SECOND DIVISION

[G.R. No. 136914. January 25, 2002.]

COUNTRY BANKERS INSURANCE CORPORATION, petitioner,

vs. LIANGA BAY AND COMMUNITY MULTI-PURPOSE
COOPERATIVE, INC., respondent.

Velasquez Meru & Associates for petitioner.

Alvizo Alvvizo Ranoco & Alvizo Law Offices for private respondent.

SYNOPSIS

For the loss it sustained fire as a result of the fire, respondent filed an
insurance claim with petitioner. Petitioner, however, denied the claim on the ground
that based on the submitted documents, the building of respondent was set on fire by
two NPA rebels who wanted to obtain provisions. This was an excepted risk under the
policy contract.

The RTC decision, affirmed by the Court of Appeals, ordered petitioner to pay
respondent P200,000 with interest at 12% per annum from the date of the filing of the
complaint until paid, as well as actual damages, exemplary damages, litigation
expenses, attorney's fees and the costs of suit. Indeed, petitioner failed to prove the
facts upon which the excepted risk was based. Petitioner relied on the sworn
statements of two witnesses and the Spot Report of Pfc. Juarbal. The sworn
statements, however, were inadmissible for being hearsay inasmuch as the people who
executed them did not take the witness stand and could not, therefore, be
cross-examined. No investigation, independent of the statements, was conducted. The
testimony of Pfc. Juarbal relative to the sworn statements, on the other hand, may be
considered as independently relevant statements gathered in the course of
investigation and may be admitted as such but not necessarily to prove the truth
thereof. Nevertheless, the 12% interest and other monetary awards were held not
proper for lack of legal and valid basis. The interest rate should be and was set to 6%
from the date of filing of the complaint.

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 SYLLABUS

1. REMEDIAL LAW; EVIDENCE; BURDEN OF PROOF; A PARTY

MUST PROVE HIS OWN AFFIRMATIVE ALLEGATIONS. — A party is bound by
his own affirmative allegations. This is a well-known postulate echoed in Section 1 of
Rule 131 of the Revised Rules of Court. Each party must prove his own affirmative
allegations by the amount of evidence required by law which in civil cases, as in this
case, is preponderance of evidence, to obtain a favorable judgment. Where a risk is
excepted by the terms of a policy which insures against other perils or hazards, loss
from such a risk constitutes a defense which the insurer may urge, since it has not
assumed that risk, and from this it follows that an insurer seeking to defeat a claim
because of an exception or limitation in the policy has the burden of proving that the
loss comes within the purview of the exception or limitation set up. If a proof is made
of a loss apparently within a contract of insurance, the burden is upon the insurer to
prove that the loss arose from a cause of loss which is expected or for which it is not
liable, or from a cause which limits its liability. Stated elsewise, since the petitioner in
this case is defending on the ground of non-coverage and relying upon an exemption
or exception clause in the fire insurance policy, it has the burden of proving the facts
upon which such excepted risk is based, by a preponderance of evidence. But
petitioner failed to do so. EDcIAC

2. ID.; ID.; ADMISSIBILITY; HEARSAY RULE; ELUCIDATED. — A

witness can testify only to those facts which he knows of his personal knowledge,
which means those facts which are derived from his perception. Consequently, a
witness may not testify as to what he merely learned from others either because he
was told or read or heard the same. Such testimony is considered hearsay and may not
be received as proof of the truth of what he has learned. Such is the hearsay rule
which applies not only to oral testimony or statements but also to written evidence as
well. The hearsay rule is based upon serious concerns about the trustworthiness and
reliability of hearsay evidence inasmuch as such evidence are not given under oath or
solemn affirmation and, more importantly, have not been subjected to
cross-examination by opposing counsel to test the perception, memory, veracity and
articulateness of the out-of-court declarant or actor upon whose reliability on which
the worth of the out-of-court statement depends. Thus, the Sworn Statements of Jose
Lomocso and Ernesto Urbiztondo are inadmissible in evidence, for being hearsay,
inasmuch as they did not take the witness stand and could not therefore be
cross-examined. There are exceptions to the hearsay rule, among which are entries in
official records. To be admissible in evidence, however, three (3) requisites must
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 concur, to wit: (a) that the entry was made by a public officer, or by another person
specially enjoined by law to do so; (b) that it was made by the public officer in the
performance of his duties, or by such other person in the performance of a duty
specially enjoined by law; and (c) that the public officer or other person had sufficient
knowledge of the facts by him stated, which must have been acquired by him
personally or through official information. The third requisite was not met in this case
since no investigation, independent of the statements gathered from Jose Lomocso,
was conducted by Pfc. Arturo V. Juarbal.

3. ID.; ID.; ID.; REPORT RELATIVE TO THE STATEMENT OF

ANOTHER MAY BE CONSIDERED AS INDEPENDENTLY RELEVANT
STATEMENT BUT NOT NECESSARILY TO PROVE THE TRUTH THEREOF. —
The Spot Report of Pfc. Arturo Juarbal relative to the statement of Jose Lomocso to
the effect that NPA rebels allegedly set fire to the respondent's building is
inadmissible in evidence, for the purpose of proving the truth of the statements
contained in the said report, for being hearsay. The said Spot Report is admissible
only insofar as it constitutes part of the testimony of Pfc. Arturo V. Juarbal since he
himself took the witness stand and was available for cross-examination. The portions
of his Spot Report which were of his personal knowledge or which consisted of his
perceptions and conclusions are not hearsay. The rest of the said report relative to the
statement of Jose Lomocso may be considered as independently relevant statements
gathered in the course of Juarbal's investigation and may be admitted as such but not
necessarily to prove the truth thereof.

4. CIVIL LAW; DAMAGES; AWARD OF INTEREST; PROPER

INTEREST RATE IN INSURANCE CLAIM IS 6%. — Concerning the application of
the proper interest rates, the guidelines were set in Eastern Shipping Lines, Inc. v.
Court of Appeals and Mercantile Insurance Co., Inc. The Court observed that a
"forbearance" in the context of the usury law is a "contractual obligation of lender or
creditor to refrain, during a given period of time, from requiring the borrower or
debtor to repay a loan or debt then due and payable." The insurance claim in this case
is evidently not a forbearance of money, goods or credit, and thus the interest rate
should be as it is hereby fixed at six percent (6%) computed from the date of filing of
the complaint.

5. ID.; ID.; ACTUAL DAMAGES MUST BE PROVED. — We find no

justification for the award of actual damages of Fifty Thousand Pesos (P50,000.00).
Well-entrenched is the doctrine that actual, compensatory and consequential damages
must be proved, and cannot be presumed.

6. ID.; ID.; EXEMPLARY DAMAGES; WHEN PROPER. — Concerning

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 the award of exemplary damages for Fifty Thousand Pesos (P50,000.00), we likewise
find no legal and valid basis for granting the same. Article 2229 of the New Civil
Code provides that exemplary damages may be imposed by way of example or
correction for the public good. Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions. They are designed to permit the courts
to mould behavior that has socially deleterious consequences, and its imposition is
required by public policy to suppress the wanton acts of an offender. However, it
cannot be recovered as a matter of right. It is based entirely on the discretion of the
court. We find no cogent and valid reason to award the same in the case at bar. IcHTED

7. ID.; ID.; LITIGATION EXPENSES AND ATTORNEY'S FEES;

ELUCIDATED. — With respect to the award of litigation expenses and attorney's
fees, Article 2208 of the New Civil Code enumerates the instances where such may be
awarded and, in all cases, it must be reasonable, just and equitable if the same were to
be granted. Attorney's fees as part of damages are not meant to enrich the winning
party at the expense of the losing litigant. They are not awarded every time a party
prevails in a suit because of the policy that no premium should be placed on the right
to litigate. The award of attorney's fees is the exception rather than the general rule.
As such, it is necessary for the court to make findings of facts and law that would
bring the case within the exception and justify the grant of such award.

DECISION

DE LEON, JR., J : p

Before us is a petition for review on certiorari of the Decision 1(1) of the

Court of Appeals 2(2) dated December 29, 1998 in CA-G.R. CV Case No. 36902
affirming in toto the Decision 3(3) dated December 26, 1991 of the Regional Trial
Court of Lianga, Surigao del Sur, Branch 28, in Civil Case No. L-518 which ordered
petitioner Country Bankers Insurance Corporation to fully pay the insurance claim of
respondent Lianga Bay and Community Multi-Purpose Cooperative, Inc., under Fire
Insurance Policy No. F-1397, for loss sustained as a result of the fire that occurred on
July 1, 1989 in the amount of Two Hundred Thousand Pesos (P200,000.00), with
interest at twelve percent (12%) per annum from the date of filing of the complaint
until fully paid, as well as Fifty Thousand Pesos (P50,000.00) as actual damages,
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 Fifty Thousand Pesos (P50,000.00) as exemplary damages, Five Thousand Pesos
(P5,000.00) as litigation expenses, Ten Thousand Pesos (P10,000.00) as attorney's
fees, and the costs of suit.

The facts are undisputed:

The petitioner is a domestic corporation principally engaged in the insurance

business wherein it undertakes, for a consideration, to indemnify another against loss,
damage or liability from an unknown or contingent event including fire while the
respondent is a duly registered cooperative judicially declared insolvent and
represented by the elected assignee, Cornelio Jamero.

It appears that sometime in 1989, the petitioner and the respondent entered into
a contract of fire insurance. Under Fire Insurance Policy No. F-1397, the petitioner
insured the respondent's stocks-in-trade against fire loss, damage or liability during
the period starting from June 20, 1989 at 4:00 p.m. to June 20, 1990 at 4:00 p.m., for
the sum of Two Hundred Thousand Pesos (P200,000.00).

On July 1, 1989, at or about 12:40 a.m., the respondent's building located at

Barangay Diatagon, Lianga, Surigao del Sur was gutted by fire and reduced to ashes,
resulting in the total loss of the respondent's stocks-in-trade, pieces of furniture and
fixtures, equipments and records.

Due to the loss, the respondent filed an insurance claim with the petitioner
under its Fire Insurance Policy No. F-1397, submitting: (a) the Spot Report of Pfc.
Arturo V. Juarbal, INP Investigator, dated July 1, 1989; (b) the Sworn Statement of
Jose Lomocso; and (c) the Sworn Statement of Ernesto Urbiztondo.

The petitioner, however, denied the insurance claim on the ground that, based
on the submitted documents, the building was set on fire by two (2) NPA rebels who
wanted to obtain canned goods, rice and medicines as provisions for their comrades in
the forest, and that such loss was an excepted risk under paragraph No. 6 of the policy
conditions of Fire Insurance Policy No. F-1397, which provides:

This insurance does not cover any loss or damage occasioned by or

through or in consequence, directly or indirectly, of any of the following
occurrences, namely:

xxx xxx xxx

(d) Mutiny, riot, military or popular uprising, insurrection, rebellion,

revolution, military or usurped power.
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 Any loss or damage happening during the existence of abnormal
conditions (whether physical or otherwise) which are occasioned by or through
or in consequence, directly or indirectly, of any of said occurrences shall be
deemed to be loss or damage which is not covered by this insurance, except to
the extent that the Insured shall prove that such loss or damage happened
independently of the existence of such abnormal conditions.

Finding the denial of its claim unacceptable, the respondent then instituted in
the trial court the complaint for recovery of "loss, damage or liability" against
petitioner. The petitioner answered the complaint and reiterated the ground it earlier
cited to deny the insurance claim, that is, that the loss was due to NPA rebels, an
excepted risk under the fire insurance policy.

In due time, the trial court rendered its Decision dated December 26, 1991 in
favor of the respondent, declaring that:

Based on its findings, it is therefore the considered opinion of this Court,

as it so holds, that the defenses raised by defendant — Country Bankers has
utterly crumbled on account of its inherent weakness, incredibility and
unreliability, and after applying those helpful tools like common sense, logic and
the Court's honest appraisal of the real and actual situation obtaining in this area,
such defenses remains (sic) unimpressive and unconvincing, and therefore, the
defendant — Country Bankers has to be irreversibly adjudged liable, as it should
be, to plaintiff-Insolvent Cooperative, represented in this action by its Assignee,
Cornelio Jamero, and thus, ordering said defendant — Country Bankers to pay
the plaintiff-Insolvent Cooperative, as follows:

1. To fully pay the insurance claim for the loss the insured-plaintiff sustained
as a result of the fire under its Fire Insurance Policy No. F-1397 in its full
face value of P200,000.00 with interest of 12% per annum from date of
filing of the complaint until the same is fully paid;

2. To pay as and in the concept of actual or compensatory damages in the

total sum of P50,000.00;

3. To pay as and in the concept of exemplary damages in the total sum of

P50,000.00;

4. To pay in the concept of litigation expenses the sum of P5,000.00;

5. To pay by way of reimbursement the attorney's fees in the sum of

P10,000.00; and

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 6. To pay the costs of the suit.

For being unsubstantiated with credible and positive evidence, the

"counterclaim" is dismissed.

IT IS SO ORDERED.

Petitioner interposed an appeal to the Court of Appeals. On December 29,

1998, the appellate court affirmed the challenged decision of the trial court in its
entirety. Petitioner now comes before us via the instant petition anchored on three (3)
assigned errors, 4(4) to wit:

1. THE HONORABLE COURT OF APPEALS FAILED TO

APPRECIATE AND GIVE CREDENCE TO THE SPOT REPORT OF
PFC. ARTURO JUARBAL (EXH. 3) AND THE SWORN
STATEMENT OF JOSE LOMOCSO (EXH. 4) THAT THE
RESPONDENT'S STOCK-IN-TRADE WAS BURNED BY THE NPA
REBELS, HENCE AN EXCEPTED RISK UNDER THE FIRE
INSURANCE POLICY.

2. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING

PETITIONER LIABLE FOR 12% INTEREST PER ANNUM ON THE
FACE VALUE OF THE POLICY FROM THE FILING OF THE
COMPLAINT UNTIL FULLY PAID.

3. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING

THE PETITIONER LIABLE FOR ACTUAL AND EXEMPLARY
DAMAGES, LITIGATION EXPENSES, ATTORNEYS FEES AND
COST OF SUIT.

A party is bound by his own affirmative allegations. This is a well-known

postulate echoed in Section 1 of Rule 131 of the Revised Rules of Court. Each party
must prove his own affirmative allegations by the amount of evidence required by law
which in civil cases, as in this case, is preponderance of evidence, to obtain a
favorable judgment. 5(5)

In the instant case, the petitioner does not dispute that the respondent's
stocks-in-trade were insured against fire loss, damage or liability under Fire Insurance
Policy No. F-1397 and that the respondent lost its stocks-in-trade in a fire that
occurred on July 1, 1989, within the duration of said fire insurance. The petitioner,
however, posits the view that the cause of the loss was an excepted risk under the
terms of the fire insurance policy.
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 Where a risk is excepted by the terms of a policy which insures against other
perils or hazards, loss from such a risk constitutes a defense which the insurer may
urge, since it has not assumed that risk, and from this it follows that an insurer seeking
to defeat a claim because of an exception or limitation in the policy has the burden of
proving that the loss comes within the purview of the exception or limitation set up. If
a proof is made of a loss apparently within a contract of insurance, the burden is upon
the insurer to prove that the loss arose from a cause of loss which is excepted or for
which it is not liable, or from a cause which limits its liability. 6(6) Stated elsewise,
since the petitioner in this case is defending on the ground of non-coverage and
relying upon an exemption or exception clause in the fire insurance policy, it has the
burden of proving the facts upon which such excepted risk is based, by a
preponderance of evidence. 7(7) But petitioner failed to do so.

The petitioner relies on the Sworn Statements of Jose Lomocso and Ernesto
Urbiztondo as well as on the Spot Report of Pfc. Arturo V. Juarbal dated July 1, 1989,
more particularly the following statement therein:

. . . investigation revealed by Jose Lomocso that those armed men wanted to get can goods and
rice for their consumption in the forest PD investigation further disclosed that the perpetrator are
member (sic) of the NPA PD end. . . .

A witness can testify only to those facts which he knows of his personal
knowledge, which means those facts which are derived from his perception. 8(8)
Consequently, a witness may not testify as to what he merely learned from others
either because he was told or read or heard the same. Such testimony is considered
hearsay and may not be received as proof of the truth of what he has learned. Such is
the hearsay rule which applies not only to oral testimony or statements but also to
written evidence as well. 9(9)

The hearsay rule is based upon serious concerns about the trustworthiness and
reliability of hearsay evidence inasmuch as such evidence are not given under oath or
solemn affirmation and, more importantly, have not been subjected to
cross-examination by opposing counsel to test the perception, memory, veracity and
articulateness of the out-of-court declarant or actor upon whose reliability on which
the worth of the out-of-court statement depends. 10(10)

Thus, the Sworn Statements of Jose Lomocso and Ernesto Urbiztondo are
inadmissible in evidence, for being hearsay, inasmuch as they did not take the witness
stand and could not therefore be cross-examined.

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 There are exceptions to the hearsay rule, among which are entries in official
records. 11(11) To be admissible in evidence, however, three (3) requisites must
concur, to wit:

(a) that the entry was made by a public officer, or by another person specially
enjoined by law to do so;

(b) that it was made by the public officer in the performance of his duties, or
by such other person in the performance of a duty specially enjoined by
law; and

(c) that the public officer or other person had sufficient knowledge of the
facts by him stated, which must have been acquired by him personally or
through official information. 12(12)

The third requisite was not met in this case since no investigation, independent of the
statements gathered from Jose Lomocso, was conducted by Pfc. Arturo V. Juarbal. In
fact, as the petitioner itself pointed out, citing the testimony of Pfc. Arturo Juarbal,
13(13) the latter's Spot Report "was based on the personal knowledge of the caretaker
Jose Lomocso who witnessed every single incident surrounding the facts and
circumstances of the case." This argument undeniably weakens the petitioner's defense,
for the Spot Report of Pfc. Arturo Juarbal relative to the statement of Jose Lomocso to the
effect that NPA rebels allegedly set fire to the respondent's building is inadmissible in
evidence, for the purpose of proving the truth of the statements contained in the said
report, for being hearsay.

The said Spot Report is admissible only insofar as it constitutes part of the
testimony of Pfc. Arturo V. Juarbal since he himself took the witness stand and was
available for cross-examination. The portions of his Spot Report which were of his
personal knowledge or which consisted of his perceptions and conclusions are not
hearsay. The rest of the said report relative to the statement of Jose Lomocso may be
considered as independently relevant statements gathered in the course of Juarbal's
investigation and may be admitted as such but not necessarily to prove the truth
thereof. 14(14)

The petitioner's evidence to prove its defense is sadly wanting and thus, gives
rise to its liability to the respondent under Fire Insurance Policy No. F-1397.
Nonetheless, we do not sustain the trial court's imposition of twelve percent (12%)
interest on the insurance claim as well as the monetary award for actual and
exemplary damages, litigation expenses and attorney's fees for lack of legal and valid

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 basis.

Concerning the application of the proper interest rates, the following guidelines
were set in Eastern Shipping Lines, Inc. v. Court of Appeals and Mercantile
Insurance Co., Inc.: 15(15)

I. When an obligation, regardless of its source, i.e., law, contracts,

quasi-contracts, 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.

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 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
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 to be by then an equivalent to a forbearance of credit.

In the said case of Eastern Shipping, the Court further observed that a "forbearance" in
the context of the usury law is a "contractual obligation of lender or creditor to refrain,
during a given period of time, from requiring the borrower or debtor to repay a loan or
debt then due and payable."

Considering the foregoing, the insurance claim in this case is evidently not a
forbearance of money, goods or credit, and thus the interest rate should be as it is
hereby fixed at six percent (6%) computed from the date of filing of the complaint.

We find no justification for the award of actual damages of Fifty Thousand

Pesos (P50,000.00). Well-entrenched is the doctrine that actual, compensatory and
consequential damages must be proved, and cannot be presumed. 16(16) That part of
the dispositive portion of the Decision of the trial court ordering the petitioner to pay
actual damages of Fifty Thousand Pesos (P50,000.00) has no basis at all. The
justification, if any, for such an award of actual damages does not appear in the body
of the decision of the trial court. Neither is there any testimonial and documentary
evidence on the alleged actual damages of Fifty Thousand Pesos (P50,000.00) to
warrant such an award. Thus, the same must be deleted.

Concerning the award of exemplary damages for Fifty Thousand Pesos

(P50,000.00), we likewise find no legal and valid basis for granting the same. Article
2229 of the New Civil Code provides that exemplary damages may be imposed by
way of example or correction for the public good. Exemplary damages are imposed
not to enrich one party or impoverish another but to serve as a deterrent against or as a
negative incentive to curb socially deleterious actions. They are designed to permit the
courts to mould behavior that has socially deleterious consequences, and its
imposition is required by public policy to suppress the wanton acts of an offender.
However, it cannot be recovered as a matter of right. It is based entirely on the
discretion of the court. We find no cogent and valid reason to award the same in the
case at bar.

With respect to the award of litigation expenses and attorney's fees, Article
2208 of the New Civil Code 17(17) enumerates the instances where such may be
awarded and, in all cases, it must be reasonable, just and equitable if the same were to
be granted. Attorney's fees as part of damages are not meant to enrich the winning
party at the expense of the losing litigant. They are not awarded every time a party
prevails in a suit because of the policy that no premium should be placed on the right
to litigate. 18(18) The award of attorney's fees is the exception rather than the general
rule. As such, it is necessary for the court to make findings of facts and law that
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 would bring the case within the exception and justify the grant of such award. We
find none in this case to warrant the award by the trial court of litigation expenses and
attorney's fees in the amounts of Five Thousand Pesos (P5,000.00) and Ten Thousand
Pesos (P10,000.00), respectively, and therefore, the same must also be deleted.

WHEREFORE, the appealed Decision is MODIFIED. The rate of interest on

the adjudged principal amount of Two Hundred Thousand Pesos (P200,000.00) shall
be six percent (6%) per annum computed from the date of filing of the Complaint in
the trial court. The awards in the amounts of Fifty Thousand Pesos (P50,000.00) as
actual damages, Fifty Thousand Pesos (P50,000.00) as exemplary damages, Five
Thousand Pesos (P5,000.00) as litigation expenses, and Ten Thousand Pesos
(P10,000.00) as attorney's fees are hereby DELETED. Costs against the petitioner.

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

Footnotes
1. Penned by Associate Justice Jesus M. Elbinias and concurred in by Associate Justices
Eugenio S. Labitoria and Marina L. Buzon, Rollo, pp. 25-29.
2. Fourth Division.
3. Penned by Judge Bernardo V. Saludares, Rollo, pp. 31-52.
4. Rollo, p. 12.
5. Tai Tong Chuache & Co. v. Insurance Commission, 158 SCRA 366, 372 [1988];
Summit Guaranty & Insurance Co., Inc. v. Court of Appeals, 110 SCRA 241, 249
[1981] citing 20 Am. Jur. 142; Paris-Manila Perfume Co. v. Phoenix Assurance Co.,
49 Phil. 753 [1926].
6. 44 Am Jur 2d Insurance § 1938.
7. 44 Am Jur 2d Insurance § 2021.
8. Section 36 of Rule 130 of the Revised Rules of Court.
9. D.M. Consunji, Inc. v. Court of Appeals and Maria J. Juego, G.R. No. 137873, April
20, 2001, pp. 3-4 citing 31A C.J.S. Evidence § 194 and Philippine Home Assurance
Corp. v. Court of Appeals, 257 SCRA 468, 479 [1996].
10. Section 216 [2], Gilbert, Law Summaries on Evidence, cited in Remedial Law, Vol. V:
Revised Rules on Evidence, Oscar M. Herrera, 1999 Edition, p. 565.
11. Section 44 of Rule 130 of the Revised Rules of Court provides:
Entries in official records made in the performance of his duty by a public officer of
the Philippines, or by a person in the performance of a duty specially enjoined by law,
are prima facie evidence of the facts therein stated.
12. Africa v. Caltex (Phil.), Inc., 16 SCRA 448, 452 [1966].
13. Rollo, pp. 16-17.
Copyright 1994-2017 CD Technologies Asia, Inc. Jurisprudence 1901 to 2016 12
 14. Rodriguez v. Court of Appeals, 273 SCRA 607, 618 [1997].
15. 234 SCRA 78, 95-97 [1994].
16. Eduardo P. Lucas v. Spouses Maximo C. Royo and Corazon B. Royo, G.R. No.
136185, October 30, 2000, p. 9; Integrated Packaging Corporation v. Court of
Appeals, 333 SCRA 170, 179 [2000]; Lucena v. Court of Appeals, 313 SCRA 47,
61-62 [1999].
17. Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
1) When exemplary damages are awarded;
2) When the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest;
3) In criminal cases of malicious prosecution against the plaintiff;
4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
5) Where the defendant acted in gross and evident bad faith in refusing to satisfy
the plaintiff's plainly valid, just and demandable claim;
6) In actions for legal support;
7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
8) In actions for indemnity under workmen's compensation and employer's
liability laws;
9) In a separate civil action to recover civil liability arising from a crime;
10) When at least double judicial costs are awarded;
11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
18. Ibaan Rural Bank, Inc. v. Court of Appeals, 321 SCRA 88, 95 [1999].

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 Endnotes

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1. Penned by Associate Justice Jesus M. Elbinias and concurred in by Associate Justices
Eugenio S. Labitoria and Marina L. Buzon, Rollo, pp. 25-29.

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2. Fourth Division.

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3. Penned by Judge Bernardo V. Saludares, Rollo, pp. 31-52.

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4. Rollo, p. 12.

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5. Tai Tong Chuache & Co. v. Insurance Commission, 158 SCRA 366, 372 [1988];
Summit Guaranty & Insurance Co., Inc. v. Court of Appeals, 110 SCRA 241, 249
[1981] citing 20 Am. Jur. 142; Paris-Manila Perfume Co. v. Phoenix Assurance Co.,
49 Phil. 753 [1926].

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6. 44 Am Jur 2d Insurance § 1938.

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7. 44 Am Jur 2d Insurance § 2021.

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8. Section 36 of Rule 130 of the Revised Rules of Court.

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 9 (Popup - Popup)
9. D.M. Consunji, Inc. v. Court of Appeals and Maria J. Juego, G.R. No. 137873, April
20, 2001, pp. 3-4 citing 31A C.J.S. Evidence § 194 and Philippine Home Assurance
Corp. v. Court of Appeals, 257 SCRA 468, 479 [1996].

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10. Section 216 [2], Gilbert, Law Summaries on Evidence, cited in Remedial Law, Vol. V:
Revised Rules on Evidence, Oscar M. Herrera, 1999 Edition, p. 565.

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11. Section 44 of Rule 130 of the Revised Rules of Court provides:
Entries in official records made in the performance of his duty by a public officer of
the Philippines, or by a person in the performance of a duty specially enjoined by law,
are prima facie evidence of the facts therein stated.

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12. Africa v. Caltex (Phil.), Inc., 16 SCRA 448, 452 [1966].

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13. Rollo, pp. 16-17.

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14. Rodriguez v. Court of Appeals, 273 SCRA 607, 618 [1997].

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15. 234 SCRA 78, 95-97 [1994].

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 16. Eduardo P. Lucas v. Spouses Maximo C. Royo and Corazon B. Royo, G.R. No.
136185, October 30, 2000, p. 9; Integrated Packaging Corporation v. Court of
Appeals, 333 SCRA 170, 179 [2000]; Lucena v. Court of Appeals, 313 SCRA 47,
61-62 [1999].

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17. Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
1) When exemplary damages are awarded;
2) When the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest;
3) In criminal cases of malicious prosecution against the plaintiff;
4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just and demandable claim;
6) In actions for legal support;
7) In actions for the recovery of wages of household helpers, laborers and
skilled workers;
8) In actions for indemnity under workmen's compensation and employer's
liability laws;
9) In a separate civil action to recover civil liability arising from a crime;
10) When at least double judicial costs are awarded;
11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.

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18. Ibaan Rural Bank, Inc. v. Court of Appeals, 321 SCRA 88, 95 [1999].

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