FELINA RODRIGUEZ-LUNA, JOSE R. LUNA AND ROBERTO R. LUNA, JR., PETITIONERS, VS. THE HON. INTERMEDIATE APPELLATE COURT, JOSE E. DELA ROSA AND LUIS DELA ROSA, RESPONDENTS.

Rodriguez-Luna versus Intermediate Appellate Court

The Case

This is a petition for review brought by the widow and children of Roberto R. Luna, a business executive killed in a vehicular collision at a go-kart practice area in Greenhills, San Juan, on January 18, 1970. The collision involved the go-kart driven by the deceased and a Toyota car driven by Luis dela Rosa, then a minor of thirteen years who held no driver's license. The Lunas sued Luis and his father Jose dela Rosa for damages arising from a quasi-delict. The case matters because it fixes the rules on how unearned net earnings of a deceased person are computed, on the weight to be given to mortality tables and the deceased's habits and manner of life, and on when interest may be added to an award of attorney's fees.

Procedural History

The heirs of Roberto R. Luna sued Luis dela Rosa and his father Jose dela Rosa for damages before the Court of First Instance of Manila. The trial court rendered judgment sentencing both defendants, jointly and severally, to pay the heirs 1,650,000 pesos as unearned net earnings, 12,000 pesos as compensatory damages, and 50,000 pesos for the loss of the deceased's companionship, with legal interest from the date of the decision, plus 50,000 pesos in attorney's fees and the costs of suit.

The defendants appealed to the defunct Court of Appeals, which affirmed the trial court in full in a decision dated May 22, 1979. On the defendants' motion for reconsideration, however, the appellate court issued a resolution dated June 19, 1981, modifying its judgment: it reduced the unearned net earnings to 450,000 pesos, with legal interest from the filing of the complaint, and left the rest of the dispositions standing.

Both sides filed separate petitions for review. The petition of Jose and Luis dela Rosa was ultimately dismissed with finality for their failure to file an amended petition as required. The present case is the separate appeal of the Lunas, which the Supreme Court gave due course. In an earlier resolution, the Court ordered the private respondents to pay the amounts already adjudged, but they failed to pay, saying they had no cash money. Execution yielded only a nominal amount.

Facts

On January 18, 1970, Roberto R. Luna, then thirty-three years old, was killed in a collision at the go-kart practice area in Greenhills, San Juan. He was driving a go-kart; the other vehicle, a Toyota car, was driven by Luis dela Rosa, a minor of thirteen who had no driver's license. Luna was survived by his wife Felina Rodriguez-Luna and their two children, Roberto Jr., aged thirteen, and Jose, aged twelve.

At the time of his death, Luna was president and general manager of Rodlun, Inc. and held positions in several other corporations. His income tax returns showed a gross income of 16,900 pesos for 1967, 29,700 pesos for 1968, and 45,117.69 pesos for 1969, and he had investments in various corporations amounting to 136,116 pesos. His physician testified that, apart from a slight anemia ten years earlier, Luna was of good health.

The trial court found a life expectancy of thirty years and an annual net income of 55,000 pesos, computed as 75,000 pesos gross income less 20,000 pesos personal expenses, and awarded 1,650,000 pesos as unearned net earnings. On reconsideration, the Court of Appeals said that Luna had engaged in car racing as a sport here and abroad, treated this habit and manner of life as a factor affecting the mortality table, and concluded that he could not have lived beyond forty-three years, reducing his life expectancy to ten years. It also raised his annual personal expenses to 30,000 pesos because of the escalating price of automobile gas. Multiplying 45,000 pesos by ten years, it arrived at 450,000 pesos.

Issues

• Whether or not the Court of Appeals erred in reducing the life expectancy of the deceased from thirty years to ten years.
• Whether or not the Court of Appeals erred in increasing the annual personal expenses of the deceased from 20,000 pesos to 30,000 pesos without a corresponding increase in his annual gross income.
• Whether or not the award of attorney's fees should earn interest at the legal rate.
• Whether or not, as a matter of equity, the liability of the father, Jose dela Rosa, should be merely subsidiary to that of his son Luis, who had since attained majority and married.

Applicable Provisions

Article 2211 of the Civil Code provides:

In contracts and quasi-contracts, the court may award interest upon damages if it deems it equitable to do so.

This provision is the basis for the Court's holding that interest may be adjudicated on the attorney's fees, which were awarded in the concept of damages in a quasi-delict case.

Article 2180 of the Civil Code, which the private respondents invoke through the Elcano versus Hill doctrine, provides:

The obligation imposed by the preceding article is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

This is the provision on the liability of parents for the acts of their minor children, which the Court declines to relax in favor of the father on equitable grounds.

Ruling

On the first issue, the Court sustained the petitioners. The appellate court's premise that Luna had engaged in car racing was not based on any evidence on record. What the record showed was go-kart racing, and go-kart racing cannot be categorized as a dangerous sport, for go-karts are extremely low-slung, low-powered vehicles, only slightly larger than foot-pedalled four-wheeled conveyances. It was therefore error for the Court of Appeals to disturb the trial court's determination of life expectancy, which it had previously affirmed.

On the second issue, the Court likewise found error. It was wrong to reduce the net annual income of the deceased by increasing his annual personal expenses without at the same time increasing his annual gross income. If his personal expenses should rise because of the escalating price of gas, a statement the Court found to lack complete basis, it would not be unreasonable to suppose that his income would also increase, considering its manifold sources. In short, the Court of Appeals erred in modifying its original decision.

On the third issue, the Court found merit in the petitioners' prayer. The attorney's fees were awarded in the concept of damages in a quasi-delict case, and under the circumstances interest as part thereof may be adjudicated at the discretion of the court. As with the other damages awarded, however, the interest should accrue only from the date of the trial court's decision.

On the fourth issue, the Court refused to apply equity instead of strict law. To do so would not serve the ends of justice, because Luis dela Rosa was abroad and beyond the reach of Philippine courts, had no property either in the Philippines or elsewhere, and his earnings were insufficient to support his family.

Doctrine

First, the computation of unearned net earnings rests on two factors: the life expectancy of the deceased and his annual net income, that is, gross income less personal expenses. Second, the deceased's habit and manner of life may affect the value of the mortality table, but only on the basis of evidence on record; a sport that is not shown to be dangerous cannot be used to shorten life expectancy. Third, personal expenses and gross income must be adjusted together; it is error to raise expenses without a corresponding increase in income. Fourth, attorney's fees awarded in the concept of damages in a quasi-delict case may earn legal interest under Article 2211 of the Civil Code, accruing from the date of the trial court's decision. Fifth, the subsidiary liability of a parent under Article 2180 of the Civil Code will not be relaxed on equitable grounds where the child is abroad, beyond the reach of Philippine courts, and without property.

Disposition

The Court set aside the resolution of the Court of Appeals and reinstated its decision of May 22, 1979, with the sole modification that the award for attorney's fees shall earn interest at the legal rate from July 5, 1973, the date of the trial court's decision, with costs against the private respondents.

Remember This

The line worth memorizing is that the Court of Appeals erred in modifying its original decision, for life expectancy and net income must rest on the evidence, and attorney's fees awarded as damages may earn legal interest from the date of the trial court's decision. Examiners like to use this case on the computation of unearned net earnings, on the effect of the deceased's habits and manner of life on mortality tables, and on the award of interest on attorney's fees under Article 2211 of the Civil Code.