G.R. No. and Date: G.R. No. L-10422, January 11, 1916

FACTS:
On July 10, 1913, plaintiff A. Lemoine, an expert automobile mechanic, and defendant C. Alkan entered into a written contract whereby Lemoine was hired to work in Alkan’s Manila repair shop for three years at a monthly salary of P350. Lemoine began work immediately but was discharged in late August 1913, finally leaving service on September 5. On September 8, Lemoine filed an action to recover damages for breach of contract, specifically the wages due under the contract’s unexpired term.

The defendant raised three defenses: (1) Lemoine was incompetent, insubordinate, and unduly absent; (2) Lemoine failed to mitigate damages by not seeking readily available similar employment in Manila after his discharge; and (3) On December 6, 1913, Alkan offered to reinstate Lemoine under substantially the same terms, which Lemoine unreasonably refused.

The trial court found for the defendant on the second defense (failure to mitigate) but awarded Lemoine wages for three months, deemed a reasonable period to find new employment. Both parties appealed.

ISSUE:
1. Whether the defendant’s discharge of the plaintiff was wrongful.
2. Whether the plaintiff had a duty to mitigate damages by seeking other employment after his wrongful discharge.
3. Whether the plaintiff was obligated to accept the defendant’s subsequent offer of reinstatement to limit recoverable damages.
4. Which party bears the burden of proof regarding the plaintiff’s ability to obtain similar employment.

RULING:
1. On the Wrongful Discharge: The Supreme Court affirmed the trial court’s finding that the defendant’s first defense failed. The evidence did not establish that Lemoine was incompetent, insubordinate, or absent without permission. Therefore, the discharge was wrongful.

2. On the Duty to Mitigate (Second Defense): The Court agreed with the trial court’s factual finding that, with ordinary diligence, Lemoine could have obtained similar employment in Manila immediately after his discharge. However, it clarified the legal consequence. The availability of other work does not bar recovery entirely but serves to mitigate damages. The defendant, as the party asserting mitigation, bears the burden of proving not only the availability of work but also the wages such employment would have paid. Since the defendant failed to prove what wages Lemoine could have earned elsewhere, he could not fully avail himself of this mitigation defense.

3. On the Offer of Reinstatement (Third Defense): The Court held that a wrongfully discharged employee has a duty to accept a bona fide offer of reinstatement under substantially the same terms and conditions to minimize damages. Refusal to accept such an offer, barring special circumstances like mistreatment making it unreasonable to return, limits recoverable damages to the period before the offer was made. Alkan’s offer of December 6, 1913, was such a valid offer, and Lemoine’s refusal was unjustified. Consequently, Lemoine’s recoverable damages could only extend from his discharge (September 5) until the reinstatement offer (December 6).

4. On the Burden of Proof: The Court placed the burden of proving mitigation of damages squarely on the defendant-employer. This aligns with the principle under the Civil Code that a wrongfully discharging employer is considered a “debtor in bad faith,” who must affirmatively prove facts that would reduce his liability.

DISPOSITIVE:
The judgment of the trial court was AFFIRMED. Lemoine was entitled to recover wages only for the three-month period from his discharge (September 5, 1913) until Alkan’s offer of reinstatement (December 6, 1913). No costs were awarded.