LOPEZ v.

PAN AMERICAN WORLD AIRWAYS

Reservation for first class accommodation in Pan American Airlines from Tokyo to San Francisco was made by
Delfin Faustino for then Senator Fernando Lopez and company. First class tickets were issued and paid for. The
party left Manila for Tokyo as scheduled. Senator Lopez requested Minister Busuego to contact the airlines
regarding their accommodation. However, they were informed that there was no accommodation for them.
Because of some urgent matters to attend to in San Francisco, they were constrained to take the tourist flight
under protest.

RTC: In view of the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against
the defendant, which is accordingly ordered to pay the plaintiffs the following: (a) P100,000.00 as moral
damages; (b) P20,000.00 as exemplary damages; (c) P25,000.00 as attorney's fees, and the costs of this action.

Issues:
(1) Whether the defendant acted in bad faith for deliberate refusal to comply with its contract to provide
first-class accommodation to the plaintiff
(2) Whether moral and exemplary damages should be awarded

Held:
Wherefore, the judgment appealed from is hereby modified so as to award in favor of plaintiffs and against
defendant, the following: (1) P200,000.00 as moral damages, divided among plaintiffs, thus: P100,000.00 for
Senate President Pro Tempore Fernando Lopez; P50,000.00 for his wife Maria J. Lopez; P25,000.00 for his son-in-
law Alfredo Montelibano, Jr.; and P25,000.00 for his daughter Mrs. Alfredo Montelibano, Jr.; (2) P75,000.00 as
exemplary or corrective damages; (3) interest at the legal rate of 6% per annum on the moral and exemplary
damages aforestated, from December 14, 1963, the date of the amended decision of the court a quo, until said
damages are fully paid; (4) P50,000.00 as attorney's fees; and (5) the costs

(1) From the evidence of defendant, it is in effect admitted that defendant - through its agents - first cancelled
plaintiffs reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or their
travel agent the fact of said cancellation, letting them go on believing that their first-class reservations stood
valid and confirmed. In so, misleading plaintiffs into purchasing first class tickets in the conviction that they had
confirmed reservations for the same, when in fact they had none, defendant willfully and knowingly placed
itself into the position of having to breach its aforesaid contracts with plaintiffs should there be no last-minute
cancellation by other passengers before flight time, as it turned out in this case. Such actuation of defendant may
indeed have been prompted by nothing more than the promotion of its self-interest in holding on to Senator
Lopez and party as passengers in its flight and foreclosing on their chances to seek the services of other airlines
that may have been able to afford them first class accommodations. All the time, in legal contemplation, such
conduct already amounts to action in bad faith. For bad faith means a breach of a known duty through some
motive of interest or ill-will.

At the time plaintiffs bought their tickets, defendant, therefore, in breach of its known duty, made plaintiffs
believe that their reservation had not been cancelled. Such willful-non-disclosure of the cancellation or pretense
that the reservations for plaintiffs stood - and not simply the erroneous cancellation itself - is the factor to which
is attributable the breach of the resulting contracts. And, as above-stated, in this respect, defendant clearly acted
in bad faith.

(2) First, then, as to moral damages. As a proximate result of defendant's breach in bad faith of its contracts with
plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety and mental anguish. For
plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist
class. At stop-overs, they were expected to be among the first-class passengers by those awaiting to welcome
them, only to be found among the tourist passengers. It may not be humiliating to travel as tourist passengers;
it is humiliating to be compelled to travel as such, contrary to what is rightfully to be expected from the contractual
undertaking.

The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or
correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may
award exemplary damages in addition to moral damages. In view of its nature, it should be imposed in such an
amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other
airlines. In this light, we find it just to award P75,000.00 as exemplary or corrective damages.
 ABS-CBN v. CA

In 1992, ABS-CBN Broadcasting Corporation, through its vice president, Charo Santos-Concio, requested Viva Production,
to allow ABS-CBN to air at least 14 films produced by Viva. Pursuant to this request, a meeting was held between Vivas
representative (Vicente Del Rosario) and ABS-CBNs Eugenio Lopez (General Manager) and Santos-Concio on April 2, 1992.

During the meeting, Del Rosario proposed a film package which will allow ABS-CBN to air 104 Viva films for P60 million.
Later, Santos-Concio, in a letter to Del Rosario, proposed a counterproposal of 53 films (including the 14 films initially
requested) for P35 million. Del Rosario presented the counter offer to Vivas Board of Directors but the Board rejected the
counter offer. Several negotiations were subsequently made but on April 29, 1992, Viva made an agreement with Republic
Broadcasting Corporation (referred to as RBS or GMA 7) which gave exclusive rights to RBS to air 104 Viva films including
the 14 films initially requested by ABS-CBN.

ABS-CBN filed a complaint for specific performance against Viva as it alleged that there is already a perfected contract
between Viva and ABS-CBN in the April 2, 1992 meeting. Lopez testified that Del Rosario agreed to the counterproposal
and he (Lopez) even put the agreement in a napkin which was signed and given to Del Rosario. ABS-CBN also filed an
injunction against RBS to enjoin the latter from airing the films. The injunction was granted. RBS now filed a countersuit
with a prayer for moral damages as it claimed that its reputation was debased when they failed to air the shows that they
promised to their viewers. RBS relied on the ruling in People vs Manero and Mambulao Lumber vs PNB which states that
a corporation may recover moral damages if it has a good reputation that is debased, resulting in social humiliation. The
trial court ruled in favor of Viva and RBS. The Court of Appeals affirmed the trial court.

RTC: (2) Plaintiff ABS-CBN is ordered to pay defendant RBS the following:
a) P107,727.00, the amount of premium paid by RBS to the surety which issued defendant RBS's bond to lift the injunction;
b) P191,843.00 for the amount of print advertisement for "Maging Sino Ka Man" in various newspapers;
c) Attorney's fees in the amount of P1 million;
d) P5 million as and by way of moral damages;
e) P5 million as and by way of exemplary damages;
(3) For defendant VIVA, plaintiff ABS-CBN is ordered to pay P212,000.00 by way of reasonable attorney's fees.
(4) The cross-claim of defendant RBS against defendant VIVA is dismissed.
(5) Plaintiff to pay the costs.

ISSUE:
(1) Whether a contract was perfected in the April 2, 1992 meeting between the representatives of the two corporations.
(2) Whether a corporation, like RBS, is entitled to an award of moral damages upon grounds of debased reputation.

HELD:
(1) No. There is no proof that a contract was perfected in the said meeting. Lopez testimony about the contract being written
in a napkin is not corroborated because the napkin was never produced in court. Further, there was no meeting of the minds
because Del Rosarios offer was of 104 films for P60 million was not accepted. And that the alleged counter-offer made by
Lopez on the same day was not also accepted and that theres no proof of such. The counter offer can only be deemed to
have been made days after the April 2 meeting when Santos-Concio sent a letter to Del Rosario containing the counter-offer.
Regardless, there was no showing that Del Rosario accepted. But even if he did accept, such acceptance will not bloom into
a perfected contract because Del Rosario has no authority to do so.

As a rule, corporate powers, such as the power to enter into contracts, are exercised by the Board of Directors. But this
power may be delegated to a corporate committee, a corporate officer or corporate manager. Such a delegation must be
clear and specific. In the case at bar, there was no such delegation to Del Rosario. The fact that he has to present the counter-
offer to the Board of Directors of Viva is proof that the contract must be accepted first by Vivas Board. Hence, even if Del
Rosario accepted the counter-offer, it did not result to a contract because it will not bind Viva.

(2)
MORAL DAMAGES
No. The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having
existence only in legal contemplation, it has no feelings, no emotions, no senses. It cannot, therefore, experience physical
suffering and mental anguish, which can be experienced only by one having a nervous system. No moral damages can be
awarded to a juridical person. The statement in the case of People vs Manero and Mambulao Lumber vs PNB are a mere
obiter dictum hence it is not binding as a jurisprudence.

WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of Appeals in CA-G.R. CV No, 44125
is hereby REVERSED except as to unappealed award of attorney's fees in favor of VIVA Productions.
 FILIPINAS BROADCASTING v. AGO MEDICAL

Expos is a radio documentary program hosted by Carmelo Mel Rima (Rima) and Hermogenes Jun Alegre (Alegre). It is
aired every morning over DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (FBNI) and is heard over
Legazpi City, the Albay municipalities and other Bicol areas.

In the morning of 14 and 15 December 1989, Rima and Alegre exposed various alleged complaints from students, teachers
and parents against Ago Medical and Educational Center-Bicol Christian College of Medicine (AMEC) and its
administrators. Claiming that the broadcasts were defamatory, AMEC and Angelita Ago (Ago), as Dean of AMECs College
of Medicine, filed a complaint for damages against FBNI, Rima and Alegre. The complaint further alleged that AMEC is a
reputable learning institution. With the supposed expose, FBNI, Rima and Alegre transmitted malicious imputations, and
as such, destroyed plaintiffs (AMEC and Ago) reputation. AMEC and Ago included FBNI as defendant for allegedly failing
to exercise due diligence in the selection and supervision of its employees, particularly Rima and Alegre.

The trial court rendered a Decision finding FBNI and Alegre liable for libel except Rima. In holding FBNI liable for libel,
the trial court found that FBNI failed to exercise diligence in the selection and supervision of its employees.

Considering the controversy was not very serious and damaging, and there being no showing that enrollment in
plaintiff school dropped, defendants Alegre, Jr. and Filipinas Broadcasting Network, are jointly and severally ordered to
pay Ago Medical and Educational Center the amount of P300,000.00 moral damages, plus P30,000.00 reimbursement of
attorneys fees, and to pay the costs of suit.

The Court of Appeals affirmed the judgment with modification. It made Rima solidarily liable with FBNI and Alegre.

Issues:
1. Whether or not the broadcasts are libelous.
2. Whether or not AMEC is entitled to moral damages.

Ruling:
1. Libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act or omission,
condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person,
or to blacken the memory of one who is dead.

Every defamatory imputation is presumed malicious. Rima and Alegre failed to show adequately their good intention
and justifiable motive in airing the supposed gripes of the students. As hosts of a documentary or public affairs program,
Rima and Alegre should have presented the public issues free from inaccurate and misleading information. Hearing the
students alleged complaints a month before the expose, they had sufficient time to verify their sources and information.
However, Rima and Alegre hardly made a thorough investigation of the students alleged gripes. Neither did they
inquire about nor confirm the purported irregularities in AMEC from the Department of Education, Culture and Sports.
Alegre testified that he merely went to AMEC to verify his report from an alleged AMEC official who refused to disclose
any information. Alegre simply relied on the words of the students because they were many and not because there is
proof that what they are saying is true. This plainly shows Rima and Alegres reckless disregard of whether their report
was true or not.

Had the comments been an expression of opinion based on established facts, it is immaterial that the opinion happens
to be mistaken, as long as it might reasonably be inferred from the facts. However, the comments of Rima and Alegre
were not backed up by facts. Therefore, the broadcasts are not privileged and remain libelous.

2. FBNI contends that AMEC is not entitled to moral damages because it is a corporation.

A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience
physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. The Court
of Appeals cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages. However, the Courts
statement in Mambulao, that a corporation may have a good reputation which, if besmirched, may also be a ground for
the award of moral damages is an obiter dictum.

Nevertheless, AMECs claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision
expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article
2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a
corporation can validly complain for libel or any other form of defamation and claim for moral damages. Moreover,
where the broadcast is libelous per se, the law implies damages. Thus, AMEC is entitled to moral damages.

However, the SC find the award of P300,000 moral damages unreasonable. The record shows that even though the
broadcasts were libelous per se, AMEC has not suffered any substantial or material damage to its reputation. Therefore,
we reduce the award of moral damages from P300,000 to P150,000.

WHEREFORE, we DENY the instant petition. We AFFIRM the Decision of 4 January 1999 and Resolution of 26 January
2000 of the Court of Appeals in CA-G.R. CV No. 40151 with the MODIFICATION that the award of moral damages is
reduced from P300,000 to P150,000 and the award of attorneys fees is deleted. Costs against petitioner.
 PEOPLE v. MARTINEZ (Rape)

The spouses Warlito and BBB live in Janipaan, Mina, Iloilo. They have six children: the three elder daughters
have left home, while the three younger ones, a mentally retarded daughter and two sons, live with
them. AAA is their mentally retarded daughter.

When BBB went to Iloilo City to procure a ship ticket for her trip to Manila. AAA, then 13 years old, was tasked
to cook rice while her brothers gathered firewood in a distant place. While cooking, Warlito approached
AAA. Without a word, Warlito removed AAAs clothes and panties. He then forced his her to lie down on a
bed. He stripped off his shirt, pants, and underwear. He parted AAAs thighs, went on top of her, and inserted
his penis into AAAs vagina. AAA could only cry in pain.

After the molestation, Warlito threatened to kill her if she would reveal the incident to her mother. So, she kept
the incident a secret. This happened several times when her mother left for Manila.

AAAs teachers noticed that she was unusually weak, hardly the strength to move. Aware of the fact that Warlito
had sired two children from AAAs elder sister, the teacher asked her if her father had raped her. She answered
in the affirmative. The teachers then reported the matter to the DSWD.

When BBB returned, she then learned that her husband had sexually abused AAA. Unable to contain her outrage
over Warlitos assault on their mentally retarded daughter, she and AAA filed a complaint against him.

Dr. Flaviano, a resident physician at the Iloilo Provincial Hospital, physically examined AAA. His medical report
stated that AAA suffered old healed hymenal lacerations. Dr. Flaviano noted that the lacerations could have
been caused by sexual intercourse or by trauma caused by large blood clots during the menstrual period, or
masturbation and insertion of an object.

Warlito was then charged with three counts of qualified rape.

RTC: WARLITO MARTINEZ was found guilty beyond reasonable doubt of three counts of rape under Art. 395
of the Revised Penal Code and imposes on him the extreme penalty of death on each of the three counts of rape
he committed. It is further ordered that on each count of rape, the accused must pay the victim the P75,000.00 as
civil indemnity; P50,000.00 as moral damages; and P25,000.00 as exemplary damages.

CA: Affirmed with modifications: Moral damages shall be P75,000. Also, he shall suffer the penalty of reclusion
perpetua for each count of rape in view of RA No. 9346 prohibiting the imposition of the death penalty.

Issue:
Whether the award of damages is proper.

Ruling:
As to the damages, SC noted that the appellate court correctly modified the amount of moral damages that
should be awarded to AAA from P50,000 to P75,000, in line with current jurisprudence on qualified rape. The
amount of exemplary damages, however, should also be modified. Following People v. Layco, the award
of exemplary damages is increased from P25,000 to P30,000, in order to serve as public example and to protect
the young from sexual abuse.

WHEREFORE, the accused WARLITO MARTINEZ is found GUILTY beyond reasonable doubt of committing
three (3) counts of QUALIFIED RAPE and is sentenced to suffer the penalty of reclusion perpetua for each count
of rape, without benefit of parole. Likewise, for each count of rape, he is ordered to pay the victim, the sum of
PhP 75,000 as civil indemnity, PhP 75,000 as moral damages, and PhP 30,000 as exemplary damages.
 ILISAN v. PEOPLE OF THE PHILIPPINES (Homicide)

A baptismal celebration was held at Ricky Silvas residence in Quezon City. Among the attendees were Ilisan and Joey
Gaton. They belonged to different groups of guests. While having a drinking spree with their respective groups, one of
Ilisans companions got irked by the way Gaton looked at him.

Ilisan and his companions mauled Gaton. A melee ensued. Ilisan shot Gaton at the abdomen, causing the latters instant
death.

An Information for murder was filed against Ilisan. Gabriel Gaton (brother), Marlon Dellamas (neighbor) and Edgardo
Dag-um (neighbor) all positively identified Ilisan as the gunman.

In defense, Ilisan, Jomarie (brother) and Jaime Escasinas (cousin) claimed that another guest, Chito Partisala, was the
assailant. Also, Ilisan tested negative for gunpowder residue when paraffin tests were conducted a day after the incident.

RTC: convicted Ilisan of homicide. It Accorded more weight to the positive testimonies of the prosecution witnesses over
the declarations of the defense. He was sentenced to suffer imprisonment for a term ranging from 8 years and 1 day of
prision mayor as minimum to 14 years and 8 months of reclusion temporal as maximum, and to indemnify the heirs of the
deceased in the amounts of P75, 000 as actual damages, P50,000 for the death of the victim and P50,000 as moral damages.

CA: RTC decision was affirmed, with modification of the maximum period of the indeterminate sentence to 14 years, 8
months and 1 day of reclusion temporal medium, and the reduction of the award of actual damages to P58,520. Hence, the
present petition.
ISSUES
WON imposed penalty is correct. (YES except for actual damages)

Ruling
Yes, the prison term and the other awards for damages are correct, except for actual damages.

The civil indemnity and moral damages awarded by the RTC and the CA were also in order and consistent with current
jurisprudence.

Civil indemnity is mandatory and granted to the heirs of the victim without need of proof other than the commission of the
crime. Under prevailing jurisprudence, the award of P50,000.00 to the heirs of the victim as civil indemnity is proper.

Moral damages must also be awarded because these are mandatory in cases of homicide, without need of allegation and
proof other than the death of the victim. The award of P50,000.00 as moral damages is correct.

Homicide is punishable by reclusion temporal. There being no mitigating or aggravating circumstance proven, the penalty
should be applied in its medium period (14 years, 8 months and 1 day to 17 years and 4 months)

Applying the Indeterminate Sentence Law the maximum penalty will be selected from the above range, with the minimum
penalty being selected from the range of penalty one degree lower than reclusion temporal, which is prision mayor (6 years
and 1 day to 12 years). Thus, the 8 years and 1 day of prision mayor (as minimum) to 14 years, 8 months and 1 day of
reclusion temporal, as maximum, imposed by the RTC, and affirmed with modification by the CA, is correct.

Actual damages pertain to the actual expenses incurred by the victims heirs in relation to his death, i.e., burial and funeral
expenses. To justify an award, it is necessary for a party to produce competent proof or the best evidence obtainable, such
as receipts.

In this case, the actual expenses incurred for the wake and burial of the victim were duly shown by receipts in the aggregate
amount of P88,520.00. But the CA awarded only P58,520.00, which appears to have been caused by the non-inclusion of
Exhibit "L," a receipt for P30,000.00 paid by the victims wife for the deceaseds autopsy and embalming treatment, and use
of mortuary equipment for the interment.

Having convincingly proved the nature of the expense in the amount of P30,000, it is only right to increase the actual
damages awarded to the victims heirs to P88,520.00.
 LAMBERT v. HEIRS OF CASTILLON (Quasi-Delict)

One evening, Ray Castillon visited the house of his brother, Joel Castillon, in Iligan City and borrowed his motorcycle. He
then invited his friend, Sergio Labang, to roam around the city. Ray drove the motorcycle with Sergio as the back rider.

At around 10:00p.m., after eating supper at Honas Restaurant and imbibing a bottle of beer, they traversed the highway
towards at a high speed. They got into an accident with a Tamaraw jeepney, owned by petitioner Nelen Lambert and
driven by Reynaldo Gamot, which was traveling on the same direction but made a sudden left turn. The incident resulted
in the instantaneous death of Ray and injuries to Sergio.

Respondents, the heirs of Ray Castillon, filed an action for damages with prayer for preliminary attachment against the
petitioner Nelen Lambert. The complaint was subsequently amended to include the claim by Joel Castillon for the damages
caused to the motorcycle.

The court rendered decision in favor of Castillon heirs but reduced Lamberts liability by 20% in view of the contributory
negligence of Ray. The defendants were ordered to jointly and severally pay P633,091 representing the loss of support,
death indemnity, funeral and related expenses, moral damages and attorneys fees and Costs of the suit.

On the claim of Joel Castillon, the evidence shows that he is not the real owner of the motorcycle. He is not the real party in
interest. Accordingly, his complaint is dismissed.
On the third-party complaint, the third-party defendant Zenith Insurance Corporation is ordered to pay the sum of
P16,500.00 directly to the plaintiffs. This sum, if paid, should be deducted from the amount adjudged in par. 1 above.
SO ORDERED.[6]

The Court of Appeals affirmed the decision of the trial court.

Issue/s:
1. Did the CA err in not applying the doctrine of Edna A. Raynera vs. Freddie Hiceta and Jimmy Orpilla that drivers of
vehicles who bump the rear of another vehicle are presumed to be the cause of the accident? In other words, was Lambert
negligent?
2. Does the act of tailgating merely constitute contributory negligence?
Lambert insists that the negligence of Ray Castillon was the proximate cause of his unfortunate death and therefore she is
not liable for damages.

Held
1. No. Clearly, the abrupt and sudden left turn by Reynaldo, without first establishing his right of way, was the proximate
cause of the mishap which claimed the life of Ray and injured Sergio. Proximate cause is defined as that which, in the
natural and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the
result would not have occurred. The cause of the collision is traceable to the negligent act of Reynaldo for without that left
turn executed with no precaution, the mishap in all probability would not have happened.
Petitioner misunderstood our ruling in Raynera v. Hiceta. That case also involved a motorcycle crashing into the left rear
portion of another vehicle, and we declared therein that drivers of vehicles who bump the rear of another vehicle are
presumed to be the cause of the accident, unless contradicted by other evidence. Raynera, being the driver of the rear vehicle,
had full control of the situation as he was in a position to observe the vehicle in front of him. Thus, the theory that drivers
of vehicles who bump the rear of another vehicle are presumed to be the cause of the accident is, as in this case, sufficiently
contradicted by evidence, which is the sudden left turn made by Reynaldo which proximately caused the collision.

2. Yes. The SC found it equitable to increase the ratio of apportionment of damages on account of the victims
negligence. Article 2179 reads as follows:
When the plaintiffs negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if
his negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due
care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should
not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus
be held liable only for the damages actually caused by his negligence.[15] The determination of the mitigation of the
defendants liability varies depending on the circumstances of each case. In the case at bar, it was established that Ray, at
the time of the mishap: (1) was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw jeepney; (3) has
imbibed one or two bottles of beer; and (4) was not wearing a protective helmet.[21] These circumstances, although not
constituting the proximate cause of his demise and injury to Sergio, contributed to the same result. The contribution of
these circumstances are all considered and determined in terms of percentages of the total cause. Hence, pursuant to Rakes
v. AG & P, the heirs of Ray Castillon shall recover damages only up to 50% of the award. In other words, 50% of the damage
shall be borne by the private respondents; the remaining 50% shall be paid by the petitioner.

Anent the award of loss of earning capacity, we agree with the petitioner that the trial court erred in the computation of the
net earnings.
In considering the earning capacity of the victim as an element of damages, the following factors are considered in
determining the compensable amount of lost earnings: (1) the number of years for which the victim would otherwise have
lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that the first factor, i.e., life
expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of
Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multiplying
the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of such
earnings or income and less living and other incidental expenses. The net earning is ordinarily computed at fifty percent
(50%) of the gross earnings. Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning
Capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and necessary living expenses)].[22]

We sustain the awards of P33,215.00 as funeral and burial expenses being supported with receipts;[24] P50,000.00 as death
indemnity; and P50,000.00 as moral damages. However, the award of P20,000.00 as attorneys fees must be deleted for lack
of basis.
The indemnity for death caused by a quasi-delict used to be pegged at P3,000.00,[25] based on Article 2206 of the Civil Code,
which reads:
ART. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even
though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the
heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account
of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the recipient who is not an heir
called to the decedents inheritance by the law of testate or intestate succession, may demand support from the person
causing the death, for a period of not exceeding five years, the exact duration to be fixed by the court;
(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.
However, the amount has been gradually increased through the years. At present, prevailing jurisprudence fixes the
amount at P50,000.00.[26]
Paragraph 3 of the same provision also serves as the basis for the award of moral damages in quasi-delict. The reason for the
grant of moral damages has been explained, thus:
the award of moral damages is aimed at a restoration, within the limits possible, of the spiritual status quo ante; and
therefore, it must be proportionate to the suffering inflicted. The intensity of the pain experienced by the relatives of the
victim is proportionate to the intensity of affection for him and bears no relation whatsoever with the wealth or means of
the offender.[27]
While it is true that there can be no exact or uniform rule for measuring the value of human life and the measure of damages
cannot be arrived at by a precise mathematical calculation,[28] we hold that the trial courts award of moral damages of
P50,000.00 for the death of Ray Castillon is in accord with the prevailing jurisprudence.[29]
With respect to attorneys fees, it is well settled that the same should not be awarded in the absence of stipulation except
under the instances enumerated in Article 2208 of the Civil Code. The trial court did not indicate the basis for its award. As
we have held in Rizal Surety and Insurance Company v. Court of Appeals:[30]
Article 2208 of the Civil Code allows attorneys fess to be awarded by a court when its claimant is compelled to litigate
with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party
from whom it is sought. While judicial discretion is here extant, an award thereof demands, nevertheless, a factual, legal
or equitable justification. The matter cannot and should not be left to speculation and conjecture (Mirasol vs. De la Cruz, 84
SCRA 337; Stronghold Insurance Company, Inc. vs. Court of Appeals, 173 SCRA 619).
In the case at bench, the records do not show enough basis for sustaining the award for attorneys fees and to adjudge its
payment by petitioner
the Court had occasion to state that [t]he reason for the award of attorneys fees must be stated in the text of the courts
decision, otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal.
 SAN MIGUEL CORP v TEODOSIO (Labor)

Eduardo Teodosio was hired by SMC as a casual forklift operator in its Bacolod City Brewery. Respondent
continuously worked from September 5, 1991 until March 1992, after which he was asked to rest. A month
after, respondent was rehired for the same position, and after serving for about five to six months, he was again
asked to rest. After three weeks, he was again rehired. He continued to work as such until he was made to sign
an Employment with a Fixed Period contract, wherein it was stipulated that respondents employment would
be from August 7, 1993 to August 30, 1995, or upon cessation of the instability/fluctuation of the market demand,
whichever comes first.

On March 20, 1995, respondent was transferred to the plants bottling section as a case piler. In a letter, he
informed SMC of his opposition to his transfer to the bottling section. He asserted that he would be more
effective as a forklift operator because he had been employed as such for more than three years
already. However, SMC did not answer his letter.

SMC notified the respondent that his employment shall be terminated on July 1, 1995 in compliance with the
Employment with a Fixed Period contract. SMC explained that this was due to the reorganization and
streamlining of its operations.

In a letter, respondent expressed his dismay for his dismissal. He signed a Receipt and Release document in
favor of SMC and accepted his separation pay, thereby releasing all his claims against SMC.

Respondent filed a Complaint against SMC before the NLRC of Bacolod City, for illegal dismissal and
underpayment of wages and other benefits. Labor Arbiter dismissed the complaint for lack of merit. He sought
recourse before the NLRC Cebu City which was also dismissed.

CA grants the respondents petition, ordering San Miguel to pay the amount of P50,000.00 as moral damages,
P10,000.00 as exemplary damages and 10% of the total amount awarded to petitioner by this Court as attorneys
fees.

Issues
Whether the respondent is entitled to his monetary claims and damages.

Held
Respondent is not entitled to moral and exemplary damages. Moral damages are recoverable where the
dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs or public policy. On the other hand, exemplary damages
are proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy
requires that these acts must be suppressed and discouraged.

In the present case, respondent failed to sufficiently establish that his dismissal was done in bad faith; was
contrary to morals, good customs or public policy; and was arbitrary and oppressive to labor, thus not entitling
him to the award of moral and exemplary damages. The awards of moral and exemplary damages granted by
CA are DELETED.

As to the award of attorneys fees, by reason of his illegal dismissal, respondent was forced to litigate and incur
expenses to protect his rights and interest. Moreover, in labor cases, although an express finding of fact and law
is still necessary to prove the merit of the award of attorneys fees, there need not be any showing that the
employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the
lawful wages were not paid accordingly. Thus, it is but just and proper that the same should be awarded to
respondent.
 LUFTHANSA GERMAN AIRLINES v. CA

Tirso Antiporda, Sr. was, contracted by Sycip, Gorres, Velayo & Co. (SGV) to be the institutional financial specialist for the
agricultural credit institution project of the Investment and Development Bank of Malawi in Africa. Antiporda would be
provided one round-trip economy ticket from Manila to Blantyre and back with a maximum travel time of four days per
round-trip. Lufthansa, through SGV, issued the ticket for Antiporda's confirmed flights to Malawi, Africa.

Thus, on September 25, 1984, Antiporda took the Lufthansa flight to Singapore from where he proceeded to Bombay on
board the same airline. He arrived in Bombay as scheduled and waited at the transit area of the airport for his connecting
flight to Nairobi which was, per schedule given him by Lufthansa, to leave Bombay. Lufthansa, informed Antiporda that
his seat in Air Kenya Flight 203 to Nairobi had been given to a very important person of Bombay who was attending a
religious function in Nairobi. Antiporda protested but Air Kenya Flight 203 left for Nairobi without him on board. Stranded
in Bombay, Antiporda was booked for Nairobi via Addis Ababa only on September 27, 1984. He finally arrived in Blantyre
at 9:00 o'clock in the evening of September 28, 1984, more than a couple of days late for his appointment with people from
the institution he was to work with in Malawi.

Consequently, Antiporda's counsel wrote the general manager of Lufthansa in Manila demanding P1,000,000 in damages
for the airline's "malicious, wanton, disregard of the contract of carriage." Apparently getting no positive action from
Lufthansa, Antiporda filed with the RTC of Quezon City a complaint against Lufthansa.

Lufthansa argued that it cannot be held liable for the acts committed by Air Kenya on the basis of the following:

(a) it merely acted as a ticket-issuing agent in behalf of Air Kenya; consequently the contract of carriage entered into is
between respondent Antiporda and Air Kenya, to the exclusion of petitioner Lufthansa;
(b) under sections (1) and (2) Article 30 of the Warsaw Convention, an airline carrier is liable only to untoward occurrences
on its own line;
(c) the award of moral and exemplary damages in addition to attorney's fees by the trial court is without basis in fact and
in law.

ISSUE: Was there a breach of obligation by the defendant in failing to transport the plaintiff from Manila to Blantyre,
Malawi, Africa?

HELD:
This case is one of a contract of carriage. And the ticket issued by the defendant to the plaintiff is the written agreement
between the parties herein. From the ticket, therefore, it is indubitably clear that it was the duty and responsibility of the
defendant Lufthansa to transport the plaintiff from Manila to Blantyre, on a trip of five legs.

SC rejected Lufthansa's theory it merely acted as a ticket-issuing agent in behalf of said carrier. Although the contract of
carriage was to be performed by several air carriers, the same is to be treated as a single operation conducted by Lufthansa
because Antiporda dealt exclusively with it which issued him a Lufthansa ticket for the entire trip. By issuing a confirmed
ticket, Lufthansa in effect guaranteed Antiporda a sure seat with Air Kenya. Private respondent Antiporda had the right to
expect that his ticket would be honored by Air Kenya which, in the legal sense, Lufthansa had endorsed and, in effect,
guaranteed the performance of its principal engagement to carry out his five-leg trip.

The appellate court also ruled that Lufthansa cannot rely on Sections (1) and (2), Article 30 of the Warsaw Convention
because the provisions thereof are not applicable under the circumstances of the case.

Antiporda is likewise entitled to the award of exemplary damages based on Article 2232 of the Civil Code which provides:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner.

There is every indication that Lufthansa, through its representatives in Bombay, acted in a reckless and malevolent manner
in dealing with Antiporda.

In justifying its award of moral and exemplary damages, the court emphasized that the breach of contract was
aggravated by the discourteous and highly arbitrary conduct of an official of Lufthansa in Bombay. Bumped off from his
connecting flight and stranded in the Airport for 32 hours. He was not provided any accommodation nor relief. He had to
stay in the transit area and could not sleep for fear that his luggage might be lost. Every time he went to the toilet, he had
to drag with him his luggage. It was indeed a pathetic sight that the plaintiff, an official of the Central Bank, a multi-awarded
institutional expert, tasked to perform consultancy work in a World Bank funded agricultural bank project in Malawi,
instead found himself stranded in a foreign land where nobody was expected to help him except the defendant, who
displayed utter lack of concern of its obligation to the plaintiff and left plaintiff alone in his misery at the Bombay airport
 THE MANILA BANKING CORPORATION vs. IAC

In the morning of July 10, 1975, Private respondent Wilfredo Rivera deposited with petitioner bank the
sum of P80,189.19. In the afternoon of the same day, Rivera issued a Manila Banking Corporation check
in the amount of P80,000.00 payable to Collins Philippines with whom he had a business transaction.
Thereafter, private respondent's wife received a letter of demand from Collins Philippines because the
issued check was dishonored.

His wife immediately informed him about letter of demand. Upon receipt of the message, Mr. Rivera
complained to the Public Relations Officer of petitioner bank of dishonor of his check. The Public
Relations Officer found that the money deposited was credited into another account which was the
reason it could not be encashed.

As a consequence, private respondent claimed that he suffered humiliation and embarrassment due to
the bank's gross negligence. Complaint was filed in court which awarded private respondent damages,
as follows:

(1) P75,000.00 as actual damages, to compensate plaintiff for the loss of business and business
opportunities;
(2) P25,000.00 as moral damages, to compensate for the embarrassment, humiliation and mental
anguish suffered;
(3) P10,000.00 as exemplary damages;
(4) P25,000.00 as and for attorney's fees; and Cost of suit.

On appeal to the Intermediate Appellate Court, modified the award of damages. Actual damage of
P75,000 eliminated and instead the P10,000.00 was awarded as temperate damage and the reduction of
the award of attorney's fees from P25,000 to P15,000.

Issue
Whether the amount of damages awarded is proper

Ruling
We agree with petitioner that private respondent is not entitled to moral damages considering that in
a matter of four hours the mistake was rectified and the payee, Collins Philippines, was paid the full
amount of the check. In the case of Singson vs. Bank of Philippine Island, the plaintiffs commenced the
action against the bank and its President, Santiago Freixas for damages in consequence of illegal
freezing of plaintiff's account. This Court held that since "the wrong done to the plaintiffs was remedied
as soon as the President of the bank realized the mistake he and his subordinate employee had
committed, the Court finds that an award of nominal damages the amount of which need not be
proven in the sum of P1,000.00, in addition to attorney's fees in the sum of P500.00, would suffice to
vindicate plaintiff's rights."

In the case at bar, temperate or moderate damages are proper, not for indemnification of loss suffered,
but for the vindication or recognition of a right violated or invaded. Considering the facts of the case
under appeal, the sum of P5,000.00 as temperate or moderate damages would suffice, plus attorney's
fees of P5,000.00.

WHEREFORE, the judgment appealed from is modified in the sense that petitioner bank is hereby
sentenced to pay private respondent Wilfredo J. Rivera the sums of P5,000.00, as temperate or moderate
damages and P5,000.00, as attorney's fees, apart from the costs.