to guarantee an obligation is in effect a
mortgage, and being in its essence a mortgage, is but a security
and not a satisfaction of indebtedness.
Reasoning The stipulations of the deeds of assignment constantly
referred to the contract as a mortgage contract. The parties
admitted that the assignment was by way of security for the
payment of the loans.
-on NOVATION: the said assignment merely complemented or
supplemented the notes; both could stand together. The obligation
to pay a sum of money remained, and the assignment merely
served as security for the loans covered by the promissory notes.
-on CESSION: Article 1255 contemplates the existence of two or
more creditors and involves the assignment of all the debtor's
property, but in the case only DBP is the creditor
-on DATION: The assignment, being in its essence a mortgage, was
but a security and not a satisfaction of indebtedness so not Dation
as defined in Article 1254
2. NO
Ratio To have a pactum commissiorum, the following elements
must be present: (1) there should be a property mortgaged by way
of security for the payment of the principal obligation, and (2) there
should be a stipulation for automatic appropriation by the creditor
of the thing mortgaged in case of non-payment of the principal
obligation within the stipulated period.
Reasoning Condition no. 12 merely provided for the appointment
of DBP as attorney-in-fact with authority, among other things, to
sell or otherwise dispose of the said real rights, in case of default
by CUBA, and to apply the proceeds to the payment of the loan.
-The provision is a standard condition in mortgage contracts and is
in conformity with Article 2087 of the Civil Code, which authorizes

the mortgagee to foreclose the mortgage and alienate the

mortgaged property for the payment of the principal obligation.

allegedly damaged before DBP took over the fishpond in question

(no inventory, receipts presented).

3. YES

- Such claim for "losses of property," having been made before

knowledge of the alleged actual loss, was therefore speculative.
The alleged loss could have been a mere afterthought or
subterfuge to justify her claim for actual damages.

Ratio Even in cases where foreclosure proceedings were had, this

Court had not hesitated to nullify the consequent auction sale for
failure to comply with the requirements laid down by law, such as
Act No. 3135, as amended. 15 With more reason that the sale of
property given as security for the payment of a debt be set aside if
there was no prior foreclosure proceeding.
Reasoning Article 2088 of the Civil Code forbids a creditor from
appropriating, or disposing of, the thing given as security for the
payment of a debt.
- DBP knew that foreclosure proceedings were necessary, however
it did not conduct any. In view of the false representation of DBP
that it had already foreclosed the mortgage, the Bureau of Fisheries
canceled CUBA's original lease permit, approved the deed of
conditional sale, and issued a new permit in favor of CUBA. Said
acts which were predicated on such false representation, as well as
the subsequent acts emanating from DBP's appropriation of the
leasehold rights, should therefore be set aside. To validate these
acts would open the floodgates to circumvention of Article 2088 of
the Civil Code.
4. NO
Ratio Estoppel cannot give validity to an act that is prohibited by
law or against public policy
Reasoning The appropriation of the leasehold rights, being
contrary to Article 2088 of the Civil Code and to public policy,
cannot be deemed validated by estoppel.
5.
5.1 NO
Ratio Actual or compensatory damages cannot be presumed, but
must be proved with reasonable degree of certainty.
Reasoning Other than the testimony of CUBA and her caretaker,
there was no proof as to the existence of those items which were

- From 1979 until after the filing of her complaint in court in May
1985, CUBA did not bring to the attention of DBP the alleged loss,
and CUBA even admitted that the loss was due to the fraudulent
acts of her fishpond workers.
5.2 YES, but reduced
Reasoning DBP's act of appropriating CUBA's leasehold rights
which was contrary to law and public policy, as well as its false
representation to the then Ministry of Agriculture and Natural
Resources that it had "foreclosed the mortgage," an award of
moral damages in the amount of P50,000 is in order.
- Exemplary or corrective damages in the amount of P25,000
should likewise be awarded by way of example or correction for the
public good. There being an award of exemplary damages,
attorney's fees are also recoverable.

Dispositive WHEREFORE, the 25 May 1994 Decision of the Court

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

SO ORDERED.
Ramos vs. CA
Facts:
In the morning of June 17, 1985, Erlinda Ramos, 47-year old robust
woman underwent on an operation to the stone at her gall bladder
removed after being tested that she was fit for "cholecystectomy"
operation performed by Dr. Orlino Hozaka. Dr. Hosaka charged a fee
of P16,000.00, which was to include the anesthesiologist's fee and
which was to be paid after the operation. He assured Rogelio E.
Ramos, husband that he will get a good anesthesiologist who was
Dra. Perfecta Gutierrez. Erlinda's hand was held by Herminda Cruz,
her sister -in-law who was the Dean of the College of Nursing at the
Capitol Medical Center together with her husband went down with
her to the operating room. Instead of 9:30 am, Dr. Hosaka arrived
at about 12:15 P.M.Herminda noticing what Dra. Perfecta Gutierrez
was doing, saw the nailbed of Erlinda becoming bluish and Dr.
Hosaka called for another anesthesiologist Dr. Calderon. She went
out of the operating room to tell Rogelio that something is wrong.
When she went back she saw Erlinda in a trendelenburg position
and at 3 p.m. she was taken to the Intensive Care Unit (ICU) where
she stayed for a month due to bronchospasm incurring P93,542.25
and
she
was
since
then
comatosed.
She suffered brain damage as a result of the absence of oxygen in
her
brain
for
four
to
five
minutes.
She was also diagnosed to be suffering from "diffuse cerebral
parenchymal
damage"
Monthly expenses ranged from P8,000 to P10,000 Spouses Ramos
and their minors filed against Dr. Hosaka and Dra. Perfecta
Gutierrez. The Regional Trial Court ruled in favor of the plaintiffs
awarding P8,000 as actual monthly expenses totalling to P632,000
as of April 15, 1992, P100,000 atty. fees, P800,000 moral
damages,P200,000 exemplary damages and cost of suit
The Court of Appeals, however, reversed the decision of the lower
court and ordered the dismissal of the complaint and ordering the
Ramos' to pay their unpaid bills of P93,542.25 plus interest.
Hence, this petition.
Issue:
Whether or not petitioners are entitled to damages.
Held:

DAMAGES; ACTUAL AND TEMPERATE DAMAGES; PROPER IN CASE AT

BAR. The amount of actual damages recoverable in suits arising
from negligence should at least reflect the correct minimum cost of
proper care, not the cost of the care the family is usually compelled
to undertake at home to avoid bankruptcy. However, the provisions
of the Civil Code on actual or compensatory damages present us
with some difficulties. Well-settled is the rule that actual damages
which may be claimed by the plaintiff are those suffered by him as
he has duly proved. Our rules on actual or compensatory damages
generally assume that at the time of litigation, the injury suffered
as a consequence of an act of negligence has been completed and
that the cost can be liquidated. However, these provisions neglect
to take into account those situations, as in this case, where the
resulting injury might be continuing and possible future
complications directly arising from the injury, while certain to occur,
are difficult to predict. In these cases, the amount of damages
which should be awarded, if they are to adequately and correctly
respond to the injury caused, should be one which compensates for
pecuniary loss incurred and proved, up to the time of trial; and one
which would meet pecuniary loss certain to be suffered but which
could not, from the nature of the case, be made with certainty. In
other words, temperate damages can and should be awarded on
top of actual or compensatory damages in instances where the
injury is chronic and continuing. And because of the unique nature
of such cases, no incompatibility arises when both actual and
temperate damages are provided for. The reason is that these
damages cover two distinct phases. As it would not be equitable
and certainly not in the best interests of the administration of
justice for the victim in such cases to constantly come before the
courts and invoke their aid in seeking adjustments to the
compensatory damages previously awarded temperate damages
are appropriate. The amount given as temperate damages, though
to a certain extent speculative, should take into account the cost of
proper care. In the instant case, petitioners were able to provide
only homebased nursing care for a comatose patient who has
remained in that condition for over a decade. Having premised our
award for compensatory damages on the amount provided by
petitioners at the onset of litigation, it would be now much more in
step with the interests of justice if the value awarded for temperate
damages would allow petitioners to provide optimal care for their
loved one in a facility which generally specializes in such care. They
should not be compelled by dire circumstances to provide
substandard care at home without the aid of professionals, for
anything less would be grossly inadequate.

PROPER MORAL DAMAGES. The actual physical, emotional and

financial cost of the care of petitioner would be virtually impossible
to quantify. Even the temperate damages herein awarded would be
inadequate if petitioner's condition remains unchanged for the next
ten years. We recognized that the victim's actual injury would not
even scratch the surface of the resulting moral damage because it
would be highly speculative to estimate the amount of emotional
and moral pain, psychological damage and injury suffered by the
victim or those actually affected by the victim's condition. The
husband and the children, all petitioners in this case, will have to
live with the day to day uncertainty of the patient's illness, knowing
any hope of recovery is close to nil. They have fashioned their daily
lives around the nursing care of petitioner, altering their long term
goals to take into account their life with a comatose patient. They,
not the respondents, are charged with the moral responsibility of
the care of the victim. The family's moral injury and suffering in this
case is clearly a real one. For the foregoing reasons, an award of
P2,000,000.00 in moral damages would be appropriate.
EXEMPLARY DAMAGES AND ATTORNEY'S FEES. By way of
example, exemplary damages in the amount of P100,000.00 are
hereby awarded. Considering the length and nature of the instant
suit we are of the opinion that attorney's fees valued at
P100,000.00 are likewise proper. Our courts face unique difficulty in
adjudicating medical negligence cases because physicians are not
insurers of life and, they rarely set out to intentionally cause injury
or death to their patients. However, intent is immaterial in
negligence cases because where negligence exists and is proven,
the same automatically gives the injured a right to reparation for
the damage caused. Established medical procedures and practices,
though in constant flux are devised for the purpose of preventing
complications. A physician's experience with his patients would
sometimes tempt him to deviate from established community
practices, and he may end a distinguished career using unorthodox
methods without incident. However, when failure to follow
established procedure results in the evil precisely sought to be
averted by observance of the procedure and a nexus is made
between the deviation and the injury or damage, the physician
would necessarily be called to account for it. In the case at bar, the
failure to observe pre-operative assessment protocol which would
have influenced the intubation in a salutary way was fatal to
private respondents' case. TCacIA

Gatchalian v. Delim 203 Scra 126

FACTS: Reynalda Gatchalian boarded, as a paying passenger,

a minibus owned by the Delim spouses, respondents in this
case. She was allegedly on her way to confer with the district
supervisor of public schools for a substitute teachers job.
Later, while the bus was running along the highway, a
snapping sound was suddenly heard and shortly thereafter,
the vehicle bumped a cement flower pot on the side of the
road, went off the road, turned turtle and fell into a ditch.
Several passengers, including Gatchalian, were injured and
were promptly taken to a hospital for medical treatment.
The aforementioned events led Gatchalian to file an action
extra contractu to recover compensatory and moral
damages. She alleged in her complaint that her injuries had
left her with a conspicuous white scar on her forehead,
generating mental suffering and feeling of inferiority on her
part.
She also alleged that the scar diminished her facial beauty
and deprived her of opportunities for employment.
ISSUE: WON the Delims are liable for the cost of plastic
surgery to remove the scar on Gatchalians forehead.
HELD: Yes. A PERSON IS ENTITLED TO THE PHYSICAL
INTEGRITY OF HIS OR HER BODY; IF THAT INTEGRITY IS
VIOLATED OR DIMINISHED, ACTUAL INJURY IS SUFFERED FOR
WHICH ACTUAL AND COMPENSATORY DAMAGES ARE DUE
AND ASSESSABLE. Petitioner Gatchalian is entitled to be
placed as nearly as possible in the condition that she was in
before the mishap.
A SCAR, ESPECIALLY ONE ON THE FACE OF A WOMAN,
RESULTING FROM THE INFLICTION OF INJURY UPON HER, IS A

VIOLATION OF BODILY INTEGRITY, GIVING RISE TO A

LEGITIMATE CLAIM FOR RESTORATION TO HER CONDITION
ANTE.
VIRGILIO M. DEL ROSARIO and CORAZON PAREDES-DEL
ROSARIO, petitioners, vs. COURT OF APPEALS and METAL
FORMING CORPORATION, respondents.
FACTS:
The Del Rosarios' filed a complaint wherein it charged MFC
with violation of Section 3 of Act No. 3740, "An Act to
Penalize Fraudulent Advertising, Mislabeling or Misbranding
of any Product, Stocks, Bonds, etc." They alleged that MFC
made representations on the durability of the product and
sturdiness of its installation through massive advertisements
in print media and television and brochures. However, barely
2 months after completion of the installation, portions of the
roof of Del Rosario's were blown away by strong wind brought
about by typhoon "Ruping."
After due proceedings, the DTI rendered judgment declaring
that MCF had indeed misrepresented its product. The
decision of DTI was appealed and affirmed in toto by the
Office of the President on April 30, 1993; and the latter
judgment was in turn affirmed by the courts. The court held
that, although the occurrence of a typhoon is a fortuitous
event which by itself might have exempted petitioner from
liability to private respondents cannot efface the
fundamental fact that (petitioner) acted in bad faith and/or
with gross negligence in falling to deliver the necessary
accessories for the proper installation of the structure and
actually installed inferior roofing materials at (private
respondents) residence, in violation of the proper installation
procedure expressly specified in the former's brochures and
advertisements for installation.

It appears that MFC replaced and repaired the roof free of

charge, evidently acknowledging that the damage was
covered by one-year warranty on the materials and the
installation. The repair work was observed and analyzed by
Esteban Adjusters and Valuer's, Inc., which was engaged by
the Del Rosarios to determine the cause of the destruction.
The repair work was begun on October 23, 1989, with the
delivery of replacement tiles, and completed on November 7,
1989. Thereafter the Esteban Adjusters and Valuer's, Inc.
submitted its report to the Del Rosarios, dated November 8,
1989, in which it made the following conclusion:
"The Banawe metal tiles which were detached from the roof
trusses were not fastened two (2) wood screws on each
metal cleat as required but only with single wood screw or a
combination of a single wood screw and a 1-inch nail which is
contrary to the design and specification. We have observed
during the course of repai(r) works that some 'Banawe' metal
tiles installed were no longer than the roof span, hence there
is overlapping on the ridge roll/hip. It is very evident that the
original subcontractor (which we were not able to identify)
were in haste to complete the project.
MFC however declined to concede liability for the other
damages claimed by the Del Rosario Spouses to have been
caused to the interior of their home. This prompted the latter
to commence a civil action against MFC on April 16, 1990 in
the Regional Trial Court of Manila.
ISSUE:
WON the Del Rosario's are entitled to damages
HELD:
A. DAMAGES; ACTUAL DAMAGES; PETITIONER NOT ENTITLED
THERETO FOR LACK OF EVIDENTIARY FOUNDATION; CASE AT
BENCH. Turning now to the matter of damages, it is the Del

Rosarios' contention that the pecuniary detriment to their

home amounted to P1,008,003.00, covering not only the
destruction of the roof, but also substantial harm to the
electrical wiring, ceiling, fixtures, walls, wallpaper, wood
parquet flooring and furniture. They rely on the Report of the
Esteban Adjusters and Valuers, Inc, to which the Regional
Trial Court accorded full credit. But that report contains no
statement whatever of the amount of the damage. Indeed,
the testimony of Engineer Abril, the representative of the
Esteban Adjusters and Valuers, Inc., is that his firm had been
retained only to determine the cause of the damage, not to
estimate and assess it. A similar aridity as to the amount of
the damage, unfortunately characterizes the testimony of
Atty. Virgilio Del Rosario and the rest of the spouses' proofs.
There is therefore no evidentiary foundation upon which to
lay an award of actual damages. The Trial Court's grant
thereof must be struck down. Lufthansa German Airlines vs.
CA, et al. promulgated on April 21, 1995, inter alia ruled that:
"Actual or Compensatory damages cannot be presumed, but
must be duly proved and proved with reasonable degree of
certainty. A court cannot rely on speculations, conjectures or
guesswork as to the fact and amount of damages, but must
depend upon competent proof that they have (been) suffered
and on evidence of the actual amount thereof."

actually suffered by the Del Rosarios, the grant to them of

moral damages is warranted. Over a period of about a
month, they experienced "feelings of shock, helplessness,
fear, embarrassment and anger. "As declared by this Court in
Makabili v. Court of Appeals, among other precedents: It is
essential . . . in the award of damages that the claimant must
have satisfactorily proven during the trial the existence of the
factual basis of the damages and its causal connection to
defendant's acts. This is so because moral damages though
incapable of pecuniary estimation are in the category of an
award designed to compensate the claimant for actual injury
suffered and not to impose a penalty on the wrongdoer
(Enervida v. De la Torre, 55 SCRA 340 [1974]) and are
allowable only when specifically prayed for in the complaint
(San Miguel Brewery, Inc. v. Magno, 21 SCRA 292 [1968]). As
reflected in the records of the case, the Court of Appeals was
in agreement with the findings of the trial court that
petitioners suffered anguish, embarrassment and mental
sufferings due to the failure of private respondent to perform
its obligation to petitioners. According to the Court of
Appeals, private respondent acted in wanton disregard of the
rights of petitioners. These pronouncements lay the basis
and justification for this Court to award petitioners moral and
exemplary damages."

B. MORAL DAMAGES; PRESENCE OF SATISFACTORY EVIDENCE

OF PSYCHOLOGICAL AND MENTAL TRAUMA, ENTITLES
PETITIONER TO MORAL DAMAGES; CASE AT BENCH. That
MFC did in truth act with bad faith, in flagrant breach of its
express warranties made to the general public and in wanton
disregard of the rights of the Del Rosarios who relied on those
warranties, is adequately demonstrated by the recorded
proofs. The law explicitly authorizes the award of moral
damages "in breaches of contract where the defendant acted
fraudulently or in bad faith." There being, moreover,
satisfactory evidence of the psychological and mental trauma

C. EXEMPLARY DAMAGES; AWARDED BUT SUBJECT TO

REDUCTION. This Court also agrees with the Trial Court
that exemplary damages are properly exigible of MFC,
"Article 2229 of the Civil Code provides that such damages
may be imposed by way of example or correction for the
public good. While exemplary damages cannot be recovered
as a matter of right, they need not be proved, although
plaintiff must show that he is entitled to moral, temperate or
compensatory damages before the court may consider the
question of whether or not exemplary damages should be
awarded." "Exemplary damages are imposed not to enrich

one party or impoverish another but to serve as a deterrent

against or as a negative incentive to curb socially deleterious
actions." However, the same statutory and jurisprudential
standards just mentioned dictate reduction of the amounts of
moral and exemplary damages fixed by the Trial Court. There
is, to be sure, no hard and fast rule for determining what
would be a fair amount of moral (or exemplary) damages,
each case having to be governed by its attendant particulars.
Generally, the amount of moral damages should be
commensurate with the actual loss or injury suffered. In the
case of PNB v. C.A just cited, this Court quoted with approval
the following observation from RCPI v. Rodriguez, viz.: ". . .
Nevertheless, we find the award of P100,000.00 as moral
damages in favor of respondent Rodriguez excessive and
unconscionable. In the case of Prudenciado v. Alliance
Transport System, Inc., (148 SCRA 440 [1987]) we said: '. . .
[I]t is undisputed that the trial courts are given discretion to
determine the amount of moral damages (Alcantara v. Surro,
93 Phil. 472) and that the Court of Appeals can only modify
or change the amount awarded when they are palpably and
scandalously excessive' so as to indicate that it was the
result of passion, prejudice or corruption on the part of the
trial court (Gellada v. Warner Barnes & Co., Inc., 57 O.G.[4]
7347, 7358; Saddie v. Bacharach Motors Co., 57 O.G. [4] 636
and Adone v. Bacharach Motor Co., Inc., 57 O.G. 656). But in
more recent cases where the awards of moral and exemplary
damages are far too excessive compared to the actual losses
sustained by the aggrieved party this Court ruled that they
should be reduced to more reasonable amounts . . ." "In
other words, the moral damages awarded must be
commensurate with the loss or injury suffered." In the same
case (PNB v. CA), this Court found the amount of exemplary
damages required to be paid (P1,000,000.00) "too excessive"
and reduced it to an "equitable level''(P25,000.00) . . . (T)he
award of P1,000,000.00 exemplary damages is also far too

excessive and should likewise be reduced to an equitable

level. Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a deterrent
against or as a negative incentive to curb socially deleterious
actions." In another case involving strikingly analogous facts
decided in 1994, Geraldez vs. C.A., where no actual damages
were adjudicated but moral and exemplary damages in
similar amounts (P500,000.00 and P300,000.00, respectively)
were awarded by the Trial Court, as in this case, and of
exemplary damages to P50,000.00. The Court sees no reason
to adopt a different treatment in the case at bar, and
accordingly reduces the moral damages from P500,000.00 to
P100,000.00, and the exemplary damages from P300,000.00
to P50,000.00.
D. ATTORNEY'S FEES; DELETED, FOR JUDGMENT FAILED TO
STATE THE BASIS THEREOF. Like the adjudication of actual
or compensatory damages, the award of attorney's fees must
be deleted. The matter was dealt with only in the dispositive
portion of the Trial Court's decision. Since the judgment does
not say why attorney's fees are awarded, there is no basis for
such award which should consequently be removed. So did
this Court rule, for instance, in Scott Consultants and
Resource Development Corp., Inc. vs. CA, et al.: "It is settled
that the award of attorney's fees is the exception rather than
the rule and counsel's fees are not to be awarded every time
a party wins. The power of the court to award attorney's fees
under Article 2208 of the Civil Code demands factual, legal,
and equitable justification; its basis cannot be left to
speculation or conjecture. Where granted, the court must
explicitly state in the body of the decision, and not only in the
dispositive portion thereof, the legal reason for the award of
attorney's fees."