DAMAGES

without injury in those instances in which the loss

or harm was not the result of a violation of a legal
duty.

A. CONCEPT
(People v Ballesteros)
Custodio v CA
Civil Law Torts and Damages Damnum Absque
Injuria Actionable Wrong
FACTS: Pacifico Mabasa owns a property behind
the properties of spouses Cristino and Brigida
Custodio and spouses Lito and Ma. Cristina
Santos. The passageway leading to Mabasas
house passes through the properties of the
Custodios and the Santoses.
Sometime in 1981, the spouses Lito and Ma.
Cristina Santos built a fence around their property.
This effectively deprived Mabasa passage to his
house. Mabasa then sued the Custodios and the
Santoses to compel them to grant his right of way
with damages. Mabasa claims that he lost tenants
because of the blockade done by the families in
front. The trial court ruled in favor of Mabasa. It
ordered the Custodios and the Santoses to give
Mabasa a permanent easement and right of way
and for Mabasa to pay just compensation. The
Santoses and the Custodios appealed. The Court
of Appeals affirmed the decision of the trial court.
However, the CA modified the ruling by awarding
damages in favor of Mabasa (Actual damages:
P65k, Moral damages: P30k, Exemplary damages:
P10k).
ISSUE: Whether or not the grant of damages by
the CA is proper.
HELD: No. The award is not proper. This is an
instance of damnum absque injuria.
There is a material distinction between damages
and injury. Injury is the illegal invasion of a legal
right; damage is the loss, hurt, or harm which
results from the injury; and damages are the
recompense or compensation awarded for the
damage suffered. Thus, there can be damage

In this case, it is true that Mabasa may have

incurred losses (damage) when his tenants left
because of the fence made by the Santoses.
However, when Santos built the fence, he was well
within his right. He built the fence inside his
property. There was no existing easement
agreement, either by contract or by operation of
law, on his property. Hence, Santos has all the right
to build the fence. It was only after the judgment in
the trial court that the easement was created which
was even conditioned on the payment of Mabasa of
the just compensation. Santos did not commit a
legal injury against Mabasa when he built the
fence, therefore, there is no actionable wrong as
basis for the award of damages. In this case, the
damage has to be borne by Mabasa.
Heirs Of Borlado V. Vda. De Bulan G.R. 114118
(2001)
FACTS:
April 15, 1942: Serapio Borlado sold the lot to
Francisco Bacero
February 1948: His widow Amparo Dionisio Vda. de
Bacero, as legal guardian of her minor children,
sold the lot to the Spouses Bienvenido Bulan and
Salvacion Borbon and they declared the lot in the
name of Bulan for Tax Declaration purposes and
obtained the continuous, peaceful, uninterrupted,
adverse and exclusive possession of the lot until
November 4, 1972 when heirs of Simeon Borlado
forcibly entered and wrested physical possession
from them.
November 23, 1972: Spouses filed with the MTC a
complaint for ejectment
MTC: in favor of the spouses. The heirs were
ordered to vacated the lot and pay 100 cavans of
palay annually from 1972 until they vacate the
premises and P5K for attorneys fees and cost of
suit
RTC: dismissed for lack of cause of action in a
decision
CA: affirmed

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ISSUE: W/N the 100 cavans of palay is an

acceptable form of damages
HELD: NO. Affirm with modification.
100 cavans of palay for lack of basis.

Deleting the

B. KINDS
1. Actual or Compensatory
PNOC Shipping and Transport Corporation v.
Court of Appeals, G.R. No. 107518, October 8,
1998

ISSUE: W/N the damage was adequately proven

HELD:
YES. Affirming with modification actual
damages of P6,438,048.00 for lack of evidentiary
bases therefor. P2M nominal damages instead. In
connection with evidence which may appear to be
of doubtful relevancy or incompetency or
admissibility, it is the safest policy to be liberal, not
rejecting them on doubtful or technical grounds, but
admitting them unless plainly irrelevant, immaterial
or incompetent, for the reason that their rejection
places them beyond the consideration of the court.
If they are thereafter found relevant or competent,
can easily be remedied by completely discarding or
ignoring them.

FACTS:
September 21, 1977 early morning: M/V Maria
Efigenia XV, owned by Maria Efigenia Fishing
Corporation on its way to Navotas, Metro Manila
collided with the vessel Petroparcel owned by the
Luzon Stevedoring Corporation (LSC)
Board of Marine Inquiry, Philippine Coast Guard
Commandant Simeon N. Alejandro found
Petroparcel to be at fault
Maria Efigenia sued the LSC and the
Petroparcel captain, Edgardo Doruelo praying for
an award of P692,680.00 representing the value of
the fishing nets, boat equipment and cargoes of M/
V Maria Efigenia XV with interest at the legal rate
plus 25% as attorney's fees and later on amended
to add the lost value of the hull less the P200K
insurance and unrealized profits and lost business
opportunities
During the pendency of the case, PNOC
Shipping and Transport Corporation sought to be
substituted in place of LSC as it acquired
Petroparcel
Lower Court: against PNOC ordering it to pay
P6,438,048 value of the fishing boat with interest
plus P50K attorney's fees and cost of suit
CA: affirmed in toto

Under Article 2199 of the Civil Code, actual or

compensatory damages are those awarded in
satisfaction of, or in recompense for, loss or injury
sustained. They proceed from a sense of natural
justice and are designed to repair the wrong that
has been done, to compensate for the injury
inflicted and not to impose a penalty. In actions
based on torts or quasi-delicts, actual damages
include all the natural and probable consequences
of the act or omission complained of.
Two kinds of actual or compensatory damages: 1.
loss of what a person already possesses (dao
emergente) 2. failure to receive as a benefit that
which would have pertained to him (lucro cesante)
As stated at the outset, to enable an injured party
to recover actual or compensatory damages, he is
required to prove the actual amount of loss with
reasonable degree of certainty premised upon
competent proof and on the best evidence
available. The burden of proof is on the party who
would be defeated if no evidence would be
presented on either side. He must establish his
case by a preponderance of evidence which means
that the evidence, as a whole, adduced by one side
is superior to that of the other. In other words,
damages cannot be presumed and courts, in
making an award must point out specific facts that
could afford a basis for measuring whatever
compensatory or actual damages are borne.

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Nonetheless, the non-admissibility of said exhibits

does not mean that it totally deprives private
respondent of any redress for the loss of its vessel.
This is because in Lufthansa German Airlines v.
Court of Appeals, the Court said: In the absence of
competent proof on the actual damage suffered,
private respondent is entitled to nominal damages
which, as the law says, is adjudicated in order that
a right of the plaintiff, which has been violated or
invaded by defendant, may be vindicated and
recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered.
Nominal damages are damages in name only and
not in fact. Where these are allowed, they are not
treated as an equivalent of a wrong inflicted but
simply in recognition of the existence of a technical
injury. However, the amount to be awarded as
nominal damages shall be equal or at least
commensurate to the injury sustained by private
respondent considering the concept and purpose of
such damages. The amount of nominal damages to
be awarded may also depend on certain special
reasons extant in the case.

ISSUE: Whether or not Philex is correct.

HELD: Yes. Under the law, Floresca et al could only
do either one. If they filed for benefits under the
WCA then they will be estopped from proceeding
with a civil case before the regular courts.
Conversely, if they sued before the civil courts then
they would also be estopped from claiming benefits
under the WCA.
HOWEVER, the Supreme Court ruled that Floresca
et al are excused from this deficiency due to
ignorance of the fact. Had they been aware of such
then they may have not availed of such a remedy.
But, if in case theyll win in the lower court whatever
award may be granted, the amount given to them
under the WCA should be deducted. The SC
emphasized that if they would go strictly by the
book in this case then the purpose of the law may
be defeated. Idolatrous reverence for the letter of
the law sacrifices the human being. The spirit of the
law insures mans survival and ennobles him. As
Shakespeare said, the letter of the law killeth but its
spirit giveth life.
Justice Gutierrez dissenting

Floresca vs Philex Mining Corporation

FACTS: Perfecto Floresca et al are the heirs of the
deceased employees of Philex Mining Corporation
who, while working at its copper mines
underground operations in Tuba, Benguet on June
28, 1967, died as a result of the cave-in that buried
them in the tunnels of the mine. Theircomplaint
alleges that Philex, in violation of government rules
and regulations, negligently and deliberately failed
to take the required precautions for the protection
of the lives of its men working underground.
Floresca et al moved to claim their benefits
pursuant to the Workmens Compensation Act
before the Workmens Compensation Commission.
They also filed a separate civil case against Philex
for damages.
Philex sought the dismissal of the civil case as it
insisted that Floresca et al have already claimed
benefits under the Workmens Compensation Act.

No civil suit should prosper after claiming benefits

under the WCA. If employers are already liable to
pay benefits under the WCA they should not be
compelled to bear the cost of damage suits or get
insurance for that purpose. The exclusion provided
by the WCA can only be properly removed by the
legislature NOT the SC.
Sps Zalamea vs. Court of Appeals 288 SCRA 23
(1993)
FACTS:
Spouses Cesar and Suthira Zalamea, and their
daughter, Liana Zalamea, purchased three (3)
airline tickets from the Manila agent of respondent
TransWorld Airlines, Inc. (TWA) for a flight from
New York to Los Angeles on June 6, 1984. The
tickets of the spouses were
purchased at a discount of 75% while that of their
daughter was a full fare ticket. All three tickets
represented confirmed reservations.

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While in New York, on June 4, 1984, the spouses

Zalamea and their daughter received a notice of
reconfirmation of their reservations for said flight.
On the appointed date, however, the spouses
Zalamea and their daughter checked in at 10:00
am, an hour earlier than the scheduled flight at
11:00 am but were placed on the wait-list because
the number of passengers who checked in before
tem had already taken all the seats available on the
flight.
Out of the 42 names on the wait-list, the first 22
names were eventually allowed to board the flight
to Los Angeles, including Cesar Zalamea. The two
others, on the other hand, being ranked lower than
22, were not able to fly. As it were, those holding
full-fare ticket were given first priority among the
wait-listed passengers. Mr. Zalamea, who was
holding the full-fare ticket of his daughter, was
allowed to board the plane; while his wife and
daughter, who presented the discounted tickets
were denied boarding. Even in the next TWA flight
to Los Angeles, Mrs. Zalamea and her daughter,
could not be accommodated because it was full
booked. Thus, they were constrained to book in
another flight and purchased two tickets from
American Airlines.
Upon their arrival in the Philippines, the spouses
Zalamea filed an action for damages based on
breach of contract of air carriage before the RTC of
Makati which rendered a decision in their favor
ordering the TWA to pay the price of the tickets
bought from American Airlines together with moral
damages and attorneys fees. On appeal, the CA
held that moral damages are recoverable in a
damage suit predicated upon a breach of contract
of carriage only where there is fraud or bad faith. It
further stated that since it is a matter of record that
overbooking of flights is a common and accepted
practice of airlines in the United States and is
specifically allowed under the Code of Federal
Regulations by the Civil Aeronautics Board, neither
fraud nor bad faith could be imputed on TWA.
ISSUE:

Whether or not the CA erred in accepting the

finding that overbooking is specifically allowed by
the US Code of Federal Regulations and in holding
that there was no fraud or bad faith on the part of
TWA ?
HELD:
The CA was in error. There was fraud or bad faith
on the part of TWA when it did not allow Mrs.
Zalamea and her daughter to board their flight for
Los Angeles in spite of confirmed tickets. The US
law or regulation allegedly authorizing overbooking
has never been proved.
1.) Foreign laws do not prove themselves nor can
the court take judicial notice of them. Like any other
fact, they must be alleged and proved. Written law
may be evidenced by an official publication thereof
or by a copy attested by the officers having legal
custody of the record, or by his deputy and
accompanied with a certificate that such officer has
custody. The certificate may be made by a
secretary of an embassy or legation, consulgeneral, consul, vice-consul, or consular agent or
by any officer in the foreign service of the Phil.
stationed in the foreign country in which the record
is kept and authenticated by the seal of his office.
Here, TWA relied solely on the testimony of its
customer service agent in her deposition that the
Code of Federal Regulations of the Civil Aeronautic
Board allows overbooking. Aside from said
statement, no official publication of said code was
presented as evidence. Thus, the CAs finding that
overbooking is specifically allowed by the US Code
of Federal Regulations has no basis in fact.

"That there was fraud or bad faith on the part of

respondent airline when it did not allow petitioners
to board their flight for Los Angeles in spite of
confirmed tickets cannot be disputed. The U.S. law
or regulation allegedly authorizing overbooking has
never been proved. Foreign laws do not prove
themselves nor can the courts take judicial notice
of them. Like any other fact, they must be alleged
and proved. Written law may be evidenced by an
official publication thereof or by a copy attested by
the officer having the legal custody of the record, or

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by his deputy, and accompanied with a certificate

that such officer has custody. The certificate may
be made by a secretary of an embassy or legation,
consul general, consul, vice-consul, or consular
agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of
his office.
Respondent TWA relied solely on the statement of
Ms. Gwendolyn Lather, its customer service agent,
in her deposition dated January 27, 1986 that the
Code of Federal Regulations of the Civil
Aeronautics Board allows overbooking. Aside from
said statement, no official publication of said code
was presented as evidence. Thus, respondent
court's finding that overbooking is specifically
allowed by the US Code of Federal Regulations
has no basis in fact."
"Even if the claimed U.S. Code of Federal
Regulations does exist, the same is not applicable
to the case at bar in accordance with the principle
of lex loci contractus which require that the law of
the place where the airline ticket was issued should
be applied by the court where the passengers are
residents and nationals of the forum and the ticket
is issued in such State by the defendant airline.
Since the tickets were sold and issued in the
Philippines, the applicable law in this case would
be Philippine law."
Other Issues:
2.) Even if the claimed US Code of Federal
Regulations does exist, the same is not applicable
to the case at bar in accordance with the principle
of lex loci contractus which requires that the law of
the place where the airline ticket was issued should
be applied by the court where the passengers are
residents and nationals of the forum and the ticket
is issued in such State by the airline.
3.) Existing jurisprudence explicitly states that
overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral
damages. Where an airline had deliberately
overbooked, it took the risk of having to deprive
some passengers of their seats in case all of them

would show up for check in. for the indignity and

inconvenience of being refused a confirmed seat
on the last minute, said passenger is entitled to an
award of moral damages. This is so, for a contract
of carriage generates a relation attended with
public duty --- a duty to provide public service and
convenience to its passengers which must be
paramount to self-interest or enrichment. Even on
the assumption that overbooking is allowed, TWA is
still guilty of bad faith in not informing its
passengers beforehand that it could breach the
contract of carriage even if they have confirmed
tickets if there was overbooking. Moreover, TWA
was also guilty of not informing its passengers of its
alleged policy of giving less priority to discounted
tickets. Evidently, TWA placed self-interest over the
rights of the spouses Zalamea and their daughter
under their contract of carriage. Such conscious
disregard make respondent TWA liable for moral
damages, and to deter breach of contracts by TWA
in similar fashion in the future, the SC adjudged
TWA liable for exemplary damages, as well.
Mercury Drug Corporation v. Huang, G.R. No.
172122, June 22, 2007
Facts: Petitioner Mercury Drug is the registered
owner of a six-wheeler truck and has in its employ
petitioner Rolando Del Rosario as driver.
Respondent spouses Huang are the parents of
respondent Stephen Huang and own the red Toyota
Corolla Sedan. These two vehicles figured in a road
accident at around 10:30 p.m. in C-5 Highway in
Taguig. Stephen was driving the car, weighing
1,450 kg., while Del Rosario was driving the truck,
weighing 14,058 kg. The car was on the left
innermost lane while the truck was on the next lane
to its right, when the truck suddenly swerved to its
left and slammed into the front right side of the car.
The collision hurled the car over the island where it
hit a lamppost, spun around and landed on the
opposite lane. The truck also hit a lamppost, ran
over the car and zigzagged towards, and finally
stopped.
At the time of the accident, Del Rosario only had a
Traffic Violation Receipt (TVR). His driver's license

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had been confiscated because he had been

previously apprehended for reckless driving.
The car was a total wreck. Stephen, an exceptional
17 year-old student, 45 sustained massive injuries
to his spinal cord, head, face,
45 Stephen's background (in case sir asks): He
was in fourth year high school, and a member of
the school varsity basketball team. He was also
class president and editor-in-chief of the school
annual. He had shown very good leadership
qualities. He was looking forward to his college life,
having just passed the entrance examinations of
the University of the Philippines, De La Salle
University, and the University of Asia and the
Pacific. The University of Sto. Tomas even offered
him a chance to obtain an athletic scholarship, but
the accident prevented him from attending the
basketball try-outs. Without doubt, he was an
exceptional student. He excelled both in his
academics and extracurricular undertakings. He is
intelligent and motivated, a go-getter. Had the
accident not happened, he had a rosy future ahead
of him. He wanted to embark on a banking career,
get married and raise children.
and lung. Despite a series of operations, Stephen
is paralyzed for life from his chest down and
requires continuous medical and rehabilitation
treatment.
Respondents fault Del Rosario for committing gross
negligence and reckless imprudence while driving,
and Mercury Drug for failing to exercise the
diligence of a good father of a family in the
selection and supervision of its driver.
Both the trial court and the Court of Appeals found
petitioners Mercury Drug and Del Rosario jointly
and severally liable to pay respondents actual,
compensatory, moral and exemplary damages,
attorney's fees, and litigation expenses.
Issue: Whether or not Mercury Drug is liable as
employer for Del Rosario's negligence.

Held: Yes. The liability of the employer under Art.

2180 is direct or immediate. It is not conditioned on
a prior recourse against the negligent employee, or
a prior showing of insolvency of such employee. It
is also joint and solidary with the employee.
To be relieved of liability, Mercury Drug should
show that it exercised the diligence of a good father
of a family, both in the selection of the employee
and in the supervision of the performance of his
duties. Thus, in the selection of its prospective
employees, the employer is required to examine
them as to their qualifications, experience, and
service records. With respect to the supervision of
its employees, the employer should formulate
standard operating procedures, monitor their
implementation, and impose disciplinary measures
for their breach. To establish compliance with these
requirements, employers must submit concrete
proof, including documentary evidence.
In the instant case, Mercury Drug presented
testimonial evidence on its hiring procedure.
According to Mrs. Caamic, the Recruitment and
Training Manager of Mercury Drug, applicants are
required to take theoretical and actual driving tests,
and psychological examination. In the case of Del
Rosario, however, she admitted that he took the
driving tests and psychological examination when
he applied for the position of Delivery Man, but not
when he applied for the position of Truck Man. Mrs.
Caamic also admitted that Del Rosario used a
Galant which is a light vehicle, instead of a truck
during the driving tests. Further, no tests were
conducted on the motor skills development,
perceptual speed, visual attention, depth
visualization, eye and hand coordination and
steadiness of Del Rosario. No NBI and police
clearances were also presented. Lastly, Del
Rosario attended only three driving seminars in
2001, 2000 and 1984. In effect, the only seminar he
attended before the accident, which occurred in
1996, was held twelve years ago in 1984.
It also appears that Mercury Drug does not provide
for a back-up driver for long trips. At the time of the
accident, Del Rosario has been out on the road for
more than 13 hours, without any alternate. Mrs.

6 of 27

Caamic testified that she does not know of any

company policy requiring back-up drivers for long
trips.
Mercury Drug likewise failed to show that it
exercised due diligence on the supervision and
discipline over its employees. In fact, on the day of
the accident, Del Rosario was driving without a
license. He was holding a TVR for reckless driving.
He testified that he reported the incident to his
superior, but nothing was done about it. He was not
suspended or reprimanded. No disciplinary action
whatsoever was taken against petitioner Del
Rosario. We therefore affirm the finding that
Mercury Drug has failed to discharge its burden of
proving that it exercised due diligence in the
selection and supervision of its employee, Del
Rosario.
TA N AY R E C R E AT I O N C E N T E R A N D
DEVELOPMENT CORP., vs. CATALINA FAUSTO
AND ANUNCIACION FAUSTO PACUNAYEN
Facts:Tanay Recreation leased the property owned
by Catalina Fausto under a Contract of Lease. The
contract also provided that should Fausto decides
to sell the property, Tanay shall have the priority
right to purchase same.Thereafter, Fausto's
daughter Respondent Pacunayan informed Tanay
to remove the improvements built on the property
leased. Tanay found out that the property was sold
to Pacunayan. Tanay filed a complaint for
annulment of Deed, SpecificPerformance with
Damages.The lower Courts dismissed Tanays
claim for Damages.
Issue: W/N Tanay Recreation is entitled to moral
damages and exemplary damages.
Ruling: No.The award of moral damages cannot be
granted in favor 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 experienced only by one having a
nervous system. Hence, Tanay being a corporation
cannot be entitled to moral damages. For the claim

of exemplary damages, it is a requisite in the grant

that the act of the offender must be accompanied
by bad faith or done in wanton, fraudulent or
malevolent manner. Moreover, when a party is not
entitled to actual or moral damages an award
of exemplary damages cannot also be
awarded. In this case, Tanay failed to show that
respondent acted in bad faith, or in wanton,
fraudulent or malevolent manner
(Crisostomo v People)
PHILIPPINE HAWK CORPORATION V. LEE
G.R. No. 166869 February 16, 2010
Facts: Respondent filed a case for Damages based
on quasi delict arising from vehicular accident
between motorcycle and bus of Phil Hawk.
Husband died, respondent sustained injuries.
Before answer, an amended complaint was filed,
adding additional damages and reliefs. RTC ruled
in favour of respondent. The Court of Appeals
added to the relief granted by the lower court. Phil
Hawk filed Rule 45 Petition before the Supreme
Court, saying that respondent did not appeal to the
ruling of the RTC and it was error on part of CA to
grant damages.
Issue: whether or not the award of damages was
proper.
Ruling: yes. There is no error in awarding additional
reliefs. The petitioner is liable for damages because
as provided for under the Civil Code, whenever an
employees negligence causes damage or injury to
another, there arises a presumption that the
employer failed to exercise the due diligence of a
good father of the family in the selection or
supervision of its employees. To avoid liability for a
quasi-delict committed by his employee, an
employer must overcome the presumption by
presenting convincing proof that he exercised the
care and diligence of a good father of a family in
the selection and supervision of his employee. The
findings of the trial court and Court of Appeals were
upheld that petitioner is liable because the
diligence of a good father of a family requirement in

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the selection and supervision of its bus driver is not

properly exercised.

BOBIE ROSE FRIAS v. FLORA SAN DIEGOSISON

2007 / Austria-Martinez

Sison filed a complaintfor sum of money with

preliminary attachment. Sison averred that Frias
tried to deprive her of the security for the loan by
making a false report of the loss of her owners
copy of TCT, executing an affidavit of loss and by
filing a petition[1] for the issuance of a new owners
duplicate copy. RTC issued a writ of preliminary
attachment upon the filing of a 2M bond.

On 7 Dec 1990, Bobie Rose Frias and Dr. Flora

San-Diego Sison entered into a MOA over
Friasproperty

RTC found that Frias was under obligation to pay

Sison 2M with compounded interest pursuant to
their MOA. RTC ordered Frias to pay Sison:

MOA consideration is 3M
Sison has 6 months from the date of contracts
execution to notify Frias of her intention to
purchase the property with the improvements at
6.4M
Prior to this 6 month period, Frias may still offer the
property to other persons, provided that 3M shall
be paid to Sison including interest based on
prevailing compounded bank interest + amount of
sale in excess of 7M [should the property be sold at
a price greater than 7M]
In case Frias has no other buyer within 6 months
from the contracts execution, no interest shall be
charged by Sison on the 3M
In the event that on the 6th month, Sison would
decide not to purchase the property, Frias has 6
months to pay 3M (amount shall earn compounded
bank interest for the last 6 months only)
3M treated as a loan and the property considered
as the security for the mortgage
Upon notice of intention to purchase, Sison has 6
months to pay the balance of 3.4M (6.4M less 3M
MOA consideration)
Frias received from Sison 3M (2M in cash; 1M
post-dated check dated February 28, 1990, instead
of 1991, which rendered the check stale). Frias
gave Sison the TCT and the Deed of Absolute Sale
over the property. Sison decided not to purchase
the property, so shenotified Frias through a letter
dated March 20, 1991 [Frias received it only on
June 11, 1991],and Sison reminded Frias of their
agreement that the 2M Sison paid should be
considered as a loan payable within 6 months.
Frias failed to pay this amount.

2M + 32% annual interest beginning December 7,

1991 until fully paid
70k representing premiums paid by Sison on the
attachment bond with legal interest counted from
the date of this decision until fully paid
100k moral, corrective, exemplary damages [liable
for moral damages because of Frias fraudulent
scheme]
100k attorneys fees + cost of litigation
CA affirmed RTC with modification32% reduced
to 25%. CA said that there was no basis for Frias to
say that the interest should be charged for 6
months only. It said that a loan always bears
interest; otherwise, it is not a loan. The interest
should commence on June 7, 1991 until fully paid,
with compounded bank interest prevailing at the
time [June 1991] the 2M was considered as a loan
(as certified by the bank).

Frias v. San Diego-Sison

ISSUES & HOLDING Ratio only discusses topic

of INTEREST (as per syllabus)
WON compounded bank interest should be limited
to 6 months as contained in the MOA. NO
WON Sison is entitled to moral damages. YES
WON the grant of attorneys fees is proper, even if
not mentioned in the body of the decision. NO
CA committed no error in awarding an annual 25%
interest on the 2M even beyond the 6-month
stipulated period. In this case, the phrase for the
last six months only should be taken in the context
of the entire agreement.
SC notes that the agreement speaks of two (2)
periods of 6 months each (see FACTSwords in

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bold & underline). No interest will be charged for

the 1st 6-month period [while Sison was making up
her mind], but only for the 2nd 6-month period after
Sison decided not to buy the property. There is
nothing in the MOA that suggests that interest will
be charged for 6 months only even if it takes
forever for Frias to pay the loan.
The payment of regular interest constitutes the
price or cost of the use of money, and until the
principal sum due is returned to the creditor, regular
interest continues to accrue since the debtor
continues to use such principal amount. 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 constitutes unjust enrichment on
the part of the debtor at the expense of the creditor.
CA DECISION AND RESOLUTION AFFIRMED
WITH MODIFICATIONAward of attorneys fees
deleted
[1] At first, Frias petition was granted, but it was
eventually set aside, since RTC granted Sisons
petition for relief from judgment (as Sison was in
possession of the owners duplicate copy)
Lim v. Court of Appeals,
January 16, 2002

G.R. No. 125817,

Sometime in 1982 private respondent Donato

Gonzales purchased an Isuzu passenger jeepney
from Gomercino Vallarta, holder of a certificate of
public convenience for the operation of public utility
vehicles plying the Monumento-Bulacan route.
While private respondent Gonzales continued
offering the jeepney for public transport services he
did not have the registration of the vehicle
transferred in his name nor did he secure for
himself a certificate of public convenience for its
operation. Thus Vallarta remained on record as its
registered owner and operator. On 22 July 1990,
while the jeepney was running northbound along
the North Diversion Road somewhere in
Meycauayan, Bulacan, it collided with a tenwheeler-truck owned by petitioner Abelardo Lim
and driven by his co-petitioner Esmadito

Gunnaban. Gunnaban owned responsibility for the

accident, explaining that while he was traveling
towards Manila the truck suddenly lost its brakes.
To avoid colliding with another vehicle, he swerved
to the left until he reached the center island.
However, as the center island eventually came to
an end, he veered farther to the left until he
smashed into a Ferroza automobile, and later, into
private respondent's passenger jeepney driven by
one Virgilio Gonzales. The impact caused severe
damage to both the Ferroza and the passenger
jeepney and left one (1) passenger dead and many
others wounded. Petitioner Lim shouldered the
costs for hospitalization of the wounded,
compensated the heirs of the deceased passenger,
and had the Ferroza restored to good condition. He
also negotiated with private respondent and offered
to have the passenger jeepney repaired at his
shop. Private respondent however did not accept
the offer so Lim offered him P20,000.00, the
assessment of the damage as estimated by his
chief mechanic. Again, petitioner Lim's proposition
was rejected; instead, private respondent
demanded a brand-new jeep or the amount of
P236,000.00. Lim increased his bid to P40,000.00
but private respondent was unyielding. Under the
circumstances, negotiations had to be abandoned;
hence, the filing of the complaint for damages by
private respondent against petitioners. In his
answer Lim denied liability by contending that he
exercised due diligence in the selection and
supervision of his employees. He further asserted
that as the jeepney was registered in Vallarta's
name, it was Vallarta and not private respondent
who was the real party in interest. For his part,
petitioner Gunnaban averred that the accident was
a fortuitous event which was beyond his control.
Meanwhile, the damaged passenger jeepney was
left by the roadside to corrode and decay. Private
respondent explained that although he wanted to
take his jeepney home he had no capability,
financial or otherwise, to tow the damaged vehicle
On 1 October 1993 the trial court upheld private
respondent's claim and awarded him P236,000.00
with legal interest from 22 July 1990 as
compensatory damages and P30,000.00 as
attorney's fees. In support of its decision, the trial
court ratiocinated that as vendee and current owner

9 of 27

of the passenger jeepney private respondent stood

for all intents and purposes as the real party in
interest. Even Vallarta himself supported private
respondent's assertion of interest over the jeepney
for, when he was called to testify, he dispossessed
himself of any claim or pretension on the property.
Gunnaban was found by the trial court to have
caused the accident since he panicked in the face
of an emergency which was rather palpable from
his act of directing his vehicle to a perilous streak
down the fast lane of the superhighway then across
the island and ultimately to the opposite lane where
it collided with the jeepney. Forthwith, petitioners
appealed to the Court of Appeals which, on 17 July
1996, affirmed the decision of the trial court.
Argument: Giving damages even when the kabit
system was violated is against public policy. It is
petitioners' contention that the Court of Appeals
erred in sustaining the decision of the trial court
despite their opposition to the well-established
doctrine that an operator of a vehicle continues to
be its operator as long as he remains the operator
of record. According to petitioners, to recognize an
operator under the kabit system as the real party in
interest and to countenance his claim for damages
is utterly subversive of public policy. Held:
Petitioners' attempt to illustrate that an affirmance
of the appealed decision could be supportive of the
pernicious kabit system does not persuade. It
would seem then that the thrust of the law in
enjoining the kabit system is not so much as to
penalize the parties but to identify the person upon
whom responsibility may be fixed in case of an
accident with the end view of protecting the riding
public. The policy therefore loses its force if the
public at large is not deceived, much less involved.
In the present case it is at once apparent that the
evil sought to be prevented in enjoining the kabit
system does not exist. First, neither of the parties
to the pernicious kabit system is being held liable
for damages. Second, the case arose from the
negligence of another vehicle in using the public
road to whom no representation, or
misrepresentation, as regards the ownership and
operation of the passenger jeepney was made and
to whom no such representation, or
misrepresentation, was necessary. Thus it cannot
be said that private respondent Gonzales and the

registered owner of the jeepney were in estoppel

for leading the public to believe that the jeepney
belonged to the registered owner. Third, the riding
public was not bothered nor inconvenienced at the
very least by the illegal arrangement. On the
contrary, it was private respondent himself who had
been wronged and was seeking compensation for
the damage done to him. Certainly, it would be the
height of inequity to deny him his right. In light of
the foregoing, it is evident that private respondent
has the right to proceed against petitioners for the
damage caused on his passenger jeepney as well
as on his business. Any effort then to frustrate his
claim of damages by the ingenuity with which
petitioners framed the issue should be
discouraged, if not repelled.
Issue: The proper measure of damages?
Held: In awarding damages for tortuous injury, it
becomes the sole design of the courts to provide
for adequate compensation by putting the plaintiff in
the same financial position he was in prior to the
tort. When can a plaintiff be awarded more than
actual damages? It is a fundamental principle in the
law on damages that a defendant cannot be held
liable in damages for more than the actual loss
which he has inflicted and that a plaintiff is entitled
to no more than the just and adequate
compensation for the injury suffered. His recovery
is, in the absence of circumstances giving rise to an
allowance of punitive damages, limited to a fair
compensation for the harm done. The law will not
put him in a position better than where he should
be in had not the wrong happened.
In the present case, petitioners insist that as the
passenger jeepney was purchased in 1982 for only
P30,000.00 to award damages considerably
greater than this amount would be improper and
unjustified. Petitioners are at best reminded that
indemnification for damages comprehends not only
the value of the loss suffered but also that of the
profits which the obligee failed to obtain. In other
words, indemnification for damages is not limited to
damnum emergens or actual loss but extends to
lucrum cessans or the amount of profit lost.

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Had private respondent's jeepney not met an

accident it could reasonably be expected that it
would have continued earning from the business in
which it was engaged. Private respondent avers
that he derives an average income of P300.00 per
day from his passenger jeepney and this earning
was included in the award of damages made by the
trial court and upheld by the appeals court. The
award therefore of P236,000.00 as compensatory
damages is not beyond reason nor speculative as it
is based on a reasonable estimate of the total
damage suffered by private respondent, i.e.
damage wrought upon his jeepney and the income
lost from his transportation business. Petitioners for
their part did not offer any substantive evidence to
refute the estimate made by the courts a quo.
However, we are constrained to depart from the
conclusion of the lower courts that upon the award
of compensatory damages legal interest should be
imposed beginning 22 July 1990, i.e. the date of
the accident. Upon the provisions of Art. 2213 of
the Civil Code, interest "cannot be recovered upon
unliquidated claims or damages, except when the
demand can be established with reasonable
certainty." It is axiomatic that if the suit were for
damages, unliquidated and not known until
definitely ascertained, assessed and determined by
the courts after proof, interest at the rate of six
percent (6%) per annum should be from the date
the judgment of the court is made (at which time
the quantification of damages may be deemed to
be reasonably ascertained). In this case, the matter
was not a liquidated obligation as the assessment
of the damage on the vehicle was heavily debated
upon by the parties with private respondent's
demand for P236,000.00
being refuted by petitioners who argue that they
could have the vehicle repaired easily for
P20,000.00. In fine, the amount due private
respondent was not a liquidated account that was
already demandable and payable. Doctrine of
Avoidable Consequence, Defined: One last word.
We have observed that private respondent left his
passenger jeepney by the roadside at the mercy of
the elements. Article 2203 of the Civil Code exhorts
parties suffering from loss or injury to exercise the
diligence of a good father of a family to minimize

the damages resulting from the act or omission in

question. One who is injured then by the wrongful
or negligent act of another should exercise
reasonable care and diligence to minimize the
resulting damage. Anyway, he can 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.
Was it applied? NO! However we sadly note that in
the present case petitioners failed to offer in
evidence the estimated amount of the damage
caused by private respondent's unconcern towards
the damaged vehicle. It is the burden of petitioners
to show satisfactorily not only that the injured party
could have mitigated his damages but also the
amount thereof; failing in this regard, the amount of
damages awarded cannot be proportionately
reduced.
2. Moral
a. Concept
Kierulf v CA
FACTS:
February 28, 1987 7:45 pm: Pantranco bus driven
by Jose Malanum lost control and swerved to the
left flying over the center island occupying the eastbound lane of EDSA. The front of the bus hit the
front of the Isuzu pickup driven by Legaspi
smashed to pieces and inflicting physical injury to
Legaspi and his passenger Lucila Kierulf. Both
were treated at the Quezon City General Hospital
The bus also hit and injured a pedestrian who was
then crossing EDSA
Despite the impact, the bus continued to move
forward and its front portion rammed against a
Caltex gasoline station, damaging its building and
gasoline dispensing equipment
RTC: proximate cause was the negligence of the
defendant's driver. Pantranco North Express,
Incorporated to pay Lucila Kierulf, Victor Kierulf for
the damages of the Isuzu pick-up and Porfirio
Legaspi
CA: Affirmed with modification by adding P25,000
attorney's fees and to pay costs

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ISSUE: W/N both Lucila should be awarded moral

damages
HELD: YES. AFFIRMED with MODIFICATION.
The award of moral damages to Lucila and Legaspi
is hereby INCREASED to P400,000.00 and
P50,000.00 respectively; exemplary damages to
Lucila is INCREASED to P200,000.00. Legaspi is
awarded exemplary damages of P50,000.00
Rodriguez case ruled 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 loss is
immediate and consequential rather than remote
and unforeseeable; it is personal to the spouse and
separate and distinct from that of the injured
person. Victor's claim for deprivation of his right to
consortium, although argued before Respondent
Court, is not supported by the evidence on record.
The social and financial standing of Lucila cannot
be considered in awarding moral damages.
no "rude and rough" reception, no "menacing
attitude," no "supercilious manner," no "abusive
language and highly scornful reference" was given
her
awarded only if he or she was subjected to
contemptuous conduct despite the offender's
knowledge of his or her social and financial
standing
proper to award moral damages to Lucila for her
physical sufferings, mental anguish, fright, serious
anxiety and wounded feelings
She sustained multiple injuries on the scalp, limbs
and ribs. She lost all her teeth. She had to
undergo several corrective operations and
treatments. Despite treatment and surgery, her
chin was still numb and thick. She felt that she has
not fully recovered from her injuries. She even had
to undergo a second operation on her gums for her
dentures to fit. She suffered sleepless nights and
shock as a consequence of the vehicular accident.
Exemplary damages are designed to permit the
courts to mould behavior that has socially
deleterious consequences, and its imposition is
required by public policy to suppress the wanton
acts of an offender

discretion of the court

(1) They may be imposed by way of example or
correction only in addition, among others, to
compensatory damages, and cannot be recovered
as a matter of right, their determination depending
upon the amount of compensatory damages that
may be awarded to the claimant;
(2) the claimant must first establish his right to
moral, temporate, liquidated or compensatory
damages; and
(3) the wrongful act must be accompanied by bad
faith, and the award would be allowed only if the
guilty party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner."
exemplary damages awarded increased to
P200,000
The fact of gross negligence duly proven, we
believe that Legaspi, being also a victim of gross
negligence, should also receive exemplary
damages
Moral damages, though incapable of pecuniary
estimation, are in the category of an award
designed to compensate the claimant for actual
injury and are not meant to enrich complainant at
the expense of defendant
Porfirio that he had been incapacitated for 10
months and that during said period he did not have
any income
P16,500 as compensation for loss of earning
capacity for the period is amply supported by the
records and is demandable under Article 2205 of
the Civil Code
Lucila's claim of loss of earning capacity has not
been duly proven
A party is entitled to adequate compensation for
such pecuniary loss actually suffered and duly
proved
Mere proof of Lucila's earnings consisting of her
1983 and 1984 income tax returns would not
suffice to prove earnings for the years 1985 and
1986. The incident happened on February 28,
1987.
An estimate, as it is categorized, is not an actual
expense incurred or to be incurred in the repair.
The reduction made by respondent court is
reasonable considering that in this instance such
estimate was secured by the complainants
themselves

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in order that moral damages may be awarded,

there must be pleading and proof of moral
suffering, mental anguish, fright and the like. While
no proof of pecuniary loss is necessary in order
that moral damages may be awarded, the amount
of indemnity being left to the discretion of the court
it is nevertheless essential that the claimant should
satisfactorily show the existence of the factual
basis of damages and its causal connection to
defendant's acts.
This is so because moral
damages, 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.
Moral damages are awarded to enable the injured
party to obtain means, diversions or amusements
that will serve to alleviate the moral suffering he/
she has undergone, by reason of the defendant's
culpable action.
Its award is aimed at restoration, as much as
possible, of the spiritual status quo ante; thus, it
must be proportionate to the suffering inflicted.
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 that 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.
b. Cases where allowed
People v. Anticamara, G.R. No. 178771, June 8,
2011
Fact: At around 3 am in the morning, Sulpicio
(driver) and AAA (househelper) were sleeping in
the Estrella Farm in Pangasinan, where they work.
Suddenly, 6 robbers came in and took them away
from the house. Sulpicio was blindfolded and his
hands were too tied. He was brought to the
fishpond, shot to death and buried in a shallow
grave. AAA was also brought along by the robbers
whom she identified as Dick, Bert, Al, Lando, Fred

and Marvin. Fred and Lando took AAA to Lando's

residence in tarlac. Lando brought AAA to a hotel
and raped her under the threat that she will be
given to Bert and Fred who want to kill her.
Afterwards, AAA was brought to the house of Fred's
niece where Fred made her his wife during the
night, under the threat that she will be returned to
Lando who killed Sulpicio. Then she was made a
helper in the house of the brother of Fred's wife.
She was able to escape and asked for help. Lando,
Al, Dick), Bert, Marvin, Cita and Fred Doe are
charged with the crimes of Murder and of
Kidnapping/Serious Illegal Detention in two
separate information. Al, Lando and Cita pleaded
not guilty during the arraignment. The rest were not
yet caught. The case against Cita was dismissed
because of insufficiency of evidence. Lando allege
that during the time of the crime he was in his
house in Tarlac. Al claimed that he acted as a
lookout and was tasked to report to his companions
if any person or vehicle would approach the house
of the Estrellas from 7:30pm-1am. He said that he
was forced to follow the order and did not report to
the police because he was threatened to be killed.
Al showed the authorities shallow grave of Sulpicio.
Sulpicio's body was found in a sealed metal coffin
with cloth tied to his skull and eye sockets as well
as to his wrist. His autopsy showed that he died of
gunshots. The RTC, Al and Lando were found guilty
beyond reasonable doubt in the charge of Murder
qualified by treachery, Considering the presence of
aggravating circumstance of premeditation, with no
mitigating circumstance to offset the same, the
penalty of DEATH. They are also ordered jointly
and severally to pay the heirs of the Sulpacio the
following:1) 50k as moral damages; 2) P75k as
indemnity for the death of the victim; 3) P57,122.30
as actual damages; and 4) The cost of suit. Also,
both were found guilty beyond reasonable doubt,
as principal, of the crime of Kidnapping/Serious
Illegal Detention of the AAA. Considering that the
victim AAA was raped during her detention, the
maximum penalty of DEATH is imposed. They are
also ordered to
pay, jointly and severally, the victim AAA the
amount of: (1) P100k as moral damages;(2) P50k
as exemplary damages ;and 3) Cost of suit. Al

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appealed and claimed that he should not be liable

to pay with Lando for the damages pursuant to the
rape of AAA because he was already not assocated
with the group when it happened. Issue: WON
Lando and AL are guilty of the crimes charged.
(Yes! Not relevant to Torts) Held: yes! There was
sufficient circumstantial evidence to establish with
moral certainty the identities and guilt of the
perpetrators of the crime. AAA heard Fred utter
Usapan natin pare, kung sino ang masagasaan,
sagasaan. Al admitted his participation as lookout
and named his as the ones who took AAA and
Sulpacio and brought them to the fishpond. Before
the crime, he group met in a landing field in
Pangasinan and conspired to rob the farm and kill
anybody who will come their way. The killing of
Sulpacio was part of their conspiracy. In conspiracy,
the act of one is the act of all the conspirators. Al's
claim that he was only forced to follow because of
threat against his life and his family's life was not
meritorious. He has enough time and chance to
escape and/or report to the authorities. The
qualifying aggravating circumstance of treachery
was present in the commission of the murder to
Sulpicio because he was tied and blindfolded. More
than 8 hours had elapsed from the time they
decided to kill anyone who will come their way and
killing Sulpicio, sufficient for them to reflect on the
consequences of their actions and desist. However,
the aggravating circumstance of superior strength
cannot be separately appreciated because it is
absorbed by treachery.
Lando is guilty of the
special complex crime of kidnapping and serious
illegal detention with rape. The essence of serious
illegal detention is the actual deprivation of the
victim's liberty, coupled with intent of the accused to
effect such deprivation. There is no evidence to
prove that Al was aware of the subsequent events
that transpired after the killing of Sulpacio and the
kidnapping of AAA. Al could not have prevented
Lando from raping AAA, because at the time of
rape, he was no longer associated with Lando. AAA
even testified that only Fred and Lando brought her
to Tarlac. The penalty for Al and Lando for murder
aggravated by treachery and evident premeditation
is death but reduced to reclusion Perpetua without
eligibility for parole, because of RA 9346. Also, the
he penalty for the special complex crime of

kidnapping and serious illegal detention with rape

for Lando is death. It is reduced to reclusion
Perpetua without eligibility for parole, because of
RA 9346. Al is guilty of serious illegal detention with
a penalty of reclusion perpetua. (TORTS) In murder
qualified by treachery, award of civil indemnity is
mandatory and granted to the heirs of the victim
without need of proof other than the commission of
the crime. The civil indemnity of P75k is proper
because the penalty providedby law for a heinous
offense is still death, and the offense is still
heinous. Civil indemnity 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 offense. Moral damages are
mandatory in cases of murder without need of
allegation and proof other than the death of the
victim. Pursuant to jurisprudence on death penalty
being reduced to reclusion Perpetua because of RA
9346, award of moral damages should be
increased from P50k to P75k. The award of
exemplary damages is in order, because of the
presence of the aggravating circumstances of
treachery and evident. The Court awards the
amount of P30k as exemplary damages, in line with
current jurisprudence on the matter. Actual
damages is also warranted. The spouse of victim
Sulpacio, incurred expenses in the amount of
P57,122.30, which was duly supported by receipts.
AAA is entitled to civil indemnity in line with
prevailing jurisprudence that civil indemnification is
mandatory upon the finding of rape. Applying
prevailing jurisprudence, AAA is entitled to P75k.
AAA is entitled to moral damages distinct from civil
indemnity pursuant to Article 2219 of the Civil
Code, without the necessity of additional pleadings
or proof other than the fact of rape. Moral damages
is granted in recognition of the victim's injury
necessarily resulting from the odious crime of rape.
The award of exemplary damages to AAA in the
amount of P50,000 is hereby reduced to
P30,000.00 in accordance with recent
jurisprudence. As Al In the absence of conspiracy,
the liability of the accused is individual and not
collective. Since appellant Al is liable only for the
crime of serious illegal detention, he is jointly and

14 of 27

severally liable only to pay the amount of

P50,000.00 as civil indemnity. For serious illegal
detention, the award of civil indemnity is in the
amount of P50,000.00, in line with prevailing
jurisprudence. Along that line, appellant Al's liability
for moral damages is limited only to the amount of
P50,000.00.Pursuant to Article 2219 of the Civil
Code, moral damages may be recovered in cases
of illegal detention. This is predicated on AAA's
having suffered serious anxiety and fright when she
was detained for almost one (1) month
Doctrine: Circumstantial evidence consists of proof
of collateral facts and circumstances from which
the existence of the main fact may be inferred
according to reason and common experience.
Circumstantial evidence is sufficient to sustain
conviction if: (a) there is more than one
circumstance; (b) the facts from which the
inferences are derived are proven; (c) the
combination of all circumstances is such as to
produce a conviction beyond reasonable doubt. To
avail of the exempting circumstance of having
acted under the compulsion of an irresistible force,
or under the impulse of an uncontrollable fear of
equal or greater injury, the evidence must establish:
(1) the existence of an uncontrollable fear; (2) that
the fear must be real and imminent; and (3) the fear
of an injury is greater than, or at least equal to, that
committed.19 For such defense to prosper, the
duress, force, fear or intimidation must be present,
imminent and impending, and of such nature as to
induce a well-grounded apprehension of death or
serious bodily harm if the act be done. A threat of
future injury is not enough. Two conditions must
concur for treachery to exist, namely, (a) the
employment of means of execution gave the
person attacked no opportunity to defend himself or
to retaliate; and (b) the means or method of
execution was deliberately and consciously
adopted. Evident premeditation requires proof
showing: (1) the time when the accused
determined to commit the crime; (2) an act
manifestly indicating that the accused has clung to
his determination; and (3) sufficient lapse of time
between such determination and execution to allow
him to reflect upon the consequences of his act.

B.F. METAL vs. SPOUSES LOMOTAN and RICO

UMUYON
FACTS:
1. Respondent Rico Umuyon was driving the
owner-type jeep owned by Spouses Lomotan.
a. The jeep was cruising at a moderate speed of 20
to 30 kmph.
b. Suddenly, at the opposite lane, the speeding tenwheeler truck driven by Onofre Rivera overtook a
car by invading the lane being traversed by the
jeep and rammed into the jeep.
c. The jeep was a total wreck
d. Umuyon suffered an injury which entailed his
hospitalization for 19 days.
e. Due to the injuries he sustained, Umuyon could
no longer drive, reducing his daily income
fromP150 to P100
2. *RTC: Respondents instituted a separate and
independent civil action for damages against BF
Metal Corporation and Rivera.
a. The complaint alleged that Riveras gross
negligence and recklessness was the immediate
and proximate cause of the vehicular accident and
that petitioner failed to exercise the required
diligence in the selection and supervision of Rivera.
b. The complaint prayed for the award of actual,
exemplary and moral damages and attorneys fees
in favor of respondents.
3. BF Metal and Rivera averred that:
a. Respondents were not the proper parties-ininterest to prosecute the action since they were not
the registered owner of the jeep.
b. the sole and proximate cause of the accident
was the fault and negligence of Umuyon.
c. Petitioner exercised due diligence in the
selection and supervision of its employees.
4. During the trial, respondents presented:
a. The testimonies of Umuyon, SPO1 Rico Canaria,
SPO4 Theodore Cadaweg and Nicanor Fajardo,
the auto-repair shop owner who gave a cost
estimate for the repair of the wrecked jeep.
b. Document showing the cost estimate of
Pagawaan Motors, Inc. which pegged the repair
cost of the jeep at P96,000, and the cost estimate
of Fajardo Motor Works done which reflected an
increased repair cost at P130,655.

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c. A copy of the Decision in Criminal Case No. 4742

finding Rivera guilty of reckless imprudence
resulting in damage to property with physical
injuries.
5. The court declared Rivera negligent
a. When he failed to determine with certainty that
the opposite lane was clear before overtaking the
vehicle in front of the truck he was driving.
b. Also negligent in the selection and supervision of
its employees when it failed to prove the proper
dissemination of safety driving instructions to its
drivers.
6. *CA: Petitioner and Rivera appealed the decision
a. The court affirmed the RTCs finding that
Riveras negligence was the proximate cause of the
accident and that petitioner was liable under Article
2180 of the Civil Code for its negligence in the
selection and supervision of its employees.
b. However, it modified the amount of damages
awarded to respondents.
7. Motion for reconsideration denied by CA.
8. *SC: Only petitioner filed the instant petition,
expressly stating that it is assailing only the
damages awarded by the appellate court
ISSUE#1: W/N the amount of actual damages
based only on a job estimate should be lowered
HELD: YES
Except as provided by law or by 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. Actual damages are
such compensation or damages for an injury that
will put the injured party in the position in which he
had been before he was injured. They pertain to
such injuries or losses that are actually sustained
and susceptible of measurement. To justify an
award of actual damages, there must be competent
proof of the actual amount of loss. Credence can
be given only to claims which are duly supported by
receipts.
In the instant case, no evidence was submitted to
show the amount actually spent for the repair or
replacement of the wrecked jeep. Spouses

Lomotan presented two different cost estimates to

prove the alleged actual damage of the wrecked
jeep. Exhibit "B," is a job estimate by Pagawaan
Motors, Inc., which pegged the repair cost of the
jeep at P96,000.00, while Exhibit "M," estimated the
cost of repair at P130,655.00. An estimate is
competent to prove actual damages. Courts cannot
simply rely on speculation, conjecture or guesswork
in determining the fact and amount of damages.
As correctly pointed out by petitioner, the best
evidence to prove the value of the wrecked jeep is
reflected in Exhibit "I," the Deed of Sale showing
the jeeps acquisition cost at P72,000.00. However,
the depreciation value of equivalent to 10% of the
acquisition cost cannot be deducted from it in the
absence of proof in support thereof.
ISSUE#2: W/N respondents also entitled to moral
and exemplary damages
HELD: Only Spouses Lomotan are not entitled to
moral damages
Petitioner argues that the award of moral damages
was premised on the resulting physical injuries
arising from the quasi-delict; since only respondent
Umuyon suffered physical injuries, the award
should pertain solely to him. Correspondingly, the
award of exemplary damages should pertain only
to respondent Umuyon since only him was entitled
to moral damages.
In the case of moral damages, recovery is more an
exception rather than the rule. Moral damages are
not punitive in nature but are designed to
compensate and alleviate the physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar harm unjustly caused to a
person. In order that an award of moral damages
can be aptly justified, the claimant must be able to
satisfactorily prove that he has suffered such
damages and that the injury causing it has sprung
from any of the cases listed in Articles 2219 and
2220 of the Civil Code. Then, too, the damages
must be shown to be the proximate result of a
wrongful act or omission. The claimant must

16 of 27

establish the factual basis of the damages and its

causal tie with the acts of the defendant. In fine, an
award of moral damages would require, firstly,
evidence of besmirched reputation or physical,
mental or psychological suffering sustained by the
claimant; secondly, a culpable act or omission
factually established; thirdly, proof that the wrongful
act or omission of the defendant is the proximate
cause of the damages sustained by the claimant;
and fourthly, that the case is predicated on any of
the instances expressed or envisioned by Article
2219 and Article 2220 of the Civil Code.
In culpa aquiliana, or quasi-delict, (a) when an act
or omission causes physical injuries, or (b) where
the defendant is guilty of intentional tort, moral
damages may aptly be recovered. This rule also
applies to breaches of contract where the
defendant acted fraudulently or in bad faith. In
culpa criminal, moral damages could be lawfully
due when the accused is found guilty of physical
injuries, lascivious acts, adultery or concubinage,
illegal or arbitrary detention, illegal arrest, illegal
search, or defamation.
Undoubtedly, petitioner is liable for the moral
damages suffered by respondent Umuyon. Its
liability is based on a quasi-delict or on its
negligence in the supervision and selection of its
driver, causing the vehicular accident and physical
injuries to respondent Umuyon. Rivera is also liable
for moral damages to respondent Umuyon based
on either culpa criminal or quasi-delict. Since the
decision in the criminal case, which found Rivera
guilty of criminal negligence, did not award moral
damages, the same may be awarded in the instant
civil action for damages.
Jurisprudence show that in criminal offenses
resulting to the death of the victim, an award within
the range ofP50,000.00 to P100,000.00 as moral
damages has become the trend. Under the
circumstances, because respondent Umuyon did
not die but had become permanently incapacitated
to drive as a result of the accident, the award of
P30,000.00 for moral damages in his favor is
justified.

However, there is no legal basis in awarding moral

damages to Spouses Lomotan whether arising
from the criminal negligence committed by Rivera
or based on the negligence of petitioner under
Article 2180. Article 2219 speaks of recovery of
moral damages in case of a criminal offense
resulting in physical injuries or quasi-delicts
causing physical injuries, the two instances where
Rivera and petitioner are liable for moral damages
to respondent Umuyon. Article 2220 does speak of
awarding moral damages where there is injury to
property, but the injury must be willful and the
circumstances show that such damages are justly
due. There being no proof that the accident was
willful, Article 2220 does not apply.
Exemplary or corrective damages are imposed, by
way of example or correction for the public good, in
addition to moral, temperate, liquidated or
compensatory damages. Exemplary damages
cannot be recovered as a matter of right; the court
will decide whether or not they should be
adjudicated. In quasi-delicts, exemplary damages
may be granted if the defendant acted with gross
negligence.While the amount of the exemplary
damages need not be proved, the plaintiff must
show that he is entitled to moral, temperate or
compensatory damages before the court may
consider the question of whether or not exemplary
damages should be awarded.
To serve as an example for the public good, the
Court affirms the award of exemplary damages in
the amount of P100,000.00 to respondents.
Because exemplary damages are awarded,
attorneys fees may also be awarded in
consonance with Article 2208 (1). The Court affirms
the appellate courts award of attorneys fees in the
amount of P25,000.00.
WHEREFORE, the instant petition for certiorari is
PARTIALLY GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 58655 is AFFIRMED
with MODIFICATION. The award of actual
damages for the cost of repairing the owner-type
jeep is hereby REDUCED to P72,000.00 while the
moral damages of P30,000.00 is awarded solely to

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respondent Umuyon. All other awards of the Court

of Appeals are AFFIRMED. full satisfaction.

Francisco vs. Ferrer. G.R. No. 142029.nFebruary

28, 2001

PEOPLE OF THE PHILIPPINES vs. FILOMINO

LIZANO
G.R. No. 174470 April 27, 2007

FACTS: The petitioners failed to deliver the

wedding cake on the wedding day as ordered and
paid for. Petitioners gave the lame excuse that
delivery was probably delayed because of the
traffic, when in truth, no cake could be delivered
because the order slip got lost. The respondents
filed a complaint with the Regional Trial Court,
Cebu City, for breach of contract with damages.
The trial court rendered a decision in favor of
plaintiffs and against Erlinda Francisco who is
ordered to pay an amount of P30, 000 for moral
damages. The petitioners appealed to the Court of
Appeals which modified the appealed decision
increasing the award of moral damages from thirty
thousand (P30,000.00) to two hundred fifty
thousand pesos (P250,000.00) and awarded an
additional exemplary damages of one hundred
thousand pesos (P100,000.00).

FACTS: On 20 February 1997, appellant was

charged with three (3) counts of rape in three (3)
separate Informations, which allege that accused
raped the victim, a minor, 11 years of age, against
her will. The prosecution presented the mother to
testify on the age of her daughter. The mother
stated in court that she was born on 14 May 1985.
Her birth certificate attesting to the same data was
likewise presented in court. Appellant testified on
his behalf, raising denial and alibi as defenses.
ISSUE: Whether or not the accused is guilty of the
crime of rape.
HELD: In the prosecution of rape cases, conviction
or acquittal depends on the credence to be
accorded to the complainant's testimony because
of the fact that usually the participants are the only
witnesses to the occurrences. Thus, the issue boils
down to credibility.
Under Article 335 of the Revised Penal Code, rape,
which is punishable by reclusion perpetua is
committed by having carnal knowledge of a woman
under any of the following circumstances:
1. By using force or intimidation;
2. When the woman is deprived of reason or
otherwise unconscious;
3. When the woman is under twelve years of age or
is demented.
Hence, the trial court correctly imposed the penalty
of reclusion perpetua for rape of the victim, who
was then under 12 years old, as proven by the
prosecution through the testimony of her mother
and the presentation of her birth certificate.

ISSUE: Whether the petitioners are liable for moral

and exemplary damages?
RULING: The Court granted the petition and
reversed the ruling of the Court of Appeals. To
recover moral and exemplary damages in an action
for breach of contract, the breach must be palpable
wanton, reckless, malicious, in bad faith,
oppressive or abusive. The person claiming moral
damages must prove the existence of bad faith by
clear and convincing evidence, for the law always
presumes good faith. The Court found no such
fraud or bad faith.
Nevertheless, the Court found the petitioners liable
for nominal damages (an amount of P10,000) for
insensitivity, inadvertence or inattention to their
customers anxiety and need of the hour. Nominal
damages 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 or where there has been a breach
of contract and no substantial injury or actual
damages whatsoever have been or can be shown.
Nominal damages may be awarded to a plaintiff
whose right has been violated or invaded by the

18 of 27

defendant, for the purpose of vindicating or

recognizing that right, not for indemnifying the
plaintiff for any loss suffered.
ABS-CBN V. CA (1999)
FACTS:
Viva, through Del Rosario, offered ABS-CBN
through its vice-president Charo Santos-Concio, a
list of 3 film packages or 36 titles from which ABSCBN may exercise its right of first refusal
Mrs. Concio informed Vic through a letter that they
can only purchase 10 titles to be schedules on nonprimetime slots because they were very adult
themes which the ruling of the MTRCB advises to
be aired at 9:00 p.m
February 27, 1992: Del Rosario approached ABSCBN's Ms. Concio with a list consisting of 52
original movie titles as well as 104 re-runs
proposing to sell to ABS-CBN airing rights for P60M
(P30M cash and P30M worth of television spots)
April 2, 1992: Del Rosario and ABS-CBN general
manager, Eugenio Lopez III met wherein Del
Rosario allegedly agreed to grant rights for 14 films
for P30M
April 06, 1992: Del Rosario and Mr. Graciano
Gozon of RBS Senior vice-president for Finance
discussed the terms and conditions of Viva's offer
to sell the 104 films, after the rejection of the same
package by ABS-CBN
April 07, 1992: Ms. Concio sent the proposal draft
of 53 films for P35M which Viva's Board rejected
since they will not accept anything less than P60M
April 29, 1992: Viva granted RBS exclusive grants
for P60M
RTC: Issued TRO against RBS in showing 14 films
as filed by ABS-CBN.
RBS also set up a cross-claim against VIVA
RTC: ordered ABS-CBN to pay RBS P107,727
premium paid by RBS to the surety which issued
their bond to lift the injunction, P191,843.00 for the
amount of print advertisement for "Maging Sino Ka
Man" in various newspapers, P1M attorney's fees,
P5M moral damages, P5M exemplary damages
and costs. Cross-claim to VIVA was dismissed.

ABS-CBN appealed. VIVA and Del Rosario also

appealed seeking moral and exemplary damages
and additional attorney's fees.
CA: reduced the awards of moral damages to P2M,
exemplary damages to P2M and attorney's fees to
P500,000. Denied VIVA and Del Rosario's appeal
because it was RBS and not VIVA which was
actually prejudiced when the complaint was filed by
ABS-CBN
ISSUE:
1. W/N RBS is entitled to damages. -YES
2. W/N VIVA is entitled to damages. - NO
HELD: REVERSED except as to unappealed
award of attorney's fees in favor of VIVA
Productions, Inc.
1. YES.
One is entitled to compensation for actual damages
only for such pecuniary loss suffered by him as he
has duly proved.
The indemnification shall
comprehend not only the value of the loss suffered,
but also that of the profits that the obligee failed to
obtain. In contracts and quasi-contracts the
damages which may be awarded are dependent on
whether the obligor acted with good faith or
otherwise, It case of good faith, the damages
recoverable are those which 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 of the
constitution of the obligation. If the obligor acted
with fraud, bad faith, malice, or wanton attitude, he
shall be responsible for all damages which may be
reasonably attributed to the non-performance of the
obligation. In crimes and quasi-delicts, the
defendant shall be liable for all damages which are
the natural and probable consequences of the act
or omission complained of, whether or not such
damages has been foreseen or could have
reasonably been foreseen by the defendant. Actual
damages may likewise be recovered for loss or
impairment of earning capacity in cases of
temporary or permanent personal injury, or for
injury to the plaintiff's business standing or
commercial credit.

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The claim of RBS for actual damages did not arise

from contract, quasi-contract, delict, or quasi-delict.
It arose from the fact of filing of the complaint
despite ABS-CBN's alleged knowledge of lack of
cause of action. Needless to state the award of
actual damages cannot be comprehended under
the above law on actual damages. RBS could only
probably take refuge under Articles 19, 20, and 21
of the Civil Code.
In this case, ABS-CBN had not yet filed the
required bond; as a matter of fact, it asked for
reduction of the bond and even went to the Court of
Appeals to challenge the order on the matter,
Clearly then, it was not necessary for RBS to file a
counterbond. Hence, ABS-CBN cannot be held
responsible for the premium RBS paid for the
counterbond
Neither could ABS-CBN be liable for the print
advertisements for "Maging Sino Ka Man" for lack
of sufficient legal basis.
Article 2217 thereof defines what are included in
moral damages, while Article 2219 enumerates the
cases where they may be recovered, Article 2220
provides that moral damages may be recovered in
breaches of contract where the defendant acted
fraudulently or in bad faith. RBS's claim for moral
damages could possibly fall only under item (10) of
Article 2219
(10) Acts and actions referred to in Articles 21, 26,
27, 28, 29, 30, 32, 34, and 35.
The award of moral damages cannot be granted in
favor 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 call be
experienced only by one having a nervous system.
A corporation may recover moral damages if it "has
a good reputation that is debased, resulting in
social humiliation" is an obiter dictum. On this score
alone the award for damages must be set aside,
since RBS is a corporation.
exemplary damages are imposed by way of
example or correction for the public good, in
addition to moral, temperate, liquidated or
compensatory damages. They are recoverable in
criminal cases as part of the civil liability when the
crime was committed with one or more aggravating

circumstances in quasi-contracts, if the defendant

acted with gross negligence and in contracts and
quasi-contracts, if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent
manner
It may be reiterated that the claim of RBS against
ABS-CBN is not based on contract, quasi-contract,
delict, or quasi-delict, Hence, the claims for moral
and exemplary damages can only be based on
Articles 19, 20, and 21 of the Civil Code.
There is no adequate proof that ABS-CBN was
inspired by malice or bad faith. If damages result
from a person's exercise of a right, it is damnum
absque injuria.
NPC v Philipp Brothers
FACTS:
May 14, 1987: National Power Corporation
(NAPOCOR) issued invitations to bid for the supply
and delivery of 120,000 metric tons of imported
coal for its Batangas Coal-Fired Thermal Power
Plant of which Philipp Brothers Oceanic, Inc.
(PHIBRO) bidded and was accepted.
July 10, 1987: PHIBRO told NAPOCOR that
disputes might soon plague Australia that will
seriously hamper its ability to supply coal
July 23 to July 31, 1987: PHIBRO informed
NAPOCOR that unless a "strike-free" clause is
incorporated in the charter party or the contract of
carriage shipowners are unwilling to load their
cargo. In order to hasten the transfer of coal, they
should share the burden of the "strike-free" clause
but NAPOCOR refused.
November 17, 1987: PHIBRO effected its first
shipment which was suppose to be on the 30th dat
after receipt of the letter of credit of which it
received on August 6, 1987
October 1987: NAPOCOR once more advertised
for the delivery of coal to its Calaca thermal plant of
which PHIBRO applied but was rejected since it
was not able to satisfy the demand for damages on
its delay.
PHIBRO filed for damages in the RTC alleging that
the rejection was tainted with malice and bad faith
RTC: favored PHIBRO. Ordering NAPCOR to
reinstate PHIBRO as accredited bidder, to pay

20 of 27

$864,000 actual damages, $100,000 moral

damages, $50,000 exemplary damages,
$73,231.91 reimbursement for expenses, cost of
litigation and attorney's fees, cost of suit and
dismissed counterclaim of NAPOCOR.
CA: affirmed in toto. "Strikes" are undoubtedly
included in the force majeure clause of the Bidding
Terms and Specifications
ISSUE: W/N PHIBRO is entitled to damages.
HELD: NO. Modified actual, moral and exemplary
damages, reimbursement for expenses, cost of
litigation and attorney's fees, and costs of suit, is
DELETED
Since there is no evidence to prove bad faith and
arbitrariness on the part of the petitioners in
evaluating the bids, we rule that the private
respondents are not entitled to damages
representing lost profits
NAPOCOR's act of disapproving PHIBRO's
application for pre-qualification to bid was without
any intent to injure or a purposive motive to
perpetrate damage. Apparently, NAPOCOR acted
on the strong conviction that PHIBRO had a
"seriously-impaired" track record
The circumstances under which NAPOCOR
disapproved PHIBRO's pre-qualification to bid do
not show an intention to cause damage to the
latter. The measure it adopted was one of selfprotection. Consequently, we cannot penalize
NAPOCOR for the course of action it took.
NAPOCOR cannot be made liable for actual, moral
and exemplary damages.
Corollarily, in awarding to PHIBRO actual damages
in the amount of $864,000, the Regional Trial Court
computed what could have been the profits of
PHIBRO had NAPOCOR allowed it to participate in
the subsequent public bidding. - Erroneous
Basic is the rule that to recover actual damages,
the amount of loss must not only be capable of
proof but must actually be proven with reasonable
degree of certainty, premised upon competent proof
or best evidence obtainable of the actual amount
thereof.
Moral damages are granted in recompense for
physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings,

moral shock, social humiliation, and similar injury. A

corporation, being an artificial person and having
existence only in legal contemplation, has no
feelings, no emotions, no senses; therefore, it
cannot experience physical suffering and mental
anguish. Mental suffering can be experienced only
by one having a nervous system and it flows from
real ills, sorrows, and griefs of life
a winning party may be awarded attorney's fees
only in case plaintiff's action or defendant's stand is
so untenable as to amount to gross and evident
bad faith - none here
3. Nominal

Almeda vs. Carino| Mendoza G.R. No. 152143.

January 13, 2003|
FACTS
April 30, 1980, Ponciano L. Almeda and Avelino
G. Cario, predecessors-in-interest of petitioners
and respondents, entered into 2 agreements to
sell, one covering 8 titled properties at
P1,743,800.00, 20% upon the signing and
execution of the agreement, balance four equal
semi-annual installments, beginning six months
from the signing thereof, with 12% interest per
annum.
Another 3 untitled properties, at P1,208,580.00,
15% upon the signing and execution of the
agreement, and the balance, bearing a 12%
annual interest from the signing thereof, to be
paid as follows: 15% of the purchase price plus
interest to be paid upon the issuance of titles to
the lots, and the balance plus interests to be paid
in semi-annual installments starting from the date
of issuance of the respective certificates of title to
the lots involved, which must be not later than
March 30, 1982.
The parties amended their agreement by
extending the deadline of producing the titles to
the lands, P300K payment for the titled lands,
Carino tor ender acctg of the sugar cane crops
and Carino to pay 10K a month in case of failure
to produce the title of the documents.

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 Almeda asked Carino for the Deed of Absolute

Sale over the 8 titled properties despite nonpayment of the full price.
Carino granted the request and Almeda
executed an undertaking to pay the balance but
failed despite repeated demands of Carino.
.Carino filed a case against Almeda. RTC ruled
in favor of Carino.
Almeda appealed, questioning the award of
nominal damages of the trial court.
Court of Appeals affirmed the decision of the
lower court. It held that the award of nominal
damages was justified by the unjust refusal of
Almeda and Almeda, Inc. to settle and pay the
balance of the purchase price in violation of the
rights of Cario
ISSUES & ARGUMENTS
W/N the award of NOMINAL damages was proper?
HOLDING & RATIO DECIDENDI
YES. Almeda's refusal to pay the purchase price
despite repeated demands and after they sold the
properties to third parties constitutes a violation of
Carino's right to the amount in their agreement.
Nominal damages may be awarded to a plaintiff
whose right has been violated or invaded by the
defendant, for the purpose of vindicating or
recognizing that right, and not for indemnifying the
plaintiff for any loss suffered by him. Its award is
thus not for the purpose of indemnification for a
loss but for the recognition and vindication of a
right. Indeed, nominal damages are damages in
name only and not in fact. When granted by the
courts, they are not treated as an equivalent of a
wrong inflicted but simply a recognition of the
existence of a technical injury. A violation of the
plaintiffs right, even if only technical, is sufficient to
support an award of nominal damages. Conversely,
so long as there is a showing of a violation of the
right of the plaintiff, an award of nominal damages
is proper.

Erlinda Francisco v. Ricardo Ferrer, Jr., et al. |

Pardo G.R. No. 142029, February 28, 2001 | 353
SCRA 261
FACTS
Mrs. Rebecca Lo and her daughter Annette Ferrer
ordered a 3-layered cake from Fountainhead
Bakeshop. It was agreed that the wedding cake
shall be delivered at 5:00 in the afternoon on
December 14, 1992 at the Cebu Country Club,
Cebu City. Plaintiffs made their full payment. At
7:00 in the evening, the wedding cake has not
arrived. Plaintiffs made a follow-up call and were
informed that it was probably late because of the
traffic. At 8:00, plaintiffs were informed that no
wedding cake will be delivered because the order
slip got lost. They were then compelled to buy the
only available cake at the Cebu Country Club which
was a sans rival. At 10:00, a 2-layered wedding
cake arrived. Plaintiffs declined to accept it.
Defendant Erlinda Francisco sent a letter of
apology accompanied with a P5,000.00 check
which was declined by plaintiffs. 2 weeks after the
wedding, Francisco called Mrs. Lo and apologized.
Plaintiffs filed an action for breach of contract with
damages. TC decided in favor of plaintiffs,
directing defendant to pay the cost of the wedding
cake, MORAL DAMAGES, attorney's fees and the
cost of litigation. CA modified the award by
increasing the MORAL DAMAGES to P250,000.00
and awarding EXEMPLARY DAMAGES of
P100,000.00.
ISSUES & ARGUMENTS
W/N the CA erred in affirming the TC's award of
MORAL DAMAGES and increasing the amount
from P30,000.00 to P250,000.00.
W/N the CA was justified in awarding in addition to
moral damages, EXEMPLARY DAMAGES of
P100,000.00.
Petitioner- CA and TC erred in
awarding moral damages because moral damages
are recoverable in breach of contract cases only
where the breach was palpably wanton, reckless,
malicious, in bad faith, oppressive or abusive.

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HOLDING & RATIO DECIDENDI

justices. In this case, we find no such fraud or

bad faith.

YES. CA erred in awarding MORAL DAMAGES.

Article 2219 of the Civil Code provides: To recover
moral damages in an action for breach of contract,
the breach must be palpably wanton, reckless,
malicious, in bad faith, oppressive or abusive. In
culpa contractual or breach of contract, moral
damages may be recovered when the defendant
acted in bad faith or was guilty of gross negligence
(amounting 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.
Bad faith does not simply connote bad judgment
or negligence, it imports a dishonest purpose or
some moral obliquity and conscious doing of a
wrong, a breach of known duty through some
motive or interest or ill will that partakes of the
nature of fraud. Moral damages 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. The person claiming
moral damages must prove the existence of bad
faith by clear and convincing evidence for the law
always presumes good faith. It is not enough that
one merely suffered sleepless nights, mental
anguish, serious anxiety as the result of the
actuations of the other party. Mere allegations of
besmirched reputation, embarrassment and
sleepless nights are insufficient to warrant an
award for moral damages.
An award of moral
damages would require certain conditions to be
met, to wit: (1) first, there must be an injury,
whether physical, mental or psychological, clearly
sustained by the claimant; (2) second, there must
be culpable act or omission factually established;
(3) third, the wrongful act or omission of the
defendant is the proximate cause of the injury
sustained by the claimant; and (4) fourth, the award
of damages is predicated on any of the cases
stated in Article 2219 of the Civil Code. When
awarded, moral damages must not be palpably and
scandalously excessive as to indicate that it was
the result of passion, prejudice or corruption on the
part of the trial court judge or appellate court

CA also erred in awarding EXEMPLARY

DAMAGES. To warrant the award of exemplary
damages, [t]he wrongful act must be accompanied
by bad faith, and an award of damages would be
allowed only if the guilty party acted in a wanton,
fraudulent, reckless or malevolent manner. The
requirements of an award of exemplary damages
are: (1) they may be imposed by way of example
in addition to compensatory damages, and only
after the claimant's right to them has been
established; (2) that they can not be recovered as a
matter of right, their determination depending upon
the amount of compensatory damages that may be
awarded to the claimant; (3) the act must be
accompanied by bad faith or done in a wanton,
fraudulent, oppressive or malevolent manner.
NOMINAL DAMAGES awarded. The facts show
that when confronted with their failure to deliver on
the wedding day, petitioners gave the lame excuse
that delivery was probably delayed because of the
traffic, when in truth, no cake could be delivered
because the order slip got lost.
For such
prevarication, petitioners must be held liable for
nominal damages for insensitivity, inadvertence or
inattention to their customer's anxiety and need of
the hour.
Nominal damages 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 or
where there has been a breach of contract and no
substantial injury or actual damages whatsoever
have been or can be shown.
Nominal damages may be awarded to a plaintiff
whose right has been violated or invaded by the
defendant, for the purpose of vindicating or
recognizing that right, not for indemnifying the
plaintiff for any loss suffered.
Petition granted. CA reversed. Petitioner order to
pay the cost of the wedding cake, nominal
damages of P10,000.00, attorney's fees and the
costs of litigation.

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ROBES-FRANCISCO vs CFI

Held

NATURE: Direct appeal on question of law where

the petitioner company questions the awarding of
payment of nominal damages. They state it is
excessive and unjustified.

NO. Though Millan failed to present evidence on

the amount of damage caused to her, she is still
entitled to nominal damages because her right to
acquire the land she bought was violated. As the
company acted in neglect, they are to be held liable
for damages to Millan. However, her right to claim
the damages is limited because the contract
already covers for compensatory damages in such
an occasion of non-performance on the part of the
company. Her contention that this was to be read
as a penal clause is incorrect because even without
it she is still entitled to recover the amount she paid
with the interest.

Facts
- May 1962- petitioner company agreed to sell a
parcel of land to Lolita Millan worth P3,864
payable in installments. She complied with her
obligation finishing the payment on December 21,
1971. She made repeated demands for the
company to execute the deed of sale and transfer
certificate title.
- It was stipulated in their contract that this should
be done within six months after the full payment
was made. If not, the vendee is entitled to refund
with 4% interest per annum. The company failed to
comply so Millan filed against them for specific
performance and damages. She asked that the
deed of absolute sale be executed as well as the
transfer certificate title, or if not, pay her the present
value of the land which was around Php27k, and to
pay her for damages. She invokes ART 1226
saying that if the obligation has a penal clause, it
will substitute the indemnity for damages and the
payment of interest in case of non-compliance.
- The company said they are not liable for anything
because it was covered by their contract that in the
event of delay in delivery, the vendee is entitled to a
refund with 4% interest per annum.
- During trial, the court found that the company
could not execute the deed of sale nor the transfer
certificate title because the same land was
mortgaged to the GSIS to secure a prior obligation
of P10mil.
- Millan asks for the compensatory damages
despite the return rate of 4% interest in the
contract.
Issue
Should Millan be entitled to the P27,000 nominal
damages despite the stipulation in the contract of
the 4% interest in the event of delay or failure to
deliver?

4. Temperate
Pleno vs. Court of Appeals| Gutierrez, Jr. G.R.
No. L-56505, June 16, 1992 | 161 SCRA 208
FACTS
Florante de Luna was driving a delivery truck
owned by Philippine Paper Products Inc. at great
speed along South Super Highway in Taguig when
he bumped the van which was being driven by
Maximo Pleno. The bump caused Pleno's van to
swerve to the right and crash into a parked truck.
As a result, Pleno was hospitalized and his van
was wrecked. Pleno sued and was awarded
actual, temperate, moral, exemplary damages and
attorney's fees by the trial court. However, the CA
reduced the amount of temperate and moral
damages given because they were too high'.
ISSUES & ARGUMENTS
W/N the CA erred in reducing the amount of
temperate damages awarded?
HOLDING & RATIO DECIDENDI
The CA erred in reducing the award of temperate
damages. Temperate damages are included within
the context of compensatory damages. In arriving
at a reasonable level of temperate damages to be
awarded, trial courts are guided by our ruling that

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there are cases where from the nature of the case,

definite proof of pecuniary loss cannot be offered,
although the court is convinced that there has been
such loss. For instance, injury to one's commercial
credit or to the goodwill of a business firm is often
hard to show certainty in terms of money. Should
damages be denied for that reason? The judge
should be empowered to calculate moderate
damages in such cases, rather than that the plaintiff
should suffer, without redress from the defendant's
wrongful act. As to the loss or impairment of
earning capacity, there is no doubt that Pleno is an
entrepreneur and the founder of his own
corporation, the Mayon Ceramics Corporation. It
appears also that he is an industrious and
resourceful person with several projects in line and
were it not for the incident, might have pushed
them through. His actual income however has not
been sufficiently established so that this Court
cannot award actual damages, but, an award of
temperate or moderate damages may still be made
on loss or impairment of earning capacity. That
Pleno sustained a permanent deformity due to a
shortened left leg and that he also suffers from
double vision in his left eye is also established.
Because of this, he suffers from some inferiority
complex and is no longer active in business as well
as in social life.

allegation is insufficient. Nevertheless, considering

that the definite proof of pecuniary loss cannot be
offered and the fact that loss has been established,
appellants should pay the heirs of the victim
temperate damages.
People v. Plazo
FACTS: Edison Plazo boxed and stabbed Romeo
Fabula. Plazo was convicted of murder.
ISSUE: WON temperate damages should be
awarded.
HELD: Yes. Temperate damages under Art. 2224
may be recovered where it has been shown that
the victims family suffered some pecuniary loss but
the amount thereof cannot be proved with certainty.
15K as temperate damages was awarded.
5. Liquidated
H.L. Carlos Construction v. MPC G.R. No.
137147. January 29, 2002

ISSUE: WON damages should be awarded.

FACTS
MARINA PROPERTIES
CORPORATION (MPC for brevity) is engaged in
the business of real estate development. It entered
into a contract with
H.I. CARLOS
CONSTRUCTION, INC. (HLC) to construct Phase
III of a condominium complex called MARINA
B AY H O M E S C O N D O M I N I U M P R O J E C T,
consisting of townhouses and villas, totaling 31
housing units, for a total consideration of
P38,580,609.00, within a period of 365 days from
receipt of Notice to Proceed'. The original
completion date of the project was May 16, 1989,
but it was extended to October 31, 1989 with a
grace period until November 30, 1989.
The
contract was signed by Jovencio F. Cinco,
president of MPC, and Honorio L. Carlos, president
of HLC.
On December 15, 1989, HLC instituted

HELD: Yes, although award for loss of earning

capacity should be deleted. Such awards partake
of damages which must be proven not only by
credible and satisfactory evidence, but also by
unbiased proof (such as income tax reports). Bare

this case for sum of money against not only MPC

but also against the latter's alleged president,
[Respondent] Jesus K. Typoco, Sr. (Typoco) and
[Respondent] Tan Yu (Tan), seeking the payment of
various sums with an aggregate amount of P14
million pesos, broken down as follows: a.

People v. Singh
FACTS: Dalvir, et al ganged up on Surinder, killing
him.
Dilbag, who was cleaning his motorbike
nearby, tried to stop the attack, but he too was
stabbed. The accused were convicted of murder
and frustrated murder.
Lower courts awarded
hospitalization and medical expenses, actual
damages, civil indemnity, moral damages,
attorneys fees and compensation for loss of
earning capacity.

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P7,065,885.03 for costs of labor escalation, change

orders and material price escalation;
ISSUES & ARGUMENTS W/N H.L. is liable for
actual and liquidated damages for failing to finish
the construction it undertook to complete ( Which
party was in delay)

assume greater liability in case of a breach. It is

attached to an obligation in order to ensure
performance.
6. Exemplary or Corrective
PNB v. CA
April 2, 1996

HOLDING & RATIO DECIDENDI

Yes. petitioner did not fulfill its contractual
obligations. It could not totally pass the blame to
MPC for hiring a second contractor, because the
latter was allowed to terminate the services of the
contractor.
Either party shall have the right to terminate this
Contract for reason of violation or non-compliance
by the other party of the terms and conditions
herein agreed upon.
As of November 1989, petitioner accomplished only
approximately 80 percent of the project. In other
words, it was already in delay at the time. In
addition, Engineer Miranda testified that it would
lose money even if it finished the project; thus,
respondents already suspected that it had no
intention of finishing the project at all.
Petitioner was in delay and in breach of contract.
Clearly, the obligor is liable for damages that are
the natural and probable consequences of its
breach of obligation. In order to finish the project,
the latter had to contract the services of a second
construction firm for P11,750,000. Hence, MPC
suffered actual damages in the amount of
P4,604,579 for the completion of the project.
Petitioner is also liable for liquidated damages as
provided in the Contract.
Liquidated damages are those that the parties
agree to be paid in case of a breach. As worded,
the amount agreed upon answers for damages
suffered by the owner due to delays in the
completion of the project. Under Philippine laws,
these damages take the nature of penalties. A
penal clause is an accessory undertaking to

FACTS: Tan owned a parcel of land which was

expropriated by the government. He filed a motion
w/ the TC requesting that it issue an order for the
payment of P32K as expropriation price. PNB was
ordered to pay Tan the amount. PNB issued and
delivered a managers check to Sonia Gonzaga
who had a Special Power of Attorney supposedly
executed by Tan in her favor. Gonzaga took the
money for herself. Tan demanded payment which
was refused by PNB, having already paid the
amount to Tans agent. Tan file a motion with the
court requiring PNB to pay. TC: ruled in favor of
Tan and ordered PNB to pay the amount and
exemplary damages. CA: affirmed, but deleted the
award of exemplary damages.
ISSUE: WON exemplary damages should be
awarded to Tan.
HELD: No. Exemplary damages may be awarded
if a party acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner. It cannot be
recovered as a matter of right, but left to the
discretion of the court.
Although there was a
breach of PNBs obligation to Tan, there is no basis
for the award of exemplary damages.
*(memorize) DOCTRINE: Requirements for the
award of Exemplary Damages: (1) they may be
imposed by way of example in addition to
compensatory damages, and only after the
claimants right to them has been established. (2)
they cannot be recovered as a matter of right, their
determination depending upon the amount of
compensatory damages that may be awarded to
the claimant. (3) the act must be accompanied by
bad faith or done in a wanton, fraudulent,
oppressive or malevolent manner.

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