G.R. No. 72828 . January 31, 1989.
ESTELITA S. MONZON, ET AL., petitioners, vs. INTERMEDIATE APPELLATE COURT & THEO H. DAVIES & CO., FAR EAST LTD., respondents.

FACTS

The case originated from a fatal plane crash on September 13, 1967, which killed Arturo Monzon and five others. Prior to the crash, the aircraft’s propeller had been damaged and was repaired by the chief mechanic of respondent Theo H. Davies & Co., who filed down the propeller blade tips. The crash was caused by the in-flight detachment of the plane’s right aileron. Petitioners, the widow and children of Arturo Monzon, filed a complaint for damages against Dole Philippines (the plane owner) and respondent Davies, alleging gross negligence. Dole settled via compromise, while Davies proceeded to trial.
The trial court found Davies liable and awarded petitioners substantial damages, including sums for loss of earning capacity, moral damages, exemplary damages, and attorney’s fees. The court later granted petitioners’ motion and ordered that the awards for indemnity and loss of earning capacity bear legal interest. The Intermediate Appellate Court initially affirmed the trial court’s decision in toto. However, upon Davies’ motion for reconsideration, the appellate court modified the decision by drastically reducing the awards for loss of earning capacity, moral damages, and exemplary damages, and by deleting the imposed interests.

ISSUE

Whether the Intermediate Appellate Court committed reversible error in modifying its original decision by reducing the awarded damages and deleting the legal interests.

RULING

Yes, the Supreme Court reversed the modified decision of the Intermediate Appellate Court. The legal logic is anchored on the nature of the damages awarded and the proper computation of interest. The reduction of the loss of earning capacity was erroneous. The trial court’s computation, based on the deceased’s life expectancy and proven annual income, was sound. The appellate court’s alternative computation, which unrealistically assumed the deceased’s income would remain static, was rejected as it ignored the natural progression of income over a career. Furthermore, the credit from the compromise with Dole could not be applied to reduce Davies’ liability, as Davies and Dole were not established joint tortfeasors; Davies did not pursue its cross-claim against Dole.
The reduction of moral and exemplary damages was also unjustified. The trial court’s award properly considered the attendant circumstances, including the wanton negligence of Davies, the social standing of the deceased and his heirs, and the diminished purchasing power of the currency. Finally, the deletion of the legal interest was incorrect. Interest on damages awarded for loss or injury begins to run from the time of the judicial demand, which is the filing of the complaint. Therefore, interest should accrue from the filing of the suit. The Supreme Court reinstated the trial court’s awards with the modification that the death indemnity be increased to P30,000.00 in accordance with prevailing jurisprudence.