Sunday, October 2, 2011

Damages; formula for loss of earning capacity - G.R. No. 187044

G.R. No. 187044

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"x x x.

Both the RTC and the Court of Appeals failed to consider that under Article 2206 of the Civil Code, the accused are also jointly and severally liable for the loss of the earning capacity of Biag and such indemnity should be paid to his heirs.[56] In People v. Jadap,[57] this Court said:

As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case judicial notice may be taken of the fact that in the deceased's line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws. In this case, no documentary evidence was presented to prove the claim of the victim’s heirs for damages by reason of loss of earning capacity. However, the victim’s father testified that at the time of his son’s death, he was only 20 years old and was working as a mason with a monthly income of 3,000.00. We find the father’s testimony sufficient to justify the award of damages for loss of earning capacity.[58]

Biag’s widow, Florida, testified that Biag worked as a farmer, tanod, and tricycle driver, and that his income amounted to ₱40,000.00 per cropping season as a farmer, ₱2,000.00 per month as a tanod, and ₱300.00 per day as a tricycle driver. However, since the prosecution failed to present any document pertaining to Biag’s appointment as a tanod, or that he actually worked as a farmer, we shall consider only his earnings as a tricycle driver. According to the death certificate[59] submitted by the prosecution, Biag was 56 years old at the time of his death.

The amount of damages recoverable for the loss of earning capacity of the deceased is based on two factors: 1) the number of years on the basis of which the damages shall be computed; and 2) the rate at which the losses sustained by the heirs of the deceased should be fixed. The first factor is based on the formula (2/3 x 80 – age of the deceased at the time of his death = life expectancy) which is adopted from the American Expectancy Table of Mortality.[60] Net income is computed by deducting from the amount of the victim’s gross income the amount of his living expenses. As there is no proof of Biag’s living expenses, the net income is estimated to be 50% of the gross annual income.[61] Thus, the loss of earning capacity of the deceased is computed as follows:

Net Earning Capacity = life expectancy x [gross annual income – living expenses][62]

= 2/3 [80-age at time of death] x [gross annual income - 50% of gross annual income]

= 2/3 [80-56] x [₱109,500.00 - ₱54,750.00]

= 16 x ₱54,750.00

= ₱876,000.00

x x x."