De Guzman v. Tomulva

G.R. No. 188072 (October 19, 2011)

SC upheld the CA ruling denying damages to De Guzman but increased temperate damages in fence collapse case.

Facts:

On September 6, 2004, Emerita M. De Guzman (De Guzman) entered into a Construction Agreement with Antonio M. Tumolva, who operated under the name A.M. Tumolva Engineering Works, for the construction of an orphanage in Silang, Cavite, at a contract price of P15,982,150.39. The Agreement included plans and specifications for a perimeter fence. After the project was completed, De Guzman issued a Certificate of Acceptance on September 6, 2005, and Tumolva issued a quitclaim acknowledging the contract's termination and full compliance.

In November 2006, during Typhoon "Milenyo," parts of the perimeter fence collapsed, prompting De Guzman to demand repairs from Tumolva. Tumolva attributed the damage to an act of God and expressed willingness to discuss the matter. De Guzman insisted on repairs at no additional cost or compensation for damages, but her demands were ignored.

On February 14, 2008, De Guzman filed a Request for Arbitration with the Construction Industry Arbitration Commission (CIAC), alleging that Tumolva had defrauded her by using inferior materials and deviating from the agreed plans. She sought actual, moral, and exemplary damages, as well as attorney's fees.

In his Answer with Counterclaim, Tumolva denied liability, claiming the damage was due to an act of God and that deviations from the plan were made with De Guzman's representatives' knowledge. He also argued that De Guzman's claims were barred by a 12-month period following the Certificate of Acceptance. Tumolva counterclaimed for damages related to additional work.

The CIAC ruled in favor of De Guzman on July 17, 2008, awarding her P187,509.00 in actual damages, P100,000.00 in moral damages, P100,000.00 in exemplary damages, and P50,000.00 in attorney's fees, totaling P437,509.00. Tumolva appealed to the Court of Appeals (CA), which modified the award on February 24, 2009, deleting the awards for actual, moral, and exemplary damages but granting P100,000.00 in temperate damages.

De Guzman filed a motion for reconsideration, which was denied, leading her to petition the Supreme Court.

Legal Issues:

  1. Did the Court of Appeals err in ruling that De Guzman failed to establish the amount of actual damages?
  2. Did the Court of Appeals err in denying De Guzman’s claims for moral and exemplary damages?

Arguments:

  • De Guzman's Arguments:

    • She contended that the Contractor was liable for actual damages due to negligence in failing to include weep holes in the fence, which contributed to its collapse.
    • She argued that the computation of reconstruction costs provided by her engineer constituted sufficient evidence for actual damages.
    • De Guzman asserted that her anxiety over the safety of the children justified an award for moral damages and that the Contractor's actions warranted exemplary damages.

  • Tumolva's Arguments:

    • Tumolva maintained that the damage was caused by an act of God and that any deviations from the plan were made with De Guzman's representatives' consent.
    • He argued that De Guzman's claims for damages were barred by the 12-month limitation period following the Certificate of Acceptance.
    • Tumolva contended that the evidence presented by De Guzman was insufficient to support her claims for actual, moral, and exemplary damages.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the CA's decision with modifications. It recognized that De Guzman suffered damages due to the Contractor's negligence but found that the CIAC's award of actual damages was not supported by sufficient evidence. The Court emphasized that actual damages must be proven with competent evidence, and De Guzman's reliance on her engineer's affidavit, which was not subject to cross-examination, was insufficient.

The Court upheld the CA's award of temperate damages, stating that when pecuniary loss cannot be proven with certainty, temperate damages may be awarded. The Court increased the temperate damages from P100,000.00 to P150,000.00, recognizing the pecuniary loss suffered by De Guzman.

Regarding moral damages, the Court agreed with the CA that De Guzman failed to provide evidence of actual suffering, and her concerns for the children's safety did not meet the legal standard for such damages. The Court also found no basis for awarding exemplary damages, as there was no evidence of wanton or fraudulent conduct by Tumolva.

The Court upheld De Guzman's entitlement to attorney's fees due to Tumolva's unjust refusal to address her claims, which compelled her to litigate.

Significant Legal Principles Established:

  1. Actual damages must be proven with competent evidence; mere assertions or uncorroborated affidavits are insufficient.
  2. Temperate damages may be awarded when pecuniary loss is suffered but cannot be proven with certainty.
  3. Moral damages require clear evidence of actual suffering, and concerns for safety alone do not suffice.
  4. Exemplary damages are not warranted without evidence of wanton, fraudulent, or malevolent conduct.