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BERSAMIN, J. :

&n an action for breach of contract of carriage commenced by a passenger

against his common carrier, the plaintiff can reco er damages from a third-party

defendant brought into the suit by the common carrier upon a claim based on tort

or quasi -delict. $he liability of the third-party defendant is independent from the

liability of the common carrier to the passenger.

Philtranco Ser ice "nterprises, &nc. Philtranco/ appeals the affirmance 0ith

modifications by the Court of ppeals C / of the decision of the Regional $rial

Court R$C/ a0arding moral, actual and temperate damages, as 0ell as attorney1s

fees and costs of suit, to respondent 2eli3 Paras Paras/, and temperate damages to

respondent &nland $rail0ays, &nc. &nland/, respecti ely the plaintiff and the

defendant4third-party plaintiff in this action for breach of contract of carriage, upon

a finding that the negligence of the petitioner and its dri er had caused the serious

physical in5uries Paras sustained and the material damage &nland1s bus suffered in

a ehicular accident.

A !"#"$" !%

$he antecedent facts, as summari6ed by the C , are as follo0s:

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Plaintiff-appellant 7respondent8 2eli3 Paras Paras for bre ity/, 0ho hailsfrom Cainta, Ri6al is engaged in the buy and sell of fish products. Sometime on+9 2ebruary 9;, on his 0ay home to %anila from Bicol Region, he boarded a

bus 0ith Body No. + and Plate No. "'" *+9, o0ned and operated by &nland$rail0ays, &nc. &nland for bre ity/ and dri en by its dri er Cal in Coner Conerfor bre ity/.

t appro3imately igh0ay, $iaong, ?ue6on, it 0as bumped at the rear by another bus 0ith Plate No. "'B )* , o0ned and operated by Philtranco Ser ice "nterprises, &nc. Philtranco for bre ity/. s a result of thestrong and iolent impact, the &nland bus 0as pushed for0ard and smashed into acargo truc= par=ed along the outer right portion of the high0ay and the shoulderthereof. Conse@uently, the said accident bought considerable damage to the

ehicles in ol ed and caused physical in5uries to the passengers and cre0 of thet0o buses, including the death of Coner 0ho 0as the dri er of the &nland Bus atthe time of the incident.

Paras 0as not spared from the pernicious effects of the accident. fter an

emergency treatment at the San Pablo %edical Center, San Pablo City, !aguna,Paras 0as ta=en to the National Orthopedic >ospital. t the latter hospital, he0as found and diagnosed by #r. ntonio $anchuling, (r. to be affected 0ith thefollo0ing in5uries: a/ contusion4hematomaA b/ dislocation of hip upon fracture ofthe fibula on the right legA c/ fractured small bone on the right legA and d/ closefracture on the tibial plateau of the left leg. "3h. , p. *;, record/

On +D %arch 9; and * pril 9;, Paras under0ent t0o )/ operationsaffecting the fractured portions of his body. "3hs. -) and -< , pp. * and

E+ respecti ely, record/

Fnable to obtain sufficient financial assistance from &nland for the costs ofhis operations, hospitali6ation, doctors1 fees and other miscellaneous e3penses, on< (uly 9 , Paras filed a complaint for damages based on breach of contract ofcarriage against &nland.

&n its ans0er, defendant &nland denied responsibility, by alleging, among

others, that its dri er Coner had obser ed an utmost and e3traordinary care anddiligence to ensure the safety of its passengers. &n support of its disclaimer ofresponsibility, &nland in o=ed the Police &n estigation Report 0hich establishedthe fact that the Philtranco bus dri er of 7sic8 polinar %iralles 0as the one 0hich

iolently bumped the rear portion of the &nland bus, and therefore, the direct and pro3imate cause of Paras1 in5uries.

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On +) %arch +, upon lea e of court, &nland filed a third-partycomplaint against Philtranco and polinar %iralles $hird Party defendants/. &nthis third-party complaint, &nland, sought for e3oneration of its liabilities to Paras,asserting that the latter1s cause of action should be directed against Philtrancoconsidering that the accident 0as caused by %iralles1 lac= of care, negligence and

rec=less imprudence. pp. *+ to *E, records/.

fter trial, the R$C Branch ; / in ntipolo, Ri6al rendered its 5udgment on

(uly 9, ;, 7 8 viz :

G>"R"2OR", third-party defendant Philtranco and polinar %iralles are

hereby ordered to pay plaintiff 5ointly and se erally, the follo0ing amounts:

.P*D,+++.++ as actual damagesA ).P*+,+++.++ as moral damagesA

" $R& ! COFR$ "RR"# &N >O!#&NH $> $ ON!I $>&R#-P R$I #"2"N# N$- PP"!! N$ P>&!$R NCO &S !& B!" 2OR $>"# % H"S SF22"R"# BI PP"!! N$ P R S.

7 8 Rollo , pp. EE-;+.

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&&. $>" $R& ! COFR$ "RR"# &N NO$ >O!#&NH PP"!! N$&N! N# $R &!G IS &NC. $O B" (O&N$!I N# S"'"R !!I !& B!"2OR $>" # % H"S SF22"R"# BI P R S.

&&&. $>" $R& ! COFR$ "RR"# &N NO$ G R#&NH FN" RN"#

&NCO%" S ##&$&ON ! C$F ! # % H"S SF22"R"# BIPP"!! N$ P R S S >&S P>IS&C ! #&S B&!&$I &S P"R% N"N$ &N N $FR".

&'. $>" $R& ! COFR$ "RR"# &N NO$ G R#&NH "J"%P! RI# % H"S &N 2 'OR O2 PP"!! N$ P R S.

On the other hand, &nland assigned the follo0ing errors to the R$C, namely:

$>" $R& ! COFR$ "RR"# G>"N &$ 2 &!"# $O G R# # % H"SFN$O $>" $>&R# P R$I P! &N$&22 NO$G&$>S$ N#&NH C!" R2&N#&NH $> $:

It is clear from the evidence that the plaintiff sustained

injuries because of the rec less, ne!li!ence, and lac of precaution ofthird part" defendant #polinar $iralles, an emplo"ee of %hiltranco.&

N#, CO%P!"$"!I #&SR"H R#"# $>" FNCON$RO'"R$"# OR !N# #OCF%"N$ RI "'"NC"S "S$ B!&S>&NH $>" "J$"N$ N#

#"HR"" O2 # % H"S SFS$ &N"# BI $>" $>&R# P R$I P! &N$&22.

!astly, Philtranco stated that the R$C erred thus0ise:

&

$>" COFR$ ?FO %&S"R B!I "RR"# &N G R#&NH C$F !# % H"S HR" $"R $> N G> $ G S !!"H"# &N $>" CO%P! &N$&$S"!2, N# "'"N %FC> %OR" HR" $"R $> N G> $ G"R"PRO'"# #FR&NH $>" $R& !, >"NC", P"RP"$F $&NH FN(FS$"NR&C>%"N$.

&&

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$>" COFR$ ?FO S"R&OFS!I "RR"# &N G R#&NH %OR !# % H"S $O C FS" O2 C$&ON O2 CF!P -CON$R C$F ! "'"NG&$>OF$ NI "'"NC" O2 HROSS B # 2 &$>A >"NC", CON$R RI$O $>" "S$ B!&S>"# #OC$R&N" &N $>" C S"S O2 P>&!. R BB&$BFS !&N"S 'S. "SHF"RR A SOB"R NO 'S. B"NHF"$ F$O !&N" N#

2!OR"S 'S. %&R N# .

&&&

$>" COFR$ ?FO %&S"R B!I "RR"# &N >O!#&NH $> $ %&R !!"SG S $>" ON" $ 2 F!$ %"R"!I ON $>" S$R"NH>$ O2 $>"$"S$&%ONI O2 $>" PO!&C" &N'"S$&H $OR G>&C> &S &N $FRNB S"# ON $>" S$ $"%"N$S O2 !!"H"# G&$N"SS"S G>O G"R"

N"'"R PR"S"N$"# ON $>" G&$N"SS S$ N#.

&'

$>" COFR$ ?FO CO%%&$$"# HR&"'OFS "RROR &N#&SR"H R#&NH $>" $"S$&%ONI O2 PP"!! N$S1 G&$N"SS"S G>O$"S$&2&"# S $O $>" #"2"NS" O2 "J"RC&S" O2 #F" #&!&H"NC" &N$>" S"!"C$&ON N# SFP"R'&S&ON O2 "%P!OI""S PFRSF N$ $O

R$. ) 9+, ! S$ P R HR P>, N"G C&'&! CO#".

On September )*, )++), the C promulgated its decision, ) 7)8 disposing:

G>"R"2OR", in consideration of the foregoing premises, the assaileddecision dated 9 (uly /; is perforce affirmed 0ith the follo0ingmodifications:

. $hird party defendants-appellants Philtranco and polinar %iralles are

ordered to pay plaintiff-appellant 2eli3 Paras 5ointly and se erally the follo0ingamounts:

) 7)8 C rollo, pp. *- ilarion !. @uino retired/ and ssociate (ustice %ario !.HuariKa &&& retired/ concurring.

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a/ P ,< ;. * as actual damagesA

b/ P*+,+++.++ as temperate damagesA

c/ P*+,+++.++ as moral damagesA and

d/ P)+,+++.++ as attorney1s fees and costs of suit.

). On the third party plaintiff-appellant &nland1s claims, the third party

defendant-appellants Philtranco and polinar %iralles are hereby ordered to paythe former &nland/ 5ointly and se erally the amount of P)*+,+++.++ as and by0ay of temperate damages.

SO OR#"R"#.

$he C agreed 0ith the R$C1s finding that no trace of negligence at the

time of the accident 0as attributable to &nland1s dri er, rendering &nland not guilty

of breach of contract of carriageA that faulty bra=es had caused Philtranco1s bus to

forcefully bump &nland1s bus from behind, ma=ing it hit the rear portion of a

par=ed cargo truc=A that the impact had resulted in considerable material damage to

the three ehiclesA and that Paras and others had sustained arious physical

in5uries.

ccordingly, the C : a / sustained the a0ard of moral damages of

P*+,+++.++ in fa or of Paras pursuant to rticle )) of the Civil Code based on

quasi- delict committed by Philtranco and its dri erA b/ reduced the actual damages

to be paid by Philtranco to Paras from P*D,+++.++ to P ,< ;. * because only the

latter amount had been duly supported by receiptsA c/ granted temperate damages

of P*+,+++.++ in lieu of actual damages in ie0 of the absence of competent proof

of actual damages for his hospitali6ation and therapy/ to be paid by Philtranco to

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ParasA and d / a0arded temperate damages of P)*+,+++.++ under the same premise

to be paid by Philtranco to &nland for the material damage caused to &nland1s bus.

Philtranco mo ed for reconsideration,

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$he Court does not disturb the unanimous findings by the C and the R$C

on the negligence of Philtranco and its dri er being the direct cause of the physical

in5uries of Paras and the material damage of &nland.

Nonetheless, 0e feel bound to pass upon the disparate results the C and the

R$C reached on the liabilities of Philtranco and its dri er.

1.

P*+*% #* +"#o "+ -o+*' $*-*)"%( ! (% %&(! /*%"$ o quasi $"'(#!

Philtranco contends that Paras could not reco er moral damages because his

suit 0as based on breach of contract of carriage, pursuant to 0hich moral damages

could be reco ered only if he had died, or if the common carrier had been guilty of

fraud or bad faith. &t argues that Paras had suffered only physical in5uriesA that he

had not adduced e idence of fraud or bad faith on the part of the common carrierA

and that, conse@uently, Paras could not reco er moral damages directly from it

Philtranco/, considering that it 0as only being subrogated for &nland.

$he Court cannot uphold the petitioner1s contention.

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s a general rule, indeed, moral damages are not reco erable in an action

predicated on a breach of contract. $his is because such action is not included in

rticle )) of the Civil Code *7*8 as one of the actions in 0hich moral damages

may be reco ered. By 0ay of e3ception, moral damages are reco erable in anaction predicated on a breach of contract: a / 0here the mishap results in the death

of a passenger, as pro ided in rticle ;ED, E7E8 in relation to rticle ))+E,

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of the Civil Code A and b/ 0here the common carrier has been guilty of fraud or

bad faith, 9798 as pro ided in rticle )))+ 7 8of the Civil Code .

lthough this action does not fall under either of the e3ceptions, the a0ard

of moral damages to Paras 0as nonetheless proper and alid. $here is no @uestion

that &nland filed its third-party complaint against Philtranco and its dri er in order

to establish in this action that the", instead of Inland, should be directl" liable to

%aras for the ph"sical injuries he had sustained because of their ne!li!ence . $o be

precise, Philtranco and its dri er 0ere brought into the action on the theory of

liability that the pro3imate cause of the collision bet0een &nland1s bus and

Philtranco1s bus had been the negligent, rec=less and imprudent manner defendant

polinar %iralles dro e and operated his dri en unit, the Philtranco Bus 0ith Plate

No. )* , o0ned and operated by third-party defendant Philtranco Ser ice

"nterprises, &nc. +7 +8 $he apparent ob5ecti e of &nland 0as not to merely

subrogate the third-party defendants for itself, as Philtranco appears to suggest,

awarded by the court) unless the deceased on account of "ermanent "hysical disability not caused by thedefendant) had no earning ca"acity at the time of his death$

2! +f the deceased was obliged to give su""ort according to the "rovisions of article 291) the reci"ient who is not an heir called to the decedent4s inheritance by the law of testate or intestate succession) maydemand su""ort from the "erson causing the death) for a "eriod not e ceeding five years) the e actduration to be fi ed by the court$

'! he s"ouse) legitimate and illegitimate descendants and ascendants of the deceased maydemand moral damages for mental anguish by reason of the death of the deceased.

9798 Japan #irlines v. 'iman!an, H.R. No. ;+ D , pril )), )++9, **) SCR

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7 8 but, rather, to obtain a different relief 0hereby the third-party defendants

0ould be held directly, fully and solely liable to Paras and &nland for (hatever

dama!es each had suffered from the negligence committed by Philtranco and its

dri er. &n other 0ords, Philtranco and its dri er 0ere charged here as 5ointtortfeasors 0ho 0ould be 5ointly and se erally be liable to Paras and &nland.

&mpleading Philtranco and its dri er through the third-party complaint filed

on %arch ), + 0as correct. $he de ice of the third-party action, also =no0n as

impleader, 0as in accord 0ith Section ), Rule E of the Revised Rules of Court , therule then applicable, viz :

Section ). )hird-part" complaint . L third-party complaint is a claimthat a defending party may, 0ith lea e of court, file against a person not a party tothe action, called the third-party defendant, for contribution, indemnity,subrogation or any other relief, in respect of his opponent1s claim. )7 )8

"3plaining the application of Section ), Rule E, supra , the Court said in

*albastro v. Court of #ppeals,

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Section ) of Rule E of the Re ised Rules of Court authori6es a defendantto bring into a la0suit any person not a party to the action . . . for contribution,indemnity, subrogation or any other relief in respect of his opponent s claim.2rom its e3plicit language it does not compel the defendant to bring the third-

parties into the litigation, rather it simply permits the inclusion of anyone 0ho

meets the standard set forth in the rule. $he secondary or deri ati e liability of thethird-party is central M 0hether the basis is indemnity, subrogation, contribution,e3press or implied 0arranty or some other theory. T " (- '"*$"+ o2 "3 *+!("%& $"+ ! (% +&'" (% +o "+ o '4 3 " * +() ! !o +"'("2 "5(%!% & $"+ ! "* '(#*/'" %&/%!* !( " '*3. T (% +&'" (% -"+"'4 * +o#"$&+*' -"# * (%-, * $#* o! /" &!('( "$ & '"%% ! "+" (% %o-" %&/%!* !( " /*%(% & $"+ * '(#*/'"'*3.

A *+! 2+o- ! " +"7&(+"-" ! ! *! ! " ! (+$ *+!4 #o- '*( * ! % o&'$

*%%"+! * $"+( *!( " o+ %"#o $*+4 #'*(- 2o+ +"'("2 2+o- ! " ! (+$ *+!4$"2" $* ! ! "+" *+" o! "+ '(-(!*!(o % o %*($ *+!48% */('(!4 !o (- '"*$. T "

+&'" +"7&(+"% ! *! ! " ! (+$ *+!4 $"2" $* ! (% o! * *+!4 !o ! " *#!(o 2o+o! "+3(%" ! " +o "+ +o#"$&+" 2o+ *%%"+!( ) * #'*(- *)*( %! o " 3 o (%*'+"*$4 * *+!4 !o ! " %&(! (% /4 -"* % o2 #o& !"+#'*(- o+ #+o%% #'*(- & $"+%"#!(o % 6 * $ ; o2 R&'" 6. I *$$(!(o !o ! " *2o+"#(!"$ +"7&(+"-" !, ! "#'*(- *)*( %! ! " ! (+$ *+!4 $"2" $* ! -&%! /" /*%"$ & o '*( !(22

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s the foregoing indicates, the claim that the third-party complaint asserts

against the third-party defendant must be predicated on substanti e la0. >ere, the

substanti e la0 on 0hich the right of &nland to see= such other relief through its

third-party complaint rested 0ere rticle ) ;E and rticle ) 9+ of the Civil Code ,0hich read:

rticle ) ;E. Ghoe er by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault ornegligence, if there is no pre-e3isting contractual relation bet0een the parties, iscalled a @uasi-delict and is go erned by the pro isions of this chapter. +)a/

rticle ) 9+. $he obligation imposed by article ) ;E is demandable not

only for one1s o0n acts or omissions, but also for those of persons for 0hom oneis responsible.

333"mployers shall be liable for the damages caused by their employees and

household helpers acting 0ithin the scope of their assigned tas=s, e en though theformer are not engaged in any business or industry.

333$he responsibility treated of in this article shall cease 0hen the persons

herein mentioned pro e that they obser ed all the diligence of a good father of afamily to pre ent damage. +

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%rocedure of the Fnited States from 0hich Section ), supra , 0as deri ed,

obser ed so, to 0it: E7 E8

$he third-party claim need not be based on the same theory as the mainclaim. 2or e3ample, there are cases in 0hich the third-party claim is based on ane3press indemnity contract and the original complaint is framed in terms ofnegligence. Similarly, there need not be any legal relationship bet0een the third-

party defendant and any of the other parties to the action. &mpleader also is propere en though the third party1s liability is contingent, and technically does not comeinto e3istence until the original defendant1s liability has been established. &naddition, the 0ords is or may be liable1 in Rule D a/ ma=e it clear that impleaderis proper e en though the third-party defendant1s liability is not automatically

established once the third-party plaintiff1s liability to the original plaintiff has been determined.

Nor 0as it a pre-re@uisite for attachment of the liability to Philtranco and its

dri er that &nland be first declared and found liable to Paras for the breach of its

contract of carriage 0ith him. ; 7 ;8 s the Court has cogently discoursed in 'amala

v. Jud!e ictor : 97 98

ppellants argue that since plaintiffs filed a complaint for damages againstthe defendants on a breach of contract of carriage, they cannot reco er from thethird-party defendants on a cause of action based on @uasi-delict. $he third partydefendants, they allege, are ne er parties liable 0ith respect to plaintiff s claimalthough they are 0ith respect to the defendants for indemnification, subrogation,contribution or other reliefs. Conse@uently, they are not directly liable to the

E7 E8 Gright, %iller Qane, ederal %ractice and %rocedure , 'ol. E, DDE, + "dition, pp.

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plaintiffs. $heir liability commences only 0hen the defendants are ad5udged liableand not 0hen they are absol ed from liability as in the case at bar.

?uite apparent from these arguments is the misconception entertained byappellants 0ith respect to the nature and office of a third party complaint.

Section E, Rule E of the Re ised Rules of Court defines a third partycomplaint as a claim that a defending party may, 0ith lea e of court, file againsta person not a party to the action, called the third-party defendant, forcontribution, indemnification, subrogation, or any other relief, in respect of hisopponent1s claim. &n the case of iluan vs. Court of #ppeals, et al., E SCR;D) 7 EE8, this Court had occasion to elucidate on the sub5ects co ered by thisRule, thus:

... s e3plained in the tlantic Coast !ine R. Co. s. F.S.2idelity Huaranty Co., *) 2. Supp. ;; D

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by both ad5udications.$hat part of the sentence refers to the secondsub5ect. &f third party is brought in as liable to plaintiff, then third

party is bound by the ad5udication as bet0een him and plaintiff.$hat refers to the first sub5ect. &f third party is brought in as liableto plaintiff and also o er to defendant, then third party is bound by

both ad5udications. 333 Fnder this Rule, a person not a party to an action may be impleaded by the

defendant either a/ on an allegation of liability to the latterA b/ on the ground ofdirect liability to the plaintiff-A or, c/ both a/ and b/. $he situation in a/ isco ered by the phrase for contribution, indemnity or subrogationA 0hile b/ and

c/ are subsumed under the catch all or any other relief, in respect of hisopponent1s claim.

T " #*%" *! /*+ (% o " ( 3 (# ! " ! (+$ *+!4 $"2" $* !% *+" /+o&) !

( !o ! " *#!(o *% $(+"#!'4 '(*/'" !o ! " '*( !(22% & o ! " *''")*!(o ! *! ! "

+(-*+4 * $ (--"$(*!" #*&%" *% % o3 /4 ! " o'(#" ( "%!()*!(o o2 %*($" (#&'*+ #o''(%(o /"!3"" =%(#> ! " */o " -" !(o "$ ! +"" " (#'"% 3*% ! "+"# '"%% "%% * $ ")'()" #" * $ '*# o2 (- +&$" #" =%(#> o2 ! " ! (+$ *+!4$"2" $* ! V(+)('(o =% o&'$ /" L"o *+$o> E%)&"++* 4 L"$"%-* ! " $+( "+ o2! " *%%" )"+ /&%. T " "22"#!% *+" ! *! '*( !(22 * $ ! (+$ *+!4 *+" *! (%%&"*% !o ! "(+ +() !% +"% "#!( ) ! " #'*(- * $ ! " ! (+$ *+!4 (% /o& $ /4 ! "*$ &$(#*!(o *% /"!3"" (- * $ '*( !(22. I! (% o! ( $(% " %*/'" ( ! "

+"-(%"% ! *! ! " $"2" $* ! /" 2(+%! *$ &$)"$ '(*/'" !o '*( !(22 /"2o+" ! "! (+$ *+!4 $"2" $* ! -*4 /" "'$ '(*/'" !o ! " '*( !(22, *% +"#(%"'4, ! "! "o+4 o2 $"2" $* ! (% ! *! (! (% ! " ! (+$ *+!4 $"2" $* !, * $ o! ", 3 o (%directly liable !o '*( !(22. T " %(!&*!(o #o !"- '*!"$ /4 * "''* !% 3o&'$

+o "+'4 "+!*( !o %(!&*!(o =*> */o " 3 "+"( ! " ! (+$ *+!4 $"2" $* ! (%/"( ) %&"$ 2o+ #o !+(/&!(o , ( $"- (!4 o+ %&/+o)*!(o , o+ %(- '4 %!*!"$, 2o+ *$"2" $* !

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?.A3*+$ o2 !"- "+*!" $*-*)"% 3*% ( o+$"+

Philtranco assails the a0ard of temperate damages by the C considering

that, firstl" , Paras and &nland had not raised the matter in the trial court and in their

respecti e appealsA secondl" , the C could not substitute the temperate damages

granted to Paras if Paras could not properly establish his actual damages despite

e idence of his actual e3penses being easily a ailable to himA and, thirdl" , the C

gra ely abused its discretion in granting motu proprio the temperate damages ofP)*+,+++.++ to &nland although &nland had not claimed temperate damages in its

pleading or during trial and e en on appeal.

$he Court cannot side 0ith Philtranco.

ctual damages, to be reco erable, must not only be capable of proof, but

must actually be pro ed 0ith a reasonable degree of certainty. $he reason is that

the court cannot simply rely on speculation, con5ecture or guess0or= in

determining the fact and amount of damages, but there must be competent proof

of the actual amount of loss, credence can be gi en only to claims 0hich are dulysupported by receipts. ) 7) 8

) 7) 8 iron )ransportation Co., Inc. v. /elos 'antos, H..R. No.

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$he receipts formally submitted and offered by Paras 0ere limited to the

costs of medicines purchased on arious times in the period from 2ebruary 9; to

(uly 9 "3hibits " to "-

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City 0here he 0as diagnosed to ha e suffered a dislocated hip, fracture of the

fibula on the right leg, fracture of the small bone of the right leg, and closed

fracture on the tibial plateau of the left leg. >e under0ent surgeries on %arch D,

9; and pril *, 9; to repair the fractures. )* 7)*8 $hus, the C a0arded to himtemperate damages of P*+,+++.++ in the absence of definite proof of his actual

e3penses to0ards that end. s to &nland, %ara illa1s testimony of the bus ha ing

been damaged beyond economic repair sho0ed a definitely substantial pecuniary

loss, for 0hich the C fi3ed temperate damages of P)*+,+++.++. Ge cannot

disturb the C 1s determination, for 0e are in no position today to 5udge its

reasonableness on account of the lapse of a long time from 0hen the accident

occurred. )E7)E8

&n a0arding temperate damages in lieu of actual damages, the C did not

err, because Paras and &nland 0ere definitely sho0n to ha e sustained substantial

pecuniary losses. &t 0ould really be a tra esty of 5ustice 0ere the C no0 to be

held bereft of the discretion to calculate moderate or temperate damages, and

thereby lea e Paras and &nland 0ithout redress from the 0rongful act of Philtranco

and its dri er. ); 7);8 Ge are satisfied that the C e3erted effort and practiced great

care to ensure that the causal lin= bet0een the physical in5uries of Paras and the

material loss of &nland, on the one hand, and the negligence of Philtranco and its

dri er, on the other hand, e3isted in fact. &t also re5ected arbitrary or speculati e

)* 7)*8 $SN, October 9, , pp. - ).

)E 7)E8 $he Civil Code states:

rticle )))*. $emperate damages must be reasonable under the circumstances.

); 7);8 0overnment 'ervice Insurance '"stem v. 1abun!-/ean!, H.R. No.

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proof of loss. Clearly, the costs of Paras1 surgeries and conse@uential

rehabilitation, as 0ell as the fact that repairing &nland1s ehicle 0ould no longer be

economical 5ustly 0arranted the C to calculate temperate damages of P*+,+++.++

and P)*+,+++.++ respecti ely for Paras and &nland.

$here is no @uestion that rticle )))D of the Civil Code e3pressly authori6es

the courts to a0ard temperate damages despite the lac= of certain proof of actual

damages, to 0it:

rticle )))D. $emperate or moderate damages, 0hich are more thannominal but less than compensatory damages, may be reco ered 0hen the courtfinds that some pecuniary loss has been suffered but its amount cannot, from thenature of the case, be pro ed 0ith certainty.

$he rationale for rticle )))D has been stated in %remiere /evelopment *an v.

Court of #ppeals )9 7)98 in the follo0ing manner:

" en if not reco erable as compensatory damages, Panacor may still bea0arded damages in the concept of temperate or moderate damages. Ghen thecourt finds that some pecuniary loss has been suffered but the amount cannot,from the nature of the case, be pro ed 0ith certainty, temperate damages may bereco ered. $emperate damages may be allo0ed in cases 0here from the nature ofthe case, definite proof of pecuniary loss cannot be adduced, although the court iscon inced that the aggrie ed party suffered some pecuniary loss.

$he Code Commission, in e3plaining the concept of temperate damages

under rticle )))D, ma=es the follo0ing comment:

)9 7)98 H.R. No. *

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&n some States of the merican Fnion, temperate damagesare allo0ed. $here are cases 0here from the nature of the case,definite proof of pecuniary loss cannot be offered, although thecourt is con inced that there has been such loss. 2or instance,in5ury to one1s commercial credit or to the good0ill of a business

firm is often hard to sho0 0ith certainty in terms of money.Should damages be denied for that reasonT $he 5udge should beempo0ered to calculate moderate damages in such cases, ratherthan that the plaintiff should suffer, 0ithout redress from thedefendant1s 0rongful act.

.P*+*%8 'o%% o2 "*+ ( ) #* *#(!4

-&%! /" #o- " %*!"$

&n the body of its decision, the C concluded that considering that Paras had

a minimum monthly income of P9,+++.++ as a trader he 0as entitled to reco er

compensation for unearned income during the

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also the claimant1s lost profits compensatory damages or lucrum cessans /.

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.I #+"*%" ( *3*+$ o2 *!!o+ "48% 2""%

lthough it is a sound policy not to set a premium on the right to litigate,

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Pursuant to 6astern 'hippin! 1ines, Inc. v. Court of #ppeals,

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e/ + of the total of items a / to d / hereof as attorney1s feesA and f / &nterest of E per annum from (uly 9, ; on the total of items

a/ to d / hereof until finality of this decision, and ) per annumthereafter until full payment.

). $o &nland $rail0ays, &nc.:

+a P)*+,+++.++ as temperate damagesA +b + of item a / hereofA and

+c &nterest of E per annum on item a / hereof from (uly 9, ;until finality of this decision, and ) per annum thereafter untilfull payment.

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WE CONCUR:

RENATO C. CORONA

Chief (ustice

Chairperson

TERESITA . LEONARDO DE CASTRO MARIANO C. DEL CASTILLO

ssociate (ustice ssociate (ustice

MARTIN S. VILLARAMA, R.

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ssociate (ustice

CERTIFICATION

Pursuant to Section