PHILIPPINE HAWK CORPORATION v.

VIVIAN TAN LEE

Doctrine:
Re: Damages Based on Loss of Earnings
General Rule: As a rule, documentary evidence should be presented to
substantiate the claim for damages for loss of earning capacity.


Exception: damages for loss of earning capacity may be awarded despite the
absence of documentary evidence when:
(1) the deceased is self-employed and earning less than the minimum
wage under current labor laws, in which case, judicial notice may be taken
of the fact that in the deceased's line of work no documentary evidence is
available; OR
(2) the deceased is employed as a daily wage worker earning less than the
minimum wage under current labor laws

Re: Actual Damages
Actual damages must be substantiated by documentary evidence, such as
receipts, in order to prove expenses incurred as a result of the death of the victim

or the physical injuries sustained by the victim.

Re: Moral Damages
They are awarded to allow the plaintiff to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he/she has
undergone due to the defendants culpable action and must, perforce, be
proportional to the suffering inflicted.

Re: Temperate Damages
Under Art. 2224 of the Civil Code, temperate damages may be recovered when
the court finds that some pecuniary loss has been suffered but its amount cannot,
from the nature of the case, be proved with certainty

Facts:
VIVIAN Tan Lee filed before the RTC of Quezon City a complaint against PHIL
HAWK CORP. (Bus company) for damages based on quasi delict arising from a
vehicular accident. The accident resulted in the death of SILVINO Tan (VIVIANs
husband) and caused VIVIAN physical injuries.

In the civil case for damages against HAWK, VIVIAN sought the payment of
indemnity for the death of his husband, moral exemplary damages, funeral and
interment expenses, medical & hospitalization expenses, motorcycle repair,
attorneys fees and other just and equitable reliefs

Both VIVIAN & HAWK agree to the following facts

1. On March 17, 1991, in Bgy. Buensoceso, Gumaca, Quezon,
plaintiff Vivian Lee Tan and her husband Silvino Tan, while on
board a motorcycle with driven by the latter, and a Metro Bus
with driven by Margarito Avila, were involved in an accident;
2. As a result of the accident, Silvino Tan died on the spot while
plaintiff Vivian Lee Tan suffered physical injuries which
necessitated medical attention and hospitalization;
3. The deceased Silvino Tan is survived by his wife, plaintiff
Vivian Lee Tan and four children, three of whom are now
residents of the United States; and
4. Defendant Margarito Avila is an employee of defendant
Philippine Hawk.

HAWK denied liability and alleges that the proximate cause of the accident was
the recklessness of SILVINO. Moreover, it asserts that it exercised diligence of a
good father in selection and supervision of its employees.

AVILA (the driver of the bus) that the bus was running at 60 kmph when a
motorcycle ran from his left side of the highway, as the bus came near, the
motorcycle crossed the path of the bus and so he turned the bus to the right.
AVILA heard a crash and saw the motorcycle turn turtle. AVILA did not stop for
fear of his life.

Note: VIVIAN further testified that her husband was leasing and operating a
Caltex gasoline station in Gumaca, Quezon that yielded one million pesos a year
in revenue. They also had a copra business, which gave them an income
of P3,000.00 a month or P36,000.00 a year


Note: OVIAL (driver of the passenger jeep involved in the accident) testified that
his jeep was parked at the left side of the highway. He then saw the bus dragging
the motorcycle and then the bus bumped his jeep and sped away.

The trial court held that if the bus were on the right side of the highway, and
Margarito Avila turned his bus to the right in an attempt to avoid hitting the
motorcyle, then the bus would not have hit the passenger jeep, which was then
parked on the left side of the road. The fact that the bus also hit the passenger
jeep showed that the bus must have been running from the right lane to the left
lane of the highway, which caused the collision with the motorcycle and the
passenger jeep parked on the left side of the road. The trial court stated that
since Avila saw the motorcycle before the collision, he should have stepped on
the brakes and slowed down, but he just maintained his speed and veered to the
left. The trial court found Margarito Avila guilty of simple negligence.

The trial court decision reads as follows:

ACCORDINGLY, MARGARITO AVILA is adjudged guilty of simple
negligence, and judgment is hereby rendered in favor of the plaintiff
Vivian Lee Tan and her husbands heirs ordering the defendants
Philippine Hawk Corporation and Margarito Avila to pay them jointly
and solidarily the sum of P745,575.00 representing loss of earnings
and actual damages plus P50,000.00 as moral damages

In its Decision, the Court of Appeals sustained the award by the trial court for
loss of earning capacity of the deceased Silvino Tan, moral damages for his death,
and actual damages, although the amount of the latter award was modified.

WHEREFORE, foregoing premises considered, the appeal is
DENIED. The assailed decision dated March 16, 2001 is hereby
AFFIRMED with MODIFICATION. Appellants Philippine Hawk and Avila
are hereby ordered to pay jointly and severally appellee the following
amount: (a) P168,019.55 as actual damages; (b) P10,000.00 as
temperate damages; (c) P100,000.00 as moral damages;
(d) P590,000.00 as unearned income; and (e) P50,000.00 as civil
indemnity

However,

Issues & Held:
Issue 1: Whether Negligence may be attributed to the driver? (Optional)

YES. To be negligent, a defendant must have acted or failed to act in such a way
that an ordinary reasonable man would have realized that certain interests of
certain persons were unreasonably subjected to a general but definite class of
risks.

In this case, the bus driver, who was driving on the right side of the road, already
saw the motorcycle on the left side of the road before the collision. However, he
did not take the necessary precaution to slow down, but drove on and bumped
the motorcycle, and also the passenger jeep parked on the left side of the road,
showing that the bus was negligent in veering to the left lane, causing it to hit
the motorcycle and the passenger jeep.

HAWK is liable to respondent, since it failed to exercise the diligence of a good
father of the family in the selection and supervision of its bus driver, Margarito
Avila, for having failed to sufficiently inculcate in him discipline and correct
behavior on the road. Indeed, petitioners tests were concentrated on the ability
to drive and physical fitness to do so. It also did not know that Avila had been
previously involved in sideswiping incidents.

Issue 2: Whether the CA erred in the award of damages based on loss of
earning capacity?

YES. Records show that respondents husband was leasing and
operating a Caltex gasoline station in Gumaca, Quezon. Respondent testified
that her husband earned an annual income of one million pesos However, no
documentary evidence was presented regarding the income derived from their
copra business; hence, the testimony of respondent as regards such income
cannot be considered.

In the computation of loss of earning capacity, only net earnings, not gross
earnings, are to be considered; that is, the total of the earnings less expenses
necessary for the creation of such earnings or income, less living and other
incidental expenses. In the absence of documentary evidence, it is reasonable to
peg necessary expenses for the lease and operation of the gasoline station at 80
percent of the gross income, and peg living expenses at 50 percent of the net
income (gross income less necessary expenses).

In this case, the computation for loss of earning capacity is as follows:

Net earning capacity = (Life Expectancy) x (Gross annual income) (reasonable
and necessary expenses)

Note: Life Expectancy = 2/3 (80 age at the time of death)
Reasonable and Necessary Expenses = (80% of Gross Annual
Income)

X = [2/3 (80-65)] x P1,000,000.00 - P800,000.00

X = 2/3 (15) x P200,000.00 - P100,000.00
(Living Expenses)
X = P1,000,000.00


Issue 3: Whether the CA erred in the award of actual damages?

YES. The Court of Appeals awarded actual damages for the expenses incurred in
connection with the death, wake, and interment of respondents husband in the
amount of P154,575.30, and the medical expenses of respondent in the amount
of P168,019.55.

Actual damages must be substantiated by documentary evidence, such as
receipts, in order to prove expenses incurred as a result of the death of the victim

or the physical injuries sustained by the victim. A review of the valid receipts
submitted in evidence showed that the funeral and related expenses amounted
only to P114,948.60, while the medical expenses of respondent amounted only
to P12,244.25, yielding a total of P127,192.85 in actual damages.

Issue 4: Whether the CA erred in the award of Moral damages?

NO. The Court of Appeals correctly sustained the award of moral damages in the
amount of P50,000.00 for the death of respondents husband. Moral damages are
not intended to enrich a plaintiff at the expense of the defendant

Issue 5: Whether the CA erred in the award of temperate damages?

NO. The Court of Appeals correctly awarded temperate damages in the amount
of P10,000.00 for the damage caused on respondents motorcycle. The cost of the
motorcycles repair amounting to P17, 829.00. The Court of Appeals aptly held
that there was no doubt that the damage caused on the motorcycle was due to
the negligence of petitioners driver. In the absence of competent proof of the
actual damage caused on the motorcycle or the actual cost of its repair, the
award of temperate damages by the appellate court in the amount of P10,000.00
was reasonable under the circumstances

Issue 6: Whether the CA correctly awarded respondent moral damages for
the physical injuries sustained due to vehicular accident?

YES. Under Art. 2219 of the Civil Code, moral damages may be recovered in
quasi-delicts causing physical injuries. However, the award of P50,000.00 should
be reduced to P30,000.00 in accordance with prevailing jurisprudence.

Issue 7: Whether the CA correctly awarder civil indemnity for the death of
her husband?

YES. The award is proper under Art. 2206 of the Civil Code.

In Fine: In fine, the Court of Appeals correctly awarded civil indemnity for the
death of respondents husband, temperate damages, and moral damages for the
physical injuries sustained by respondent in addition to the damages granted by
the trial court to respondent. The trial court overlooked awarding the additional
damages, which were prayed for by respondent in her Amended Complaint. The
appellate court is clothed with ample authority to review matters, even if they
are not assigned as errors in the appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case.