G.R. No. 203902, July 19, 2017
Spouses Dionisio Estrada and Jovita R. Estrada, Petitioners, vs. Philippine Rabbit Bus Lines, Inc. and Eduardo R. Saylan, Respondents.
FACTS
Petitioner Dionisio Estrada was a passenger on a bus owned by respondent Philippine Rabbit and driven by respondent Eduardo Saylan. On April 9, 2002, the bus, while tailgating a jeepney, suddenly swerved into the opposite lane to avoid the stopped jeepney, colliding with an oncoming truck. The collision resulted in injuries to Dionisio, leading to the amputation of his right arm. Petitioners filed a Complaint for Damages based on breach of contract of carriage, seeking moral damages of ₱500,000.00, actual damages, and attorney’s fees. The RTC ruled in favor of petitioners, awarding moral and actual damages. The CA affirmed liability but deleted the award of moral damages, finding no factual or legal basis for its grant in a breach of contract case absent proof of fraud or bad faith.
ISSUE
Whether the Court of Appeals correctly deleted the award of moral damages to petitioners.
RULING
Yes, the Court of Appeals was correct. The Supreme Court affirmed the deletion of moral damages. The action was predicated on breach of contract of carriage. As a general rule, moral damages are not recoverable in an action for damages predicated on a breach of contract, pursuant to Article 2220 of the Civil Code. The exception is when the breach was attended by fraud or bad faith. In this case, the driver’s negligence, which constituted the breach, was not shown to be so wanton, reckless, or malevolent as to amount to bad faith. Mere negligence in the performance of a contractual obligation, without more, does not warrant an award of moral damages. The Court emphasized that the grant of moral damages cannot be justified by mere conjecture or sympathy; it requires clear factual and legal grounds. Since petitioners failed to prove that respondent common carrier acted fraudulently or in bad faith, the exception does not apply, and the general rule against awarding moral damages in pure breach of contract cases prevails. The Court also modified the award of damages, granting temperate damages for loss of earning capacity in lieu of actual damages, as Dionisio’s capacity to earn was established but no competent evidence of his actual income was presented.
