MIGUEL PEREZ RUBIO VS. COURT OF APPEALS, ROBERT O. PHILLIPS & SONS, INC.

G.R. NO. L-50911 MARCH 12, 1986

We fail to see any reason why the petitioner should be accused of unlawful interference in maintaining his stand
regarding the sale of shares of stock of Hacienda Benito, Inc. that he still had the option to rescind the contract
between him and Phillips and Sons and stating the existence of his vendor's hen over said shares of stock. The
conclusion to be drawn from these facts is that the petitioner is not liable for any form of damages in favor of Phillips
and Sons and the Phillips spouses. Consequently, we come to the issue of whether or not the Phillips spouses are
solidarily liable for the debt of Phillips and Sons. This is the issue raised in the seventh assignment of error.

FACTS:

Rubio owned shares of stock in Hacienda Bonito. These shares of stock were sold to Robert O. Phillips and Sons,
Inc. (PS) on instalment basis. In the meantime, PS entered into negotiations for the sale of their shares of stock in
Hacienda Benito, Inc. to Alfonso Yuchengco. Upon learning this, Rubio reminded PS of their obligations under the
contract of sale and reminded them in particular that the shares subject matter thereof were still subject to the
payment of the unpaid balance of the sale price. They gave a similar notice to Alfonso Yuchengco, but expressed no
objection to the sale provided the obligations in their favor were satisfied.

PS filed for a writ of preliminary injunction to prevent Rubio from interfering with the sale of shares of stock of
Hacienda Benito. The trial court issued a permanent writ of preliminary injunction and ordered Rubio to pay PS
actual, exemplary and moral damages.

Because of the above incidents and orders, Perez Rubio filed a petition for certiorari before the SC against PS
alleging that in issuing the writ of preliminary injunction ex parte, the respondent court committed a grave abuse
of discretion The petitioner prayed that the respondent court be restrained from in any way proceeding with the
case, and that, respondent Phillips be enjoined from proceeding with the sale of the shares of stock of Hacienda
Benito, Inc. or any of its assets to Alfonso Yuchengco or to any other person.

SC issued a writ of preliminary injunction restraining all the respondents named in the original petition (l) from
taking further proceedings; (2) from proceeding with the sale of shares of stock of Hacienda Benito, Inc. or any of
its assets to Alfonso T. Yuchengco or to any other person; and (3) from performing any act which would either
diminish the value of said shares of stock or deplete the assets of the Hacienda. Subsequently, SC held that writ of
preliminary injunction previously issued by the trial court is null and void.

The main issue continued and the trial court ordered PS to pay Rubio P4, 250, 000 with 8% interest per annum and
attorney’s fees. They may, however, offset this amount with the damages that Rubio should pay them for
unlawfully interfering in the transaction with Yuchengco (amount of said damages is P4, 404, 510).

They all appealed to the CA. CA modified lower’s court decision by eliminating the payment of interest and
attorney’s fees. Rubio then elevated the case to the SC.

ISSUE:

Whether the award of damages in favour of PS for the unlawful interference of Rubio is warranted.

RULING:

The award of damages is not warranted because Rubio did not unlawfully interfered with the sale of shares of
stock between PS and Yuchengco.

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Taking into consideration, all the details of the negotiations in the sale of the shares of stock of Hacienda Benito,
Inc. from Phillips and Sons to Mr. Yuchengco, there is no factual or legal basis for the appellate court's conclusion
that the petitioner unlawfully and inofficiously interfered with the negotiations.

We fail to see any reason why the petitioner should be accused of unlawful interference in maintaining his stand
regarding the sale of shares of stock of Hacienda Benito, Inc. that he still had the option to rescind the contract
between him and Phillips and Sons and stating the existence of his vendor's hen over said shares of stock.

The petitioner never pretended that he still had full control of the shares of stock which he sold to Phillips and
Sons. He in fact admitted that the shares of stock were already transferred to the corporation and that he did not
have a recorded lien therein. He merely made of record his right to rescind under the original contract of sale. The
details pertaining to the earlier transaction governing the sale of the shares of stock between the petitioner and
Phillips and Sons were in fact, all known to Yuchengco. And, more important, it is obvious from the records that the
petitioner's interest was only in the payment of the P4,250,000.00 balance due him from Phillips and Sons. Thus, in
a meeting called by Yuchengco where the negotiations for the sale of the shares of stock of Hacienda Benito were
discussed, the petitioner made it clear that he was amenable to his waiving or withdrawing the controversial
November 24, 1964 letter provided his interests would be taken care of and protected. (Testimony of Perez Rubio,
TSN., August 5, 1970, pp. 44-50). Obviously, the petitioner felt that the payment of his P4,250,000.00 was not
secured under the terms of payment proposed by Yuchengco. He had the right to refuse to withdraw the November
24, 1964 letter. We see nothing illegal or inofficious about the letter or the refusal to withdraw it.

Whether or not Yuchengco, the prospective buyer, believed that Perez Rubio had a good ground to rescind and
whether or not the buyer's interest would be prejudiced were matters of decision-making dependent solely on hint
In fact the March 12, 1965 letter of Atty. Juan T. David to the petitioner is quite revealing. Phillips and Sons
admitted that under the circumstances, the petitioner's waiver of the controversial November 24, 1964 letter was
unnecessary. The letter disclosed the fact that the waiver issue was extensively discussed by the parties including
their counsel's maintaining the view that waiver was unnecessary.

The conclusion to be drawn from these facts is that the petitioner is not liable for any form of damages in favor of
Phillips and Sons and the Phillips spouses. Consequently, we come to the issue of whether or not the Phillips
spouses are solidarily liable for the debt of Phillips and Sons. This is the issue raised in the seventh assignment of
error.

All the transactions which led to the litigations by, against, or among Manufacturers Bank, Hacienda Benito, Phillips
and Sons, and the Phillips spouses were entered into at the time when payments on the petitioner's shares of stock
were overdue, A person who has not been paid a balance of P4,250,000.00 on a sale of P5,500,000.00 will naturally
be extremely disturbed to see the buyers and other parties dealing with the properties in a manner which could be
reasonably construed as calculated to bring them beyond his reach and making full payment of the debt extremely
difficult, if not impossible. It was a normal reaction and to be expected for the original owner to inform third
persons trying to buy the still unpaid properties about that fact of non- payment and to emphasize to them his right
and options under the original contract of sale. It was also normal to include the third party would-be-buyers who
had taken sides with the defaulting original buyer in the litigations brought against Perez Rubio, the man seeking
to protect his endangered interests.

EDGARDO CARIAGA, ET AL. vs. LAGUNA TAYABAS BUS COMPANY

G.R. No. L-11037 December 29, 1960

Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of
contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the
breach and which the parties had forseen or could have reasonably forseen at the time the obligation was constituted,
provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims
that only the actual damages suffered by Edgardo Cariaga were his medical and hospital expeses. The SC was of the
opinion that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the
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corresponding board examinations must be deemed to be within the same category because they could have
reasonably been foreseen by the parties at the time he boarded the bus owned and operated by the LTB.

FACTS:

One of the buses of Laguna Tayabas Bus Company (LTB) collided with a train. Due to said accident, the driver of the
bus died and many of its passengers sustained severe injuries. Among these passengers was Edgardo Cariaga. An
action for the collection of actual, compensatory, moral, and exemplary damages was filed against LTB. Lower
court ruled against LTB and ordered them to pay Eduardo Cariaga Php 10,490.00 as compensatory damages.
Cross-claim against MRC was likewise dismissed.

Both Cariaga and LTB appealed said decision to the SC. Cariaga contends that LTB should also be ordered to pay
actual and moral damages and attorney’s fees. They also claim that the award given to them is inadequate
considering the nature and the after effects of the physical injuries sustained by Cariaga. LTB, on the other hand,
contends that their cross-claim should not have been dismissed.

ISSUE:

Whether the amount of damages granted by the trial court was inadequate and whether moral damages should
also be awarded.

RULING:

The amount of damages was insufficient, but the moral damages claimed cannot be awarded.

From the deposition given by the doctors who attended to Cariaga, it appears that as a result of the physical
injuries suffered by Edgardo, he is now in a helpless condition. He can no longer finish his studies as a medical
student in UST and has become unfit for any kind of work. Appellant LTB admits that under Art. 2201 of the Civil
Code the damages for which the obligor, guilty of a breach of contract but who acted in good faith, is liable shall be
those that are the natural and probable consequences of the breach and which the parties had forseen or could
have reasonably forseen at the time the obligation was constituted, provided such damages, according to Art. 2199
of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by
Edgardo Cariaga were his medical and hospital expeses. The SC was of the opinion that the income which Edgardo
Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be
deemed to be within the same category because they could have reasonably been foreseen by the parties at the
time he boarded the bus owned and operated by the LTB. Hence, the award for compensatory damages was
increased to P25,000.

However, no moral damages may be awarded. Article 2219 enumerated the instances wherein a plaintiff may
recover for moral damages. Present case does not fall under any of said instances. Plaintiff cannot recover based on
the first instance (criminal offense resulting in physical injuries) because the one who committed the offense was
not LTB. It does not fall also under the second instance (quasi-delict causing physical injuries) because of the pre-
existing contractual relation between the parties.

Neither could defendant Laguna Tayabas Bus Company be held liable to pay moral damages to Edgardo Cariaga
under Article 2220 of the Civil Code on account of breach of its contract of carriage because said defendant did not
act fraudulently or in bad faith in connection therewith. The plaintiff Edgardo Cariaga is also not entitled to recover
for attorney's fees, because this case does not fall under any of the instances enumerated in Article 2208 of the Civil
Code.

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G.A MACHINERIES, INC. V. HORACIO YAPTINCHAY
G.R. NO. L-30965. NOVEMBER 29, 1983

The bare assertion of the respondent that he lost about P54,000.00 and the accompanying documentary evidence
presented to prove the amount lost are inadequate if not speculative. The document itself merely shows that every
time a truck travels, Mr. Yaptinchay earns P369.88. To prove actual damages, it would have been easy to present the
average actual profits realized by the other freight trucks plying the Manila-Baguio route. With the presentation of
such actual income the court could have arrived with reasonable certainty at the amount of actual damages suffered
by the respondent.

FACTS:
G.A. Machineries Inc (GAMI) offered to sell a brand-new Fordson Diesel Engine to Horacio Yaptinchay, owner of the
freight hauling business ‘Hi-Way Express’ which the latter accepted. Within the week after its delivery, however,
the engine in question started to have a series of malfunctions which necessitated successive trips to GAMI’s repair
shop. This prompted Yaptinchay to write a letter protesting that the engine was not brand-new. Scientific
examination and verification tests revealed that the original motor number of the engine aforesaid was tampered.

Yaptinchay filed a complaint for indemnification for damages against GAMI. The trial court ruled in his favour and
ordered GAMI to pay actual damages, reimburse the purchase price, and to pay attorney’s fees. The amount of
actual damages awarded also covers the probable income which the respondent failed to realize because of the
breach of contract.

GAMI appealed to the CA but CA affirmed the trial court’s decision. GAMI then elevated the case to the SC.

ISSUE:

Whether the award for actual damages should also cover the probable income which the respondent failed to
realize because of the breach of contract.

RULING:

SC ruled that the actual damages was not warranted.

Article 2200 of the Civil Code entitles the respondent to recover as compensatory damages not only the value of
the loss suffered but also prospective profits while Article 2201 entitles the respondent to recover all damages
which may be attributed to the non-performance of the obligation. However, in order to recover this kind of
damages, the plaintiff must prove his case. In Cerreno vs. Tan, SC said that when the existence of a loss is
established, absolute certainty as to its amount is not required. The benefit to be derived from a contract which one
of the parties has absolutely failed to perform is of necessity to some extent, a matter of speculation, but the
injured party is not to be denied all remedy for that reason alone. He must produce the best evidence of which his
case is susceptible and if that evidence warrants the inference that he has been damaged by the loss of profits
which he might with reasonable certainty have anticipated but for the defendant’s wrongful act, he is entitled to
recover.

Applying the foregoing test to the instant case, we find the evidence of the respondent insufficient to be considered
within the purview of "best evidence." The bare assertion of the respondent that he lost about P54,000.00 and the
accompanying documentary evidence presented to prove the amount lost are inadequate if not speculative. The
document itself merely shows that every time a truck travels, Mr. Yaptinchay earns P369.88. This amount is then
multiplied by the number of trips which the truck was allegedly unable to make. The estimates were prepared by a
certain Dionisio M. Macasieb whose identity was not even revealed by the Respondent. Mr. Yaptinchay was in the
freight truck business. He had several freight trucks among them the truck with the subject Fordson diesel engine,
covering the route from Manila to Baguio. To prove actual damages, it would have been easy to present the average
actual profits realized by the other freight trucks plying the Manila-Baguio route. With the presentation of such
actual income the court could have arrived with reasonable certainty at the amount of actual damages suffered by
the respondent.

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CHIANG KAI SHEK SCHOOL VS. COURT OF APPEALS AND FAUSTINA FRANCO OH
G.R. NO. L-58028 APRIL 18, 1989

For the wrongful act of the petitioner, the private respondent is entitled to moral damages. As a proximate result of
her illegal dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even besmirched reputation
as an experienced teacher for more than three decades.

FACTS:

When Fausta F. Oh reported back for work at Chiang Kai Shek, she was surprised to find out that she had no
assignment for the next semester. The school did not give any justification for this. Fausta filed a complaint
demanding for separation pay, SSS benefits, salary differentials, maternity benefits, and moral and exemplary
damages.

CFI dismissed the complaint. On appeal, CA set aside the decision of the trial court and found that the school was
liable for illegal dismissal. Moral damages was likely awarded. Chiang Kai Shek then filed a petition for review with
the SC.

ISSUE:

Whether the award for moral damages made by the respondent court was warranted.

RULING:

Yes. Fausta Oh was illegally dismissed from work. Fausta was arbitrarily treated by the petitioner, which has
shown no cause for her removal nor had it given her the notice required by law. It is easy to imagine the
astonishment and hurt she felt when she was flatly and without warning told she was dismissed. There was not
even the amenity of a formal notice of her replacement, with perhaps a graceful expression of thanks for her past
services. She was simply informed she was no longer in the teaching staff. To put it bluntly, she was fired.

For the wrongful act of the petitioner, the private respondent is entitled to moral damages. As a proximate result of
her illegal dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even besmirched
reputation as an experienced teacher for more than three decades. We also find that the respondent court did not
err in awarding her exemplary damages because the petitioner acted in a wanton and oppressive manner when it
dismissed her.

SABENA BELGIAN WORLD AIRLINES VS. COURT OF APPEALS

GR NO. 82068, MARCH 31, 1989

In this case, there is no finding that the carrier’s delay in delivering respondent’s luggage was wrongful or due to bad
faith and hence, no award for moral damages may be given for that instance. Nonetheless, an award of P25,000.00 for
the airline’s bad faith in making the respondent sign a quitclaim without informing her of its contents, which were
written in French, is justified. On the other hand, the award of exemplary damages cannot be justified. SC does not
think that its neglect was so gross as to amount to bad faith or wantonness.

FACTS:

Private respondents bought 3 round trip tickets for the routes covering Manila-Brussels-Barcelona-Madrid from
Sabena Belgian World Airlines (SBWA). Before the flight arrived in Brussels, it was announced that the city would
be cloudy and rainy. When they arrived at the airport, there were no ground stewards with umbrella. They were
forced to walk under the rain. This scenario happened again when their connecting flight to Barcelona was
announced.

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In Barcelona, the luggage of the private respondent went missing. While her luggage was missing, she incurred
expenses for the purchase of several clothes and an overseas call. While they were at the hotal, the private
respondent had an asthma attack. Her children also developed fever. These may be attributed to the rainy weather
condition upon their arrival and departure from Brussels. Hence, plaintiff likewise incurred medical expenses.
Respondent wrote a complaint letter to the Sabena office. Sabena said that their Madrid office would pay about half
of what she was asking, and the balance would be paid in Manila. She received a check and signed a document
written in French, a language she did not understand. Contents of the letter were not explained to her. When she
returned to Manila, she found out that the document she signed was a quitclaim. Private respondent filed a
complaint to recover the balance of her claim as well as moral damages. Trial court ordered Sabena to pay the
respondent actual, moral, and exemplary damages and attorney’s fees.

On appeal, CA modified said decision. CA reduced the moral damages awarded in favor of the private respondent.
SBWA filed a petition for review on certiorari before the SC. Petitioner contends that the award of moral damages
was not proper because it did not act in bad faith.

ISSUE:

Whether the petitioner SBWA is liable to the respondents for moral and exemplary damages.

RULING:

Yes, SBWA is liable to pay for moral damages but not for exemplary damages. In this case, there is no finding that
the carrier’s delay in delivering respondent’s luggage was wrongful or due to bad faith and hence, no award for
moral damages may be given for that instance. Nonetheless, an award of P25,000.00 for the airline’s bad faith in
making the respondent sign a quitclaim without informing her of its contents, which were written in French, is
justified.

On the other hand, the award for exemplary damages was not warranted. SC stated that SBWA failed to protect
respondent from the rain in disembarking from the plane for the stopover in Brussels and again in re-boarding it
for the onward flight to Barcelona. This constitutes a neglect of its duty to its passengers; however, SC does not
think that its neglect was so gross as to amount to bad faith or wantonness. The award of exemplary damages
cannot be justified. In the Airlines Cases in which the Supreme Court awarded moral and exemplary damages, the
airlines concerned were found guilty of either gross neglect or malfeasance or even malice. In contrast, what is
involved in this case was simple negligence, considering that the rain through which the plaintiff-appellees had to
walk was a slight drizzle. If it was driving rain or heavy snow, perhaps there would be basis for finding the
defendant-appellant guilty of gross negligence, in light of the duty of air carriers to observe utmost or
extraordinary diligence.

(NOTE: But SC said that they are liable to pay exemplary damages for alleged duplicity of the airline employee. No
discussion was made with regard to this issue)

PAN AMERICAN WORLD AIRWAYS, INC. VS. INTERMEDIATE APPELLATE COURT, RENE V. PANGAN, SOTANG
BASTOS PRODUCTIONS AND ARCHER PRODUCTIONS
G.R. NO. 70462 AUGUST 11, 1988

SC sustained the validity of a printed stipulation at the back of an airline ticket limiting the liability of the carrier for
lost baggage to a specified amount and ruled that the carrier's liability was limited to said amount since the passenger
did not declare a higher value. Moreover, SC found itself unable to agree with the decision awarding private
respondents damages as and for lost profits when their contracts to show the films in Guam and San Francisco,
California were cancelled. The evidence reveals that the proximate cause of the cancellation of the contracts was
private respondent Pangan's failure to deliver the promotional and advertising materials on the dates agreed upon.
For this petitioner cannot be held liable.

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FACTS:

Rene Pangan obtained from Pan America an economy class ticket for a passage from Manila to Guam. He checked in
two luggages which contained promotional and advertising materials for their film and some personal belongings.
Since there was no space in the economy class, plaintiff Pangan took the first class because he wanted to be on time
in Guam to comply with his commitment, paying an additional sum of $112.00. When he arrived in Guam, his two
luggages did not arrive with his flight. As a consequence, his agreement with Prime Films to supply three movies to
the latter was cancelled. This prompted Pangan filed a complaint against the airlines.

The trial court rendered a decision ordering Pan to pay Pangan actual damages in the amount of Php 83,000 (for
the missing baggage and the loss of income) and the cost of the suit. Pan appealed to the IAC, but IAC affirmed trial
court’s decision. Hence, the instant recourse to this Court by petitioner.

Pan America contends that there is a stipulation at the back of the airplane ticket limiting their liability to $20.00
per kilo for checked baggage. Hence, they are only liable to pay $600.00 (baggage of Pangan weighs 30 kilos) as the
latter did not declare a higher value for his baggage and pay the corresponding additional charges.

ISSUE:

Whether Pangan is entitled to the award of actual damages which is more than what is stipulated at the back of the
airline ticket.

RULING:

No, Pangan is not entitled to an award of actual damages which is more than the stipulated amount at the back of
the ticket.

SC stated that Ong Yiu vs. CA is applicable here. In the said case, SC sustained the validity of a printed stipulation at
the back of an airline ticket limiting the liability of the carrier for lost baggage to a specified amount and ruled that
the carrier's liability was limited to said amount since the passenger did not declare a higher value, much less pay
additional charges. While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by
the provisions thereof. Such provisions have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation.

Moreover, SC found itself unable to agree with the decision awarding private respondents damages as and for lost
profits when their contracts to show the films in Guam and San Francisco, California were cancelled. The evidence
reveals that the proximate cause of the cancellation of the contracts was private respondent Pangan's failure to
deliver the promotional and advertising materials on the dates agreed upon. For this petitioner cannot be held
liable. Private respondent Pangan had not declared the value of the two luggages he had checked in and paid
additional charges. In the absence of a showing that petitioner's attention was called to the special circumstances
requiring prompt delivery of private respondent Pangan's luggages, petitioner cannot be held liable for the
cancellation of private respondents' contracts as it could not have foreseen such an eventuality when it accepted
the luggages for transit.

Neither was petitioner privy to respondents' contracts nor was its attention called to the condition therein
requiring delivery of the promotional and advertising materials on or before a certain date.