SPOUSES ESTRADA vs. PHILIPPINE RABBIT BUS LINES, INC. and SAYLAN G.R. No. 203902.

July 19, 2017.

FACTS:

Petitioner Dionisio Estrada lost his arm in a vehicular accident as a passenger in one of the buses owned
by Philippine Rabbit Bus Lines. The bus was driven by respondent Eduardo Saylan. Petitioners filed a
complaint for damages and prayed for the awards of moral damages of P500,000, actual damages of
P60,000.00, and attorney's fees of P25,000.00. The RTC held Philippine Rabbit jointly and severally liable
with Eduardo for and awarded him the amount he prayed for as moral damages for his emotional
anguish and suffering as a consequence of the injury and amputation of his right arm. The CA imputed
error upon the RTC in not finding that it exercised the diligence of a good father of a family in the
selection and supervision of its drivers. It argued that moral damages are not recoverable in an action
for damages predicated on breach of contract except when death results or when the carrier is guilty of
fraud or bad faith.

ISSUE: WON petitioner is entitled to moral damages. (NO)

RULING:

Moral damages are not recoverable in this case. Moral damages, as a general rule, are not recoverable
in actions for damages predicated on breach of contract. As an exception, such damages are recoverable
[in an action for breach of contract]: (1) in cases in which the mishap results in the death of a passenger,
as provided in Article 1764, in relation to Article 2206(3) of the Civil Code; and (2) in cases in which the
carrier is guilty of fraud or bad faith, as provided in Article 2220. The case does not come under the
exceptions since Dionisio did not die in the mishap but merely suffered an injury. Nevertheless,
petitioners contend that it falls under the second category since they aver that Philippine Rabbit is guilty
of fraud or bad faith. However, allegations of bad faith and fraud must be proved by clear and
convincing evidence. They are never presumed considering that they are serious accusations that can be
so conveniently and casually invoked. And unless convincingly substantiated by whoever is alleging
them, they amount to mere slogans or mudslinging. While petitioners denominated their claim for
P500,000.00 as moral damages, their computation was actually based on the supposed loss/impairment
of Dionisio's earning capacity. It is, however, settled that damages for loss of earning capacity is in the
nature of actual damages. To be recoverable, they must be duly proved with a reasonable degree of
certainty. A court cannot rely on speculation, conjecture, or guesswork as to the fact and amount of
damages, but must depend upon competent proof that they have suffered, and on evidence of the
actual amount thereof. As a rule, documentary evidence should be presented to substantiate the claim
for damages for loss of earning capacity. By way of exception, damages for loss [or impairment] of
earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased
[or the injured] was selfemployed 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 was employed as a daily worker earning less than the
minimum wage under current labor laws. Dionisio does not fall under any of the two exceptions. It is
also unlikely that petitioners presented evidence to prove a claim for actual damages based on
loss/impairment of earning capacity since what they were claiming at the outset was an award for moral
damages. Since it was established that Dionisio lost his right arm, temperate damages in lieu of actual
damages for loss/impairment of earning capacity may be awarded in his favor. Under Article 2224,
"[t]emperate 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 cannot, from the nature of the case, be proved with certainty." The Court finds reasonable to
award Dionisio temperate damages of P500,000.00 in lieu of actual damages for the loss/impairment of
his earning capacity. Petition denied, judgment and resolution affirmed with modifications. Petitioners
are awarded temperate damages of P500,000.00, and actual damages of P57,658.25; both subject to
legal interest of 6% per annum until full satisfaction.