Torts and Damages | Atty.

Marriane Beltran-Angeles

[G.R. No. 188072 : October 19, 2011]

EMERITA M. DE GUZMAN, PETITIONER, VS. ANTONIO M. TUMOLVA,

RESPONDENT.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
assailing the February 24, 2009 Decision[1] of the Court of Appeals (CA) and its May 26,
2009 Resolution[2] in CA-G.R. SP. No. 104945 entitled "Antonio M. Tumolva v. Emerita M.
De Guzman."

The Facts

On September 6, 2004, petitioner Emerita M. De Guzman (De Guzman), represented by her

attorneys-in-fact, Lourdes Rivera and Dhonna Chan, and respondent Antonio Tumolva,
doing business under the name and style A.M. Tumolva Engineering Works (the
Contractor), entered into a Construction Agreement[3] (Agreement) for the construction of an
orphanage consisting of an administration building, directors/guests house, dining and
service building, children's dormitory, male staff house, and covered walkways in Brgy.
Pulong Bunga, Purok 4, Silang, Cavite, for a contract price of P15,982,150.39. Incorporated
in the Agreement was the plan and specifications of the perimeter fence. The Contractor,
however, made deviations from the agreed plan[4] with respect to the perimeter fence of the
orphanage.

On September 6, 2005, after the completion of the project, De Guzman issued a Certificate
of Acceptance. For his part, the Contractor issued a quitclaim acknowledging the
termination of the contract and the full compliance therewith by De Guzman.

In November 2006, during typhoon "Milenyo," a portion of the perimeter fence collapsed
and other portions tilted. In her Letter dated December 5, 2006, De Guzman, through
counsel, demanded the repair of the fence in accordance with the plan. In response, the
Contractor claimed that the destruction of the fence was an act of God and expressed
willingness to discuss the matter to avoid unnecessary litigation. De Guzman, however,
reiterated her demand for the restoration of the wall without additional cost on her part, or
in the alternative, for the Contractor to make an offer of a certain amount by way of
compensation for the damages she sustained. Her demand was not heeded.

On February 14, 2008, De Guzman filed a Request for Arbitration[5] of the dispute before
the Construction Industry Arbitration Commission (CIAC). She alleged that the Contractor
deliberately defrauded her in the construction of the perimeter fence by "under sizing the
required column rebars from 12mm. based on the plan to only 10mm., the required concrete
hollow blocks from #6 to #5, and the distance between columns from 3.0m to
4.3m."[6] Further, the Contractor neither anchored the lenten beams to the columns nor
placed drains or weepholes along the lower walls. She prayed for an award of actual, moral
and exemplary damages, as well as attorney's fees and expenses of litigation, and for the
inspection and technical assessment of the construction project and the rectification of any
defect.

In his Answer with Counterclaim, the Contractor denied liability for the damaged fence
claiming, among others, that its destruction was an act of God. He admitted making
deviations from the plan, but pointed out that the same were made with the knowledge and
consent of De Guzman through her representatives, Architect Quin Baterna and Project
Engineer Rodello Santos (Engineer Santos), who were present during the construction of
the fence. He further argued that pursuant to the Agreement, the claim for damages was
already barred by the 12-month period from the issuance of the Certificate of Acceptance of
the project within which to file the claim. He, thus, prayed for the dismissal of the action

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and interposed a counterclaim for actual and compensatory damages for the additional
work/change orders made on the project in the amount of P2,046,500.00, attorney's fees and
litigation expenses.

After due proceedings, the CIAC issued the Award dated July 17, 2008 in favor of De
Guzman, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered and AWARD is made on the monetary

claims of Claimant EMERITA M. DE GUZMAN, directing Respondent
Contractor ANTONIO M. TUMOLVA, to pay her the following amounts:

P187,509.00 as actual damages for reconstructing the collapsed and damaged perimeter
fence.

Interest is awarded on the foregoing amount at the legal rate of 6% per annum computed
from the date of this Award. After finality thereof, interest at the rate of 12% per annum
shall be paid thereon until full payment of the awarded amount shall have been made, "this
interim period being deemed to be at that time already a forbearance of credit" (Eastern
Shipping Lines, Inc. v. Court of Appeals (243 SCRA 78 [1994])

P100,000.00 as moral damages.

P100,000.00 as exemplary damages.
P50,000.00 for attorney's fees and expenses of litigation.
P437,509.00 - TOTAL AMOUNT DUE THE CLAIMANT

The CIAC staff is hereby directed to make the necessary computation of how much has
been paid by Claimant as its proportionate share of the arbitration costs
totaling P110,910.44, which computed amount shall be reimbursed by Respondent to the
Claimant.

SO ORDERED.[7]

Aggrieved, the Contractor filed before the CA a Petition for Review with prayer for the
issuance of a temporary restraining order, challenging the CIAC's award of damages in
favor of De Guzman.

On February 24, 2009, the CA modified the Award rendered by CIAC. The dispositive
portion of the decision states:

WHEREFORE, the instant petition is partly GRANTED. The assailed Award dated July
17, 2008 rendered by the CIAC in CIAC Case No. 03-2008 is hereby MODIFIED, deleting
the award of actual, moral and exemplary damages, but awarding temperate damages in
the amount of P100,000.00 for reconstructing the collapsed and damaged perimeter fence.
The rest of the Award stands.

SO ORDERED.[8]

The CA held that although the Contractor deviated from the plan, CIAC's award of actual
damages was not proper inasmuch as De Guzman failed to establish its extent with
reasonable certainty. The CA, however, found it appropriate to award temperate damages
considering that De Guzman suffered pecuniary loss as a result of the collapse of the
perimeter fence due to the Contractor's negligence and violation of his undertakings in the
Agreement. It further ruled that there was no basis for awarding moral damages reasoning
out that De Guzman's worry for the safety of the children in the orphanage was insufficient
to justify the award. Likewise, it could not sustain the award of exemplary damages as
there was no showing that the Contractor acted in wanton, reckless, fraudulent, oppressive,
or malevolent manner.

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De Guzman filed a motion for reconsideration of the said decision, but it was denied for lack
of merit by the CA in its Resolution dated May 26, 2009.

Hence, De Guzman interposed the present petition before this Court anchored on the
following

GROUNDS

(I)

THE COURT OF APPEALS ERRED IN RULING THAT THE EVIDENCE ON

RECORD FAILED TO SUFFICIENTLY ESTABLISH THE AMOUNT OF ACTUAL
DAMAGES THAT PETITIONER DE GUZMAN CAN RECOVER FROM THE
RESPONDENT.

(II)

THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER DE GUZMAN

IS NOT ENTITLED TO AWARDS OF MORAL AND EXEMPLARY DAMAGES.[9]

De Guzman argues inter alia that the Contractor is liable for the actual damages that she
suffered from the collapse of the perimeter fence. He failed to put weep holes on the
collapsed portion of the said fence, which could have relieved the pressure from the wet soil
of the adjoining higher ground.

De Guzman adds that the computation of the cost of rebuilding the collapsed portion of the
perimeter fence by Engineer Santos constituted substantial evidence warranting an award
of actual damages. His affidavit served as his direct testimony in the case even if he did not
appear during the hearing. Having been notarized, it must be admissible in evidence
without further proof of authenticity.

Further, De Guzman questions the CA's deletion of the award for moral and exemplary
damages. She insists that her anxiety and suffering over the safety of the children in the
orphanage entitled her to an award of moral damages. It is likewise her position that the
Contractor's wanton acts of deliberately cheating the benefactors of the orphanage by
making deviations on the approved plan through the use of construction materials of
inferior quality warranted the imposition of exemplary damages against the Contractor.

The Court's ruling

There is no doubt that De Guzman incurred damages as a result of the collapse of the
perimeter fence. The Contractor is clearly guilty of negligence and, therefore, liable for the
damages caused. As correctly found by the CA:

Nonetheless, the Court sustains the CIAC's conclusion that the CONTRACTOR was
negligent in failing to place weepholes on the collapsed portion of the perimeter
fence. Fault or negligence of the obligor consists in his failure to exercise due care and
prudence in the performance of the obligation as the nature of the obligation so demands,
taking into account the particulars of each case. It should be emphasized that even if not
provided for in the plan, the CONTRACTOR himself admitted the necessity of putting
weepholes and claimed to have actually placed them in view of the higher ground elevation
of the adjacent lot vis-Ã -vis the level ground of the construction site. Since he was the one
who levelled the ground and was, thus, aware that the lowest portion of the adjoining land
was nearest the perimeter fence, he should have ensured that sufficient weepholes were
placed because water would naturally flow towards the fence.

However, the CONTRACTOR failed to refute Mr. Ramos' claim that the collapsed portion of
the perimeter fence lacked weepholes. Records also show that the omission of such
weepholes and/or their being plastered over resulted from his failure to exercise the

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requisite degree of supervision over the work, which is the same reason he was unable to
discover the deviations from the plan until the fence collapsed. Hence, the CONTRACTOR
cannot be relieved from liability therefor.[10]

The Court finds no compelling reason to deviate from this factual finding by the CIAC, as
affirmed by the CA. It is settled that findings of fact of quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only respect, but also finality, especially when affirmed by the CA. In
particular, factual findings of construction arbitrators are final and conclusive and not
reviewable by this Court on appeal.[11]

CIAC's award of actual damages, however, is indeed not proper under the circumstances as
there is no concrete evidence to support the plea. In determining actual damages, one
cannot rely on mere assertions, speculations, conjectures or guesswork, but must depend on
competent proof and on the best evidence obtainable regarding specific facts that could
afford some basis for measuring compensatory or actual damages.[12] Article 2199 of the
New Civil Code defines actual or compensatory damages as follows:

Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages.

Unfortunately, De Guzman failed to adduce evidence to satisfactorily prove the amount of

actual damage incurred. Contrary to her assertion, the handwritten calculation of
reconstruction costs made by Engineer Santos and attached to his affidavit cannot be given
any probative value because he never took the witness stand to affirm the veracity of his
allegations in his affidavit and be cross-examined on them. In this regard, it is well to
quote the ruling of the Court in the case of Tating v. Marcella,[13] to wit:

There is no issue on the admissibility of the subject sworn statement. However, the
admissibility of evidence should not be equated with weight of evidence. The admissibility
of evidence depends on its relevance and competence while the weight of evidence pertains
to evidence already admitted and its tendency to convince and persuade. Thus, a particular
item of evidence may be admissible, but its evidentiary weight depends on judicial
evaluation within the guidelines provided by the rules of evidence. It is settled that
affidavits are classified as hearsay evidence since they are not generally prepared by the
affiant but by another who uses his own language in writing the affiant's statements, which
may thus be either omitted or misunderstood by the one writing them. Moreover, the
adverse party is deprived of the opportunity to cross-examine the affiant. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves are
placed on the witness stand to testify thereon.

Neither is there any evidence presented to substantiate Engineer Santos' computation of

the reconstruction costs. For such computation to be considered, there must be some other
relevant evidence to corroborate the same.[14] Thus, the CA was correct in disregarding the
affidavit of Engineer Santos for being hearsay and in not giving probative weight to it.
There being no tangible document or concrete evidence to support the award of actual
damages, the same cannot be sustained.

Nevertheless, De Guzman is indeed entitled to temperate damages as provided under

Article 2224 of the Civil Code for the loss she suffered. When pecuniary loss has been
suffered but the amount cannot, from the nature of the case, be proven with certainty,
temperate damages may be recovered. Temperate damages may be allowed in cases where
from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the
court is convinced that the aggrieved party suffered some pecuniary loss.[15] Undoubtedly,
De Guzman suffered pecuniary loss brought about by the collapse of the perimeter fence by
reason of the Contractor's negligence and failure to comply with the specifications. As she
failed to prove the exact amount of damage with certainty as required by law, the CA was

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correct in awarding temperate damages, in lieu of actual damages. However, after

weighing carefully the attendant circumstances and taking into account the cost of
rebuilding the damaged portions of the perimeter fence, the amount of ?100,000.00 awarded
to De Guzman should be increased. This Court, in recognition of the pecuniary loss
suffered, finds the award of ?150,000.00 by way of temperate damages as reasonable and
just under the premises.

As to the CIAC's award of P100,000.00 as moral damages, this Court is one with the CA
that De Guzman is not entitled to such an award. The record is bereft of any proof that she
actually suffered moral damages as contemplated in Article 2217 of the Code, which
provides:

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of the defendant's wrongful act or omission.

Certainly, the award of moral damages must be anchored on a clear showing that she
actually experienced mental anguish, besmirched reputation, sleepless nights, wounded
feelings, or similar injury. There could not have been a better witness to this experience
than De Guzman herself.[16] Her testimony, however, did not provide specific details of the
suffering she allegedly went through after the fence collapsed while she was miles away in
the United States. As the CA aptly observed, "the testimony of the OWNER as to her worry
for the safety of the children in the orphanage is insufficient to establish entitlement
thereto."[17] Since an award of moral damages is predicated on a categorical showing by the
claimant that she actually experienced emotional and mental sufferings, it must be
disallowed absent any evidence thereon.[18]

Moreover, under the aforequoted provision, moral damages cannot be recovered as the
perimeter fence collapsed in the midst of the strong typhoon "Milenyo." It was not clearly
established that the destruction was the proximate result of the Contractor's act of making
deviation from the plan. As correctly concluded by the CA, viz:

However, while it cannot be denied that the Contractor deviated from the plan, there was
no clear showing whether the same caused or contributed to the collapse/tilting of the
subject perimeter fence. No competent evidence was presented to establish such fact. As
the CIAC itself acknowledged, "(t)here is no way by which to accurately resolve this issue
by the evidence submitted by the parties." The statement of Edwin B. Ramos, Engineering
Aide at the Office of the Municipal Engineer of Silang, Cavite, who conducted an ocular
inspection of the collapsed perimeter fence, that the observed deviations from the plan
"affected the strength of the fence and made it weaker, such that its chance of withstanding
the pressure of water from the other side thereof was greatly diminished or affected" was
merely an expression of opinion. As he himself admitted, he is not qualified to render an
expert opinion.[19]

Further, De Guzman was not able to show that her situation fell within any of the cases
enumerated in Article 2219[20] of the Civil Code upon which to base her demand for the
award of moral damages.

Neither does the breach of contract committed by the Contractor, not being fraudulent or
made in bad faith, warrant the grant of moral damages under Article 2220 which provides
that:

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if
the court should find that, under the circumstances, such damages are justly due. The same
rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

De Guzman cannot be awarded exemplary damages either, in the absence of any evidence

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showing that the Contractor acted in a wanton, fraudulent, reckless, oppressive, or

malevolent manner as provided in Article 2232 of the Civil Code. The ruling in the case
of Nakpil and Sons v. Court of Appeals,[21] relied upon by De Guzman, where it was
emphasized that the wanton negligence in effecting the plans, designs, specifications, and
construction of a building is equivalent to bad faith in the performance of the assigned task,
finds no application in the case at bench. As already pointed out, there is negligence on the
part of Contractor, but it is neither wanton, fraudulent, reckless, oppressive, nor
malevolent.

The award of exemplary damages cannot be made merely on the allegation of De Guzman
that the Contractor's deviations from the plans and specifications without her written
consent was deplorable and condemnable. The Court regards the deviations as excusable
due to the unavailability of the approved construction materials. Besides, these were made
known to De Guzman's project manager who was present all the time during the
construction. Indeed, no deliberate intent on the part of the Contractor to defraud the
orphanage's benefactors was ever shown, much less proved. As may be gleaned from his
testimony:
xxx
2.2.0: What can you say to the claim that the column rebars were reduced in size from
12mm to 10mm?
A : That is untrue.
2.2.1: Why did you say that it was untrue?
A : Because the column rebars that we used is 12mm and not 10mm contrary to the
claim of the claimant. The column rebars that claimant and his engineers claimed
to have been undersized [were] those already subjected to stretching. Due to the
lateral load on the perimeter fence coming from the water that accumulated
thereon, the strength of the column bars was subjected to such kind of force
beyond its capacity thereby resulting them to yield or "mapatid." As a result of
such stretching, the column rebars were deformed thereby causing it [to] change
its width but the length was extended. You can compare it to a candy like "tira-
tira" which if you stretch it becomes longer but its width is reduced. The other
column rebars on the perimeter fence which [were] not subjected to stretching will
prove what I am stating.
2.2.2: Also, in the said request for arbitration, it was claimed that the required hollow
blocks (CHB) was reduced also from #6 to #5, how would you explain this?
A : It is true but such deviation was known to them in view of the fact that there was
no available CHB #6 in Silang, Cavite and so to save on the travel cost in bringing
materials from Manila to the site, it was agreed that such CHB #5 shall be used
instead.
2.2.3: What was the effect of such deviation in using CHB #5 instead of CHB #6?
A : No effect, madam.
2.2.4: Why did you state so, Mr. Witness?
A : Because the entire area of the land which is being secured by the perimeter fence
was fully covered with the fence which is made of CHB. This simply implies that
even though we used a much lesser size of CHB, but we increased the compressive
strength of the mortar and filler used in the premises. This has really no effect
because we cover the entire place with fence.
2.2.5: It was also claimed that the distance between columns was deviated from 3.0 m. to
4.0 m, will you please explain this matter.
A : The computation of the distance between the columns of the perimeter fence as
appearing on the plan was 3.0 m inside to inside. However, the computation made
by the engineer of the claimant as alleged in their Request for Arbitration was 4.0
m. outside to outside which should be 3.6 m. outside to outside as correct distance.
2.2.6: It now appears from your statement that there was a deviation as between the 3.0
m. inside to inside computation in the plan and the actual 3.6 m. outside to
outside computation made by the engineers of the claimant. My question Mr.
Witness is, what would be the effect of such deviation on the columns?
A : It is true that there was such a deviation on the distance of the column but it will
have no effect because still the factor of safety was well provided for. Even the

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existing law on building construction supports this matter. I even sought Engineer
Rommel Amante on the matter and his report supports my allegation.
2.2.7: Was such deviation approved by the claimant or the representatives of the
claimant?
A : Yes because during all the time the construction of the perimeter fence was done,
the project manager of the claimant was present and observing the works.
Further, they have executed a Certificate of Final Acceptance of the project.[22]
xxx

As regards the award of attorney's fees, the Court upholds De Guzman's entitlement to
reasonable attorney's fees, although it recognizes that it is a sound policy not to set a
premium on the right to litigate.[23] It must be recalled that De Guzman's repeated
demands for the repair of the fence or the payment of damages by way of compensation,
were not heeded by the Contractor. The latter's unjust refusal to satisfy De Guzman's
valid, just and demandable claim constrained her to litigate and incur expenses to protect
her interest. Article 2208 of the Civil Code, thus, provides:

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:

xxx

(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;

xxx

Finally, the dismissal of the Contractor's counterclaim is sustained for lack of merit. In his
Comment[24] and Memorandum,[25] the Contractor pleaded that damages should have been
awarded to him. This deserves scant consideration. A perusal of the record reveals that the
matter as regards the return of what he had donated by reason of De Guzman's ingratitude
was not among the issues raised in this petition. Thus, the same cannot be taken
cognizance by the Court.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated
February 24, 2009 and its Resolution dated May 26, 2009 are AFFIRMED with
the MODIFICATION that the award of ?100,000.00 as temperate damages is increased to
?150,000.00. The award shall earn interest at the rate of 12% per annum reckoned from the
finality of this judgment until fully paid.

SO ORDERED.

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