SILVERIO MARCHAN AND PHILIPPINE RABBIT BUS CO., INC., PETITIONERS, VS. ARSENIO MENDOZA, LEONARDA ILAYA, AND ZENAIDA MENDOZA, RESPONDENTS.

This is a motion for the reconsideration of our decision
promulgated on August 30, 1968, “insofar as it condemns petitioners (a) to
pay exemplary damages of P30,000.00; (b) to pay attorney’s fees of P5,000.00;
(c) to pay interest on the awards of compensatory and exemplary damages and
attorney’s fees; and (d) to pay the costs of these proceedings, * * *.”^[1]
The crucial question is the correctness of the award of exemplary damages to
respondents. For as set forth in the motion itself, if no such exemplary damages
were awarded, the granting of attorney’s fees would not be justifiable.

In the decision sought to be reconsidered, the Resolution of the
Court of Appeals of March 31, 1965
holding petitioners liable for exemplary damages was sustained.  As therein pointed out, the Court of Appeals
relied on our ruling in Singson v. Aragon.^[2]
Thus:  “From the above legal
provisions it appears that exemplary damages may be imposed by way of example
or correction only in addition, among others, to compensatory damages, but that
they cannot be recovered as a matter of right, their determination depending
upon the discretion of the court.  It
further appears that the amount of exemplary damages need not be proved,
because its determination depends upon the amount of compensatory damages that
may be awarded to the claimant.  If the
amount of exemplary damages need not be proved, it need not also be alleged,
and the reason is obvious it is merely incidental or dependent upon what the
court may award as com­pensatory damages. 
Unless and until this premise is determined and established, what may be
claimed as exemplary damages would amount to mere surmise or speculation. It
follows as a necessary consequence that the amount of exemplary damages need
not be pleaded in the complaint because the same cannot be predetermined.  One can merely ask that it be determined by
the court if in the use of its discretion the same is warranted by the
evidence, and this is just what appellee has
done.”^[3]

After such citation, the decision sought to be reconsidered
continues:  “Such a principle has
been repeatedly upheld.  In Corpuz v. Cuaderno, this Court,
again through Justice J.B.L. Reyes, made clear that the amount ‘lies within the
province of the court a quo, * * *.’  It must be admitted, of course, that where it
could be shown that a tribunal acted “with vindictiveness or wantonness
and not in the exercise of honest judgment,’ then there is room for the
interposition of the corrective power of this Tribunal.”^[4]
It was then stated that there could be no such reproach “hurled at a
decision and resolution [of the Court of Appeals] now under review.”

Petitioners, however, invoking Rotea v.
Halili,^[5]
are not in conformity.  They have misread
the decision.  The exemplary damages
sought in that case arose from a subsidiary liability under Articles 102 and
103 of the Revised Penal Code.  The
opinion of Justice Bautista Angelo, speaking for this Court, makes that
evident. Thus:  “After stating that
this action was brought to enforce the indemnity fixed in the criminal case
taken against appellee’s driver based upon the
subsidiary liability of appellee under Articles 102
and 103 of the Revised Penal Code, which indemnity amounts to P13,513.00,
including the sum of P10,000.00 as exemplary damages, appellant contends that
the trial court erred in modifying said indemnity by reducing it to P3,513.00
as actual and liquidated damages, eliminating therefrom
the sum of P10,000.00 as exemplary damages. 
* * *.”^[6]

Whatever doubts on the matter as to our conclusion being made to
rest solely on the fact that the issue therein posed was the subsidiary
liability arising from a criminal offense would be erased by another excerpt
from the opinion of Justice Bautista Angelo. 
Thus: “On the other hand, the trial court was justified in not
requiring appellee to pay exemplary damages there
being no evidence whatever that he had any participation in the wrongful act
committed by his employee.  The rule is
that exemplary damages are imposed primarily upon the wrongdoer as a deterrent
in the commission of similar acts in the future.  Such punitive damages cannot be applied to
his master or employer except only to the extent of his participation or
ratification of the act because they are penal in character.  Moreover, in this jurisdiction, exemplary
damages may only be imposed when the crime is committed with one or more
aggravating circumstances (Article 2230, new Civil Code), and here the crime
being only qualified by negligence is not accompanied by any aggravating
circumstance.”^[7]

It is to be noted that the motion for reconsideration was not
unaware of the above portion of the opinion, but emphasis was placed on the
general statement requiring “participation in the wrongful act”
attributed to the employee ignoring that such a broad statement is limited by
the more specific ruling appearing in the same paragraph to the effect that
“exemplary damages may only be imposed when the crime is committed with
one or more aggravating circumstances.”

Thereafter, in another pleading subsequently submitted by
petitioners, the attention of this Court was invited to Munsayac
v. De Lara.^[8]
Again, the appreciation of petitioners of the scope and extent of the ruling
announced by us is not sufficiently precise. 
In the opinion of this Court, through Justice Makalintal,
the alleged basis for the liability for exemplary damages is thus clearly set
forth: “Appellant points out that the act referred to in Article 2232 must
be one which is coetaneous with and characterizes the breach of the contract on
which the suit is based, and not one which is subsequent to such breach and
therefore has no causal relation thereto, such as the herein defendant’s
failure to placate the sufferings of the plaintiff.”

It is clear that the act from which exemplary damages could be
predicated was the failure on the part of therein defendant “to placate
the sufferings of [plaintiff].” The ruling that no basis for such an award
existed cannot then possibly be objected to, as was so emphatically expressed
by us:  “It is difficult to conceive
how the defendant in a breach of contract case could be held to have acted in a
wanton, fraudulent, reck­less, oppressive or malevolent manner within the
meaning of Article 2232 for something he did or did not do after the breach,
which had no causal connection therewith.” Our conclusion therefore
necessarily follows.  Thus:  “The mere statement that the defendant
failed, even refused, to placate the suffering of the plaintiff, necessitating
the filing of the action, is too tenuous a basis to warrant the conclusion that
the defendant approved of the wrongful act of his servant with full knowledge
of the facts.”

It is thus apparent that neither the Rotea
nor the Munsayac decisions lend support to this plea
for reconsideration.  Rather our decision
in Laguna-Tayabas Bus Co. v. Diasanta,^[9]
cited in the comments submitted by respondents on petitioner’s motion for
reconsideration, calls for application. 
In that case as well as in this case, there was a finding of gross
negligence on the part of the driver of the vehicle which was the cause of the
injury sustained by the victims. 
Necessarily then, as set forth in our opinion of this Court in the Diasanta case through the present Chief Justice:  “As regards the exemplary damages,
Article 2232 of the Civil Code of the Philippines provides that, in contracts
and quasi-contracts the court may award exemplary damages if the defendant
acted in a ‘wanton, fraudulent, reckless, oppressive or malevolent
manner.’ In the case at bar, petitioner’s driver and, hence, its agent has been
found guilty of recklessness.”^[10]

Thus, it clearly appears that there is no occasion to reconsider
an award of exemplary damages to respondent. 
It will follow likewise that attorney’s fees should be imposed.  We did so and there is no reason for us to
exempt petitioners from such liability. 
The claim that petitioners should not be held liable for interest as
well as for cost is insubstantial.  We
reject it.

WHEREFORE, the motion for reconsideration of petitioners,
filed on November 18, 1968,
is denied.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Capistrano, Teehankee,
and Barredo, JJ., concur.

^[1] Motion for Reconsideration, opening paragraph.

^[2] 92 Phil. 514, 518 (1953).

^[3]
Decision of August 30, 1968,
pp. 6-7.

^[4] Ibid, p. 7.

^[5] 60 O.G. 7549, Sept.
30, 1960.

^[6] Ibid, p. 7550.

^[7] Ibid,
pp. 7551-7552.

^[8]
L-21151, June 26, 1968.

^[9]
L-19882, June 30, 1964.

^[10]
Comments on Petitioners’ Motion for Reconsideration and Motion to Set Said
Motion for Oral Argument, p. 3.