Philippine National Construction Corporation v. Superlines Transportation Co.
REITERATIONFacts
The Antecedents: Superlines Transportation Co., Inc.'s (Superlines) bus crashed into Philippine National Construction Corporation's (PNCC) radio room. The bus was towed to PNCC's compound for safekeeping at the request of a traffic investigator, Patrolman Cesar Lopera. PNCC, through Pedro Balubal, refused to release the bus unless Superlines paid P40,000.00 or provided collateral for the damage to the radio room. Procedural History: Superlines filed a complaint for replevin with damages. The Regional Trial Court (RTC) dismissed the complaint and ordered Superlines to pay PNCC P40,320.00 for damages. The Court of Appeals (CA) reversed, holding that the storage was a deposit and PNCC could not release the bus without instructions from Lopera. This Court, in G.R. No. 169596, ruled that the seizure was violative of Superlines' constitutional rights and ordered the remand of the case for the inclusion of Lopera and other police officers as indispensable parties for the claim of damages. Superlines filed an amended complaint impleading Lopera. However, the bus's whereabouts became undetermined. Lopera was later dropped as a party-defendant by the RTC. The RTC ruled that PNCC and Balubal were jointly and severally liable to pay Superlines P2,036,500.00 for the cost of the bus, P33,750,000.00 for lost/unearned income, P5,000,000.00 as exemplary damages, and P300,000.00 for attorney's fees. The CA affirmed with modification, reducing exemplary damages to P1,000,000.00. PNCC filed the instant petition. The Petition: PNCC seeks to assail the CA's Decision and Resolution, arguing that the dropping of Lopera as a defendant violated this Court's ruling in G.R. No. 169596.
Issue(s)
Whether the dropping of Lopera as a defendant in the case violates this Court's ruling in G.R. No. 169596. Whether the award of lost/unearned income is proper. Whether the award of exemplary damages is proper. Whether the award of attorney's fees is proper.
Ruling
The Supreme Court DENIED the petition. The Decision dated May 30, 2014 and the Resolution dated January 13, 2015 of the Court of Appeals in CA-G.R. CV No. 95429 were AFFIRMED with MODIFICATIONS. The award of lost/unearned income was DELETED. The amounts of exemplary damages and attorney's fees were REDUCED to P100,000.00 and P30,000.00, respectively. The amount of exemplary damages shall earn interest at six percent (6%) per annum from the date of finality of the judgment until full satisfaction. All other aspects were ordered to stand.
Ratio Decidendi
On the dropping of Lopera as an indispensable party: The Court reiterated the principle of the 'law of the case' doctrine, stating that the ruling in G.R. No. 169596, which declared Lopera and other police officers as indispensable parties for the claim of damages, continues to be the law of the case. However, the Court clarified that the use of the word 'may' in the previous ruling indicated that impleading these parties was dependent on whether Superlines would pursue its claim for damages. The exclusion of Lopera was not a defiance of the Court's ruling but resulted from the trial court's findings after due hearing that Lopera had no liability. The trial court's determination of Lopera's non-liability, based on evidence, was within its mandate and could not be questioned by the Supreme Court when not raised as an issue. Therefore, the exclusion of Lopera, under these circumstances, did not violate the ruling in G.R. No. 169596. On the award of lost/unearned income: The Court found the award of unearned income for fifteen years to be improper. The data submitted by Superlines, such as the alleged longevity of the bus and its perceived daily income, lacked basis and were conjectural. To recover actual damages for lost profits, they must not be speculative or based on contingent transactions. The Court held that speculative damages are too remote to be included in an accurate estimate of damages, thus deleting the award. On the award of exemplary damages: The Court affirmed that exemplary damages may be awarded in contracts and quasi-contracts if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, citing Article 2232 of the Civil Code. While PNCC's act of seizing and impounding the bus was a violation of the Constitution, the Court found the awarded amount of P1,000,000.00 to be excessive. Citing Silahis International Hotel, Inc. v. Soluta, where P30,000.00 each was awarded for illegal search and seizure, the Court equitably reduced the exemplary damages to P100,000.00. On the award of attorney's fees: The Court found the award of attorney's fees to be proper under Article 2208(1) of the Civil Code. However, similar to exemplary damages, the amount of P300,000.00 was deemed excessive. The Court reduced the attorney's fees to P30,000.00, aligning it with the reduced award for exemplary damages and considering the overall circumstances of the case.
Main Doctrine
The determination of whether an indispensable party was properly excluded depends on the events leading to such exclusion; if the exclusion resulted from the trial court's findings after due hearing and submission of evidence, it does not necessarily violate a prior Supreme Court ruling directing their inclusion, especially if the word 'may' was used, indicating discretion on the part of the plaintiff to pursue the claim for damages.