CANDANO SHIPPING LINES, INC., petitioner, vs. FLORENTINA J. SUGATA-ON, respondent.

Posted: March 24, 2017 in Uncategorized

CANDANO SHIPPING LINES, INC., petitioner, vs. FLORENTINA J. SUGATA-ON, respondent.

G.R. No. 163212.  March 13, 2007          

FACTS:

On March 27, 1996, M/V David Jr., owned by Candano Shipping Lines, sank together with its cargo in Surigao del Sur. Melquiades Sugata-on employed by Candano Shipping Lines as third marine engineer in the cargo vessel was one of those missing.

Florentina Sugata-on (respondent and widow of Melquiades Sugata-on), went to the office of Candano Shipping in Manila to claim the death benefits of her husband but it refused to pay. Thus, Florentina filed an action before the RTC of Manila. She prayed that actual, moral, and exemplary damages including attorney’s fees, be awarded in her favor in view of the provision of Art. 1711 NCC.

The RTC decided in favor of Florentina. Candano Shipping filed a Motion for Reconsideration but was denied.

It then elevated the RTC decision to the CA which affirmed with modification the judgment of RTC. The award for actual damages was reduced from P998,400 to P608,400, while the awards for moral and exemplary damages including attorney’s fees were deleted for lack of sufficient basis for their allowance.

In arriving at the sum of P608,400, the CA applied the standard prescribed by Art. 194 of the Labor Code. It likewise denied the Motion for Reconsideration of Candano Shipping in a resolution issued on April 1, 2004. Hence, this petition for review on certiorari.

 

ISSUE:

WON the formula for fixing the amount of death compensation in Art. 194 of the Labor Code applies in determining the compensation claimed by the heir of the deceased employee against the employer under Art. 1711 of the civil code

 

HELD:

Yes. Petition is denied. CA is affirmed.

The remedy availed by Florentina in filing the claim under the New Civil Code has been validly recognized by the prevailing jurisprudence. Floresca v. Philex Mining Company declared that the employees may invoke either the Workmen’s Compensation Act or the provisions of the Civil Code, subject to the consequence that the choice of one remedy will exclude the other and that the acceptance of the compensation under the remedy chosen will exclude the other remedy except on the basis of supervening facts or developments occurring after he opted for the first remedy. This doctrinal rule is rooted on theory that the basis of compensation under the Workmen’s Compensation Act is separate and distinct from the award of damages under the Civil Code.

In this case, Florentina instituted a civil suit for indemnity under the New Civil Code. The employer shall be liable for the death of personal injury of its employees in the course of employment as sanctioned by Art. 1711 of the Civil Code. The liability of the employer for death or personal injury of his employees arose from the contract of employment entered into between the employer and his employee which is likely imbued with public interest. Accordingly, when the employee died or was injured in the occasion of employment, the obligation of the employer automatically attaches. The indemnity may partake in the form of actual, moral, nominal, temperate, liquidated or exemplary damages, as the case may be.

The provisions on damages of the New Civil Code must be transformed into a more tangible and practical mathematical form, so that the purpose of the law to indemnify the employee or his heirs for his death or injury occasioned by his employment under article 1711 may be realized. In regard to this, the formula for loss of earning capacity enunciated in the case of Villa Rey v. Court of Appeals, in computing the amount of actual damages to be awarded to the claimant under article 1711 of the New Civil Code is adopted in this case.

 

DISPOSITIVE: WHEREFORE, in view of the foregoing, the instant petition is DENIED and the Decision dated 23 May 2003 as well as the Resolution dated 1 April 2004, rendered by the Court of Appeals in CA-G.R. CV No. 70410, are hereby PARTIALLY AFFIRMED in so far as it finds petitioner liable to respondent for damages.

Pursuant to the appropriate provisions of the New Civil Code and the prevailing jurisprudence on the matter, petitioner Candano Shipping Lines, Inc., is ORDERED to pay the amount of P748,800.00, as actual damages, plus 10% of the amount awarded as attorney’s fee plus cost of the suit.

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