DIGEST: Evangelista v. Sps. Andolong

Complaint for Sum of Money and Specific Performance with prayer for issuance of writ of preliminary attachment and damages

NANITO Z. EVANGELISTA* (SUBSTITUTED BY HIS HEIRS, REPRESENTED BY THE SURVIVING SPOUSE, LEOVIGILDA C. EVANGELISTA), v. SPOUSES NEREO V. ANDOLONG III AND ERLINDA T. ANDOLONG AND RINO AMUSEMENT INNOVATORS, INC.

G.R. No. 221770

First Division

November 16, 2016

Perlas-Bernabe, J.

Facts:

Petitioner Nanito and Respondent Sps. Andolong entered into various memoranda of agreement, as well as deeds of assignment/sale with right to repurchase over machines, equipment, and amenities, which were used in the operations of amusement centers in different malls, in Cebu.

The parties agreed that they would equally share, i.e., 50%-50%, from the net profits of said amusement centers and that respondents would remit Nanito's share on the 15th and 30th of the month. Claiming that respondents failed to comply with their obligation to remit his share of the net profits, Nanito filed the instant complaint. In support thereof, Nanito presented various computations of the revenues earned by the amusement centers. During the pendency of the case, Nanito died and, consequently, was substituted by his heirs.

The RTC dismissed petitioners' complaint for insufficiency of evidence. Essentially, the RTC found that Nanito failed to establish his claim against respondents as all the evidence he presented did not prove his entitlement thereto. This was affirmed by the CA. It held that while Nanito's documentary exhibits only disclosed the gross monthly revenue earned by the amusement centers in their operation and did not show the actual profit earned by said centers. In this regard, the CA pointed out that the respective amounts of gross revenue were still subject to expenses incurred in relation to the centers' daily operations, as well as the re-infusion of any possible earnings as capital in order to sustain the maintenance of the machines and equipment therein. Thus, in view of the inconclusiveness of the evidence presented in proving the existence of the net profits, the CA concluded that petitioners failed to prove their cause of action by a preponderance of evidence, warranting the dismissal of the complaint.

Issue:

Whether Nanito is entitled to damages despite presenting only the gross revenues of the business and not the net proceeds.

Ruling:

Yes. The SC held that, under the circumstances, Nanito is still entitled to temperate damages. The petition was partly granted and the SC awarded the petitioner temperate damages in the amount of P1.1 Million.

Under the foregoing circumstances, the Court is convinced that Nanito should have received remittances representing net profits from respondents, albeit he failed to prove the exact amount he should receive from the latter. In Seven Brothers Shipping Corporation v. DMC-Construction Resources Inc., the Court allowed the recovery of temperate damages in instances where it has been established that some pecuniary loss has been suffered, but its amount cannot be proven with certainty, viz.:

In contrast, under Article 2224 [of the Civil Code], temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty. This principle was thoroughly explained in Araneta v. Bank of America[1488 Phil. 124 (1971)], which cited the Code Commission, to wit:

The Code Commission, in explaining the concept of temperate damages under Article 2224, makes the following comment:

In some States of the American Union, temperate damages are allowed. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to one's commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money. Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant's wrongful act.

Thus, in Tan v. OMC Carriers, Inc. [654 Phil. 443 (2011)], temperate damages were rightly awarded because plaintiff suffered a loss, although definitive proof of its amount cannot be presented as the photographs produced as evidence were deemed insufficient. Established in that case, however, was the fact that respondent's truck was responsible for the damage to petitioner's property and that petitioner suffered some form of pecuniary loss. In Canada v. All Commodities Marketing Corporation [590 Phil. 342 (2008)], temperate damages were also awarded wherein respondent's goods did not reach the Pepsi Cola Plant at Muntinlupa City as a result of the negligence of petitioner in conducting its trucking and hauling services, even if the amount of the pecuniary loss had not been proven. In Philtranco Service Enterprises, Inc. v. Paras[686 Phil. 736 (2012)], the respondent was likewise awarded temperate damages in an action for breach of contract of carriage, even if his medical expenses had not been established with certainty. In People v. Briones [398 Phil. 31 (2000)], in which the accused was found guilty of murder, temperate damages were given even if the funeral expenses for the victim had not been sufficiently proven.

Given these findings, we are of the belief that temperate and not nominal damages should have been awarded, considering that it has been established that respondent herein suffered a loss, even if the amount thereof cannot be proven with certainty.

Consequently, in computing the amount of temperate or moderate damages, it is usually left to the discretion of the courts, but the amount must be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory.

Here, we are convinced that respondent sustained damages to its conveyor facility due to petitioner's negligence. Nonetheless, for failure of respondent to establish by competent evidence the exact amount of damages it suffered, we are constrained to award temperate damages. Considering that the lower courts have factually established that the conveyor facility had a remaining life of only five of its estimated total life of ten years during the time of the collision, then the replacement cost of P7,046,351.84 should rightly be reduced to 50% or P3,523,175.92. This is a fair and reasonable valuation, having taking into account the remaining useful life of the facility.43 (Emphases and underscoring supplied)

As already adverted to, respondents' failure to remit the net profits to Nanito pursuant to the subject MOA caused some pecuniary loss on the part of the latter, albeit he failed to prove the exact amount of such loss. In view of such circumstance, the Court deems it reasonable to award temperate damages to petitioners in the amount of P1,100,000.00, which is roughly half44 of P2,241,632.00, or the amount of gross revenue claimed to have been earned by the amusement centers. Notably, the award of P1,100,000.00 shall earn legal interest at the rate of six percent (6%) per annum from the finality of this Decision until fully paid.