Lucio Algarra v. Sixto Sandejas

Summary

This landmark 1914 Supreme Court case established comprehensive tort damages principles under Article 1902 of the Civil Code. Plaintiff Algarra was injured in an automobile collision due to defendant Sandejas' admitted negligence. The lower court limited damages to wages lost during physical incapacity, but the Supreme Court reversed, holding that full reparation under the Civil Code includes not only actual losses but also lost profits under Articles 1106-1107. The Court awarded P360 total damages: P10 medical expenses, P100 for two months lost wages, and P250 for business damage from lost customers and reduced earning capacity. The decision extensively analyzed Spanish jurisprudence and incorporated compatible American common law damages principles, establishing that injury to an established business with ascertainable profits is compensable. This case significantly expanded Philippine tort damages doctrine beyond mere wage replacement to include comprehensive business losses, setting important precedent for future personal injury cases involving lost profits and business interruption damages.