Proof of loss of earning capacity - G.R. No. 193861

G.R. No. 193861

"x x x.

Damages for loss of earning capacity is in the nature of actual damages,²⁶ which as a rule must be duly proven²⁷ by documentary evidence, not merely by the self-serving testimony of the widow.

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 earning less than the minimum wage under current labor laws, and 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.²⁸

Based solely on Nelfa’s testimony, the CA determined that the deceased falls within one of these exceptions. Nelfa testified that her husband was in the business of contracting and manufacturing grills, fences and gates,²⁹ and his earnings “exceed P6,000.00”³⁰ per month prior to his death. She presented no documentary proof of her claims.

It was error for the CA to have awarded damages for loss of earning capacity based onNelfa’s testimony alone.

First, while it is conceded that the deceased was self-employed, the Court cannot accept that in his line of work there was no documentary proof available to prove his income from such occupation. There would have been receipts, job orders, or some form of written contract or agreement between the deceased and his clients when he is contracted for a job.

Second, and more importantly, decedent was not earning “less than the minimum wage” at the time of his death.

Wage Order No. RTWPB-XI-07,³¹ issued by the Regional Tripartite Wages and Productivity Board-XI of the National Wages and Productivity Commission, under the Department of Labor and Employment, took effect on 1 November 1999 and mandated the minimum wage rate in Region XI, including General Santos City, at the time of the accident. Section 1 provides:

SECTION 1. NEW MINIMUM WAGE RATES. Effective November 1, 1999, the new minimum wage rates in Region XI shall be as follows:

SECTOR/INDUSTRY	Davao City General Santos City Island Garden City ofSamal Tagum City	Provinces of: Davao del Norte Davao del Sur Davao Oriental Compostela Valley South Cotabato
NON-AGRICULTURE AGRICULTURE - Plantation (i.e. more than 24 Hectares or employing at least 20 workers) - Non-Plantation RETAIL/SERVICE - Employing more than 10 workers - Employing not more than 10 workers	148.00 138.00 117.00 148.00 117.00	146.00 136.00 115.00 146.00 115.00

Respondent testified that her husband was earning not less than P6,000.00 per month. On the other hand, the highest minimum wage rate at the time of the accident, based on Wage Order No. RTWPB-XI-07, was P148.00. At that rate, the monthly minimum wage would be P3,256.00,³² clearly an amount less than what respondent testified to as her husband’s monthly earnings. The deceased would not fall within the recognized exceptions.

There is therefore no basis for the CA’s computation for Mumar’s supposed net earning capacity and the subsequent award of damages due to loss of earning capacity.

 x x x."

Note: FORMULA - 

"x x x. Based on the wife’s claim that the victim earned not less than P6,000.00 a month and his age at the time of death, based on his birth certificate (29), the CA applied the formula:

Net earning capacity = 2/3 x (80 less the age of the victim at time of death) x [Gross Annual Income less the Reasonable and Necessary Living Expenses (50% of gross income)]

Using the foregoing formula, the CA awarded damages due to loss of earning capacity in the amount of P1,224,000.00.⁸

x x x."