De Guzman v. Tumolva
REITERATIONFacts
The Antecedents: Petitioner Emerita M. De Guzman entered into a Construction Agreement with respondent Antonio M. Tumolva for the construction of an orphanage. The agreement included specifications for a perimeter fence. After project completion and acceptance, a portion of the perimeter fence collapsed and other portions tilted during a typhoon. De Guzman demanded repairs, but the Contractor claimed it was an "act of God" and was willing to discuss. De Guzman then demanded repair or compensation. Procedural History: De Guzman filed a Request for Arbitration before the Construction Industry Arbitration Commission (CIAC), alleging fraud due to the Contractor's deviations from the plan (undersized rebars, incorrect CHB size, increased column distance, lack of anchors and drains). She prayed for actual, moral, and exemplary damages. The Contractor denied liability, attributing the collapse to an "act of God" and claiming deviations were with De Guzman's representatives' consent. He also invoked the 12-month prescriptive period for claims. The CIAC awarded De Guzman actual damages, moral damages, exemplary damages, and attorney's fees. The Court of Appeals (CA) modified the award, deleting actual, moral, and exemplary damages but awarding temperate damages, stating De Guzman failed to prove actual damages with certainty. The CA ruled there was no basis for moral damages due to insufficient proof of suffering and no basis for exemplary damages due to lack of showing of wanton, reckless, fraudulent, oppressive, or malevolent conduct. The CA denied De Guzman's motion for reconsideration. The Petition: De Guzman filed a petition for review on certiorari, assailing the CA's ruling on actual, moral, and exemplary damages. She argued that evidence on record sufficiently established actual damages, that the Contractor's deviations warranted moral and exemplary damages, and that Engineer Santos' computation constituted substantial evidence.
Issue(s)
Whether the Court of Appeals erred in ruling that the evidence on record failed to sufficiently establish the amount of actual damages that petitioner De Guzman can recover, and whether she is entitled to temperate damages. Whether the Court of Appeals erred in ruling that petitioner De Guzman is not entitled to awards of moral and exemplary damages, and on the matter of attorney's fees.
Ruling
The petition is DENIED. The Decision of the Court of Appeals dated February 24, 2009 and its Resolution dated May 26, 2009 are AFFIRMED with the MODIFICATION that the award of ₱ 100,000.00 as temperate damages is increased to ₱ 150,000.00. The award shall earn interest at the rate of 12% per annum reckoned from the finality of this judgment until fully paid.
Ratio Decidendi
On the issue of actual and temperate damages: The Court affirmed the CA's finding that the CIAC's award of actual damages was improper due to a lack of concrete evidence, as required by Article 2199 of the Civil Code. The handwritten calculation of reconstruction costs by Engineer Santos was deemed inadmissible hearsay. However, the Court agreed with the CA that De Guzman was entitled to temperate damages under Article 2224 of the Civil Code, as she suffered pecuniary loss due to the collapse of the perimeter fence caused by the Contractor's negligence. The Court increased the CA's award of ₱100,000.00 to ₱150,000.00, considering the attendant circumstances and the cost of rebuilding. On the issue of moral and exemplary damages, and attorney's fees: The Court upheld the CA's deletion of moral damages, agreeing that De Guzman failed to present proof of actual suffering as contemplated in Article 2217 of the Civil Code. The Court affirmed the CA's denial of exemplary damages, as there was no evidence that the Contractor acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, as required by Article 2232 of the Civil Code. The Court upheld De Guzman's entitlement to attorney's fees, noting that her repeated demands for repair or compensation were not heeded by the Contractor, compelling her to litigate, falling under Article 2208(2) of the Civil Code.
Main Doctrine
While negligence in construction can lead to liability for damages, the award of actual damages requires concrete proof of pecuniary loss. In the absence of such proof, temperate damages may be awarded. Moral and exemplary damages are not recoverable absent a showing of bad faith, fraud, or wanton, reckless, oppressive, or malevolent conduct.