G.R. No. L-54470 May 8, 1990
PHILIPPINE AIRLINES, INC., petitioner, vs. HON. COURT OF APPEALS and NATIVIDAD VDA. DE PADILLA, substituted by her legal heirs, respondents.

FACTS

On November 23, 1960, Philippine Airlines Flight 26 crashed on Mt. Baco, Mindoro, resulting in the death of all on board, including passenger Nicanor Padilla. He was 29 years old, single, a lawyer, and an officer of two corporations. His mother, Natividad Vda. de Padilla, as his sole legal heir, filed a damages suit against PAL. The parties entered into partial stipulations of facts covering Nicanor’s background and the aircraft’s history but left other matters for proof. The trial court, based on evidence of his salaries, computed his gross annual income, deducted living expenses, and applied a 30-year life expectancy to determine a net loss of support.

ISSUE

Whether the indemnity for loss of earning capacity should be computed based on the life expectancy of the deceased victim or the life expectancy of his surviving heir.

RULING

The Supreme Court ruled that the computation must be based on the life expectancy of the deceased, not the heir. The indemnity for loss of earning capacity compensates for the earnings the deceased would have generated had he not died prematurely. This is fundamentally linked to the victim’s own probable lifespan and earning potential. Using the heir’s shorter life expectancy, as PAL contended, would unjustly reduce the compensation by ignoring the period the victim could have continued to provide support beyond the heir’s lifetime. The Court affirmed the trial court’s method of using the victim’s life expectancy of 30 years, derived from actuarial tables for a 29-year-old, multiplied by his annual net income. The award was thus correctly computed at P417,000. Furthermore, due to the protracted litigation spanning decades, the Court modified the award to include legal interest from the date of the trial court’s judgment to fully compensate for the depreciated value of the money over time.