Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 176377

November 16, 2011

FUNCTIONAL, INC. Petitioner,

vs.
SAMUEL C. GRANFIL, Respondent.
DECISION
PEREZ, J.:
Assailed in this petition for review1 filed under Rule 45 of the 1997 Rules of
Civil Procedure is the Decision dated 22 November 2006 rendered by the
then Tenth Division of the Court of Appeals (CA) in CA-G.R. SP No.
94851,2the dispositive portion of which states:
WHEREFORE, premises considered, the petition is GRANTED. The
Resolution dated April 20, 2005 and the order dated January 26, 2006 of
public respondent NLRC, First Division in NLRC NCR Case No. 09-07126-02
NLRC NCR CA No. 035887-03 sustaining the findings of the Labor Arbiter
are hereby REVERSED and SET ASIDE. Private respondent Functional, Inc.
is hereby ORDERED to reinstate petitioner Granfil without loss of seniority
rights and other privileges, and to pay the latter his full backwages, inclusive
of allowances and other benefits, from July 31, 2002 up to the time of his
actual reinstatement.
SO ORDERED.3
The Facts
Sometime in 1992, respondent Samuel C. Granfil was hired as key operator
by petitioner Functional, Inc. (FI), a domestic corporation engaged in the
business of sale and rental of various business equipments, including
photocopying machines. As Key Operator, Granfil was tasked to operate the
photocopying machine rented by the National Bookstore (NBS) at its SM
Megamall Branch. There is no dispute regarding the fact that, in the evening
of 30 July 2002, Granfil attended to a customer by the name of Cosme
Cavaldeja (Cavaldeja) who, together with his wife, asked to have their flyers

photocopied. It appears that Bonnel Dechavez, the security guard assigned

at said establishment, saw Cavaldeja handing money to Granfil after the
transaction was finished.4 After investigating the matter, Dechavez submitted
the following incident report to NBS Branch Manager Lucy Genegaban
(Genegaban), to wit:
At around 1940 on July 30, 2002 at NBS SM Megamall Dona Julia Vargas
Ave., Mandaluyong City, I checked one customer and asked if he already
paid for his xerox[ed] items (sic) and he said "yes." Upon asking for a
receipt, he pointed to Sammy the Xerox operator [to] whom he g[a]ve
payment, instead of paying to the cashier. Sammy came and it was only then
that he brought the customer to the counter 09 for payment [of] the amount of
[the] xerox[ed] items (sic) is P250.5
On 3 September 2002, Granfil filed a complaint against FI, its President,
Romeo Bautista (Bautista), its Marketing Manager, Freddie Tenorio (Tenorio),
its Office Supervisor, Julius Ballesteros (Ballesteros), and its Area
Supervisor, Joel Dizon (Dizon), for illegal dismissal, unpaid 13th month pay,
moral and exemplary damages and attorneys fees. In support of his
complaint which was docketed as NLRC NCR Case No. 09-07126-2002
before the arbitral level of the National Labor Relations Commission
(NLRC),6 Granfil alleged, among other matters, that the money which
Dechavez saw him receive from Cavaldeja was a P200 tip said customer
gave him in appreciation of his assistance in xeroxing and organizing the
batches of voluminous materials he asked to be photocopied; that payment
for the materials was, however, already paid per batch by Cavaldejas wife
who, by that time, had already left the premises; and, that rather than
listening to his explanation and simply verifying the meter of the photocopy
machine as well as the paper allotted to it, Dechavez submitted his incident
report which, in turn, caused Tenorio to tell him, "Mr. Granfil, magpahinga ka
muna. Mabuti pa, pumirma ka nalang ng resignation letter para may makuha
ka pa."7
Granfil further asseverated that, with said incident report having been
telefaxed to FIs head office, he was asked to report thereat in the morning of
31 July 2002; that instead of allowing him to explain, however, Ballesteros
peremptorily ordered his termination from employment; that wishing to
explain his side, he sought out Dizon who merely ignored and tersely advised
him, "Magpahinga ka na lang"; that refused entry when he tried to report for
work on 1 August 2002, he subsequently sought out Cavaldeja whose
corroboration of his version of the incident also fell on deaf ears; that having
been terminated without just cause and observance of due process, he was
constrained to file the 3 September 2002 complaint from which the instant
suit originated; that aside from the reinstatement to which he is clearly
entitled as an illegally dismissed employee, he should be paid full backwages

and 13th month pay for the year 2002; and, that in view of the malice and
bad faith which characterized his dismissal from employment, Bautista,
Tenorio, Ballesteros and Dizon should be held jointly and severally liable with
FI for the payment of said indemnities as well as his claims for moral and
exemplary damages and attorneys fees.8
In their position paper, FI and its corporate officers, in turn, averred that
having been apprised of the incident, Genegaban requested for Granfils
relief as Key Operator of the photocopying machine installed at the NBS SM
Megamall Branch; that for the good of all concerned, FI informed Granfil that
he was going to be transferred to a different assignment, without demotion in
rank or diminution of his salaries, benefits and other privileges; that required
to report to FIs main office to act as emergency reliever to other Key
Operators while waiting for his new assignment, Granfil misconstrued his
transfer as a punishment for his guilt and refused to heed said directive
which was within the managements prerogative to issue; that an employees
right to security of tenure does not give him such vested right to his position
as would deprive his employer of its prerogative to change his assignment or
transfer him where he will be most useful; and, that aside from being guilty of
insubordination, Granfil clearly abandoned his employment rather than
illegally dismissed therefrom.9
On 29 April 2003, Labor Arbiter Eduardo Carpio rendered a decision
discounting Granfils illegal dismissal from employment in view of his failure
to prove with substantial evidence overt acts of termination on the part of FI
and its officers. Simply awarded the sum of P3,966.65 as proportionate 13th
month pay for services rendered from January to July 2002, 10 Granfil
perfected the appeal which was docketed before the First Division of the
NLRC as NLRC NCR CA No. 035887-03. With the affirmance of the Labor
Arbiters decision in the 20 April 2005 Resolution issued by the NLRC 11 and
the subsequent denial of his motion seeking the reconsideration of said
decision,12Granfil elevated the case through the Rule 65 petition for certiorari
docketed before the CA as CA-G.R. SP No. 94851. On 22 November 2006,
the CA rendered the herein assailed 22 November 2006 Decision, reversing
the NLRCs 20 April 2005 Resolution on the ground that FI failed to
satisfactorily prove Granfils supposed abandonment of his employment
which, by itself, was negated by his filing of a case for illegal employment.
Ordering FI to reinstate Granfil and to pay his full backwages, allowances
and other benefits from 31 July 2002 until his actual reinstatement, the CA
denied said employees claims for moral and exemplary damages as well as
attorneys fees for lack of factual basis.13
FIs motion for reconsideration of the CAs 22 November 2006 decision was
denied for lack of merit in said courts 22 January 2007 resolution, 14 hence,
this petition.

The Issues
FI prays for the reversal and setting aside of the assailed decision on the
following grounds, to wit:
A.
The Honorable Court erred in holding that [Granfil] was illegally
dismissed by FI.
B.
The Honorable Court erred in not giving credence to the factual
findings of both the NLRC and Labor Arbiter before wh[om] the case
was tried.15
The Courts Ruling
We find the petition bereft of merit.
The rule is long and well settled that, in illegal dismissal cases like the one at
bench, the burden of proof is upon the employer to show that the employees
termination from service is for a just and valid cause. 16 The employers case
succeeds or fails on the strength of its evidence and not the weakness of that
adduced by the employee,17in keeping with the principle that the scales of
justice should be tilted in favor of the latter in case of doubt in the evidence
presented by them.18 Often described as more than a mere scintilla, 19 the
quantum of proof is substantial evidence which is understood as such
relevant evidence as a reasonable mind might accept as adequate to support
a conclusion, even if other equally reasonable minds might conceivably opine
otherwise.20Failure of the employer to discharge the foregoing onus would
mean that the dismissal is not justified and therefore illegal. 21
Denying the charge of illegal dismissal, FI insists that Granfil abandoned his
employment after he was transferred from his assignment at the NBS
Megamall Branch as a consequence of the latters request for his relief. 22 In
the same manner that it cannot be said to have discharged the abovediscussed burden by merely alleging that it did not dismiss the employee, it
has been ruled that an employer cannot expediently escape liability for illegal
dismissal by claiming that the former abandoned his work. 23 This applies to
FI which adduced no evidence to prove Granfils supposed abandonment
beyond submitting copies of NBS 31 July 2002 request for said employees
transfer24 and its 1 August 2002 written acquiescence thereto. 25 While these

documents may have buttressed the claim that Granfil was indeed recalled
from his assignment, however, we find that the CA correctly discounted their
probative value insofar as FIs theory of abandonment is concerned.
Being a matter of intention, moreover, abandonment cannot be inferred or
presumed from equivocal acts.26 As a just and valid ground for dismissal, it
requires the deliberate, unjustified refusal of the employee to resume his
employment,27 without any intention of returning. 28 Two elements must
concur: (1) failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor and
being manifested by some overt acts. 29 The burden of proving abandonment
is once again upon the employer30 who, whether pleading the same as a
ground for dismissing an employee or as a mere defense, additionally has
the legal duty to observe due process. 31 Settled is the rule that mere absence
or failure to report to work is not tantamount to abandonment of work. 32
Viewed in the light of the foregoing principles, we find that the CA correctly
ruled out FIs position that Granfil had abandoned his employment. Aside
from the fact that Bautista, Tenorio, Ballesteros and Dizon did not even
execute sworn statements to refute the overt acts of dismissal imputed
against them, the record is wholly bereft of any showing that FI required
Granfil to report to its main office or, for that matter, to explain his supposed
unauthorized absences. Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work
anymore.33 Even then, FIs theory of abandonment was likewise negated by
Granfils filing the complaint for illegal dismissal34 which evinced his desire to
return to work. In vigorously pursuing his action against FI before the Labor
Arbiter, the NLRC and the CA, Granfil clearly manifested that he has no
intention of relinquishing his employment. In any case, the fact that Granfil
prayed for his reinstatement speaks against any intent to sever the employeremployee relationship35 with FI.
FI next faults the CA for not giving credence to the factual findings of Labor
Arbiter Eduardo Carpio which was affirmed in the NLRCs 20 April 2005
resolution.36 As may be gleaned from the above disquisition, however, both
the Labor Arbiter and the NLRC clearly erred in directing the dismissal of the
complaint by unduly shifting the burden of proving the illegality of his
dismissal to Granfil. While administrative findings of fact are, concededly,
accorded great respect, and even finality when supported by substantial
evidence, nevertheless, when it can be shown that administrative bodies
grossly misappreciated evidence of such nature as to compel a contrary
conclusion, this court had not hesitated to reverse their factual
findings.37 Indeed, said rule does not apply when, as here, it is clear that a

palpable mistake was committed by the quasi-judicial tribunal which needs

rectification.381wphi1
WHEREFORE, premises considered, the petition is DENIED for lack of merit
and the assailed Decision dated 22 November 2006 is, accordingly,
AFFIRMED in toto.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

BIENVENIDO L. REYES
Associate Justice
AT T E S TAT I O N
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 165487

July 13, 2011

COUNTRY BANKERS INSURANCE CORPORATION, Petitioner,

vs.
ANTONIO LAGMAN, Respondent.
DECISION
PEREZ, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, assailing the Decision 1 and Resolution2 of the Court of
Appeals dated 21 June 2004 and 24 September 2004, respectively.
These are the undisputed facts.
Nelson Santos (Santos) applied for a license with the National Food Authority
(NFA) to engage in the business of storing not more than 30,000 sacks of
palay valued at P5,250,000.00 in his warehouse at Barangay Malacampa,
Camiling, Tarlac. Under Act No. 3893 or the General Bonded Warehouse Act,
as amended, 3 the approval for said license was conditioned upon posting of
a cash bond, a bond secured by real estate, or a bond signed by a duly
authorized bonding company, the amount of which shall be fixed by the NFA
Administrator at not less than thirty-three and one third percent (33 1/3%) of
the market value of the maximum quantity of rice to be received.
Accordingly, Country Bankers Insurance Corporation (Country Bankers)
issued Warehouse Bond No. 033044 forP1,749,825.00 on 5 November 1989
and Warehouse Bond No. 023555 for P749,925.00 on 13 December 1989
(1989 Bonds) through its agent, Antonio Lagman (Lagman). Santos was the

bond principal, Lagman was the surety and the Republic of the Philippines,
through the NFA was the obligee. In consideration of these issuances,
corresponding Indemnity Agreements6 were executed by Santos, as bond
principal, together with Ban Lee Lim Santos (Ban Lee Lim), Rhosemelita
Reguine (Reguine) and Lagman, as co-signors. The latter bound themselves
jointly and severally liable to Country Bankers for any damages, prejudice,
losses, costs, payments, advances and expenses of whatever kind and
nature, including attorneys fees and legal costs, which it may sustain as a
consequence of the said bond; to reimburse Country Bankers of whatever
amount it may pay or cause to be paid or become liable to pay thereunder;
and to pay interest at the rate of 12% per annum computed and compounded
monthly, as well as to pay attorneys fees of 20% of the amount due it. 7
Santos then secured a loan using his warehouse receipts as
collateral.8 When the loan matured, Santos defaulted in his payment. The
sacks of palay covered by the warehouse receipts were no longer found in
the bonded warehouse.9 By virtue of the surety bonds, Country Bankers was
compelled to pay P1,166,750.37.10
Consequently, Country Bankers filed a complaint for a sum of money
docketed as Civil Case No. 95-73048 before the Regional Trial Court (RTC)
of Manila. In his Answer, Lagman alleged that the 1989 Bonds were valid
only for 1 year from the date of their issuance, as evidenced by receipts; that
the bonds were never renewed and revived by payment of premiums; that on
5 November 1990, Country Bankers issued Warehouse Bond No. 03515
(1990 Bond) which was also valid for one year and that no Indemnity
Agreement was executed for the purpose; and that the 1990 Bond
supersedes, cancels, and renders no force and effect the 1989 Bonds. 11
The bond principals, Santos and Ban Lee Lim, were not served with
summons because they could no longer be found. 12 The case was eventually
dismissed against them without prejudice. 13 The other co-signor, Reguine,
was declared in default for failure to file her answer.14
On 21 September 1998, the trial court rendered judgment declaring Reguine
and Lagman jointly and severally liable to pay Country Bankers the amount
of P2,400,499.87.15 The dispositive portion of the RTC Decision16reads:
WHEREFORE, premises considered, judgment is hereby rendered, ordering
defendants Rhomesita [sic] Reguine and Antonio Lagman, jointly and
severally liable to pay plaintiff, Country Bankers Assurance Corporation, the
amount of P2,400,499.87, with 12% interest from the date the complaint was
filed until fully satisfied plus 20% of the amount due plaintiff as and for
attorneys fees and to pay the costs.

As the Court did not acquire jurisdiction over the persons of defendants
Nelson Santos and Ban Lee Lim Santos, let the case against them be
DISMISSED. Defendant Antonio Lagmans counterclaim is likewise
DISMISSED, for lack of merit.17
In holding Lagman and Reguine solidarily liable to Country Bankers, the trial
court relied on the express terms of the Indemnity Agreement that they jointly
and severally bound themselves to indemnify and make good to Country
Bankers any liability which the latter may incur on account of or arising from
the execution of the bonds.18
The trial court rationalized that the bonds remain in force unless cancelled by
the Administrator of the NFA and cannot be unilaterally cancelled by Lagman.
The trial court emphasized that for the failure of Lagman to comply with his
obligation under the Indemnity Agreements, he is likewise liable for damages
as a consequence of the breach.
Lagman filed an appeal to the Court of Appeals, docketed as CA G.R. CV
No. 61797. He insisted that the lifetime of the 1989 Bonds, as well as the
corresponding Indemnity Agreements was only 12 months. According to
Lagman, the 1990 Bond was not pleaded in the complaint because it was not
covered by an Indemnity Agreement and it superseded the two prior bonds. 19
On 21 June 2004, the Court of Appeals rendered the assailed Decision
reversing and setting aside the Decision of the RTC and ordering the
dismissal of the complaint filed against Lagman.20
The appellate court held that the 1990 Bond superseded the 1989 Bonds.
The appellate court observed that the 1990 Bond covers 33.3% of the market
value of the palay, thereby manifesting the intention of the parties to make
the latter bond more comprehensive. Lagman was also exonerated by the
appellate court from liability because he was not a signatory to the alleged
Indemnity Agreement of 5 November 1990 covering the 1990 Bond. The
appellate court rejected the argument of Country Bankers that the 1989
bonds were continuing, finding, as reason therefor, that the receipts issued
for the bonds indicate that they were effective for only one-year.
Country Bankers sought reconsideration which was denied in a Resolution
dated 24 September 2004.21
Expectedly, Country Bankers filed the instant petition attributing two (2)
errors to the Court of Appeals, to wit:

THE HONORABLE COURT OF APPEALS seriously erred in

disregarding the express provisions of Section 177 of the insurance
code when it held that the subject surety bonds were superseded by
a subsequent bond notwithstanding the non-cancellation thereof by
the bond obligee.
B.
The honorable court of appeals seriously erred in holding that
receipts for the payment of premiums prevail over the express
provision of the surety bond that fixes the term thereof. 22
Country Bankers maintains that by the express terms of the 1989 Bonds,
they shall remain in full force until cancelled by the Administrator of the NFA.
As continuing bonds, Country Bankers avers that Section 177 of the
Insurance Code applies, in that the bond may only be cancelled by the
obligee, by the Insurance Commissioner or by a competent court.
Country Bankers questions the existence of a third bond, the 1990 Bond,
which allegedly cancelled the 1989 Bonds on the following grounds: First,
Lagman failed to produce the original of the 1990 Bond and no basis has
been laid for the presentation of secondary evidence; Second, the issuance
of the 1990 Bond was not approved and processed by Country Bankers;
Third, the NFA as bond obligee was not in possession of the 1990 Bond.
Country Bankers stresses that the cancellation of the 1989 Bonds requires
the participation of the bond obligee. Ergo, the bonds remain subsisting until
cancelled by the bond obligee. Country Bankers further assert that Lagman
also failed to prove that the NFA accepted the 1990 Bond in replacement of
the 1989 Bonds.
Country Bankers notes that the receipts issued for the 1989 Bonds are mere
evidence of premium payments and should not be relied on to determine the
period of effectivity of the bonds. Country Bankers explains that the receipts
only represent the transactions between the bond principal and the surety,
and does not involve the NFA as bond obligee.
Country Bankers calls this Courts attention to the incontestability clause
contained in the Indemnity Agreements which prohibits Lagman from
questioning his liability therein.
In his Comment, Lagman raises the issue of novation by asserting that the
1989 Bonds were superseded by the 1990 Bond, which did not include
Lagman as party. Therefore, Lagman argues, Country Bankers has no cause

A.

of action against him. Lagman also reiterates that because of novation, the
1989 bonds are neither perpetual nor continuing.
Lagman anchors his defense on two (2) arguments: 1) the 1989 Bonds have
expired and 2) the 1990 Bond novates the 1989 Bonds.

This provision in the bonds is but in compliance with the second paragraph of
Section 177 of the Insurance Code, which specifies that a continuing bond,
as in this case where there is no fixed expiration date, may be cancelled only
by the obligee, which is the NFA, by the Insurance Commissioner, and by the
court. Thus:

We do not agree.

In case of a continuing bond, the obligor shall pay the subsequent annual
premium as it falls due until the contract of suretyship is cancelled by the
obligee or by the Commissioner or by a court of competent jurisdiction, as
the case may be.

The official receipts in question serve as proof of payment of the premium for
one year on each surety bond. It does not, however, automatically mean that
the surety bond is effective for only one (1) year. In fact, the effectivity of the
bond is not wholly dependent on the payment of premium. Section 177 of the
Insurance Code expresses:

By law and by the specific contract involved in this case, the effectivity of the
bond required for the obtention of a license to engage in the business of
receiving rice for storage is determined not alone by the payment of
premiums but principally by the Administrator of the NFA. From beginning to
end, the Administrators brief is the enabling or disabling document.

Sec. 177. The surety is entitled to payment of the premium as soon as the
contract of suretyship or bond is perfected and delivered to the obligor. No
contract of suretyship or bonding shall be valid and binding unless and until
the premium therefor has been paid, except where the obligee has
accepted the bond, in which case the bond becomes valid and
enforceable irrespective of whether or not the premium has been paid
by the obligor to the surety: Provided, That if the contract of suretyship or
bond is not accepted by, or filed with the obligee, the surety shall collect only
reasonable amount, not exceeding fifty per centum of the premium due
thereon as service fee plus the cost of stamps or other taxes imposed for the
issuance of the contract or bond:Provided, however, That if the nonacceptance of the bond be due to the fault or negligence of the surety, no
such service fee, stamps or taxes shall be collected. (Emphasis supplied)

The clear import of these provisions is that the surety bonds in question
cannot be unilaterally cancelled by Lagman. The same conclusion was
reached by the trial court and we quote:

The Court of Appeals held that the 1989 bonds were effective only for one (1)
year, as evidenced by the receipts on the payment of premiums.

The 1989 Bonds have identical provisions and they state in very clear terms
the effectivity of these bonds, viz:
NOW, THEREFORE, if the above-bounded Principal shall well and truly
deliver to the depositors PALAY received by him for STORAGE at any time
that demand therefore is made, or shall pay the market value therefore in
case he is unable to return the same, then this obligation shall be null and
void; otherwise it shall remain in full force and effect and may be enforced in
the manner provided by said Act No. 3893 as amended by Republic Act No.
247 and P.D. No. 4. This bond shall remain in force until cancelled by the
Administrator of National Food Authority.23

As there appears no record of cancellation of the Warehouse Bonds No.

03304 and No. 02355 either by the administrator of the NFA or by the
Insurance Commissioner or by the Court, the Warehouse Bonds are valid
and binding and cannot be unilaterally cancelled by defendant Lagman as
general agent of the plaintiff.24
While the trial court did not directly rule on the existence and validity of the
1990 Bond, it upheld the 1989 Bonds as valid and binding, which could not
be unilaterally cancelled by Lagman. The Court of Appeals, on the other
hand, acknowledged the 1990 Bond as having cancelled the two previous
bonds by novation. Both courts however failed to discuss their basis for
rejecting or admitting the 1990 Bond, which, as we indicated, is bone to pick
in this case.
Lagmans insistence on novation depends on the validity, nay, existence of
the allegedly novating 1990 Bond. Country Bankers understandably impugns
both. We see the point. Lagman presented a mere photocopy of the 1990
Bond. We rule as inadmissible such copy.
Under the best evidence rule, the original document must be produced
whenever its contents are the subject of inquiry.25 The rule is encapsulated in
Section 3, Rule 130 of the Rules of Court, as follow:

Sec. 3. Original document must be produced; exceptions. When the

subject of inquiry is the contents of a documents, no evidence shall be
admissible other than the original document itself, except in the following
cases:
(a) When the original has been lost or destroyed, or cannot be
produced in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the
party against whom the evidence is offered, and the latter fails to
produce it after reasonable notice;
(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss of
time and the fact sought to be established from them is only the
general result of the whole; and
(d) When the original is a public record in the custody of a public
officer or is recorded in a public office.26
A photocopy, being a mere secondary evidence, is not admissible unless it is
shown that the original is unavailable.27 Section 5, Rule 130 of the Rules of
Court states:
SEC.5 When original document is unavailable. When the original
document has been lost or destroyed, or cannot be produced in court, the
offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy,
or by a recital of its contents in some authentic document, or by the
testimony of witnesses in the order stated.
Before a party is allowed to adduce secondary evidence to prove the
contents of the original, the offeror must prove the following: (1) the existence
or due execution of the original; (2) the loss and destruction of the original or
the reason for its non-production in court; and (3) on the part of the offeror,
the absence of bad faith to which the unavailability of the original can be
attributed. The correct order of proof is as follows: existence, execution, loss,
and contents.28
In the case at bar, Lagman mentioned during the direct examination that
there are actually four (4) duplicate originals of the 1990 Bond: the first is
kept by the NFA, the second is with the Loan Officer of the NFA in Tarlac, the
third is with Country Bankers and the fourth was in his possession. 29 A party
must first present to the court proof of loss or other satisfactory explanation

for the non-production of the original instrument. 30 When more than one
original copy exists, it must appear that all of them have been lost, destroyed,
or cannot be produced in court before secondary evidence can be given of
any one. A photocopy may not be used without accounting for the other
originals.31
Despite knowledge of the existence and whereabouts of these duplicate
originals, Lagman merely presented a photocopy. He admitted that he kept a
copy of the 1990 Bond but he could no longer produce it because he had
already severed his ties with Country Bankers. However, he did not explain
why severance of ties is by itself reason enough for the non-availability of his
copy of the bond considering that, as it appears from the 1989 Bonds,
Lagman himself is a bondsman. Neither did Lagman explain why he failed to
secure the original from any of the three other custodians he mentioned in
his testimony. While he apparently was able to find the original with the NFA
Loan Officer, he was merely contented with producing its photocopy. Clearly,
Lagman failed to exert diligent efforts to produce the original.
Fueling further suspicion regarding the existence of the 1990 Bond is the
absence of an Indemnity Agreement. While Lagman argued that a 1990
Bond novates the 1989 Bonds, he raises the defense of "non-existence of an
indemnity agreement" which would conveniently exempt him from liability.
The trial court deemed this defense as indicia of bad faith, thus:
To the observation of the Court, defendant Lagman contended that being a
general agent (which requires a much higher qualification than an ordinary
agent), he is expected to have attended seminars and workshops on general
insurance wherein he is supposed to have acquired sufficient knowledge of
the general principles of insurance which he had fully practised or
implemented from experience. It somehow appears to the Courts
assessment of his reneging liability of the bonds in question, that he is still
short of having really understood the principle of suretyship with reference to
the transaction of indemnity in which he is a signatory. If, as he alleged, that
he is well-versed in insurance, the Court finds no excuse for him to stand firm
in denying his liability over the claim against the bonds with indemnity
provision. If he insists in not recognizing that liability, the more that this Court
is convinced that his knowledge that insurance operates under the principle
of good faith is inadequate. He missed the exception provided by Section
177 of the Insurance Code, as amended, wherein non-payment of premium
would not have the same essence in his mind that the agreements entered
into would not have full force or effect. It could be glimpsed, therefore, that
the mere fact of cancelling bonds with indemnity agreements and replacing
them (absence of the same) to escape liability clearly manifests bad faith on
his part.32 (Emphasis supplied.)

Having discounted the existence and/or validity of the 1990 Bond, there can
be no novation to speak of. Novation is the extinguishment of an obligation
by the substitution or change of the obligation by a subsequent one which
extinguishes or modifies the first, either by changing the object or principal
conditions, or by substituting another in place of the debtor, or by subrogating
a third person in the rights of the creditor. For novation to take place, the
following requisites must concur: 1) There must be a previous valid
obligation; 2) The parties concerned must agree to a new contract; 3) The old
contract must be extinguished; and 4) There must be a valid new contract. 33

mentioned Bond, its renewals, extensions, alterations or substitutions either

in the belief that the COMPANY was obligated to make such payment or in
the belief that said payment was necessary or expedient in order to avoid
greater losses or obligations for which the COMPANY might be liable by
virtue of the terms of the above-mentioned Bond, its renewals, extensions,
alterations, or substitutions, shall be final and shall not be disputed by the
undersigned, who hereby jointly and severally bind themselves to indemnify
[Country Bankers] of any and all such payments, as stated in the preceding
clauses.

In this case, only the first element of novation exists. Indeed, there is a
previous valid obligation, i.e., the 1989 Bonds. There is however neither a
valid new contract nor a clear agreement between the parties to a new
contract since the very existence of the 1990 Bond has been rendered
dubious. Without the new contract, the old contract is not extinguished.

In case the COMPANY shall have paid[,] settled or compromised any liability,
loss, costs, damages, attorneys fees, expenses, claims[,] demands, suits, or
judgments as above-stated, arising out of or in connection with said bond, an
itemized statement thereof, signed by an officer of the COMPANY and other
evidence to show said payment, settlement or compromise, shall be prima
facie evidence of said payment, settlement or compromise, as well as the
liability of the undersigned in any and all suits and claims against the
undersigned arising out of said bond or this bond application. 361awphil

Implied novation necessitates a new obligation with which the old is in total
incompatibility such that the old obligation is completely superseded by the
new one.34 Quite obviously, neither can there be implied novation. In this
case, there is no new obligation.
The liability of Lagman is expressed in Indemnity Agreements executed in
consideration of the 1989 Bonds which we have considered as continuing
contracts. Under both Indemnity Agreements, Lagman, as co-signor, together
with Santos, Ban Lee Lim and Reguine, bound themselves jointly and
severally to Country Bankers to indemnify it for any damage or loss
sustained on the account of the execution of the bond, among others. The
pertinent identical stipulations of the Indemnity Agreements state:
INDEMNITY: To indemnify and make good to the COMPANY jointly and
severally, any damages, prejudice, loss, costs, payments advances and
expenses of whatever kind and nature, including attorneys fees and legal
costs, which the COMPANY may, at any time, sustain or incur, as well as to
reimburse to said COMPANY all sums and amounts of money which the
COMPANY or its representatives shall or may pay or cause to be paid or
become liable to pay, on account of or arising from the execution of the
above-mentioned BOND or any extension, renewal, alteration or substitution
thereof made at the instance of the undersigned or anyone of them. 35
Moreover, the Indemnity Agreements also contained identical Incontestability
Clauses which provide:
INCONTESTABILITY OF PAYMENTS MADE BY THE COMPANY: Any
payment or disbursement made by the COMPANY on account of the above-

Lagman is bound by these Indemnity Agreements. Payments made by

Country Bankers by virtue of the 1989 Bonds gave rise to Lagmans
obligation to reimburse it under the Indemnity Agreements. Lagman, being a
solidary debtor, is liable for the entire obligation.
WHEREFORE, the petition is GRANTED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 61797 are SET ASIDE
and the Decision dated 21 September 1998 of the RTC is hereby
REINSTATED.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO DE
CASTRO*
Associate Justice

MARTIN S. VILLARAMA, JR.**

Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice
AT T E S TAT I O N
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 190521

January 12, 2011

LETICIA TAN, MYRNA MEDINA, MARILOU SPOONER, ROSALINDA TAN,

and MARY JANE TAN, MARY LYN TAN, CELEDONIO TAN, JR., MARY
JOY TAN, and MARK ALLAN TAN, represented herein by their mother,
LETICIA TAN, Petitioners,
vs.
OMC CARRIERS, INC. and BONIFACIO ARAMBALA, Respondents.
RESOLUTION
BRION, J.:
We resolve the motion for reconsideration 1 filed by Leticia Tan, Myrna
Medina, Marilou Spooner, Rosalinda Tan, Mary Jane Tan, Mary Lyn Tan,
Celedonio Tan, Jr., Mary Joy Tan, and Mark Allan Tan (petitioners), all heirs of
the late Celedonio Tan asking us to reverse and set aside our Resolution of
February 17, 2010.2 We denied in this Resolution their petition for review on
certiorari for failing to show any reversible error in the assailed Court of
Appeals (CA) decision of June 22, 20093 sufficient to warrant the exercise of
our discretionary appellate jurisdiction.

The CA decision, in turn, affirmed with modification the decision of the

Regional Trial Court (RTC) of Muntinlupa City in Civil Case No. 96-186,
finding the respondents OMC Carriers, Inc. (OMC) and Bonifacio Arambala
guilty of gross negligence and awarding damages to the petitioners.

brakes. Had OMC done a more rigid inspection of the truck before its use,
the defective brake could have been discovered. The RTC, thus, held OMC
jointly and severally liable with Arambala for the damage caused to the
petitioners, based on the principle of vicarious liability embodied in Article
218012 of the Civil Code.13

THE FACTS
The dispositive portion of the decision stated:
On September 27, 1996, the petitioners filed a complaint for damages with
the RTC against OMC and Bonifacio Arambala. 4 The complaint states that on
November 24, 1995, at around 6:15 a.m., Arambala was driving a truck 5with
a trailer6 owned by OMC, along Meralco Road, Sucat, Muntinlupa City. When
Arambala noticed that the truck had suddenly lost its brakes, he told his
companion to jump out. Soon thereafter, he also jumped out and abandoned
the truck. Driverless, the truck rammed into the house and tailoring shop
owned by petitioner Leticia Tan and her husband Celedonio Tan, instantly
killing Celedonio who was standing at the doorway of the house at the time. 7
The petitioners alleged that the collision occurred due to OMCs gross
negligence in not properly maintaining the truck, and to Arambalas
recklessness when he abandoned the moving truck. Thus, they claimed that
the respondents should be held jointly and severally liable for the actual
damages that they suffered, which include the damage to their properties,
the funeral expenses they incurred for Celedonio Tans burial, as well as the
loss of his earning capacity. The petitioners also asked for moral and
exemplary damages, and attorneys fees.8
The respondents denied any liability for the collision, essentially claiming that
the damage to the petitioners was caused by a fortuitous event, since the
truck skidded due to the slippery condition of the road caused by spilled
motor oil.9

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor

of the plaintiffs and against the defendants ordering:
1. The defendants to pay the plaintiffs jointly and severally the
amount of P50,000.00 for the death of Celedonio Tan;
2. The defendants to pay the plaintiffs jointly and severally the
amount of P500,000.00 for the loss of earning capacity of Celedonio
Tan, plus interest thereon from the date of death of Celedonio Tan;
3. The defendants to pay the plaintiff Leticia Tan jointly and severally
the amount of P355,895.00 as actual damages;
4. The defendants to pay the plaintiffs jointly and severally the
amount of P500,000.00 as moral damages;
5. The defendants to pay the plaintiffs jointly and severally the
amount of P500,000.00 as exemplary damages; and
6. The defendants to pay the plaintiffs jointly and solidarily the
amount of P500,000.00 as attorneys fees.

THE RTC DECISION

Costs against the defendants.

After trial, the RTC found OMC and Arambala jointly and severally liable to
the petitioners for damages.10 Relying on the doctrine of res ipsa loquitur, the
RTC held that it was unusual for a truck to suddenly lose its brakes; the fact
that the truck rammed into the petitioners house raised the presumption of
negligence on the part of the respondents. These, the respondents failed to
refute.11

SO ORDERED.14

The RTC did not agree with the respondents claim of a fortuitous event,
pointing out that even with oil on the road, Arambala did not slow down or
take any precautionary measure to prevent the truck from skidding off the
road. The alleged oil on the road did not also explain why the truck lost its

THE COURT OF APPEALS DECISION

On appeal, the CA affirmed the RTCs findings on the issues of the
respondents negligence and liability for damages. However, the CA modified
the damages awarded to the petitioners by reducing the actual damages
award from P355,895.00 to P72,295.00. The CA observed that only the latter
amount was duly supported by official receipts.15

10

The CA also deleted the RTCs award for loss of earning capacity. The CA
explained that the petitioners failed to substantiate Celedonio Tans claimed
earning capacity with reasonable certainty; no documentary evidence was
ever presented on this point. Instead, the RTC merely relied on Leticia Tans
testimony regarding Celedonio Tans income. The CA characterized this
testimony as self-serving.16
The CA further reduced the exemplary damages from P500,000.00
to P200,000.00, and deleted the award of attorneys fees because the RTC
merely included the award in the dispositive portion of the decision without
discussing its legal basis.17
THE PETITION
In the petition for review on certiorari before us, 18 the petitioners assert that
the CA erred when it modified the RTCs awarded damages. The petitioners
submit the reasons outlined below.

example, the respondents should be made to pay P500,000.00 as exemplary

damages.
Lastly, the petitioners are entitled to attorneys fees based on Article 2208 of
the Civil Code which provides, among others, that attorneys fees can be
recovered when exemplary damages are awarded, and when the defendant
acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly
valid, just and demandable claim.
We initially denied the petition in our Resolution of February 17, 2010, for the
petitioners failure to show any reversible error in the CA decision sufficient to
warrant the exercise of our discretionary appellate jurisdiction. In our
Resolution of August 11, 2010, we reinstated the petition on the basis of the
petitioners motion for reconsideration.
OUR RULING
Finding merit in the petitioners arguments, we partly grant the petition.

First, the CA erred when it reduced the RTCs award of actual damages
from P355,895.00 to P72,295.00. The petitioners claim that they sought
compensation for the damage done to petitioner Leticia Tans house, tailoring
shop, sewing machines, as well as other household appliances. Since the
damages primarily refer to the value of their destroyed property, and not the
cost of repairing or replacing them, the value cannot be evidenced by
receipts. Accordingly, the RTC correctly relied on petitioner Leticia Tans
testimony and the documentary evidence presented, consisting of pictures of
the damaged property, to prove their right to recover actual damages for the
destroyed property.
Second, the petitioners are entitled to actual damages for the loss of
Celedonio Tans earning capacity. While they admit that they did not submit
any documentary evidence to substantiate this claim, the petitioners point out
that Celedonio Tan was undisputably a self-employed tailor who owned a
small tailor shop; in his line of work, no documentary evidence is available.
Third, the petitioners maintain that they are entitled to exemplary damages in
the amount of P500,000.00 because the RTC and the CA consistently found
that the collision was caused by the respondents gross negligence.
Moreover, the respondents acted with bad faith when they fabricated the "oil
slick on the road" story to avoid paying damages to the petitioners. As
observed by the CA, the Traffic Accident Investigation Report did not mention
any motor oil on the road at the time of the accident. SPO4 Armando
Alambro, the Investigation Officer, likewise testified that there was no oil on
the road at the time of the accident. For the public good and to serve as an

Procedural Issue
As both the RTC and the CA found that the respondents gross negligence
led to the death of Celedonio Tan, as well as to the destruction of the
petitioners home and tailoring shop, we see no reason to disturb this factual
finding. We, thus, concentrate on the sole issue of what damages the
petitioners are entitled to.
We are generally precluded from resolving a Rule 45 petition that solely
raises the issue of damages, an essentially factual question, because
Section 1, Rule 45 of the Rules of Court, expressly states that
Section 1. Filing of petition with Supreme Court. A party desiring to appeal
by certiorari from a judgment or final order or resolution of the Court of
Appeals, the Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the Supreme Court a verified
petition for review on certiorari. The petition shall raise only questions of law
which must be distinctly set forth.
In light, however of the RTCs and the CAs conflicting findings on the kind
and amount of damages suffered which must be compensated, we are
compelled to consider the case as one of the recognized exceptions. 19 We
look into the parties presented evidence to resolve this appeal.

11

Temperate damages in lieu of actual damages

We begin by discussing the petitioners claim for actual damages arising from
the damage inflicted on petitioner Leticia Tans house and tailoring shop,
taking into account the sewing machines and various household appliances
affected. Our basic law tells us that to recover damages there must be
pleading and proof of actual damages suffered. 20 As we explained in Viron
Transportation Co., Inc. v. Delos Santos:21
Actual damages, to be recoverable, must not only be capable of proof, but
must actually be proved with a reasonable degree of certainty. Courts cannot
simply rely on speculation, conjecture or guesswork in determining the fact
and amount of damages. To justify an award of actual damages, there must
be competent proof of the actual amount of loss, credence can be given only
to claims which are duly supported by receipts.22
The petitioners do not deny that they did not submit any receipt to support
their claim for actual damages to prove the monetary value of the damage
caused to the house and tailoring shop when the truck rammed into them.
Thus, no actual damages for the destruction to petitioner Leticia Tans house
and tailoring shop can be awarded.
Nonetheless, absent competent proof on the actual damages suffered, a
party still has the option of claiming temperate damages, which may be
allowed in cases where, from the nature of the case, definite proof of
pecuniary loss cannot be adduced although the court is convinced that the
aggrieved party suffered some pecuniary loss. 23As defined in Article 2224 of
the Civil Code:
Article 2224. 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.
In Canada v. All Commodities Marketing Corporation, 24 we disallowed the
award of actual damages arising from breach of contract, where the
respondent merely alleged that it was entitled to actual damages and failed
to adduce proof to support its plea. In its place, we awarded temperate
damages, in recognition of the pecuniary loss suffered.
The photographs the petitioners presented as evidence show the extent of
the damage done to the house, the tailoring shop and the petitioners
appliances and equipment.25 Irrefutably, this damage was directly attributable
to Arambalas gross negligence in handling OMCs truck. Unfortunately, these

photographs are not enough to establish the amount of the loss with
certainty. From the attendant circumstances and given the property
destroyed,26 we find the amount of P200,000.00 as a fair and sufficient award
by way of temperate damages.
Temperate damages in lieu of loss of earning capacity
Similarly, the CA was correct in disallowing the award of actual damages for
loss of earning capacity. Damages for loss of earning capacity are awarded
pursuant to Article 2206 of the Civil Code, which states that:
Article 2206. The amount of damages for death caused by a crime or quasidelict 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[.]
As a rule, documentary evidence should be presented to substantiate the
claim for loss of earning capacity.27 By way of 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. 28
According to the petitioners, prior to his death, Celedonio was a selfemployed tailor who earned approximatelyP156,000.00 a year,
or P13,000.00 a month. At the time of his death in 1995, the prevailing daily
minimum wage was P145.00,29 or P3,770.00 per month, provided the wage
earner had only one rest day per week. Even if we take judicial notice of the
fact that a small tailoring shop normally does not issue receipts to its
customers, and would probably not have any documentary evidence of the
income it earns, Celedonios alleged monthly income ofP13,000.00 greatly
exceeded the prevailing monthly minimum wage; thus, the exception set forth
above does not apply.
In the past, we awarded temperate damages in lieu of actual damages for
loss of earning capacity where earning capacity is plainly established but no

12

evidence was presented to support the allegation of the injured partys actual
income.
In Pleno v. Court of Appeals, 30 we sustained the award of temperate
damages in the amount of P200,000.00 instead of actual damages for loss of
earning capacity because the plaintiffs income was not sufficiently proven.

In view of the award of exemplary damages, we find it also proper to award

the petitioners attorney's fees, in consonance with Article 2208(1) of the Civil
Code.38 We find the award of attorneys fees, equivalent to 10% of the total
amount adjudged the petitioners, to be just and reasonable under the
circumstances.
Interests due

We did the same in People v. Singh, 31 and People v. Almedilla,32 granting

temperate damages in place of actual damages for the failure of the
prosecution to present sufficient evidence of the deceaseds income.
Similarly, in Victory Liner, Inc. v. Gammad,33 we deleted the award of
damages for loss of earning capacity for lack of evidentiary basis of the
actual extent of the loss. Nevertheless, because the income-earning capacity
lost was clearly established, we awarded the heirs P500,000.00 as
temperate damages.
In the present case, the income-earning capacity of the deceased was never
disputed. Petitioners Mary Jane Tan, Mary Lyn Tan, Celedonio Tan, Jr., Mary
Joy Tan and Mark Allan Tan were all minors at the time the petition was filed
on February 4, 2010,34 and they all relied mainly on the income earned by
their father from his tailoring activities for their sustenance and support.
Under these facts and taking into account the unrebutted annual earnings of
the deceased, we hold that the petitioners are entitled to temperate damages
in the amount ofP300,000.00 [or roughly, the gross income for two (2) years]
to compensate for damages for loss of the earning capacity of the deceased.
Reduction of exemplary damages proper
Exemplary or corrective damages are imposed by way of example or
correction for the public good, in addition to moral, temperate, liquidated or
compensatory damages.35 In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence.36
Celedonio Tans death and the destruction of the petitioners home and
tailoring shop were unquestionably caused by the respondents gross
negligence. The law allows the grant of exemplary damages in cases such
as this to serve as a warning to the pubic and as a deterrent against the
repetition of this kind of deleterious actions. 37 The grant, however, should be
tempered, as it is not intended to enrich one party or to impoverish another.
From this perspective, we find the CAs reduction of the exemplary damages
awarded to the petitioners from P500,000.00 to P200,000.00 to be proper.

Finally, we impose legal interest on the amounts awarded, in keeping with

our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals,39 which held
that:
I. When an obligation, regardless of its source, i.e., law, contracts, quasicontracts, delicts or quasi-delicts is breached, the contravenor can be held
liable for damages. The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable damages.lavvphil
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of
a sum of money, i.e., a loan or forbearance of money, the interest
due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of
money, is breached, an interest on the amount of damages awarded
may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot
be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the
court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for

Attorneys fees in order

13

the computation of legal interest shall, in any case, be on the amount

finally adjudged.
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.
Accordingly, legal interest at the rate of 6% per annum on the amounts
awarded starts to run from May 14, 2003, when the trial court rendered
judgment. From the time this judgment becomes final and executory, the
interest rate shall be 12% per annum on the judgment amount and the
interest earned up to that date, until the judgment is wholly satisfied.
WHEREFORE, premises considered, we PARTIALLY GRANT the petition.
The June 22, 2009 decision of the Court of Appeals in CA-G.R. CV. No.
84733, which modified the decision of the Regional Trial Court of Muntinlupa
City, Branch 256, in Civil Case No. 96-186, is AFFIRMED with
MODIFICATION. As modified, respondents OMC Carriers, Inc. and Bonifacio
Arambala are ordered to jointly and severally pay the petitioners the
following:
(1) P50,000.00 as indemnity for the death of Celedonio Tan;

In addition, the total amount adjudged shall earn interest at the rate of 6%
per annum from May 14, 2003, and at the rate of 12% per annum, from the
finality of this Resolution on the balance and interest due, until fully paid.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice
LUCAS P. BERSAMIN
Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice

MARIA LOURDES P.A. SERENO

Associate Justice
AT T E S TAT I O N
I attest that the conclusions in the above Resolution had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.

(2) P72,295.00 as actual damages for funeral expenses;

(3) P200,000.00 as temperate damages for the damage done to
petitioner Leticias house, tailoring shop, household appliances and
shop equipment;

CONCHITA CARPIO MORALES

Associate Justice
Chairperson
C E R T I F I C AT I O N

(4) P300,000.00 as damages for the loss of Celedonio Tans earning

capacity;
(5) P500,000.00 as moral damages;
(6) P200,000.00 as exemplary damages; and
(7) 10% of the total amount as attorneys fees; and costs of suit.

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the
above Resolution had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice

14