Torts and Damages Case Digest: Algarra v. Sandejas (1914)

G.R. No. L-8385            March 24, 1914

Lessons Applicable: Actual or Compensatory Damage (Torts and Damages)

Laws Applicable: article 1902,1106,1107 of the Civil Code (old laws)

FACTS:

• Lucio Algarra filed a civil action for personal injuries received from a car collision due to the negligence of Sixto Sandejas causing him to be hospitalized for 10 days, four of five days of which he could not leave his bed. 
• After being discharged, he still continued to receive medical treatment and that he had done no work since he was not yet entirely recovered. He also spent to pay the doctor P8 and medicine P2, the expense totalling to P110 
• Algarra sells the products of a distillery and earns 10% commission which averages to P50/month. He had around 20 regular customers which took him 4 years to build who order in small quantities and require regular and frequent deliveries.  Since his accident, his wife tried to keep up with the business but only 4 regular customers remained. 
• Lower court: refused to allow him anything for his injury on the ground that the doctrine of Marcelo vs. Velasco is opposed to such allowance and Viada which does not pertain to personal injuries 

ISSUE: W/N there is actual or compensatory damage despite absence of malicious intent (since negligence)?  How is the damage measured?

HELD: YES. judgment of the lower court is set aside, and the plaintiff is awarded the following damages; P10 for medical expenses; P100 for the 2 months of his enforced absence from his business; and P250 for the damage done to his business in the way of loss of profits = P360

• article 1902 of the Civil Code, which reads as follows: "A person who, by act or omission, causes damage to another where there is fault or negligence shall be obliged to repair the damage so done.
• 1106. Indemnity for losses and damages includes not only the amount of the loss which may have been suffered, but also that of the profit which the creditor may have failed to realize, reserving the provisions contained in the following articles.
• 1107. The losses and damages for which a debtor in good faith is liable, are those foreseen or which may have been foreseen, at the time of constituting the obligation, and which may be a necessary consequence of its nonfulfillment.

In case of fraud, the debtor shall be liable for all those which clearly may originate from the nonfulfillment of the obligation - not in present case

• GR: in order that an act omission may be the proximate cause of an injury, the injury must be the natural and probable consequence of the act or omission and such as might have been foreseen by an ordinarily responsible and prudent man, in the light of the attendant circumstances, as likely to result therefrom . . 
• in an action such as that under consideration, in order to establish his right to a recovery, must establish by competent evidence:

(1)    Damages to the plaintiff.

(2)    Negligence by act or omission of which defendant personally, or some person for whose acts it must respond, was guilty.

(3)    The connection of cause and effect between the negligence and the damages.

• "actual damages" 
• purpose of the law in awarding actual damages is to repair the wrong that has been done, to compensate for the injury inflicted, and not to impose a penalty
• not dependent on nor graded by the intent with which the wrongful act is done.
• shall be construed to include all damages that the plaintiff may he has suffered in respect to his property, business, trade, profession, or occupation, and no other damages whatever."
• proceed from a sense of natural justice
• indemnity comprises, not only the value of loss suffered, but also that of the prospective profit that was not realized, and the obligation of the debtor in good faith is limited to such losses and damages as were foreseen or might have been foreseen at the time the obligation was incurred and which are a necessary consequence of his failure of fulfillment
• The abstract rules for determining negligence and the measure of damages are, however, rules of natural justice rather than man-made law, and are applicable under any enlightened system of jurisprudence.
• As to the damages resulting from the actual incapacity of the plaintiff to attend to his business there is no question. They are, of course, to be allowed on the basis of his earning capacity, which in this case, is P50 per month.
• evidence of damages "must rest upon satisfactory proof of the existence in reality of the damages alleged to have been suffered." But, while certainty is an essential element of an award of damages, it need not be a mathematical certainty. 
• When it is shown that a plaintiff's business is a going concern with a fairly steady average profit on the investment, it may be assumed that had the interruption to the business through defendant's wrongful act not occurred, it would have continued producing this average income "so long as is usual with things of that nature.
• When in addition to the previous average income of the business it is further shown what the reduced receipts of the business are immediately after the cause of the interruption has been removed, there can be no manner of doubt that a loss of profits has resulted from the wrongful act of the defendant.
• In the present case, we not only have the value of plaintiff's business to him just prior to the accident, but we also have its value to him after the accident
• The value of such a business depends mainly on the ordinary profits derived from it. Such value cannot be ascertained without showing what the usual profits are; nor are the ordinary profits incident to such a business contingent or speculative, in the sense that excludes profits from consideration as an element of damages. What they would have been, in the ordinary course of the business, for a period during which it was interrupted, may be shown with reasonable certainty. What effect extraordinary circumstances would have had upon the business might be contingent and conjectural, and any profits anticipated from such cause would be obnoxious to the objection that they are merely speculative; but a history of the business, for a reasonable time prior to a period of interruption, would enable the jury to determine how much would be done under ordinary circumstances, and in the usual course, during the given period; and the usual rate of profit being shown, of course the aggregate becomes only a matter of calculation.
• Plaintiff having had four years' experience in selling goods on commission, it must be presumed that he will be able to rebuild his business to its former proportions; so that at some time in the future his commissions will equal those he was receiving when the accident occurred. Aided by his experience, he should be able to rebuild this business to its former proportions in much less time than it took to establish it as it stood just prior to the accident. One year should be sufficient time in which to do this. The profits which plaintiff will receive from the business in the course of its reconstruction will gradually increase. The injury to plaintiff's business begins where these profits leave off, and, as a corollary, there is where defendant's liability begins. Upon this basis, we fix the damages to plaintiff's business at P250.