Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=45922:159636&amp;catid=1459&amp;Itemid=566
Timestamp: 2019-04-26 03:45:49+00:00

Document:
G.R. No. 159636 - VICTORY LINER, INC. v. ROSALITO GAMMAD, ET AL.
VICTORY LINER, INC., Petitioner, v. ROSALITO GAMMAD, APRIL ROSSAN P. GAMMAD, ROI ROZANO P. GAMMAD and DIANA FRANCES P. GAMMAD, Respondents.
Assailed in this Petition for Review on Certiorari is the April 11, 2003 decision1 of the Court of Appeals in CA-G.R. CV No. 63290 which affirmed with modification the November 6, 1998 decision2 of the Regional Trial Court of Tuguegarao, Cagayan, Branch 5 finding petitioner Victory Liner, Inc. liable for breach of contract of carriage in Civil Case No. 5023.
On May 14, 1996, respondent heirs of the deceased filed a complaint5 for damages arising from culpa contractual against petitioner. In its answer,6 the petitioner claimed that the incident was purely accidental and that it has always exercised extraordinary diligence in its 50 years of operation.
6. Cost of the Suit.
4. Attorney's fees equivalent to 10% of the sum of the actual, compensatory, moral, and exemplary damages herein adjudged.
The court a quo's judgment of the cost of the suit against defendant-appellant is hereby AFFIRMED.
Represented by a new counsel, petitioner on May 21, 2003 filed a motion for reconsideration praying that the case be remanded to the trial court for cross - examination of respondents' witness and for the presentation of its evidence; or in the alternative, dismiss the respondents' complaint.21 Invoking APEX Mining, Inc. v. Court of Appeals,22 petitioner argues, inter alia, that the decision of the trial court should be set aside because the negligence of its former counsel, Atty. Antonio B. Paguirigan, in failing to appear at the scheduled hearings and move for reconsideration of the orders declaring petitioner to have waived the right to cross-examine respondents' witness and right to present evidence, deprived petitioner of its day in court.
Hence, this Petition for Review principally based on the fact that the mistake or gross negligence of its counsel deprived petitioner of due process of law. Petitioner also argues that the trial court's award of damages were without basis and should be deleted.
The issues for resolution are: (1) whether petitioner's counsel was guilty of gross negligence; (2) whether petitioner should be held liable for breach of contract of carriage; and (3) whether the award of damages was proper.
The exceptions, however, are not present in this case. The record shows that Atty. Paguirigan filed an Answer and Pre-trial Brief for petitioner. Although initially declared as in default, Atty. Paguirigan successfully moved for the setting aside of the order of default. In fact, petitioner was represented by Atty. Paguirigan at the pre-trial who proposed settlement for P50,000.00. Although Atty. Paguirigan failed to file motions for reconsideration of the orders declaring petitioner to have waived the right to cross-examine respondents' witness and to present evidence, he nevertheless, filed a timely appeal with the Court of Appeals assailing the decision of the trial court. Hence, petitioner's claim that it was denied due process lacks basis.
Petitioner too is not entirely blameless. Prior to the issuance of the order declaring it as in default for not appearing at the pre-trial, three notices (dated October 23, 1996,25 January 30, 1997,26 and March 26, 1997,27 ) requiring attendance at the pre-trial were sent and duly received by petitioner. However, it was only on April 27, 1997, after the issuance of the April 10, 1997 order of default for failure to appear at the pre-trial when petitioner, through its finance and administrative manager, executed a special power of attorney28 authorizing Atty. Paguirigan or any member of his law firm to represent petitioner at the pre-trial. Petitioner is guilty, at the least, of contributory negligence and fault cannot be imputed solely on previous counsel.
The case of APEX Mining, Inc., invoked by petitioner is not on all fours with the case at bar. In APEX, the negligent counsel not only allowed the adverse decision against his client to become final and executory, but deliberately misrepresented in the progress report that the case was still pending with the Court of Appeals when the same was dismissed 16 months ago.29 These circumstances are absent in this case because Atty. Paguirigan timely filed an appeal from the decision of the trial court with the Court of Appeals.
This leads us to the question of whether the negligence of counsel was so gross and reckless that petitioner was deprived of its right to due process of law. We do not believe so. It cannot be denied that the requirements of due process were observed in the instant case. Petitioner was never deprived of its day in court, as in fact it was afforded every opportunity to be heard. Thus, it is of record that notices were sent to petitioner and that its counsel was able to file a motion to dismiss the complaint, an answer to the complaint, and even a pre-trial brief. What was irretrievably lost by petitioner was its opportunity to participate in the trial of the case and to adduce evidence in its behalf because of negligence.
In the application of the principle of due process, what is sought to be safeguarded against is not the lack of previous notice but the denial of the opportunity to be heard. The question is not whether petitioner succeeded in defending its rights and interests, but simply, whether it had the opportunity to present its side of the controversy. Verily, as petitioner retained the services of counsel of its choice, it should, as far as this suit is concerned, bear the consequences of its choice of a faulty option. Its plea that it was deprived of due process echoes on hollow ground and certainly cannot elicit approval nor sympathy.
Neither can he claim that he is not bound by his lawyer's actions; it is only in case of gross or palpable negligence of counsel when the courts can step in and accord relief to a client who would have suffered thereby. If every perceived mistake, failure of diligence, lack of experience or insufficient legal knowledge of the lawyer would be admitted as a reason for the reopening of a case, there would be no end to controversy. Fundamental to our judicial system is the principle that every litigation must come to an end. It would be a clear mockery if it were otherwise. Access to the courts is guaranteed, but there must be a limit to it.
In the instant case, there is no evidence to rebut the statutory presumption that the proximate cause of Marie Grace's death was the negligence of petitioner. Hence, the courts below correctly ruled that petitioner was guilty of breach of contract of carriage.
Nevertheless, the award of damages should be modified.
Article 176435 in relation to Article 220636 of the Civil Code, holds the common carrier in breach of its contract of carriage that results in the death of a passenger liable to pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity, and (3) moral damages.
In People v. Oco,39 the evidence presented by the prosecution to recover damages for loss of earning capacity was the bare testimony of the deceased's wife that her husband was earning P8,000.00 monthly as a legal researcher of a private corporation. Finding that the deceased was neither self-employed nor employed as a daily-wage worker earning less than the minimum wage under the labor laws existing at the time of his death, the Court held that testimonial evidence alone is insufficient to justify an award for loss of earning capacity.
Here, the trial court and the Court of Appeals computed the award of compensatory damages for loss of earning capacity only on the basis of the testimony of respondent Rosalito that the deceased was 39 years of age and a Section Chief of the Bureau of Internal Revenue, Tuguergarao District Office with a salary of P83,088.00 per annum when she died.41 No other evidence was presented. The award is clearly erroneous because the deceased's earnings does not fall within the exceptions.
However, the fact of loss having been established, temperate damages in the amount of P500,000.00 should be awarded to respondents. Under Article 2224 of the Civil Code, 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 can not, from the nature of the case, be proved with certainty.
"As to the loss or impairment of earning capacity, there is no doubt that Pleno is an ent[re]preneur and the founder of his own corporation, the Mayon Ceramics Corporation. It appears also that he is an industrious and resourceful person with several projects in line, and were it not for the incident, might have pushed them through. On the day of the incident, Pleno was driving homeward with geologist Longley after an ocular inspection of the site of the Mayon Ceramics Corporation. His actual income however has not been sufficiently established so that this Court cannot award actual damages, but, an award of temperate or moderate damages may still be made on loss or impairment of earning capacity. That Pleno sustained a permanent deformity due to a shortened left leg and that he also suffers from double vision in his left eye is also established. Because of this, he suffers from some inferiority complex and is no longer active in business as well as in social life. In similar cases as in Borromeo v. Manila Electric Railroad Co., 44 Phil 165; Coriage, et al. v. LTB Co., et al., L-11037, Dec. 29, 1960, and in Araneta, et al. v. Arreglado, et al., L-11394, Sept. 9, 1958, the proper award of damages were given."
We rule that the lower court's awards of damages are more consonant with the factual circumstances of the instant case. The trial court's findings of facts are clear and well-developed. Each item of damages is adequately supported by evidence on record.
Article 2224 of the Civil Code was likewise applied in the recent cases of People v. Singh43 and People v. Almedilla,44 to justify the award of temperate damages in lieu of damages for loss of earning capacity which was not substantiated by the required documentary proof.
The actual damages awarded by the trial court reduced by the Court of Appeals should be further reduced. In People v. Duban,51 it was held that only substantiated and proven expenses or those that appear to have been genuinely incurred in connection with the death, wake or burial of the victim will be recognized. A list of expenses (Exhibit "J"),52 and the contract/receipt for the construction of the tomb (Exhibit "F")53 in this case, cannot be considered competent proof and cannot replace the official receipts necessary to justify the award. Hence, actual damages should be further reduced to P78,160.00,54 which was the amount supported by official receipts.
Pursuant to Article 220855 of the Civil Code, attorney's fees may also be recovered in the case at bar where exemplary damages are awarded. The Court finds the award of attorney's fees equivalent to 10% of the total amount adjudged against petitioner reasonable.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. (Emphasis supplied).
WHEREFORE, in view of all the foregoing, the petition is partially granted. The April 11, 2003 decision of the Court of Appeals in CA-G.R. CV No. 63290, which modified the decision of the Regional Trial Court of Tuguegarao, Cagayan in Civil Case No. 5023, is AFFIRMED with MODIFICATION. As modified, petitioner Victory Liner, Inc., is ordered to pay respondents the following: (1) P50,000.00 as indemnity for the death of Marie Grace Pagulayan-Gammad; (2) P100,000.00 as moral damages; (3) P100,000.00 as exemplary damages; (4) P78,160.00 as actual damages; (5) P500,000.00 as temperate damages; (6) 10% of the total amount as attorneys fees; and the costs of suit.
Furthermore, the total amount adjudged against petitioner shall earn interest at the rate of 12% per annum computed from the finality of this decision until fully paid.
1 Rollo, p. 57. Penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Eugenio S. Labitoria and Regalado E. Maambong.
2 Rollo, p. 135. Penned by Judge Rolando L. Salacup.
3 Mother of the other respondents (TSN, 1 July 1997, p. 8).
4 TSN, 1 July 1997, pp. 4-6.
7 Initially set on November 7, 1996 (Records, p. 16) but moved to December 18, 1996 on motion of petitioner's counsel (Records, p. 20), and thereafter motu proprio reset by the court to February 12, 1997 (Records, p. 24). Finally, upon agreement of both counsels, pre-trial was scheduled to April 10, 1997.
8 Order dated February 12, 1997, Records, p. 27.
11 Order dated May 6, 1997, Records, p. 33.
12 Pre-trial Order dated May 6, 1997, Records, p. 34.
13 Originally set on August 13, 1997 (Records, p. 36), but was rescheduled by the trial court to November 17, 1997 (Records, p. 38).
21 CA Rollo, p. 93.
22 377 Phil. 482 (1999).
23 Resolution dated August 21, 2003, Rollo, p. 83.
24 APEX Mining, Inc., supra, pp. 493-494.
28 CA Rollo, p. 95.
29 377 Phil. 482, 494-495 (1999).
30 415 Phil. 492 (2001).
32 G.R. No. 147995, 4 March 2004.
33 Producers Bank of the Philippines v. Court of Appeals, 430 Phil. 812, 830 (2002).
34 Baliwag Transit, Inc. v. Court of Appeals, 326 Phil. 762, 768 (1996).
35 ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.
37 Tiu v. Arriesgado, G.R. No. 138060, 1 September 2004.
38 People v. Oco, G.R. NOS. 137370-71, 29 September 2003, 412 SCRA 190, 222.
40 G.R. NOS. 116224-27, 28 March 2003, 400 SCRA 67, 84-85.
41 TSN, 1 July 1997, p. 8.
42 G.R. No. L-56505, 9 May 1988, 161 SCRA 208, 224-225.
43 412 Phil. 842, 859 (2001). In this case, the Court awarded P200,000.00 temperate damages in place of the P5,760,000.00 awarded by the trial court as damages for loss of earning capacity of the deceased because the prosecution did not present the best evidence to prove the deceased's income.
44 G.R. No. 150590, 21 August 2003, 409 SCRA 428, 433. Here, the Court did not compute damages for loss of earning capacity on the basis of the widow's testimony that his deceased husband was earning P22,000.00 a month and P10,000.00 from his sideline. Instead, the widow was awarded P25,000.00 as temperate damages.
45 People v. Trapane, 436 Phil. 671, 682 (2002).
46 People v. Astudillo, G.R. No. 141518, 29 April 2003, 401 SCRA 723, 739.
47 Expertravel & Tours, Inc. v. Court of Appeals, 368 Phil. 444, 448-449 (1999).
48 Yobido v. Court of Appeals, 346 Phil. 1, 13 (1997).
50 Fortune Express, Inc. v. Court of Appeals, 364 Phil. 480, 496 (1999).
51 G.R. No. 141217, 26 September 2003, 412 SCRA 131, 139.
54 Exhibit "C", Exhibit "D", Exhibit "E", Records, pp. 47-48; Exhibit "G" and Exhibit "H", Records, pp. 50-51.
56 G.R. No. 97412, 12 July 1994, 234 SCRA 78, 95-96.
57 See The Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, 28 April 2004. In this case, the Court set aside the decision of the Court of Appeals and in lieu thereof decreed the award of, among others, P500,000.00 monthly, representing the unrealized monthly income of petitioner or P6 Million a year from December 1, 1992 until respondent vacates the leased premises. The interest imposed was 12% per annum computed from the finality of the decision of the Court.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 ART. 1764
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.