Aaron Valdez

DAMAGES REVIEWER

Exemplary Damages

2229 Exemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the MALT damages.
2230 In criminal offenses, ED as a part of the CL may be imposed when the crime was
committed with ONE OR MORE AGGRAVATING CIRCUMSTANCES. Such damages are
separate and distinct from fines and shall be paid to the offended party.
2231 In QDs, ED may be granted if the defendant acted with GROSS NEGLIGENCE.
2232 In CONTRACTS and QUASI-CONTRACTS, the court may award ED if the defendant
acted in a FROWM manner.
2233 EDs cannot be recovered as a matter of right; the court will decide whether or not they
should be adjudicated.
2234 While the amount of the ED need not be proved, the plaintiff must show he is entitled to
MAT damages before the court may consider the question of whether or not ED should be
awarded. In case LD have been agreed upon, although no proof of loss is necessary in order
that such LD may be recovered, nevertheless, before the court may consider the question of
granting ED in addition to LD, plaintiff must show he would be entitled to MAT damages were it
not for the stipulation for LD.
2235 A stipulation whereby ED are renounced in advance shall be null and void.

PURPOSE
Code Commission: Largely punitive under US law; Commission preferred the term corrective.
These are required by public policy, for wanton acts must be suppressed, they are an antidote
that the poison of wickedness may not run through the body politic.

What is the purpose of exemplary/correcti ve damages?
According to People v. Catubig, exemplary damages are intended to serve as a deterrent to
serious wrongdoings and as a vindication of undue sufferings and wanton invasion of the rights
of an injured or a punishment for those guilty of outrageous conduct. The theory is that there
must be highly reprehensible conduct by the defendant associated with wilfulness, wantonness,
malice, gross negligence, or recklessness, oppression, insult, or fraud or gross fraud that
intensifies the injury; to punish outrageous conduct.

According to Republic v. Tuvera, the imposition of exemplary damages is a means by which the
State, through its judicial arm, can send the clear and unequivocal signal best expressed in the
pithy but immutable phrase never again. It goes beyond the parties to the case as it helps curb
reprehensible conduct in society.

When are EDs imposed?
2229: Imposed by way of example or correction for the public good, in addition to the MALT
damages
2233: Cannot be recovered as a matter of right

In addition to other types
2234: Need not be proved, though plaintiff must show he is entitled to MALT damages before
court may consider question of whether or not ED should be awarded; use in conjunction with
PAL v. CA, where court said that for ED to be awarded in a breach of contract, defendant must
have acted in a FROWM manner.

In Canada v. All Commodities Marketing, the Court upheld EDs because ACMC was entitled to
TD. The action was based on a contract and it was required that the defendant acted in a
FROWM manner in order to be liable for ED. Court simply relied on award of TD to justify award
of ED.

In PNB v CA (expropriation case), Court deleted ED because though there was a breach of an
obligation to pay, there was no evidence it acted in a FROWM manner. 2232 applies only in
contracts and quasi-contracts and that act must be accompanied by BF or done in a FROWM
manner. Court here applied 2232 to a case not based on a contract/quasi-contract. Court
enumerated requirements for ED:
(1) Imposed in addition to compensatory damages;
(2) Cannot be recovered as a matter of right;
(3) Act must be done in bad faith (pertains only to actions based on C/QC)

Why does the law forbid renunciation of ED in advance? The public interest function of
exemplary damages is meant to serve as a deterrent to similar acts in the future, there is a
public interest element to the award, which cannot be stipulated away by parties to a contract.

In crimes
2230: ED as part of CL may be imposed when crime was committed with one or more AC

Should the aggravating circumstance be special in order to award ED?
NO. According to People v.Catubig, the term aggravating circumstances used by the Civil Code,
the law not having specified otherwise, is to be understood in its broad or generic sense. Unlike
the criminal which is basically a State concern, the award of damages, however, is likewise, if
not primarily intended for the offended party who suffers thereby. The ordinary or qualifying
nature of an AC is a distinction that should only be of consequence to the criminal, rather than to
the civil liability of the offender

Should the Revised Rules on Criminal Procedure appl y to crimes committed before
December 2000?
NO. According to Catubig, the retroactive application of procedural rules cannot adversely affect
the rights of the private offended party that have become vested prior to the effectivity of said
rules. The offense was committed prior to the effectivity of the new rules and the civil liability
already incurred b appellant remains unaffected thereby. The court ruled similarly in People v.
Diunsay-Jalandoni, where the accused committed the crime on March 31, 2000.

In People v. Dalisay, however, the Court held that ED may still be awarded based on 2230 if the
criminal case was instituted before the effectivity of the Revised Rules. This statement was not
completely accurate as the non-application of the rule applied to cases instituted after the
effectivity of the Revised rules. The Court held that it can also award ED where the
circumstances of the case show the highly reprehensible or outrageous conduct of the offender.
The Court used 2229, the main provision, to justify the basis of the award, quoting J ustice
Carpio Morales in People v. Gragasin that in such cases, requiring the allegation of the AC in
the information defeats the underlying public policy behind the award of ED: to set a public
example of correction for the public good.

Do the aggravating circumstances need to be alleged in the information so the Court may
award exemplary damages?
YES, according to the ruling in People v. Catubig, in conjunction with the Sections 8 and 9 of
Rule 110 of the Revised Rules of Criminal Procedure.
NO In People v. Dadulla (2011), the Court held that the established presence of one or two
aggravating circumstances of ANY kind or nature entitles the offended party to ED under 2230
because the requirement of specificity in the information affected only the criminal liability of the
accused, not his civil liability. The award of damages is intended for the offended party who
suffers thereby; the criminal liability is the States concern. The crimes, however, were
committed in 1998 or prior to the effectivity of the Revised Rules.


Aaron Valdez
DAMAGES REVIEWER

When are ED awarded in quasi-delicts?
2231 provides that ED are awarded if defendant acted with gross negligence.

In Kapalaran Bus Line v. Coronado, the Court found the bus driver grossly negligent in his
reckless disregard of other vehicles and their passengers and of pedestrians. Court however did
not explain why the drivers negligence amounted to gross negligence; it is the duty of the
claimant to prove there was gross negligence on the part of the defendant in order to be entitled
to ED. Gross negligence cannot be presumed.

In Baliwag Transit v. CA, the Court affirmed the award of ED when it found the bus driver acted
with gross negligence when he moved the bus without checking its brake system. The Court
however reduced ED without any explanation.

In Philtranco v. CA, the Court awarded ED upon finding GN on the part of the driver who
jumpstarted his bus in an intersection.

Can ED be awarded in torts?
YES. In Globe Mackay v. CA, the Court awarded ED despite the case being an action rooted on
Articles 19, 20, and 21.

When are ED awarded in contracts and quasi -contracts?
According to 2232, ED are awarded in contracts and quasicontracts if the defendant acted in a
FROWM manner, There is no explicit rule which constitutes such manner though it is often
associated with bad faith. In Davila v. Phil Airlines, however, the Court held that failure to
exercise extraordinary diligence does not amount to any of the circumstances contemplated in
2232.

In Singapore Airlines v. Fernandez, the Court awarded ED after finding (1) a clear breach of
contract; and (2) bad faith on the part of Singapore Airlines. The court, however, did not explain
why the petitioners acted in bad faith. In Francisco v. Ferrer, the Court held that to warrant the
award of ED, the wrongful act must be accompanied by bad faith, and ED would be allowed only
if the guilty party acted in a FROWM manner.

In F v. F, the Court held the requirements of ED are:
(1) They are imposed in addition to A/C damages after claimants right to them has been
established
(2) They cannot be recovered as a matter of right
(3) Act accompanied by BF or done in a FROWM manner

Can an employer, who is vicariousl y liable for the negligence of her employee, be held for
ED on account of her actions subsequent to the breach?
NO. According to Munsayac v. De Lara (owner refused to assist the plaintiff after her jeeps
damaged the latter), the court found it difficult to conceive how the defendant in a breach of
contract case could be held to have acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner within the meaning of 2232 for something he did or did not do after the
breach, which had no casual connection therewith. The law does not contemplate a VL on his
part: the breach is his as party to the contract and so if he is to be held liable at all for ED by
reason of the wrongful act of his agent, it must be shown he had previously authorized or
knowingly ratified it, in effect making him a co-participant.





LIQUIDATED DAMAGES
2226 Liquidated damages are those agreed upon by the parties to a contract, to be paid in case
of a breach thereof.
2227 Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.
2228 When the breach of the contract committed by the defendant is not the one contemplated
by the parties in agreeing upon the liquidated damages, the law shall determine the measure of
damages, and not the stipulation.
DEFINITION: those stipulated and agreed to by parties in case of breach of a contract or
agreement between contracting parties

In Barons Marketing v. CA and Polytrade v. Blanco, the Court held that stipulations for
attorneys feeswere stipulations for liquidated damages.

Is it common for liquidated damages to be referred to as attorneys fees?
YES In Suatengco v. Reyes, the Court ruled that the AF were in the nature of liquidated
damages and not the AF recoverable as between attorney and client enunciated and regulated
by the RoC. It cited Ligutan v. CA, which held that the stipulation on AFs contained in the
promissory note constitutes what is known as a penal clause, an accessory undertaking to
assume greater liability on the part of the obligor in case of breach of an obligation.

PURPOSE: Either indemnity or penalty

Is HLC v. Marina Properties a good basis of proving that liquidated damages are puniti ve
in nature?
NO. The Court held that liquidated damages take the nature of penalties, though it said that the
amount agreed upon in the contract answers for damages suffered by the owner due to delays
in the completion of the project. In the case, the quoted provision of the contract states the
amount is not by way of penaltyand the party claiming liquidated damages was not required to
prove he has incurred actual damages to be entitled to liquidated damages.

Is it possible to recei ve liquidated damages and attorneys fees even if both are in the
nature of penal clauses?
YES. In Titan v. Uni-field, the Court said that the AF stipulated in the contract are in the nature of
LD because the intention is that it is a penal clause. In this case, the award of attorneys fees
was in the nature of LD, though it was still considered a separate item of damages.

Does a stipulation for liquidated damages necessaril y mean that other types of damages
may no longer be recovered?
NO. In Azcuna v. CA, the Court held it is possible for the Court to award additional damages
aside from LD. In this case, the Court saw nothing wrong with LD being awarded along with
other types of damages.

When are amounts for LDs said to be iniquitous or unconscionable?
The Court would simply say the stipulated amount is unconscionable or iniquitous without
explaining why. In Radiowealth Finance v. Spouses Del Rosario, the Court ruled the LD should
be reduced for being unconscionable without explicitly saying why it is so.

Are there several parameters on gauging whether LDs awarded are iniquitous or
unconscionable?
YES, there are seven. They are (1) the application of rules on penalty clauses; (2) the
Attorneys fees test; (3) application of precedent; (4) the Proportionality to purpose test; (5)
Necessity test; (6) In pari delicto; (7) Consideration of AD.

Aaron Valdez
DAMAGES REVIEWER

Application of rules on penalty clauses
In Ligutan v. CA, the Court said the question of whether a penalty is reasonable or iniquitous can
be partly subjective and partly objective, taking into account the type, extent, purpose of the
penalty, the nature of the obligation, the mode of breach, its consequences, supervening
realities, the standing and relationship of the parties, and the like. In this case, the Court decided
RCBC v. CA, where it considered the circumstances of Goyu, noting its pitiful situation.

Can liquidated damages be reduced when a partial or irregular performance is made by
the debtor?
YES. In Ligutan v. CA, the Court held that the stipulated penalty might be reduced when a partial
or irregular performance is made by the debtor. The Court also pointed out the stipulated penalty
might even be deleted in the ff cases:
(1) When there has been substantial performance in GF by the obligor
(2) When the penalty clause itself suffers from fatal infirmity, or when exceptional
circumstances exist as to warrant it.
Attorneys Fees Test
In Polytrade v. Blanco, the Court applied the rules on the award for AF. The Court conceded that
the professional character and the social standing of the attorney in determining the iniquity and
unconscionableness of the AF as LD.

Appl ying precedent
In Polytrade v. Blanco, the Court reviewed recent jurisprudence to determine whether the award
of LD was iniquitous or unconscionable. It also cited recent jurisprudence in determining whether
the stipulated liquidated damages were unconscionable, citing Social Security v. Almeda.

Proportionality to Purpose Test
Takes into account whether the damages were punitive or compensatory.

Necessity Test
In Henry Dela Rama Co v Admiral, the Court determined whether the LD were iniquitous and
unconscionable according to the necessity of awarding such damages as indemnity or penalty.
The Court allowed for both LD and AF even if the AF were in the nature of LD. A doctrinal issue,
however, arose: If the stipulated amount of LD by its own is unconscionable, any amount added
to it is additional. Any additional amount given in the concept of LD or as a form of penalty is
unsconscionable. Any amount awarded as AF would be unconscionable, yet damages were still
awarded.

When in Pari Delicto
In Sy v. CA, the Court tempered the liquidated damages because the other party also committed
the breach. A doctrinal issue also arose in this case, because if damages are to be halved, as
both parties were equally in breach, it makes no sense to award damages.

Consider actual damages
In Domel Trading v. CA, the Court considered the actual damages awarded to the non-
breaching party, and tempered the stipulated damages, citing 2227 saying a court may very well
take into account the AD sustained by a creditor who was compelled to sue the defaulting
debtor, which AD would include the interest and penalties the creditor may have had to pay on
its own from its funding source.






TEMPERATE DAMAGES
2224 Temperate/moderate damages, which are more than nominal but less than compensatory
damages, may be recovered when the court finds some pecuniary loss has been suffered but its
amount can not, from the nature of the case, be proved with certainty.
2225 TD must be reasonable under the circumstances.

WHEN AWARDED
When court finds some pecuniary loss has been suffered but its amount cannot, from the nature
of the case, be proved with certainty

Can TD be awarded where the actual amount of loss was not proven with certainty, even
if the nature of the case allows for the possibility of pecuniary loss being proven with
certainty?
YES. In Republic v. Tuvera, the Court held that TD may be awarded even in instances where
pecuniary loss could theoretically have been proven with certainty. The Court continued to
award TD despite 2224, which states that TD shall be awarded in cases where some pecuniary
loss has been suffered but cannot be proved with certainty from the nature of the case. 2224
provides an instance when TD may be awarded but not as the only instance. It also means it
may award TD in cases outside that which is provided for in Tuvera (pecuniary loss could have
been proven with certainty).

Can courts award temperate damages for loss of earning capacity?
YES. In Pleno v. CA, the Court awarded TD because the Court found Pleno was an
entrepreneur and the owner of his own corporation, though his actual income was not sufficiently
established. In lieu of actual damages, the Court instead awarded TD. The Court however
granted actual damages for medical expenses.

In Tan v. OMC Carriers, the Court also awarded TD in place of AD for loss of earning capacity
because there was insufficient proof as to the AD. The Court said a party still has the option of
claiming TD which may be allowed in cases where definite proof of pecuniary loss cannot be
adduced although court is convinced the aggrieved party suffered loss.

Can courts award temperate damages if nominal damages have been awarded for the
same purpose?
NO. In the case of Ventanilla v. Centeno, the Court disallowed the recovery of TD because the
claimant had already been awarded nominal damages for the same purpose.

Can TD be awarded alongside AD?
YES, in cases of (1) Chronic and Continuing Injury; (2) In addition to civil indemnity; and (3) In
addition to other actual damages.

Chronic and Continuing Injury
In Ramos v. CA, the Court rules that TD can and should be awarded on top of actual or
compensatory damages in instances where injury is chronic and continuing. Because of the
unique nature of such cases, no incompatibility arises when both actual and temperate damages
are provided as these damages cover two distinct phases.

In addition to civil indemnity
In People v. Yrat, the Court deleted the award for loss of earning capacity and funeral expenses
and instead awarded TD alongside civil indemnity.

In addition to other actual damages proven
Aaron Valdez
DAMAGES REVIEWER

In People v. Magalona, the Court deleted actual damages and the funeral and burial expenses
and instead awarded TD after it found out the family of the deceased suffered some pecuniary
loss but the amount thereof cannot be proved with certainty.

FACTORS IN DETERMINING AMOUNT

In general
2224:
(1) ND <TD <CD
(2) Reasonable under the circumstances
In the case of De Guzman v. Tumolva, the Court increased TD after weighing the attendant
circumstances and taking into account the cost of rebuilding the damaged portions of the
perimeter fence. The Court arrived at the amount to be awarded as TD by estimating the cost of
rebuilding the damaged portions on the property.

Receipts amounting to less than P25,000

Can the Court award TD of P25000 for receipts amounting to less than P25000?
YES. In Serrano v. People, the Court awarded P25k in TD for receipts amounting to P19000 for
hospitalization costs. The claimants originally asked for P15000 in hospitalization costs and
P4000 in lost income but the Courts awarded P25000 instead, an amount in excess of the
amount of actual damages prayed for as actual damages.

In the cases of People v. Andres and People v. Murcia, the Court also deleted the award for
actual damages and awarded TD of P25000 instead.

In People v. Villanueva, the Court cited the case of People v. Abrazaldo, where it awarded
P25,000 despite of the absence of receipts, saying it would be unfair and anomalous because
the victims heirs who tried and succeeded in proving AD would be in a worse situation than
those who might have presented no receipts at all. If actual damages amount to more than
P25,000, amount pleaded and proved shall be given. If receipts amount to less than P25,000,
P25000 shall be given.

No receipts provided

Can the Court award TD when no receipts are provided?
YES. In People v. Gidoc, which cites People v. Dacillo, which in turn cites People v. Abrazaldo,
the Court held that it may award TD even when no receipts are provided yet pecuniary loss has
been suffered. In Abrazaldo, the Court explained that it awards P25000 in TD because it is half
the amount of CI in case of death. It makes TD equal ED of P25k in cases where its award is
justified.

Can TD be awarded for medical expenses and loss of income?
YES. The Court has awarded TD for medical expenses in the case of Pleno it has awarded TD
for loss of income in the case of People v. Almedilla. This rule has now taken the doctrine in
Abrazaldo(funeral expenses) to cover claims for medical expenses and loss of income.








NOMINAL DAMAGES
2221 Nominal damages are adjudicated in order that a right of the plaintiff which has been
violated or invaded by the defendant may be vindicated or recognized, and not for the purpose
of indemnifying the plaintiff for any loss suffered by him.
2222 The court may award nominal damages in every obligation arising from any source
enumerated in 1157, or in every case where any property right has been invaded.
2223 The adjudication of nominal damages shall preclude further contest upon the right involved
and all accessory questions, as between the parties to the suit, or their respective heirs and
assigns.

Violation of a right
ND do not cover natural obligations; however, a violation of the plaintiffs right, even if only
technical, is sufficient to support an award of nominal damages. So long as there is a showing of
a violation of the right of the plaintiff, an award of nominal damages is proper.
Can ND be awarded for a...
Property right? Yes, as per Cojuangco v. CA.
Right as a parent? Yes, as per People v. Marquez.
Should FROWM manner be taken into account when awarding ND?
NO. In Almeda v. Carino, the Court reinstated the award of ND because a right was clearly
violated. It said that its award is not for the purpose of indemnification for a loss but for the
recognition and vindication of a right. ND are damages in name only and not in fact. They are
not treated as an equivalent of a wrong inflicted but simply a recognition of the existence of a
technical injury.
Should there be a specific right to have been invaded?
YES. In Gonzales v. PCIB, the Court awarded nominal damages after Gonzales right to be
informed of the accrued interest and of the suspension of his COHLA was violated. A doctrinal
issue arose because the Court was treating a rightin its generic sense. It should have phrased
it to the right of due process.

No actual loss caused or proven (an overlap with TD)
Can ND be awarded where no actual loss was caused or proven?
YES. In Areola v. CA, the Court awarded ND in place of actual, moral, and exemplary damages
because no actual or substantial damage or injury was inflicted on Areola, yet a legal right was
technically violated. In Robes-Francisco v. CFI, the Court ruled that ND are recoverable where
some injury has been done, the amount of which the evidence fails to show, a doctrine which
makes ND similar to TD.

In PNOC v. CA, the Court also awarded ND in place of AD, where it awarded P2M in ND
because (1) petitioner technically sustained an injury but which was not adequately or properly
proved; and (2) the case has dragged on for almost two decades.

In Francisco v. Ferrer, the Court also awarded ND, citing Areola where it said ND are
recoverable where a legal right is technically violated and must be vindicated against an invasion
that has produced no actual present loss of any kind of where there has been a breach of
contract and no substantial injury or actual damages whatsoever have been or can be shown.

HOWEVER, in Twin Ace v. Rufina, the Court held that when plaintiff suffers some species of
injury not enough to warrant an award of actual damages, the court may award nominal
damages. This vacillates from the Courts earlier pronouncements in a sense that an injury must
reach a certain threshold in order for AD to be awarded. It cited CAL v. CA, where it held that
when plaintiff suffers some species of injury not enough to warrant an award of AD, the Court
may award ND. The Court awarded ND because there was injury but there was no competent
proof to base the award. This is a bad precedent because the court, while it may consider the
Aaron Valdez
DAMAGES REVIEWER

degree of injury, it must base the award of damages to the right violated, as basing an award on
the degree of injury runs counter to the nature of nominal damages.

Under considerations of equity
Has the court granted ND under considerations of equity?
YES. In Sps Guanio v. Makati Shangri-La, the Court awarded ND under considerations of equity
for the Guanios discomfiture during their event. The Court did not specifically name a right,
though it said that it recognized that every person is entitled to respect of his dignity, personality,
privacy, and peace of mind.

NATURE and DETERMINATION of AMOUNT
Usually left to the discretion of the court, but Courts may be guided by jurisprudence.

Small but substantial
In Gonzales v. People, the Court said that ND are by their nature small sums, the amount of
which should not be based on the extent of the harm to the injurted party.
Commensurate to injury suffered
The Court held in Gonzales v. People that ND are by their nature small sums fixed by the court
without regard to the extent of the harm done to the injured party. It is generally held that a
nominal damage is a substantial claim if based upon the violation of a legal right. The law
presumes damage although actual or compensatory damages are not proven.

HOWEVER, despite this ruling, the Court has also ruled in PNOC v. CA that he amount to be
awarded as ND shall be equal or at least commensurate ot the injury sustained. In PNOC, the
Court cited CAL v. CA, where the Court equated injury with damage suffered, and the plaintiffs in
said case suffered no damage at all as the wrong was immediately rectified. The Court has also
held in Pedrosa that the amount awarded must be commensurate to the injury sustained.

Special Reasons Extant in the Case
Can the length of time the suit has been dragging on be considered in awarding ND?
YES. In PNOC v. CA, the Court took into account the fact the case had dragged on for almost
two decades.

Can the absence of bad faith be considered in tempering the amount handed out as ND?
YES. In the case of Robes-Francisco v. CFI, the Court took into account the absence of bad
faith and lowered the amount of ND from P20k to P10k.

Can the Court appreciate the time element in awarding ND for kidnapping cases?
YES. In the case of People v. Bernardo, the Court took into account the period of time the child
was taken in determining the amount of ND. This doctrine however runs counter to the rationale
behind ND and should have been claimed under MD.



































































Aaron Valdez
DAMAGES REVIEWER

MORAL DAMAGES

2217 Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendants wrongful act or omission.
2218 In the adjudication of moral damages, the sentimental value of property, real or personal,
may be considered.
2219 Moral damages maybe recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest
(6) Illegal search;
(7) Libel, slander, or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in 309
(10) Acts and actions referred to in 21,26, 27, 28, 29, 30, 32, 34, and 35
The PARENTS of the female seduced, abducted, raped, or abused, referred to in #3 may also
recover MD.
The SPOUSE, DESCENDANTS, ASCENDANTS, and BROTHERS and SISTERS may bring the
action mentioned in #9 of this article, in the order named.
2220 Willful injury to property may be a legal ground for awarding MD if the court should find
that, under the circumstances, such damages are justly due. The same rule applies to breaches
of contract where the defendant acted fraudulently or in bad faith.

What is the purpose of moral damages?
In B.F. Metal v. Sps. Lomotan, the Court held the award of moral damages fulfils two purposes:
(1) to compensate the morally injured; and (2) to alleviate his suffering. In Kierulf v. CA, the
Court held moral damages as having a compensatory purpose, as it is an award designed to
compensate the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer. In Sulpicio Lines v. Curso, the Court held its purpose is indemnity or reparation. In
ABS-CBN v. CA, the Court held it is aimed at restoration of the spiritual status quo ante.

Can a spouse claim moral damages for loss of consortium when his or her spouse
suffers permanent body injury?
YES. In Kierulf v. CA, the Court cited Rodriguez v. Bethlehem Steel Corp, where the Court held
that when a person is injured to the extent that he/she is no longer capable of giving love,
affection, comfort and sexual relations to his or her spouse, that spouse has suffered a direct
and real personal loss. The Court in this case however rejected Victor Kierulfs claim because
there must be pleading and proof of moral suffering, and there must be clear testimony on the
anguish and other forms of mental suffering, which Victor did not prove or support with the
evidence on record.

WHEN RECOVERABLE
In Sulpicio Lines v. Curso, the Court held that it can award MD if the following conditions are
met:
(1) A physical, mental, or psychological injury, clearly substantiated by the claimant
(2) A culpable act/omission factually established
(3) Wrongful act/omission of the defendant is the proximate cause of the injury sustained
by the claimant
(4) Award of damages is predicated on any of the cases stated in 2219 or 2220 of the CC
Simpler requirements:
(1) Moral suffering is proximate result of the act/omission of the defendant
(2) Act/omission of defendant falls within specified cases when MD may be awarded
Moral suffering is proximate result
In Kierulf v. CA, the Court reiterated the rule that there must be clear testimony on the anguish
and other forms of mental suffering. If claimant failed to take the witness stand and testify as to
his/her social humiliation, wounded feelings and anxiety, moral damages cannot be awarded.

Is bad faith required?
YES. In Sps. Valenzuela v. Sps. Mano, Industrial Insurance v. Bondad, and Francisco v. Ferrer,
the Court required proof of the existence of bad faith by clear and convincing evidence.

WITHIN SPECIFIC CASES
CRIMINAL OFFENSE RESULTING IN PHYSICAL INJURIES
Includes crimes resulting to death
Does physical injuries include death?
YES. In People v. Villaver, the Court ruled that MD may be recovered in a criminal offense
resulting in physical injuries, which, in its generic sense, includes death. 2206(3) provides that
the spouse, legitimate, and illegitimate descendants and ascendants of the deceased may
demand MD for mental anguish by reason of the death of the deceased.

Need for testimony on moral suffering
What is the general rule?
According to People v. Cleopas and Pirame, the general rule is that there must be testimony of
moral suffering before moral damages can be awarded, a rule which applies even in cases of
murder.

Are there exceptions to the general rule requiring testimony of moral suffering?
YES. In Arcona v. CA, the Court has ruled that in case of violent death or brutal killing, allegation
and proof of moral suffering are not required. The Court held that a violent death invariably and
necessarily brings about emotional pain and anguish on the part of the victims family. It cites
People v. Panado, where it held that a violent death invariably and necessarily brings about
emotional pain and anguish on the part of the victims family. A doctrinal issue arises vis-a-vis
Cleopas, where the circumstances are arguably as violent as in Arcona and Panado. Recent
jurisprudence, however, leans toward the award of MD without need of allegation and proof of
moral suffering, as in People v. Anticamara. The violent death exception has now become a
general rule not requiring testimony of moral suffering.

Quasi-delicts causing physical injuries
Can the owner of a jeepney claim moral damages in case his truck and his dri ver incur
damage through anothers negligence?
NO. According to BF Metal vs Sps Lomotan, because no provision in the civil code provides for
legal basis in awarding moral damages to the owner whether arising from criminal negligence or
based on the negligence of the tortfeasor under 2180. 2220 speaks of injury to property, but
such injury must be wilful and the circumstances show such damages are justly due.

Seduction, abduction, rape, or other lasci vious acts
Are moral damages automatically granted in rape cases?
YES. In People v. Lizano, the Court held that moral damages are automatically granted in rape
cases without need of further proof other than the commission of the crime because it is
assumed a rape victim had actually suffered moral injuries entitling her to such award. In People
v. Banago, the Court held the conventional requirement of allegata et probata in civil procedure
and for essentially civil cases should be dispensed with in criminal prosecutions for rape with the
civil aspect included therein, since no appropriate pleadings are filed wherein such allegations
can be made.
Aaron Valdez
DAMAGES REVIEWER


Are moral damages increased in case special qualifying circumstances, though not
alleged in the information, are established during trial?
YES. In People v. Bartolini, the Court increased the MD from P50,000 to P75,000, citing People
v. Catubig, saying that where the special qualifying circumstances of age and relationship,
although not alleged in the information, are established during trial, the award of civil indemnity
and moral damages in a conviction for simple rape should equal the award of CI and MD in
convictions for qualified rape.

In cases of rape, should moral damages be awarded alternati vely to the offended party
and her parents?
NO. In People v. Fontanilla, the Court held that the award of MD must be made to both the
offended party and her parents, because the law presumes that not only the woman who was
seduced, abducted, raped, or abused has suffered, but as well as her parents, who naturally
suffer a besmirched reputation, social humiliation, mental anguish, and wounded feelings.

Illegal or arbitrary detention or arrest
Does a case of kidnapping merit an award for moral damages?
YES. In People v. Bernardo, the Court awarded moral damages in a kidnapping case because it
is clearly analogous to illegal and arbitrary detention or arrest, thereby justifying the award of
moral damages.

Illegal search
It can also fall under Art. 32 of the NCC, which is included in 2219(10).

Libel, slander, or any other form of defamation
It may also be fall within Art. 33, included in 2219(10)
33: In cases of defamation, a civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Such civil action shall proceed
independently of the criminal prosecution and shall require only a preponderance of evidence.

Should moral damages be awarded in cases of slight oral defamation?
YES. In Occena v. Icamina, the Court awarded moral damages in a case for slight oral
defamation, saying a crime has two aspects: the criminal and the civil. Though the offense of
which private respondent was found guilty is not one of those felonies where no civil liability
results either because there is no offended party or no damages was caused to a private person,
there is an offended party who suffered damages in view of defamatory words and statements
uttered by private respondent. The award of damages is anchored in 2219(7).

Malicious prosecution
Does malicious prosecution include ci vil and administrati ve suits?
YES. In the case of Drilon v. CA, the Court held that an action for malicious prosecution is an
action for damages brought by one against whom a criminal prosecution, civil suit, or other legal
proceeding has been instituted maliciously and without probable cause, after the termination of
such prosecution, suit, or other proceeding in favour of the defendant. Based on Magbanua
v.Junsay, however, what is involved is a criminal action. The elements of a suit for malicious
prosecution are:
(1) Prosecution occurred and defendant himself was the prosecutor or he instigated its
commencement;
(2) Action terminated with an acquittal;
(3) Prosecutor acted without probable cause
(4) Legal malice
In which case did the Court forbid the award of MD in a clearl y unfounded ci vil suit?
In Expertravel v. CA, the Court ruled against the award of MD because what was involved was
an unfounded civil suit. It held that though an unfounded civil suit can at times be a legal
justification for an award of AF, it has been held not to be a ground for an award of MD, because
the law could not have meant to impose a penalty on the right to litigate. The anguish suffered
by a person for having been made a defendant in a civil suit would be no different from the usual
worry and anxiety suffered by anyone who is haled to court, a situation that cannot by itself be a
cogent reason for the award of MD. Such statement however can also be said for malicious
prosecution suits. It cited the case of Enervida v. De la Torres and Malonzo v. Galang, where it
said that (1) an unfounded civil suit is not one of the cases in 2219 though included in 2208; (2)
an unfounded civil suit cannot fall within the catch all analogous cases; and (3) 2219 excludes
QDs not resulting in physical injuries, a flimsy line of reasoning. The Malonzo case was different
because it denied the award of MD because of failure to prove the existence of the factual basis
of the damage and its causal relation to defendants acts and not simply because it was an
unfounded civil suit.

In Ramos v. Ramos, the Court denied the award of MD because the litigation in the case did not
fall within any of the cases enumerated in 2219, 2220, and 1764 in relation to 2206.

Has the Court awarded MD in a clearl y unfounded ci vil suit?
YES. In Industrial Insurance v. Bondad, the Court found bad faith in the part of Industrial
Insurance in compelling respondents to litigate an unfounded claim.

Acts mentioned in 309
Spouses, ascendants, descendants, and brothers and sisters may bring the action in the order
stated.

Acts and actions referred to in 21, 26, 27, 28, 29, 30, 32, 34, 35
21: Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs, or public policy shall compensate the latter for the damage. It includes
cases of moral seduction, public humiliation, malicious prosecution, and oppressive dismissal.

In San Miguel v. Gucaban and Triple Eight v. NLRC, the Court awarded MD where the dismissal
of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or
was done in a manner contrary to morals, good customs, or public policy.

26: Every person shall respect the dignity, personality, privacy, and peace of mind of his
neighbours and other persons. The following and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for damages, prevention, and other relief:
(1) Prying into the privacy of anothers residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life,
place of birth, physical defect, or other personal condition.
In Concepcion v. CA, the Court awarded MD after it found that private respondent suffered
mental anguish, besmirched reputation, wounded feelings, and social humiliation as a proximate
result of petitioners abusive, scandalous, and insulting language when the latter went and
confronted the former about an alleged immoral relationship in public, to the formers humiliation.

27: Any person suffering material or moral loss because a public servant or employee refuses or
neglects, without just cause, to perform his official duty may file an action for damage and other
relief against the latter, without prejudice to any disciplinary administrative action that may be
taken.
In Vital-Gozon v. CA, the Court awarded MD to a claimant under 27 in relation to 2219 and
2217. It awarded MD even if the claimant did not quantify the extent of his MD, explaining that
Aaron Valdez
DAMAGES REVIEWER

under 2217, MD are incapable of pecuniary estimation, and that courts have the discretion to fix
the corresponding amount, not being bound by any self-serving assessment by the claimants.

28: Unfair competition in cultural, commercial or industrial enterprises or in labor through the use
of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method
shall give rise to a right of action by the person who thereby suffers damage.
In Calamba Medical Center v. NLRC, the Court awarded MD after Calamba dismissed medical
doctors-spouses illegally and circulated a watchlist with their names. The Court cited 28, and
considered the circulation of such list containing names of alleged union members intended to
prevent employment of workers for union activities constitutes unfair labor practice, giving a right
of action for damages by the employees prejudiced.

32: Any public officer or employee, or any private individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of
another person shall be liable to the latter for damages.
Xxxxxxxxx
In any of the cases referred to in this article, whether or not the defendants act or omission
constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate
and distinct civil action for damages and for other relief. Such civil action shall proceed
independently of any criminal prosecution and may be proved by a preponderance of evidence.
This indemnity shall include moral damages. Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable from a judge unless his act or omission
constitutes a violation of the RPC or other penal statute.

Has the court awarded MD in cases where the right against depri vation of property of law
is violated?
YES. In Manila Electric v. Sps Chua, the Court found that MD were proper considering the
manner by which Meralco disconnected the respondents electric service. Similarly, in
Cojuangco v. CA, the Court held that bad faith was not a requisite in a claim for MD for the
violation of the right against deprivation of property without due process of law. In this case
however the Court used 32 to justify the award of ND and not MD.

Willful injury to property
2220: Willful injury to property may be a legal ground for awarding MD if the court should find
that, under the circumstances, such damages are justly due.

In Manila Electric v. Ramoy, the Court held that failure to exercise utmost care and diligence in
the performance of its obligation to a paying customer is tantamount to bad faith. The provider of
a public utility is subject to strict regulation by the State in the exercise of police power. Failure to
comply with these regulations will give rise to the presumption of BF or abuse of right. In Regala
v. Carin, the Court also looked into the manner by which petitioner carried out his renovations to
determine whether he was directly responsible for any distress respondent may have suffered
because the law requires a wrongful or illegal act or omission must have preceded the damages
sustained by the claimant.

Breach of contract in BF
2220: MD may be awarded to breaches of contract where defendant acted fraudulently or in bad
faith

In Expertravel v. CA, the Court held that MD may be recovered when defendant was guilty of
gross negligence which amounts to bad faith or in wanton disregard of his contractual obligation
and, exceptionally, when the act of breach of contract itself is constitutive of tort resulting in
physical injuries. In Francisco v. Ferrer, the Court did not award MD because bad faith, which
imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, was not
found. In Bankard v. Feliciano, the Court held that a conscious or intentional design need not
always be present since negligence may occasionally be so gross as to amount to malice or bad
faith; in the context of 2220, bad faith includes gross negligence.

In the case of Sps. Valenzuela v. Sps Mano, however, the Court awarded MD for the mere
finding of fraud on the part of respondents. The award of MD appears to simply be hinged on the
commission of fraud on the part of respondent. The mere finding of fraud is not sufficient to
warrant an award of MD without proof of compliance with the requirements of 2217 and the
identification of which case under 2219 or 2220 this case falls under.

What is the general rule?
Moral damages are not recoverable in actions for damages predicated on a breach of contract,
unless there is fraud or bad faith (2220)
Are there exceptions?
YES. In Sulpicio Lines v. Curso, the Court held that MD are recoverable in a breach of contract
of carriage that results in the death of a passenger, in accordance with 1764, in relation to
2206(3) of the Civil Code.

Does inattention and lack of care on the part of the common carrier resulting in the failure
of the passenger to be accommodated in the class contracted for amount to bad fai th or
fraud?
YES. In the case of Philippine Airlines v. Vicente Lopez, the Court awarded MD because such
inattention and lack of care amounted to bad faith or fraud on the part of PAL.

WHO MAY RECOVER

Relati ves of injured person
2219: Allows parents of the female seduced, abducted, raped, or abused to recover moral
damages. Article also allows the spouse, descendants, ascendants, and brothers and sisters to
recover damages under 309.
Can brothers and sisters of the deceased recover MD?
NO. In Sulpicio Lines v. Curso, the Court held that the omission from 2206(3) of the brothers and
sisters of the deceased passenger reveals the legislative intent to exclude them from the
recovery of MD for mental anguish by reason of the death of the deceased. Inclusio unius est
exclusion alterius.

Juridical persons
What is the general rule regarding recovery of MD by juridical persons??
The general rule is that juridical persons cannot recover moral damages. In ABS-CBN v. CA, the
Court held that the award of MD cannot be granted in favour of a corporation because, being an
artificial person and having existence only in legal contemplation, it has no feelings, no
emotions, no senses. It cannot therefore experience physical suffering and mental anguish
which can be experience only by one having a nervous system. The Court also held in Filipinas
Broadcasting v. Ago that a juridical person is generally not entitled to moral damages because,
unlike a natural person, it cannot experience physical suffering or such sentiments as wounded
feelings, serious anxiety, mental anguish, or moral shock.
Are there any exceptions?
YES. 2219(7) does not qualify whether the plaintiff is a natural or juridical person, therefore a
juridical person such as a corporation can validly complain for libel or any other form of
defamation and claim for MD. The Court applied this provision in Filipinas Broadcasting v. Ago.
No evidence of actual damages is needed. The Court struck down an award for MD in Republic
v. Tuvera because the case does not involve any of the analogous cases under 2219, and said
that, upon an intelligent reading of 2219, it is difficult to see how the Republic could sustain any
of the injuries contemplated therein.
Aaron Valdez
DAMAGES REVIEWER


In Crystal v. BPI however the Court deleted the award for MD, holding the statements in ABS-
CBNN and Filipinas Broadcasting Network regarding the decision in People v. Manero which
cited Mambulao Lumber Co v. PNB as obiter dicta. It held that while the Court may allow the
grant of MD to corporations, it is not automatically granted; there must still be proof of the
existence of the factual basis of the damage and its causal relation to defendants acts. This is
so because MD, though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury suffered and not to impose a penalty on
the wrongdoer.

FACTORS CONSIDERED IN DETERMINING AMOUNT
(1) The amount must not be too much nor should it be too little. In Kierulf v. CA, the Court
said that since each case must be governed by its own peculiar circumstances, there
is no hard and fast rule in determining the proper amount. The yardstick should be that
the amount awarded should not be so palpably and scandalously excessive as to
indicate it was the result of passion, prejudice or corruption on the part of the trial
judge. Neither should it be so little or so paltry that it rubs salt to the injury already
inflicted on plaintiffs.
(2) Proportional to and in approximation of the suffering inflicted (PNR v. Brunty).
In Lopez v. Pan-American and Kierulf v. CA, the Court has already taken into account the
following factors such as (1) the social and financial standing of the injured parties; and (2) their
wounded moral feelings and personal pride. In Valenzuela v. CA, the Court took into account the
nature of the resulting damage and the predictable sequelae of the injury, while in Heirs of
Completo v. Albayda, the Court awarded MD because the permanent deformity and the scar left
by the wounds suffered by Albayda will forever be a reminder for the pain and suffering that he
had endured and continues to endure.




























ACTUAL DAMAGES
2199 Except as provided by law or stipulation, one is entitled to an adequate compensation only
for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to
as actual or compensatory damages.
2200 Indemnification for damages shall comprehend not only the value of the loss suffered, but
also that of the profits which the obligee failed to obtain.
2201 In contracts and quasi-contracts, the damages for which the obligor who acted in GF is
liable shall be those that are the natural and probable consequences of the breach of the
obligation and which the parties have foreseen or could have reasonably foreseen at the time
the obligation was constituted.
In case of fraud, bad faith, malice, or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation.
2202 In crimes and QDs, the defendants shall be liable for all damages which are the natural
and probable consequences of the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been foreseen by the defendant.
2203 The party suffering loss or injury must exercise the diligence of a good father of a family to
minimize the damages resulting from the act or omission in question.
2204 In crimes, the damages to be adjudicated may be respectively increased or lessened
according to the aggravating or mitigating circumstances.
2205 Damages may be recovered:
(1) For loss or impairment of earning capacity in case of temporary or permanent
personal injury;
(2) For injury to the plaintiffs business standing or commercial credit.
2206 The amount of damages for death caused by a crime or QD shall be at least P3k, even
though there may have been mitigating circumstances, In addition:
(1) The defendant shall be liable for LEC of the deceased and the indemnity shall be paid
to the heirs of the latter; such indemnity shall in every case be assessed and awarded
by the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of 291, the
recipient who is not an heir called to the decedents inheritance by the law of testate or
intestate succession, may demand support from the person causing the death, for a
period not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate, and illegitimate descendants and ascendants of the deceased
may demand MD for mental anguish by reason of the death of the deceased.
2207 If the plaintiffs property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract
complained of, the insurance company shall be subrogated to the rights of the insured against
the wrongdoer or the person who has violated the contract. If the amount paid by the insurance
company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover
the deficiency from the person causing the loss or injury.
2208 In the absence of stipulation, AF and LitEx, other than judicial costs, cannot be recovered,
except:
(1) When ED are awarded;
(2) When defendants act or omission has compelled plaintiff to litigate with third persons
or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiffs plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, labourers, and skilled
workers;
(8) In actions for indemnity under workmens compensation and employers liability laws;
Aaron Valdez
DAMAGES REVIEWER

(9) In a separate civil action to recover civil liability arising from a crime
(10) When at least double judicial costs are awarded;
(11) In any other case where the Court deems it just and equitable that AF and LitEx
should be recovered.
In all cases, the AF and LitEx must be reasonable.
2209 If the obligation consists in the payment of a sum of money, and the debtor incurs in delay,
the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest which is 6% per
annum.
2210 Interest may, in the discretion of the court, be allowed upon damages awarded for breach
of contract.
2211 In crimes and QDs, interest as a part of the damages may, in a proper case, be
adjudicated in the discretion of the court.
2212 Interest due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point.
2213 Interest cannot be recovered upon unliquidated claims or damages, except when demand
can be established with reasonable certainty.
2214 In QDs, the contributory negligence of the plaintiff shall reduce the damages he may
recover.
2215 In contracts, quasi-contracts, and QDs, the court may equitably mitigate the damages
under circumstances other than the case referred in the preceding article, as in the following
instances:
(1) That the plaintiff himself has contravened the terms of the contract;
(2) Plaintiff has derived some benefit as a result of the contract;
(3) In cases where ED are to be awarded, that defendant acted upon advice of counsel;
(4) The loss would have resulted in any event;
(5) Since the filing of the action, defendant has done his best to lessen plaintiffs loss or
injury

PURPOSE: In the case of Oceaneering Contractors v. Baretto, the Court held that the purpose
of AD is intended to put the claimant in the position in which he had been before he was injured.

PROOF REQUIRED
- Requires (1) pleading and (2) proof

Nature of loss and proof
Actual damages are required to be susceptible of measurement (OMC Carriers v. Sps Nabua).
These damages are not proper for loss of things whose value cannot be computed; other
damages may be proper depending on the circumstance. In case of items of historic, artistic, or
sentimental value, AD would only cover the market value.

According to PNOC v. CA the Court cannot rely on speculations, conjectures, or guesswork as
to the fact and amount of damages, as well as hearsay, or uncorroborated testimony whose truth
is suspect.

According to Oceaneering Contractors v. Barretto, AD are awarded for injuries or losses that are
actually sustained and susceptible of measurement. These are intended to put the injured party
in the position in which he was before he was injured.

Can the Court make estimates based on their knowledge of the cost of the item lost or
profits not realized?
YES. In the case of Gatchalian v. Delim, the Court awarded AD based on an estimate of the cost
of cosmetic surgery. The court granted Gatchalians claim for plastic surgery and explained that
a person is entitled to the physical integrity of his or her body, and if that integrity is violated or
diminished, actual injury is suffered for which actual or compensatory damages are due and
assessable. The Court cited Araneta v. Areglado, where the Court granted damages for
restorative surgery and plastic surgery (cf. Gatchalian where surgery was cosmetic in character).
Does the Court award damages where injury was intended?
YES. Contrary to the Courts ruling in Oceaneering Contractors v. Barretto, where it held that AD
are those damages which the injured party is entitled to recover for the wrong done and injuries
received when none were intended, the Civil Code provides that actual damages may also be
awarded as a consequence of intentional acts.

LOSS COVERED
In general
2200: Indemnification for damages shall comprehend not only the value of the loss suffered, but
also that of the profits which the obligee failed to obtain. This provision is important in cases
where the thing lost or damaged earns income or is used for business.
Dano emergente: Loss of what a person already possesses
Lucro cesante: Failure to receive as a benefit that which would have pertained to him

In PNOC v. CA, the Court held that MEFC was entitled to the value of the goods at the time of
destruction, the sum of money which he would have to pay in the market for identical or
essentially similar goods, plus in a proper case damages for the loss of use during the period
before replacement. In the case of profit-earning chattels, what has to be assessed is the value
of the chattel to its owner as a going concern at the time and place of the loss. Here, the Court
admitted a claim for damages as to a ship with extreme caution because it was a bare assertion.

In the same case, the Court also held that the price quotations presented partook the nature of
hearsay evidence, considering the persons who issued them were not presented as witnesses.
The ruling was modified as to the award of AD for lack of evidentiary basis.

Can you use 2200 to claim AD for loss of earning capacity?
YES. In Candano v. Sugata-on, the Court used 2200 as a basis for the award of loss of income
for actions not based on crime or quasi-delict. The lower courts awarded AD for loss of income
using the Villa Rey formula but held that the award was erroneous. It cited Floresca v. Philex
Mining Corporation, declaring the general rule that employees may invoke either the Workmens
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. There however was an exception, where the
claimant who had already been paid under the WCA may still sue for damages under the Civil
Code on the basis of supervening facts or developments occurring after he opted for the first
remedy. Since Candano shipping refused to compensate her husbands death, Florentina
Sugata-on was able to recover damages.

The Court here cited the doctrine in Villa Rey v. CA, where computation for unearned income
was as follows:

Net earning capacity =life expectancy x (gross annual income reasonable and necessary
living expenses)
Life expectancy =2 x 3 (80 age of deceased at the time of death)
In the Villa Rey case, the Court said damages consist, not of the full amount of his earnings, but
of the support they received or would have received from him had he not died. In computing the
necessary living expense, a survey of more recent jurisprudence shows that the Court
consistently pegged the amount at 50% of the gross annual income. If, however, there is
evidence that living expenses are less than 50% of gross income, then that sum shall be
applied. In some cases, the Court admitted that it reduced the life expectancy multiplier
considering the medical history as when the deceased previously underwent a major surgery or
Aaron Valdez
DAMAGES REVIEWER

when it was shown that he was treated for chest pains, backache, or occasional feeling of
tiredness and the fact that the deceased has been consistently engaged in a dangerous and
risky activity tending to shorten his life.

The case is interesting because while the main issue was the determination of loss of earning
capacity and the Villa Rey formula was used, the basis of the action for damages was 1711,
which covers neither a crime nor a quasi-delict. The Court used 2206(1) (liability for a death by
crime or quasi-delict) as the basis of the award, and this cannot be used as the basis of the
award for loss of earning capacity.

In contracts and quasi-contracts

2201 provides that in contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable for those that are the natural and probable consequences of the
breach of the obligation and which the parties have foreseen or could have reasonably foreseen
at the time the obligation was constituted.
In case of bad faith, fraud, malice or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation.
Foreseeability is not a requirement and the link between damage and breach need not be
natural and probable.

Can overbooking qualify as bad faith so as to award actual damages in favour of the
claimant?
YES. In Spouses Zalamea v. CA, the Court found bad faith on the part of TransWorld Airlines,
ruling that US law does not apply and that overbooking amounts to bad faith in Philippine
jurisprudence. Because the breach of the contract was in bad faith, in accordance with 2201, the
Court held that TWA should be responsible for all damages which may be reasonably attributed
to the non-performance of its obligation. The Court awarded the cost of the tickets that the
Zalameas had to buy for a flight on another airline as damages which were reasonably attributed
to the non-performance of the obligation.

Does freezing a depositors account on account of fraudulent transactions conducted on
the account by third parties amount to bad faith?
NO. According to BPI Family Bank v. Franco, the Court held that acting out of the impetus of
self-protection and not out of malevolence or ill will does not amount to bad faith, thus it was held
not liable for unearned interest on the time deposit. Bad faith imports a dishonest purpose or
some moral obliquity and conscious doing of wrong; it partakes of the nature of fraud.

In crimes and quasi-delicts
2202: In crimes and QDs, the defendant shall be liable for all damages which are the natural and
probable consequences of the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been foreseen by the defendant. In
case of crimes and QDs, forseeability and good faith are irrelevant.

Is 2202 applicable to a tort like Art. 19?
YES. In Llorente v. Sandiganbayan, the Court found Llorente guilty of abuse of right and
awarded actual damages to the claimant, which holds the defendant liable for all natural and
probabledamages. Though 2202 is applicable to crimes and quasi-delicts, the Court here used
it in a tort action, namely Art. 19. The Court in PNOC v. CA also held that in actions based on
torts or QDs, actual damages include all the natural and probable consequences of the act or
omission complained of.

2204: In crimes, damages to be adjudicated may be respectively increased or lessened
according to the aggravating or mitigating circumstances.

Should ci vil indemnity be increased if an aggravating circumstance is proven?
YES. In People v. Sarcia, citing People v. Victor, the Court held that civil indemnity must also be
increased to not less than P75,000 if the crime of rape is committed or effectively qualified by
any of the circumstances under which the death penalty is authorized by the present amended
law.

Should ci vil indemnity be decreased if a mitigating circumstance is present?
NO. In the same case, the Court held that the fact of minority of the offender at the time of the
commission of the offense has no bearing on the gravity and extent of injury caused to the victim
and her family.

Earning capacity and business standing
2205: Damages may be recovered:
(1) For loss or impairment of earning capacity in cases of temporary or permanent
personal injury;
(2) For injury to the plaintiffs business standing or commercial credit.
Loss or impairment of earning capacity
Can the Court base the award of actual damages based on employment status?
YES, jurisprudentiall y at least. In Gatchalian v. Delim, the Court based its award on her
employment status. This doctrine however is flimsy at best, as it is correct only if what was
meant by loss of revenue is loss of earnings. If what was meant is loss of earning capacity, then
lack of employment at the time of the mishap should not necessarily mean actual damages
should not be awarded. A persons earning capacity is not necessarily shown by his employment
status.

Can actual damages be awarded in case of a claim of loss or impairment of earning
capacity of a person injured and not killed?
YES. 2205(1) covers both temporary and permanent injury. In the case of Mercury Drug v.
Huang, the Court, citing 2202, pointed out that Mercury Drug was liable for all damages which
are the natural and probable consequences of the act or omission complained of. The Court took
into account the life care cost of Stephen Huang based on his average monthly expense and the
actuarial computation of the remaining years that he is expected to live. The Court also awarded
a conservative amountof P10M for the loss or impairment of his earning capacity, considering
his age, probable life expectancy, state of his health, and his mental and physical condition
before the accident.

Can 2205(1) be used to recover loss of earning capacity in case of death of the injured
person?
YES. In Magbanua v. Tabusares, the Court, making use of 2205 (allows recovery of damages
for LEC in cases of temporary or permanent personal injury), awarded damages to cover the
loss sustained by the dependents or the heirs of the deceased, consisting of the support they
would have received from him had he not died because of the negligent act of another. The loss
is not equivalent to the entire earnings of the deceased, but only that portion that he would have
used to support his dependents or heirs.

Injury to business standing or commercial credit
Can the loss of goodwill or reputation fall under temperate damages as well?
YES. In Tanay Recreation Center v. Fausto, the Court, after denying the award of actual
damages after the allegedly unjust and wrongful conduct of the defendants caused petitioner to
lose its goodwill, held that if these damages are not recoverable as compensatory damages,
these may still be awarded n the concept of temperate or moderate damages.
DEATH BY CIVIL INDEMNITY
Aaron Valdez
DAMAGES REVIEWER

2206: The amount of damages for death caused by a crime or QD shall be at least P3k even
though there may have been mitigating circumstances. Court has gradually increased P3000.

Is the ci vil indemnity P50,000 or P75,000?
It depends. There is an inconsistency as to whether the award is P50,000 or P75,000. The rule
seems to be that the Court awarded P75,000 if the imposable penalty for the crime was death
had it not been for RA 9346 which abolished the penalty. If the imposable penalty for the murder
was only RP, the court awarded P50,000.
In People v. Maningding, the Court found the accused guilty of murder and sentenced him to
RP, ordered to pay only P50,000 as CI. It quoted from People v. Combate (2010), where the
Court stated that when the circumstances surrounding the crime call for the imposition of RP
only, the Court has ruled that the proper amounts should be P50,000 as CI, P50,000 as MD, and
P30,000 as ED.

The Court in People v. Anticamara (2011) however ruled that a finding or murder merited an
award of P75,000, citing People v. Quiachon, saying that even if the penalty of death is not to be
imposed because of the prohibition in RA 9346, the CI of P75,000 is proper, because it is not
dependent on the actual imposition of the death penalty but on the fact that qualifying
circumstances warranting the imposition of the death penalty attended the commission of the
crime.

There are however a number of recent cases (2011) where the accused was found guilty of
murder, sentenced to RP, and was ordered to pay P75,000. Some of these cases were People
v. Villarico, People v. Satonero, and People v. Arbalate (2009). In People v. Bokingo (2011), the
Court found one of the accused guilty of homicide and meted out the punishment of RP together
with P75000 CI.

In People v. Apacible (2010), the Court reduced the CI from P75000 to P50000 after it found the
accused guilty of murder and sentenced him to suffer imprisonment of RP. It cited People v.
Anod, wherein the Court stressed that the accused was sentenced to suffer the penalty of RP
and that P75,000 shall be awarded only if the penalty to be meted was death.

In Crisostomo v. People, the court convicted the accused of robbery with homicide. There being
no circumstances, aggravating or mitigating, he was sentenced to suffer RP. The Court reduced
the AD to P50,000 from P75,000 because the crime was punishable by RP to death. The Court
applied the indivisible penalty rule. Because there were no modifying circumstances present, the
Court held that the penalty of reclusion perpetua was proper, and awarded P50k CI.

Loss of earning capacity
2206: Defendant is also liable for the loss of the earning capacity of the deceased. This shall be
awarded in every case unless the deceased, on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death. Exception is when
the deceased was permanently disabled at the time of his death. This award is not for loss of
earnings but for loss of capacity to earn money (Philippine Hawk v. Lee).

The general rule is that documentary evidence should be presented to substantiate the claim for
damages for loss of earning capacity (People v. Lopez). The Court has held that the heirs must
present unbiased proof of the deceaseds average income. A self-serving, unreliable statement
is not enough. There are exceptions, however:
(1) Deceased was SELF-EMPLOYED and earning less than the minimum wage under
current labor laws, in which case, judicial notice may be taken of the fact in the
deceaseds line of work, no documentary evidence is available;
(2) Deceased was employed as a daily wage worker earning less than the minimum
wage under current labor laws.
(3) The Pleyto rule, where testimonial evidence suffices to establish a basis for which the
court can make a fair and reasonable estimate for the loss of earning capacity
Is a hand-written estimate of the deceaseds daily income made by the victims mother
valid proof to substantiate the deceaseds average income?
NO. In People v. Ereno, the Court has held that such hand-written estimate was a self-serving
and unreliable statement.

Does the Villa Rey formula apply despite Villa Rey not invol ving a crime or quasi-delict?
YES. In People v. Lopez, the Court employed the Villa Rey formula in a case not covered by
2206. People v. Lopez was a criminal case, where the Court held the accused responsible for
paying loss of earning capacity based on the wifes testimony. The Court also used the formula
in Philippine Hawk v. Lee, which is based on a quasi-delict.

Can the claimants seek loss of earning capacity in the form of actual damages despite the
failure to present substantial evidence?
YES. In Pleyto v. Lomboy, the Court held that failure to present documentary evidence to
support a claim for LEC of the deceased need not be fatal to its cause, Testimonial evidence
suffices to establish a basis for which the court can make a fair and reasonable estimate of the
loss of earning capacity. The Court cited Bangcado and Garcia as basis for the principle. In
Bangcado, the Court held that the fact the prosecution did not present documentary evidence to
support its claim for damages for loss of earning capacity of the deceased does not preclude
recovery of damages. In that case, the Court cited Verde, which cited Pantranco v. Baesa,
wherein the Court ruled that the testimony of the heirs as to the earning capacity of the
deceased were sufficient to establish a basis from which the court can make a fair and
reasonable estimate of the damages for the LEC of the deceased. The Court held it can
consider the nature of the occupation, the educational attainment, and the state of the
deceaseds health at the time of his death.

IN RAPE CASES

Is ci vil indemnity mandatory upon the finding of the fact of rape?
YES. In the case of People v. Astrologo, the Court held that civil indemnity is mandatory upon
the finding of the fact of rape. The tendency for rape is at P75,000. In People v. Apattad, the
Court held that when the circumstances surrounding the crime would justify the imposition of the
penalty of death were it not for RA 9346, the CI for rape should be P75,000. Citing People v.
Victor, the Court ratiocinated that such penalty is not only a reaction to the apathetic societal
perception of the penal law and the financial fluctuations over time, but also an expression of the
displeasure of the Court over the incidence of heinous crimes against chastity.

In People v. Apattad, however, the Court held that P75,000 is mandatory upon the finding of the
fact of rape. The Court also did the same in People v. Anticamara.

In People v. Bartolini, the Court increased the civil indemnity to P75,000 where the special
qualifying circumstances of age and relationship, despite not having been alleged in the
information, were established during the trial. The Court increased the CI despite the ruling in
Catubig.

ATTORNEYs FEES
2208: In the absence of stipulation for attorneys fees and expenses of litigation, other than
judicial costs, cannot be recovered. Unless there is stipulation under law or contract, the
prevailing party in a suit is not entitled to an award of attorneys fees. Therea re 11 exceptions to
this rule:
(1) Where exemplary damages are awarded
Aaron Valdez
DAMAGES REVIEWER

(2) When the defendants act or omission has compelled plaintiff to litigate with third
persons or to incur expenses to protect his interest (BF);
(3) In criminal cases of malicious prosecution against the plaintiff (BF);
(4) In a case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiffs plainly valid, just and demandable claim (BF);
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, labourers, and skilled
workers;
(8) In actions for indemnity under workmens compensation and employers liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorneys fees and
expenses of litigation should be recovered.

Are attorneys fees amounts awarded to the litigants counsel?
NO. In Quirante v. IAC, the Court held that attorneys fees in the concept of 2208 are awarded in
favour of the litigant, not his counsel, and the litigant is the judgment creditor who may enforce
the judgment for attorneys fees by execution. It is not a claim based on an alleged contract for
professional services.

Are exemplary damages a requisite in every case attorneys fees are to be awarded?
NO. However, in Manila Electric v. Ramoy, the Court interpreted 2208(1) to mean that ED are
required for any award of AF. The Court in this case deleted the AF because the claim was
anchored on the award for ED.

Can attorneys fees be deemed incorporated within a general prayer for such other relief
and remedy as this court may deem just and equitable ?
NO. In Briones v. Macabagdal, the Court held that attorneys fees are in the concept of actual
damages and hence, must be specifically prayed for, and may not be deemed incorporated
within a general prayer for such other relief and remedy as this court may deem just and
equitable. The Court citedScott Consultants & Resource Development Corporation v. CA,
where the Court held that the power of the Court to award AF under 2207 of the CC demands
factual, legal, and equitable justification, and cannot be left to speculation of conjecture.

When a defendants act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest, does the Court require the showing
of bad faith?
YES. In Bank of America v. PRCI, the Court held that an adverse decision does not ipso facto
justify an award of AF to the winning party. It held that even when a claimant is compelled to
litigate with third persons or to incur expenses to protect his rights, still AF may not be awarded
where no sufficient showing of bad faith could be reflected in a partys persistence in a case
other than an erroneous conviction of the righteousness of his cause.

In a claim for AF based on a case of a clearl y unfounded ci vil action or proceeding
against the plaintiff, does the Court require a showing of bad faith?
YES. In Sps.Andrada v. Pilhino Sales, the Court held that no premium should be placed on the
right to litigate and not every winning party is entitled to an automatic grant of AF. The Court held
that 2208(4) was a corollary of the general principle expressed in NCC 19 that everyone must, in
the performance of his duties, observe honesty and gf and the rule embodied in 1170 that
anyone guilty of fraud in the performance of his obligation shall be liable for damages.

INTEREST
2209: If the obligation consists of the payment of a sum of money and the debtor incurs delay,
the indemnity for damages is, there being no stipulation to the contrary, the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest which is 6% annum.

Interest is paid in the concept of damages if:
a. The obligation consists in the payment of a sum of money;
b. The debtor incurs in delay;
c. There is no stipulation to the contrary
The rate of interest will be:
a. The rate agreed upon;
b. If there is no agreed upon rate, legal interest of 6%/annum
Nacar v. Gallery Frames:

1. When the obligation is breached, and it consists in the payment of a sum of money,
i.e. a loan or a forbearance of money, the interest due should be that which may have
been stipulated in writing. The interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default, i.e. from judicial or extrajudicial demand
under and subject to the provisions of 1169;
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established
with reasonable certainty. Where the demand is established with reasonable certainty,
the interest shall begin to run from the time the claim is made judicially or
extrajudicially, but when such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only from the date of the
judgment of the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the computation of
legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, shall be 6% per annum from such finality until its satisfaction, this interim
period being deemed to be by then an equivalent to a forbearance of credit.
Why must interest be paid?
In Frias v. San Diego-Sison, the Court held that the payment of regular interest constitutes the
price or cost of the use of money and thus, until the principal sum due is returned to the creditor,
regular interest continues to accrue since the debtor continues to use such principal amount. It
has been held that for a debtor to continue in possession of the principal of the loan and to
continue to use the same after maturity of the loan without payment of the monetary interest
would constitute unjust enrichment on the part of the debtor at the expense of the creditor.

Is the interim period from the finality of the judgment awarding a monetary claim until
payment thereof deemed to be an equi valent to a forbearance of credit?
YES. In Soriamont v. Sprint, the Court cited Eastern Shipping Lines v. Inc, where it held that the
interest shall itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 12% per annum to be computed from default (now 6% in
lieu of Nacar).

When is payment of monetary interest allowed?
In Pan Pacific v. Equitable, the Court cited 1956 of the CC, which mandates that no interest shall
be due unless it has been expressly stipulated in writing. Payment of monetary interest is
allowed only if:
1. There was an express stipulation for the payment of interest;
Aaron Valdez
DAMAGES REVIEWER

2. The agreement for the payment of interest was reduced in writing.

DUTY TO MINIMIZE
2203: The party suffering loss or injury is required to exercise the diligence of a good father of a
family to minimize damages resulting from the act or omission in question. It however does not
specify the consequence of failing to comply with this obligation.

What are the consequences?
In Lim v. CA (roadside jeep), the Court exhorts parties suffering from loss or injury to exercise
the diligence of a good father of a family to minimize damages resulting from the act or omission
in question. To exercise such diligence entitles the claimant to recover from the wrongdoer
money lost in reasonable efforts to preserve the property injured and for injuries incurred in
attempting to prevent damage to it.

In Mackay Radio v. Rich ruled that it is reasonable that whatever measure the discharged
employee had taken to minimize the damage he suffered should be at the cost of the person
liable to pay the damage, being an indirect consequence of the act of the latter, and an integral
part of the injury caused.

MITIGATION of DAMAGES
2214: In QDs, the contributory negligence of the plaintiff shall reduce the damages he may
recover.
2215: In contracts, quasi-contracts, and quasi-delicts, the Court may equitable mitigate damages
under circumstances other than the case referred to in the preceding article, as in the ff
circumstances:
(1) Plaintiff has contravened the terms of the contract;
(2) Plaintiff has derived some benefit as a result of the contract
(3) In cases where ED are to be awarded, defendant acted upon advice of counsel;
(4) Loss would have resulted in any event
(5) Since filing of action, defendant has done his best to less plaintiffs loss or injury

Can 2215(2) apply in a suit for breach of contract of carriage where passenger was
brought to a different port because the ship developed engine trouble?
NO. In Sweet Lines v. CA, the Court held that the harm done to private respondents outweighs
any benefits they may have derived from being transported to Tacloban instead of being taken to
Catbalogan, their destination and the vessels first port of call, pursuant to its normal schedule.

Is 2215 in conflict with 1192?
NO. In Ong v. Bognabal, the Court held that the plaintiff referred to in 2215(2) is deemed to be
the second infractor, while the one whose liability for damages may be mitigated is the first
infractor. The directions to equitable temper the liability of the first infractor in 1192 and 2215 are
subject to the discretion of the court, despite the word shall, in the sense that it is for the courts
to decide what is equitable under the circumstances.