Prudenciado vs. Alliance Transport System, Inc.

Moral damages awarded by a trial court may be reduced on appeal when they are excessive relative to the injury actually sustained, but the reduction must itself be reasonable; a reduction that is too drastic and unrealistic cannot stand, and the award ultimately fixed must be proportionate to the suffering inflicted. Exemplary damages are recoverable in a quasi-delict under Article 2231 of the Civil Code where the defendant acted with grave negligence, as where a driver runs at full speed on a rainy day on a slippery road in complete disregard of the hazards to life and limb of other people.

Alliance Transport System, Inc. owned and operated the People's Taxicab driven by Jose Leyson, while Dra. Sofia L. Prudenciado, a physician who held classes at the Philippine Normal College, drove her own Chevrolet Bel Air. Recovery of damages arising from quasi-delicts is governed by the Civil Code, which treats moral damages as compensatory rather than penal and, under Article 2231, permits an award of exemplary damages where the defendant acted with grave negligence. The case reached the Supreme Court on the question of the appellate court's power to alter the amount of damages fixed by the trial court, an issue on which the Court's earlier rulings had distinguished between awards that are palpably and scandalously excessive and awards that are merely disproportionate to the actual loss sustained.

At about 2:05 p.m. on May 11, 1960, Dra. Sofia L. Prudenciado, a physician who held classes at the Philippine Normal College, was driving her own Chevrolet Bel Air car along Arroceros Street with the intention of crossing Taft Avenue in order to turn left and enter the Philippine Normal College compound. She claimed that she was driving at the rate of 10 kilometers per hour; that before crossing Taft Avenue she stopped her car and looked to the right and to the left; and that, not noticing any oncoming vehicle on either side, she slowly proceeded on first gear to cross the avenue.

When her car was almost at the center of the crossing, near the island, a People's Taxicab owned and operated by Alliance Transport System, Inc. and driven by Jose Leyson suddenly bumped and struck her car. The collision caused physical injuries in different parts of her body, more particularly a brain concussion, which subjected her to several physical examinations and to an encephalograph test, while her car was damaged to the extent of P2,451.27. The damage to the taxicab amounted to P190.00.

The accident and its aftermath produced the dispute over damages. The trial court found Leyson guilty of negligence in the performance of his duties as taxicab driver and held that negligence to be the proximate cause of the accident; it likewise found that Alliance Transport System, Inc. failed to prove to the court's satisfaction that it had exercised the required diligence of a good father of a family in the selection, supervision and control of its employees, including Leyson. The Court of Appeals, for its part, conceded that Dra. Prudenciado suffered a concussion of the brain but seriously doubted how serious the concussion was or had later become, and the disastrous extent of the injuries she alleged she had sustained as a result of the accident.

Specifically, the appellate court found that her claim — sustained by the trial court — that because of the concussion she eventually lost her usual liveliness, vivacity, activity and self-confidence, to the extent that she now felt uncertain and insecure, apart from extreme fright and serious anxiety, serious apprehension of losing her life, her senses or reason, or her physical mobility momentarily, and experiences of great shock and severe pains on her back near the left side of her spinal column in the lumbar region, was not supported by the deposition of Dr. Conrado Aramil, the physician who attended her from May 14 to May 26, 1960. From that deposition it was gathered that Dra. Prudenciado suffered a mild abnormality, compatible with concussion of the brain; that the symptoms of any brain concussion usually are headache, dizziness, vomiting and lack of pep or alertness; and that the possible after-effects are persistent or irregular headaches and fluctuating dizziness, for which she was advised to watch herself for alarming symptoms such as headache, dizziness or vomiting and to have herself re-checked after several months, since the condition might also produce intellectual deterioration or lessening of intelligence, and even insanity.

Dra. Prudenciado sought to establish that she had suffered precisely those after-effects except insanity, but the Court of Appeals ruled that her proof consisted merely in her own uncorroborated testimony. She could not show any medical certificate tending to prove that she was indeed medically treated abroad for her brain ailment, nor was there any showing in the documents presented that she had been demoted to the rank of technical assistant because the San Francisco State College no longer believed in her mental capacity. Finally, her statements that she was almost completely losing her voice, that she had a terrible headache when her head was pressed, that she had lost her sense of taste, that she was nervous and temperamental, and that she had lapses of memory, were belied by Dr. Aramil's deposition that the patient's EEG was already normal on May 26, 1960, and by his testimony on cross-examination that she was clinically symptomless when she was discharged from the hospital.

• Moral Damages: Petitioner argued that the Court of Appeals erred in reducing the award of moral damages from P25,000.00 to P2,000.00 notwithstanding the absence of any finding that the award was palpably and scandalously excessive so as to indicate that it was the result of passion or corruption on the part of the trial court.
• Exemplary Damages: Petitioner maintained that the Court of Appeals erred in eliminating the award of P5,000.00 as exemplary damages, the appellate court's own findings on the evidence and the applicable law having justified the award as held by the trial court.
• Factual Basis of the Reduction: Petitioner contended that the Court of Appeals erred in finding that her demotion in rank as a professor in the United States was not substantiated and in making that finding a basis for the reduction of moral damages, and in holding that her claims of loss of liveliness, vivacity, activity and self-confidence, of extreme fright and serious anxiety, of apprehension of losing her life, senses or reason, and of severe pains on her back near the left side of her spinal column in the lumbar region were uncorroborated, despite the certificate of Dr. Dominador Vergara of the Veterans Memorial Hospital and of Dr. Conrado Aramil, a brain specialist, and the latter's corroborating testimony after his examination and treatment of petitioner.
• Attorney's Fees and Costs: Petitioner argued that the Court of Appeals erred in eliminating the awards of attorney's fees and of costs, both of which were legal and proper.
• Power to Modify: Petitioner argued that the Court of Appeals erred in modifying the trial court's decision notwithstanding that it had no power to do so under the facts and circumstances as found by the appellate court itself, and that the modification was not in accordance with law.

• Modification of the Trial Court's Award of Damages: Whether the Court of Appeals was justified in modifying or changing the grant of damages made by the trial court.
• Moral Damages: Whether the reduction of the award of moral damages from P25,000.00 to P2,000.00 was proper.
• Exemplary Damages: Whether the elimination of the award of P5,000.00 as exemplary damages was proper.
• Attorney's Fees: Whether the elimination of the award of P3,000.00 as attorney's fees was proper.

• Modification of the Trial Court's Award of Damages: Yes, in part. The trial court's award was excessive and properly reduced, but the appellate reduction was too drastic and unrealistic to pass the test of reasonableness, warranting a modification of the modified judgment.
• Moral Damages: No, not to the extent decreed. The reduction to P2,000.00 was disproportionate; P15,000.00 is the reasonable amount, moral damages being compensatory and measured by the suffering inflicted.
• Exemplary Damages: No. The driver's conduct amounted to grave negligence within the meaning of Article 2231 of the Civil Code, so the award of P5,000.00 as exemplary damages was restored.
• Attorney's Fees: Restored. The dispositive portion reinstated the P3,000.00 awarded by the trial court as attorney's fees, no pronouncement being made as to costs.

• Modification of the Trial Court's Award of Damages: The trial court and the Court of Appeals were in accord that the accident was caused by the negligence of the taxi driver, leaving the award of damages as the sole bone of contention. While factual findings of the Court of Appeals are binding on the Supreme Court, such findings are subject to scrutiny when they are diametrically opposed to those of the trial court, as in this case. The trial courts are given discretion to determine the amount of moral damages, and the Court of Appeals may modify or change the amount awarded only when it is palpably and scandalously excessive so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court. More recent rulings, however, have held that where awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved party, they should be reduced to more reasonable amounts, considering the attendant facts and circumstances. A careful review of the records made it readily apparent that the injuries sustained by Dra. Prudenciado were not as serious or extensive as claimed, and that the moderate damage to her car could not by any stretch of the imagination support the conclusion that the disastrous effects she sought to establish actually took place, especially as they were not supported by the medical findings presented; the damages imposed by the lower court therefore had to be reduced to more reasonable levels. The reduction effected by the Court of Appeals, however, was both too drastic and unrealistic to pass the test of reasonableness, which is the underlying basis for justifying any such reduction.

• Moral Damages: Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury; though incapable of pecuniary computation, they may be recovered if they are the proximate result of the defendant's wrongful act or omission. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer, and are emphatically not intended to enrich a complainant at the expense of a defendant; they are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering undergone by reason of the defendant's culpable action, and the award must be proportionate to the suffering inflicted. While the damages sought were not satisfactorily established to the extent desired by petitioner, it was nonetheless undisputed that an accident occurred due to the fault and negligence of the respondents; that Dra. Prudenciado suffered a brain concussion which, although mild, could admittedly produce the effects complained of, with symptoms that can develop after several years and can lead to serious handicaps or predispose the patient to other sickness; and that, being a doctor by profession, her fears could be more real and intense than those of an ordinary person. She was therefore undeniably a proper recipient of moral damages proportionate to her suffering, and P15,000.00 was fixed as that reasonable measure.

• Exemplary Damages: Article 2231 of the Civil Code provides that in quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence. The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for the public good. The findings of the trial court, which became the basis of the award, were to the effect that the respondent driver was running at high speed after turning to the right along Taft Avenue coming from Ayala Boulevard, considering that the traffic was clear; that failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right to avoid the collision. The Court of Appeals conformed with these findings but was not prepared to accept that there was gross negligence on the part of the driver. A driver running at full speed on a rainy day, on a slippery road, in complete disregard of the hazards to life and limb of other people cannot be said to be acting in anything less than gross negligence, and the frequent incidence of accidents of this nature caused by taxi drivers demands corrective measures. The award of exemplary damages was accordingly restored.

• Attorney's Fees: The Court modified the assailed decision insofar as the award of damages is concerned and ordered the respondents to pay petitioner the sum of P3,000.00 as attorney's fees, thereby restoring the award eliminated by the Court of Appeals; no pronouncement was made as to costs.

• Moral damages in quasi-delicts — Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, they may be recovered if they are the proximate result of the defendant's wrongful act or omission. The Court applied this rule in sustaining an award in favor of a motorist who suffered a brain concussion in a collision caused by the negligence of a taxicab driver.
• Compensatory, not penal, character of moral damages — Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. They are emphatically not intended to enrich a complainant at the expense of a defendant; they are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering undergone by reason of the defendant's culpable action. The Court used this principle to justify reducing the trial court's award while rejecting the appellate court's more drastic cut.
• Proportionality of moral damages to the suffering inflicted — The award of moral damages must be proportionate to the suffering inflicted. The Court fixed P15,000.00 as reasonable, taking into account that the concussion, though mild, could produce the complained-of effects and develop into serious handicaps after several years, and that a physician's fears could be more real and intense than those of an ordinary person.
• Discretion of trial courts and the scope of appellate modification — Trial courts are given discretion to determine the amount of moral damages, and the Court of Appeals may modify or change the amount awarded only when it is palpably and scandalously excessive so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court. More recent rulings, however, permit reduction where the awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved party. The Court synthesized both lines by reducing the trial court's award yet holding that the appellate reduction was too drastic and unrealistic to pass the test of reasonableness.
• Exemplary damages for grave negligence in quasi-delicts (Article 2231, Civil Code) — In quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence. The rationale behind exemplary or corrective damages is to provide an example or correction for the public good. The Court held that a driver running at full speed on a rainy day, on a slippery road, in complete disregard of the hazards to life and limb of other people cannot be said to be acting in anything less than gross negligence, and that the frequent incidence of accidents caused by taxi drivers demands corrective measures.
• Factual findings of the Court of Appeals — Factual findings of the Court of Appeals are binding on the Supreme Court, but such findings are subject to scrutiny if they are diametrically opposed to those of the trial court. The Court invoked this exception in reviewing the appellate court's assessment of the seriousness of petitioner's injuries.

• "But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the, actual losses sustained by the aggrieved party, this Court ruled that they should be reduced to more reasonable amounts." — This passage reconciles the older rule restricting appellate modification to awards that are palpably and scandalously excessive with the more recent practice of reducing awards disproportionate to the actual loss, and supplies the doctrinal basis for the Court's own reduction of the trial court's award.
• "Moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer." — This states the compensatory character of moral damages, the premise from which the Court concluded that the trial court's P25,000.00 award was excessive and required reduction.
• "In quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence." — The Court's verbatim quotation of Article 2231 of the Civil Code, the provision on which the restoration of the P5,000.00 exemplary award rests.
• "However, a driver running at full speed on a rainy day, on a slippery road in complete disregard of the hazards to life and limb of other people cannot be said to be acting in anything less than gross negligence." — This is the Court's ratio for finding grave negligence, rejecting the Court of Appeals' refusal to characterize the driver's conduct as gross negligence, and it is the passage most often invoked on the standard of gross negligence in quasi-delicts.

• Samson vs. Court of Appeals, G.R. No. L-40071, January 29, 1986 — Cited for the rule that factual findings of the Court of Appeals are binding on the Supreme Court but are subject to scrutiny when diametrically opposed to those of the trial court; the exception supplied the Court's warrant to review the appellate assessment of petitioner's injuries.
• People vs. Baylon, 129 SCRA 62 (1984) — Cited for the rule that moral damages, though incapable of pecuniary computation, may be recovered if they are the proximate result of the defendant's wrongful act or omission.
• Alcantara vs. Surro, 93 Phil. 472 — Cited for the rule that trial courts are given discretion to determine the amount of moral damages.
• Gellada vs. Warner Barnes & Co., Inc., 57 O.G. (4) 7347, 7358 — Cited, together with the two Bachrach cases, for the rule that the Court of Appeals may modify or change the amount awarded only when the award is palpably and scandalously excessive so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court.
• Sadie vs. Bachrach Motors Co., Inc., 57 O.G. (4) 636 — Cited for the same rule on the narrow ground for appellate modification of awards of moral damages.
• Adone vs. Bachrach Motor Co., Inc., 57 O.G. 656 — Cited for the same rule on the narrow ground for appellate modification of awards of moral damages.
• San Andres vs. Court of Appeals, 116 SCRA 85 (1982) — Followed for the more recent rule that while the amount of moral damages is a matter left largely to the sound discretion of the court, an excessive award should be reduced to a more reasonable amount considering the attendant facts and circumstances.
• Siguenza vs. Court of Appeals, 137 SCRA 578-579 (1985) — Followed and reiterated for the reduction of awards of moral and exemplary damages that are far too excessive compared to the actual losses sustained, where the records show that the injury suffered was not serious or gross and therefore out of proportion to the damages awarded by the trial court.
• B Surety & Insurance Co., Inc. vs. Intermediate Appellate Court, 129 SCRA 745 (1984), citing Grand Union Supermarket, Inc. vs. Espino, Jr., 94 SCRA 966 — Cited for the rule that the award of moral damages must be proportionate to the suffering inflicted and that moral damages are not intended to enrich a complainant at the defendant's expense.
• Lopez, et al. vs. Pan American World Airways, 16 SCRA 431 — Cited for the rationale of exemplary or corrective damages, which is to provide an example or correction for the public good.

• Article 2231, Civil Code — Provides that in quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence. The Court applied the provision to the taxicab driver's conduct, holding that running at full speed on a rainy day on a slippery road in complete disregard of the hazards to life and limb of other people constitutes nothing less than gross negligence, and accordingly restored the award of exemplary damages eliminated by the Court of Appeals.

Fernan (Chairman), Alampay, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ.