G.R. NO. 163212 - CANDANO SHIPPING LINES, INC., VS. FLORENTINA J. SUGATA-ON. D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, Florentina prayed that actual, moral and exemplary damages including attorney's fees, be awarded in her favor. [8] In its Answer, [9] Candano Shipping countered that Florentina had no cause of action against it because the death of Melquiades was not yet an established fact since he was merely reported missing upon the sinking of M/V David, Jr. The filing of the case before the RTC therefore was premature for she should have waited until the body of Melquiades could be recovered or until the lapse of time which would render the provision of Article 391 of the New Civil Code [10] on presumptive death operative. The RTC resolved the controversy in favor of Florentina and ratiocinated that the provision of Article 391 of the New Civil Code on presumptive death had become operative since the period of four years had already elapsed since Melquiades was reported missing upon the sinking incident which occurred on 27 March 1996. In a Decision [11] promulgated on 15 February 2001, the RTC ordered Candano Shipping to indemnify Florentina for the death of her husband, in the following amounts: WHEREFORE, premises considered, judgment is hereby rendered ordering defendant Candano Shipping Lines, Inc. to indemnify plaintiff Forentina J. Sugata-on the amount of P988,400.00 as actual damages, P100,000.00 as moral damages P50,000.00 as exemplary damages and 10% of the amount due as and for attorney's fees plus the cost of suit. The award for actual damages amounting to P988,400.00 was computed by the lower court by adopting the formula in the computation of loss of earning capacity enunciated in the case of Villa Rey Transit, Inc. v. Court of Appeals , [12] wherein the annual expenses of the deceased are deducted from his gross annual income and multiplied by life expectancy (gross annual income - annual expense x life expectancy). [13] The Motion for Reconsideration interposed by Candano Shipping was denied by the RTC for lack of cogent reason to disturb or reconsider its decision. [14] Aggrieved, Candano Shipping elevated the adverse RTC decision to the Court of Appeals, which in turn, affirmed with modification the judgment of the lower court. The award for actual damages was reduced from P998,400.00 to P608,400.00, while the awards for moral and exemplary damages including attorney's fees were deleted for lack of sufficient basis for their allowance. [15] In arriving at the sum of P608,400.00, the appellate court applied the standard prescribed by Article 194 of the Labor Code of the Philippines, as amended, to wit: ART. 194. DEATH. - (a) Under such regulations as the Commission may approve, the System shall pay to the primary beneficiaries upon the death of the covered employee under this Title an amount equivalent to his monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution, except as provided for in paragraph (j) of Article 167 hereof; Provided