G.R. No. L-12907; August 1, 1918
VIVENCIO CERRANO, plaintiff-appellee, vs. TAN CHUCO, defendant-appellant.

FACTS:
In January 1916, defendant Tan Chuco rented his casco (barge) No. 1033 to plaintiff Vivencio Cerrano at a monthly rental of ₱70, with no express agreement on the duration of the contract. In May 1916, defendant notified plaintiff that the casco needed repairs in Malabon the following month. Plaintiff expressed his desire to re-rent the casco after repairs, and defendant indicated willingness but at an increased rental of ₱80 per month. The casco was taken to Malabon in June 1916, with plaintiff paying for towage and leaving his equipment and patron (J. Santos) with it. While under repair, defendant sold the casco to Siy Cong Bieng & Co. Upon completion of repairs, Santos, acting under instructions from the new owners, brought the casco to Manila. Plaintiff, claiming a right to possession under his contract with defendant, induced Santos to refuse the new owners’ orders. Siy Cong Bieng & Co. filed a replevin suit against Santos, and plaintiff, as surety on Santos’ delivery bond, ultimately paid the judgment for damages (₱457.98) and attorney’s fees (₱500) in that suit. Plaintiff then sued defendant for breach of contract, claiming damages for lost profits and the amounts paid in the replevin suit. The trial court ruled in favor of plaintiff, awarding ₱600 for lost profits, ₱457.98 for damages paid, and ₱500 for attorney’s fees. Defendant appealed.

ISSUE:
1. Whether there was a valid contract of hire for the casco after its repairs.
2. What was the duration of the hiring contract?
3. Whether defendant is liable for damages, including lost profits and expenses from the replevin suit.

RULING:
1. Yes, there was a valid contract of hire after repairs. The Supreme Court affirmed the trial court’s finding that the parties agreed plaintiff would re-rent the casco at ₱80 per month after repairs, as evidenced by plaintiff’s actions (paying towage, leaving equipment and patron with the casco). The sale of the casco during the repair period constituted a breach of this contract.

3. Defendant is liable only for lost profits for one month, not for expenses from the replevin suit.
– Lost Profits: The Court awarded ₱50 as damages for lost profits for one month, based on plaintiff’s uncontradicted testimony of average earnings from similar cascos. Defendant failed to prove that plaintiff could have mitigated damages by renting another casco.
– Replevin Suit Expenses: The Court reversed the trial court’s award for the ₱457.98 damages and ₱500 attorney’s fees paid by plaintiff in the replevin suit. These expenses were not a foreseeable consequence of defendant’s breach. Plaintiff’s voluntary involvement in Santos’ unlawful detention of the casco (by acting as surety and funding the defense) was the proximate cause of these losses, not defendant’s breach.

DISPOSITIVE PORTION:
The judgment of the lower court is reversed. Plaintiff is awarded ₱50 as damages and costs in the Court of First Instance. No costs are awarded in the Supreme Court.

SEPARATE OPINION:
Justice Torres dissented, stating that the trial court’s judgment should be affirmed. Justice Malcolm concurred in the dissent.