Philippine Airlines v. Court of Appeals
REITERATIONFacts
The Antecedents: On November 23, 1960, Philippine Air Lines (PAL) Flight No. 26 crashed on Mt. Baco, Mindoro, resulting in the death of 33 persons, including passenger Nicanor A. Padilla. Nicanor was 29 years old, single, and the sole legal heir of his mother, Natividad Vda. de Padilla. Mrs. Padilla filed a complaint against PAL for damages. Procedural History: The trial court awarded P477,000.00 as indemnity for expected income, P10,000.00 as moral damages, and P60,000.00 as attorney's fees. The Court of Appeals affirmed this decision in toto. The Petition: PAL appealed, arguing that the indemnity should be computed based on the life expectancy of the beneficiary (Mrs. Padilla) rather than the deceased (Nicanor Padilla).
Issue(s)
Whether the indemnity for death should be computed based on the life expectancy of the deceased or the beneficiary. Whether the award for loss of earning capacity was supported by evidence.
Ruling
The petition is dismissed. The decision of the trial court is affirmed with modification, ordering PAL to pay P417,000.00 as death indemnity with legal interest from August 31, 1973.
Ratio Decidendi
On the computation of death indemnity based on life expectancy: The Court reiterated that under Articles 1764 and 2206(1) of the Civil Code, the indemnity for death caused by a common carrier is computed based on the loss of the earning capacity of the deceased. This indemnity is to be paid to the heirs of the deceased. Article 2206(1) explicitly states that the indemnity shall be assessed and awarded by the court unless the deceased had no earning capacity at the time of death due to permanent physical disability not caused by the defendant. The law clearly directs the computation based on the deceased's earning capacity, which is intrinsically linked to their life expectancy, not that of the beneficiary. Resorting to foreign jurisprudence is only permissible when local law or jurisprudence is absent or insufficient, which is not the case here. On the evidence supporting loss of earning capacity: The Court found that the testimonies of Eduardo Mate, manager of Allied Overseas Trading Company, and Isaac M. Reyes, auditor of Padilla Shipping Company, were competent to establish the income and salary of the deceased, Nicanor Padilla. Their positions afforded them personal knowledge of these matters. Furthermore, any objections to their competence or the admissibility of their testimonies were deemed waived as petitioner's counsel cross-examined them. The Court of Appeals correctly observed that while payrolls or income tax returns could be best evidence, there is no rule disqualifying corporate officers from testifying on the compensation of a deceased officer, especially when no timely objection was raised. The Court followed the procedure in Davila vs. PAL to determine the deceased's gross annual income and net income after deducting living expenses, which formed the basis for the indemnity calculation.
Main Doctrine
In computing death indemnity for loss of earning capacity, the Civil Code mandates the use of the deceased's life expectancy, not that of the beneficiary. The award must be paid to the heirs of the deceased.