DAMAGES
RUBIO vs. Court of Appeals
Cariaga vs Laguna Tayabas
TOPIC/ARTICLE: Art 1162
FACTS: Jun 18 1952: A bus under Laguna Tayabas Bus Company (LTB), while on
its way to Lilio, Laguna bumped against the engine of a train.The bus and train
collided at the intersection of the railroad track and the national highway of Bay,
Laguna Driver immediately died while many passengers were injured including
Edgardo Cariaga, a 4th yr med student if UST
Cariaga was confined to the ff:
a. San Pablo City Hospital – from June 18 1952
b. De los Santos Clinic, QC – June 20 to Oct 14 1952
c. UST Hospital – Oct 14 to Nov 15 1952
d. De los Santos Clinic, QC – Nov 15 to Jan 15 1953
e. Private house in QC – Jan 15 to Apr 1953
LTB paid for all hospital, medical and miscellaneous expenses incurred from June 18
to April 1953.
Apr 24 1953: present action was filed against LTB and Manila Railroad Co. (MRR Co)
to claim 312k as actual, compensatory, moral and exemplary damages, and 18k for
Cariaga’s parents
LTB denied liability: accident was due to MRR Co.’s negligence for not providing a
crossing bar at the point where the nat’l hwy crossed the railroad track. LTB filed
cross-claim against MRR Co: LTB was claiming Php 18,194.75 for their expenses to
Cariaga
MRR Co denied liability: reckless negligence of the bus driver
Lower Court held: bus driver was negligent and sentenced LTB to pay Cariaga 10,
490php as compensatory damages w interest. It dismissed cross-claim against MRR
Co. The court also denied moral damages and atty’s fees that Cariaga claims.
Cariaga and LTB appealed
ISSUES:
1. W/N the bus driver was negligent
2. W/N the compensatory damages is enough
3. W/N Cariaga’s claim for moral damages and atty’s fees should be denied
4. W/N Cariaga’s parents’ claim should be denied
HELD:
1. Yes
a. Based on evidence, the whistle of the train was sounded 4 times from
an adequate distance of at least 300m – enough to warn the bus
driver to stop and wait for the train to pass by. Nonetheless, the
driver disregarded the warning.
2. No. This court increased it to 25k.
a. Cariaga’s mentality has been so reduced that he can no longer
continue studying med
b. He has become completely misfit for any work
c. Can hardly walk w/o someone helping him
d. Based on Art 2201 of CC: not only the medical, hospital and other
expenses should be included, but also the income of Cariaga which
me could’ve earned had he not been in an accident must also be
included because such income is to be deemed in the same
category as the mentioned expenses that could have reasonably
been foreseen by the parties at the time he boarded the bus
3. Yes
a. Art 2219 of CC: the present action cannot come under par 2 of this
article bec it is NOT a quasi-delict since there is a preexisting
contractual relation b/w LTB and Edgardo Cariaga
b. LTB was an obligor in good faith bec it exercised due diligence in
selecting its employees like the drivers
c. Cachero vs Manila Yellow Taxicab Co mentioned the ff:
i. Quasi-delict: obligations w/c do not arise from law, contracts,
quasi-contracts or criminal offenses
ii. Cangco vs Manila Railroad: distinction b/w obligation derived
from negligence and obligation as a result of a breach or
contract was shown
1. Contract of Carriage: foundation of legal liability
where the breach of which is based from the failure
of the obligor to exercise due care in its
performance of an action. Hence, its liability is direct
and immediate.

2. Art 1903 of CC is applicable to extra-contractual
obligations (quasi-delicts / culpa aquiliana)
4. Yes
a. The present action is based on a breach of contract of carriage to
which the spouses (parents) were not a party
b. Their claim is NOT a quasi-delict or negligence of LTB because they
(parents) were not injured as a result of the collision
G.A MACHINERIES V. YAPTINCHAY (1983) [ G.R. NO. L-30965, NOVEMBER 29,
1983 ]
Facts: "Sometime early in January, 1962 appellant GAMI, thru a duly authorized
agent, offered to sell a brand-new Fordson Diesel Engine to appellee Horacio
Yaptinchay, owner of the freight hauling business styled 'Hi-Way Express'. Relying
on the representations of appellant's representative that the engine offered for sale
was brand-new, appellee agreed to purchase the same at the price of P7,590.00.
Pursuant to the contract of sale thus entered into, appellant delivered to appellee, on
January 27, 1962, one (1) Fordson Diesel Engine assembly, Model 6-D, with Engine
Serial No. A-212193, at 1500 RPM, with fly wheel, fly wheel housing, fuel injection
assembly, exhauster, fuel filter, oil filter, fuel lift pump, plus conversion kit for F-500,
subject to the standard warranties, particularly the representation, relied upon by
appellee, that the same was brand-new. Said engine was installed by appellant in
Unit No. 6 of the Hi-Way Express.
Within the week after its delivery, however, the engine in question started to have a
series of malfunctions which necessitated successive trips to appellant's repair shop.
Thus, it sprang an oil leak such as thereafter, the malfunctioning persisted and, on
ins-pection, appellee's mechanic noticed a worn out screw which made appellee
suspicious about the age of the engine. This prompted to protest that the engine was
not brand-new. "In its defense, appellant interposed prescription of the action, denied
the imputation of misrepresenta-tion, and disputed the propriety and amount of
damages claimed."
DAMAGES
Issue: Whether or not G.A. Machineries Inc. should pay the plaintiff, Horacio
Yaptinchay, actual damages sustained in the sum of P54,000.48; to reimburse the
purchase price of the Fordson diesel engine in the amount of P7,590.00; and to pay
attorney's fees to plaintiff's counsel on the sum of P2,000.00 and costs. WON the
plaintiff likewise, oblige to return the Fordson diesel engine with to the defendant.
Decision: The CA affirmed the decision in favor to Yaptinchay. Gami appealed to the
SC on the following grounds: The assignments of errors raise the following issues: 1)
whether or not the respondent's cause of action against the petitioner had already
pres-cribed at the time the complaint was filed in the trial court; 2) whether or not the
factual findings of both the trial and appellate courts as regards the subject Fordson
diesel engine are supported by evidence and 3) whether or not the award of
damages was justified considering evidence on record.
The first issue is premised on the petitioner's proposition that the respondent's cause
of action was for breach of warranty against hidden defects as pro-vided under
Articles 1561 and 1566 of the Civil Code. Article 1571 of the Civil Code provides for a
six-month prescriptive period from the delivery of the thing sold for the filing of an
action for breach of warranty against hidden defects. According to petitioner GAMI
when respondent Yaptinchay filed the case with the trial court, more than six months
had already lapsed from the time the alleged defective engine was delivered and,
therefore, the action had prescribed.
The petitioner contends that Yaptinchay's asserted cause of action was premised
and anchored on the delivery by the defendant of a DEFECTIVE ENGINE and that
the allegations in the complaint that the engine was not brand new are clearly mere
specifica-tions of the precise nature of the hidden defects. A cursory reading of the
complaint shows that the petitioner's arguments are not well-taken.
The main thrust of the complaint is the conten-tion that the Fordson diesel engine
delivered by the petitioner to the respondent was not brand-new contrary to the
representations of the former and the expectations of the latter. The complaint was
couched in a manner which shows that instead of the brand-new Fordson diesel

engine which was bought by the respondent from the petitioner, another engine
which was not brand new was delivered resulting in the damages sought to be
recovered. It is evident therefore, that the complaint was for a breach of a contract of
sale rather than a breach of warranty against hidden defects. This is so because an
action for breach of warranty against hidden defects presupposes that the thing sold
is the same thing delivered but with hidden defects. Consequently, the six-month
prescrip-tive period under Article 1571 of the Civil Code is not applicable. Applying
the foregoing test to the instant case, we find the evidence of the respondent
insufficient to be considered within the purview of "best evidence". The bare
assertion of the respondent that he lost about P54,000.00 and the accompanying
documentary evidence presented to prove the amount lost are inadequate if not
speculative. The document itself merely shows that everytime a truck travels, Mr.
Yaptinchay earns P369.88. This amount is then multiplied by the number of trips
which the truck was allegedly unable to make. The estimates were prepared by a
certain Dionisio M. Macasieb whose identity was not even revealed by the
respondent. Mr. Yaptinchay was in the freight truck business. He had several freight
trucks among them the truck with the subject Fordson diesel engine, covering the
route from Manila to Baguio.
To prove actual damages, it would have been easy to present the average actual
profits realized by the other freight trucks plying the Manila-Baguio route. With the
presentation of such actual income the court could have arrived with reason-able
certainty at the amount of actual damages suffered by the respondent. We rule that
the award of actual damages in the amount of P54,000.08 is not warranted by the
evidence on record. The decision appealed to the SC was modified. The award of
actual damages in the amount of P54,000.48 is deleted. The petitioner shall also pay
six (6%) percent interest per annum on the P7,590.00 purchase price from January
27, 1962 to July 29, 1974 and twelve (12%) percent interest per annum from July 30,
1974 until the purchase price is reimbursed.
Chiang Kai Shek School vs CA
Sabena Belgian World Airlines vs. Court of Appeals
DAMAGES
G.R. No. 104685 | March 14, 1996 | J. VITUG
Doctrine:
– Art. 1733 of the [Civil] Code provides that from the very nature of their business and
by reasons of public policy, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods transported by them.
– Art. 1735 establishes the presumption that if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they had observed extraordinary diligence
as required in Article 1733.
– The Warsaw Convention denies to the carrier availment ‘of the provisions
which exclude or limit his liability, if the damage is caused by his wilful
misconduct or by such default on his part as, in accordance with the law of the
court seized of the case, is considered to be equivalent to wilful misconduct,’ or ‘if the
damage is (similarly) caused x x x by any agent of the carrier acting within the scope
of his employment.’
Facts:
1. Plaintiff Ma. Paula San Agustin, herein private respondent, was a passenger
on board Flight SN 284 of defendant airline originating from Casablanca to Brussels,
Belgium on her way back to Manila. She checked in her luggage which contained her
valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00; shoes/bag $150;
accessories $75; luggage itself $10.00; or a total of $4,265.00, for which she was
issued Tag No. 71423. She stayed overnight in Brussels and her luggage was left on
board Flight SN 284.
2. She arrived at Manila International Airport and immediately submitted her
Tag No. 71423 but her luggage was missing. She was advised to accomplish and
submit a property Irregularity Report which she submitted and filed on the same day
but when her luggage could not be found, she filed a formal complaint with
defendant’s Local Manager.
3. Subsequently, plaintiff was furnished copies of telexes of defendant’s
Brussel’s Office that the latter found her luggage and that they have broken the locks
for identification. Plaintiff was assured by the defendant that it has notified its Manila
Office that the luggage will be shipped to Manila. But unfortunately plaintiff was
informed that the luggage was lost for the second time.

4. Plaintiff demanded from the defendant the money value of the luggage and
its contents or its exchange value, but defendant refused to settle the
claim. Defendant asserts in its Answer and its evidence tend to show that while it
admits that the plaintiff was a passenger with a piece of checked in luggage, the loss
of the luggage was due to plaintiff’s sole if not contributory negligence.
5. Petitioner airline company, in contending that the alleged negligence of
private respondent should be considered the primary cause for the loss of her
luggage, avers that, despite her awareness that the flight ticket had been confirmed
only for Casablanca and Brussels, and that her flight from Brussels to Manila had yet
to be confirmed, she did not retrieve the luggage upon arrival in Brussels. Petitioner
insists that private respondent, being a seasoned international traveler, must have
likewise been familiar with the standard provisions contained in her flight ticket that
items of value are required to be hand-carried by the passenger and that the liability
of the airline or loss, delay or damage to baggage would be limited, in any event, to
only US$20.00 per kilo unless a higher value is declared in advance and
corresponding additional charges are paid thereon. At the Casablanca International
Airport, private respondent, in checking in her luggage, evidently did not declare its
contents or value, pursuant to Section 5(c), Article IX, of the General Conditions of
Carriage, which states that: “Passengers shall not include in his checked baggage,
and the carrier may refuse to carry as checked baggage, fragile or perishable articles,
money, jewelry, precious metals, negotiable papers, securities or other valuables.”
6. The trial court rendered judgment ordering Sabena Belgian World Airlines to
pay private respondent. Sabena appealed but the CA affirmed in toto the trial court’s
judgment, hence the present petition for review.
Issue: W/N the airline is liable for the lost luggage
Held: Yes. Fault or negligence consists in the omission of that diligence which is
demanded by the nature of an obligation and corresponds with the circumstances of
the person, of the time, and of the place. When the source of an obligation is derived
from a contract, the mere breach or non-fulfillment of the prestation gives rise to the
presumption of fault on the part of the obligor. This rule is not different in the case of
common carriers in the carriage of goods which, indeed, are bound to observe not
just the due diligence of a good father of a family but that of “extraordinary” care in
the vigilance over the goods.
The only exceptions to the foregoing extraordinary responsibility of the common
carrier is when the loss, destruction, or deterioration of the goods is due to any of the
following causes:
DAMAGES
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.’
Not one of the above excepted causes obtains in this case.
The airline cannot invoke the tort doctrine of proximate cause because the private
respondent’s luggage was lost while it was in the custody of petitioner. The “loss of
said baggage not only once by twice,” said the appellate court, “underscores the
wanton negligence and lack of care” on the part of the carrier. The above findings
foreclose whatever rights petitioner might have had to the possible limitation of
liabilities enjoyed by international air carriers under the Warsaw Convention.
In Alitalia vs. Intermediate Appellate Court, the Court held that “the Warsaw
Convention however denies to the carrier availment ‘of the provisions which exclude
or limit his liability, if the damage is caused by his wilful misconduct or by such default
on his part as, in accordance with the law of the court seized of the case, is
considered to be equivalent to wilful misconduct,’ or ‘if the damage is (similarly)
caused x x x by any agent of the carrier acting within the scope of his employment.’
The Hague Protocol amended the Warsaw Convention by removing the provision
that if the airline took all necessary steps to avoid the damage, it could exculpate
itself completely, and declaring the stated limits of liability not applicable ‘if it is
proved that the damage resulted from an act or omission of the carrier, its servants or
agents, done with intent to cause damage or recklessly and with knowledge that
damage would probably result.’ The same deletion was effected by the Montreal
Agreement of 1966, with the result that a passenger could recover unlimited
damages upon proof of wilful misconduct.
The Convention does not thus operate as an exclusive enumeration of the instances
of an airline’s liability, or as an absolute limit of the extent of that liability. It should be
deemed a limit of liability only in those cases where the cause of the death or injury to
person, or destruction, loss or damage to property or delay in its transport is not
attributable to or attended by any wilful misconduct, bad faith, recklessness or
otherwise improper conduct on the part of any official or employee for which the

carrier is responsible, and there is otherwise no special or extraordinary form of
resulting injury. Decision appealed from AFFIRMED.
Pan American World Airways vs. IAC
[G.R. No. 70462; Aug. 11, 1988]
TOPIC: Liability under the Convention
PONENTE: Cortes, J. AUTHOR: RC
NOTES: Pan Am seeked to limit its liability for lost baggage up to the amount
specified in the airline ticket absent a declaration of a higher valuation and payment
of additional charges.
FACTS:
1. Plaintiff Rene V. Pangan, pres. and gen. mngr. of the plaintiffs Sotang Bastos and
Archer Production while in San Francisco, Califonia and Primo Quesada of Prime
Films, San Francisco, California, entered into an agreement where the former, for US
$2,500.00 per picture, bound himself to supply the latter with 3 films. ('Ang Mabait,
Masungit at ang Pangit,' 'Big Happening with Chikiting and Iking,' and 'Kambal
Dragon' for exhibition in the United States.) It was also agreed that plaintiffs would
provide the promotional and advertising materials.
2. On his way home to the Philippines, Pangan visited Guam where he contacted Leo
Slutchnick of the Hafa Adai Organization. Pangan entered into a verbal agreement
with Slutchnick for the exhibition of 2 of the films at the Hafa Adai Theater in Guam
for P7,000.00 per picture. Pangan also provided the promotional and advertising
materials for the films.
3. Due to the above agreements, Pangan caused the preparation of the requisite
promotional handbills and still pictures for which he paid P12,900.00. Likewise in
preparation for his trip abroad to comply with his contracts, Pangan purchased 14
clutch bags, 4 capiz lamps and 4 barong tagalog, total value of P4,400.00.
4. Pangan obtained from defendant Pan Am's Manila Office (through Your Travel
Guide) an economy class airplane ticket for Manila to Guam on defendant's Flight
(No. 842) upon payment of the regular fare.
DAMAGES
5. The Your Travel Guide is a tour and travel office owned and managed by plaintiffs
witness Mila de la Rama.
6. 2 hours before departure time Pangan was at the defendant's ticket counter at the
Manila International Airport and presented his ticket and checked in his 2 luggages,
for which he was given baggage claim tickets.
7. The 2 luggages had the promotional & advertising materials, clutch bags, barong
tagalog and his personal belongings.
8. Subsequently, Pangan was informed that his name was not in the manifest and so
he could not take Flight (No. 842) in the economy class. Since there was no space in
the economy class, Pangan took the first class because he wanted to be on time in
Guam to comply with his commitment with an additional sum of $112.00.
9. When Pangan arrived in Guam, his 2 luggages did not arrive with his flight, as a
consequence of which his agreements with Slutchnick and Quesada for the
exhibition of the films in Guam and in the United States were cancelled.
10. He then filed a written claim for his missing luggages.
11. Upon arrival in the Philippines, Pangan contacted his lawyer, who made the
necessary representations to protest as to the treatment which he received from the
employees of the defendant and the loss of his two luggages.
12. Defendant Pan Am assured Pangan that his grievances would be investigated
and given its immediate consideration. 13. The present complaint was filed by the
plaintiff due to Pan Am’s failure to communicate with Pangan.
14. CFI: Pan Am liable. (actual damages with interest, attys fees, and costs of suit)
15. IAC: Affirmed.
ISSUE:
Whether or not the IAC erred as a matter of law in affirming the CFI's award of actual
damages beyond the limitation of liability set forth in the Warsaw Convention and the
contract of carriage.
HELD:

Yes, petitioner's liability for the lost baggage is limited to $20.00 per kilo or $600.00,
as stipulated at the back of the ticket.
>>WHEREFORE, the Petition is GRANTED and the Decision of the IAC is SET
ASIDE and a new judgment is rendered ordering petitioner to pay private
respondents damages in the amount of US $600.00 or its equivalent in Philippine
currency at the time of actual payment.
RATIO:
1. The airline ticket contains the following conditions:
NOTICE
If the passenger's journey involves an ultimate destination or stop in a country other
than the country of departure the Warsaw Convention may be applicable and the
Convention governs and in most cases limits the liability of carriers for death or
personal injury and in respect of loss of or damage to baggage. See also notice
headed "Advice to International Passengers on Limitation of Liability.
CONDITIONS OF CONTRACT
1. As used in this contract "ticket" means this passenger ticket and baggage check of
which these conditions and the notices form part, "carriage" is equivalent to
"transportation," "carrier" means all air carriers that carry or undertake to carry the
passenger or his baggage hereunder or perform any other service incidental to such
air carriage. "WARSAW CONVENTION" means the convention for the Unification of
Certain Rules Relating to International Carriage by Air signed at Warsaw, 12th
October 1929, or that Convention as amended at The Hague, 28th September 1955,
whichever may be applicable.
2. Carriage hereunder is subject to the rules and limitations relating to liability
established by the Warsaw Convention unless such carriage is not "international
carriage" as defined by that Convention.
3. To the extent not in conflict with the foregoing carriage and other services
performed by each carrier are subject to: (i) provisions contained in this ticket, (ii)
applicable tariffs, (iii) carrier's conditions of carriage and related regulations which are
made part hereof (and are available on application at the offices of carrier), except in
DAMAGES
transportation between a place in the United States or Canada and any place outside
thereof to which tariffs in force in those countries apply.
NOTICE OF BAGGAGE LIABILITY LIMITATIONS
Liability for loss, delay, or damage to baggage is limited as follows unless a higher
value is declared in advance and additional charges are paid: (1) for most
international travel (including domestic portions of international journeys) to
approximately $9.07 per pound ($20.00 per kilo) for checked baggage and $400 per
passenger for unchecked baggage: (2) for travel wholly between U.S. points, to $750
per passenger on most carriers (a few have lower limits). Excess valuation may not
be declared on certain types of valuable articles. Carriers assume no liability for
fragile or perishable articles. Further information may be obtained from the carrier.
2. On the basis of the said stipulations printed at the back of the ticket, petitioner
contends that its liability for the lost baggage of Pangan is limited to $600.00 ($20.00
x 30 kilos) as the latter did not declare a higher value for his baggage and pay the
corresponding additional charges.
3. Petitioner cites Ong Yiu v. CA, where the Court sustained the validity of a printed
stipulation at the back of an airline ticket limiting the liability of the carrier for lost
baggage to a specified amount and ruled that the carrier's liability was limited to said
amount since the passenger did not declare a higher value, much less pay additional
charges. (Ong Yiu is squarely applicable to the instant case.)
4. While it may be true that petitioner had not signed the plane ticket, he is,
nevertheless bound by the provisions thereof. "Such provisions have been held to be
a part of the contract of carriage, and valid and binding upon the passenger
regardless of the latter's lack of knowledge or assent to the regulation." It is known as
a contract of "adhesion" wherein one party imposes a ready made form of contract on
the other, as the plane ticket in the case at bar, are contracts not entirely prohibited.
The one who adheres to the contract is in reality free to reject it entirely; if he adheres,
he gives his consent.
5. Randolph v. American Airline: A contract limiting liability upon an agreed valuation
does not offend against the policy of the law forbidding one from contracting against
his own negligence.
6. On the other hand, the ruling in Shewaram v. Philippine Air Lines, Inc., where the
Court held that the stipulation limiting the carrier's liability to a specified amount was
invalid, finds no application in the instant case, as the ruling in said case was

premised on the finding that the conditions printed at the back of the ticket were so
small and hard to read that they would not warrant the presumption that the
passenger was aware of the conditions and that he had freely and fairly agreed
thereto. In the instant case, similar facts that would make the case fall under the
exception have not been alleged, much less shown to exist.
7. Northwest Airlines, Inc. v. Cuenca: "To apply the Warsaw Convention which limits
a carrier's liability to US$9.07 per pound or US$20.00 per kilo in cases of contractual
breach of carriage is against public policy" is utterly misplaced.
8. Mendoza v. Philippine Air Lines, Inc.: Under Art.1107 of the Civil Code, a debtor in
good faith like the defendant herein, may be held liable only for damages that were
foreseen or might have been foreseen at the time the contract of transportation was
entered into…Before defendant could be held to special damages, such as the
present alleged loss of profits on account of delay or failure of delivery, it must have
appeared that he had notice at the time of delivery to him of the particular
circumstances attending the shipment, and which probably would lead to such
special loss if he defaulted. Or, as the rule has been stated in another form, in order
to purpose on the defaulting party further liability than for damages naturally and
directly, i.e., in the ordinary course of things, arising from a breach of contract, such
unusual or extraordinary damages must have been brought within the contemplation
of the parties as the probable result of breach at the time of or prior to contracting.
Generally, notice then of any special circumstances which will show that the
damages to be anticipated from a breach would be enhanced has been held
sufficient for this effect.
>> Thus, applying the ruling to the instant case, in the absence of a showing that Pan
Am's attention was called to the special circumstances requiring prompt delivery of
Pangan's luggages, Pan Am cannot be held liable for the cancellation of Pangan’s
contracts as it could not have foreseen such an eventuality when it accepted the
luggages for transit.
9. The Court is unable to uphold the IAC's disregard the ruling in Mendoza that
petitioner is liable for damages based on the finding that "[tlhe undisputed fact is that
the contracts of the plaintiffs for the exhibition of the films in Guam and California
were cancelled because of the loss of the 2 luggages in question." The evidence
reveals that the proximate cause of the cancellation of the contracts was Pangan's
failure to deliver the promotional and advertising materials on the dates agreed upon.
For this petitioner cannot be held liable. Pangan had not declared the value of the 2
luggages he had checked in and paid additional charges. Neither was petitioner privy
to respondents' contracts nor was its attention called to the condition therein
DAMAGES
requiring delivery of the promotional and advertising materials on or before a certain
date.
EULOGIO OCCENA vs. HON. PEDRO M. ICAMINA, PEOPLE OF THE PHILS., &
VEGAFRIA
G.R. NO. 82146 January 22, 1990. (Kinds of Damages)
PETITION for review on certiorari seeking to annul the decision of the RTC
Facts: Petitioner Eulogio Occena filed a criminal complaint for Grave Oral
Defamation against private respondent Cristina Vegafria alleging that the latter had
openly, publicly and maliciously insulted him by uttering that he is a “foolish Barangay
Captain, traitor, tyrant and Judas” which caused great and irreparable injury to his
person and honor. After trial, Cristina was found guilty of Slight Oral Defamation and
was sentenced to pay the fine. However, the trial court did not award damages to
petitioner stating that the facts and circumstances did not warrant the awarding of
moral damages. Petitioner appealed the civil liability of Cristina but was denied.
Issue: Whether or not petitioner is entitled to moral damages.
Ruling: YES.
Article 2219, par. (7) of the Civil Code allows the recovery of moral damages in case
of libel, slander or any other form of defamation This provision of law establishes the
right of an offended party in a case for oral defamation to recover from the guilty party
damages for injury to his feelings and reputation. The offended party is likewise
allowed to recover punitive or exemplary damages.
It must be remembered that every defamatory imputation is presumed to be
malicious, even if it be true, if no good intention and justifiable motive for making it is
shown. And malice may be inferred from the style and tone of publication subject to
certain exceptions which are not present in the case at bar. Calling petitioner who

was a barangay captain an ignoramus, traitor, tyrant and Judas is clearly an
imputation of defects in petitioner’s character sufficient to cause him embarrassment
and social humiliation. Petitioner testified to the feelings of shame and anguish he
suffered as a result of the incident complained of.
From the evidence presented, we rule that for the injury to his feelings and reputation,
being a barangay captain, petitioner is entitled to moral damages in the sum of
P5,000.00 and a further sum of P5,000.00 as exemplary damages.
Sangrador vs. Sps. Valderrama,
BAGUMBAYAN CORPORATION vs.INTERMEDIATE APPELLATE COURT G.R.
No. L-66274 September 30, 1984 Damages, Quasi-delict, Gross Negligence,
Article 2176, Article 2180 of the Civil Code, Moral damages, Exemplary
damages
OCTOBER 23, 2017
FACTS:The spouses Seña and their four children went to the Tropical Palace Hotel
to see the Reycard Duet Show they occupied a table and ordered drinks before the
show, when a waiter named Baez was going to serve the tray containing the drinks
was overturned and fell on her. She was drenched. Later, she felt some chill. The
drinks and the splinters from the broken glasses allegedly destroyed her dress
which,with her handbag and shoes.
The Señas sued the corporation, as employer of the waiter, for actual damages of
P200,000 plus attorney’s fees of P10,000 and such moral and exemplary damages
as might be fixed by the court. The action involves a quasi-delict. It was based on
articles 2176 and 2180 of the Civil Code.
The corporation in its answer alleged that it came to know of the incident only when it
was served with summons. Had the incident been brought to its attention on that
same night, it would have apologized immediately to the plaintiffs, made appropriate
DAMAGES
amends and taken steps to discipline the waiter and his supervisor.The trial court
awarded the Señas P1,540 as actual damages consisting of the value of Mrs. Seña’s
outfit and P540, the cost of the six tickets used by the Seña family which was
considered a loss because of their alleged failure to enjoy the show. It also awarded
the Señas P50,000 as moral damages, P10,000 as exemplary damages and P5,000
as attorney’s fees.
The corporation appealed. The IAC affirmed the judgment with the modification that
the moral and exemplary damages were reduced to P15,000 and P5,000,
respectively. Hence, this appeal.
ISSUE: Whether the corporation is liable for moral and exemplary damages.
RULING: While the award for actual damages has some basis, the grant of moral
and exemplary damages is devoid of legal justification because it was not predicated
upon any of the cases enumerated in the Civil Code. The Civil Code provides:
ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious
anxiety,besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury. Though incapable of pecuniary computation, moral damages may
be recovered if they are the proximate result of the defendant’s wrongful act or
omission.ART. 2219. Moral damages may be recovered in the following and
analogous cases:(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
ART. 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.

The instant case is not specifically mentioned in article 2219 which refers to
quasi-delicts causing physical injuries. The Appellate Court erred in considering it as
analogous to the cases mentioned therein without indicating what specific case the
instant case resembles or is analogous to. Generally, there can be no recovery of
moral damages if the case is not mentioned in articles 2219 and2220.
What we call moral damages are treated in American jurisprudence as compensatory
damages awarded for mental pain and suffering or mental anguish resulting from a
wrong (25 C.J.S. 815).”
Generally, damages for mental anguish are limited to cases in which there has been
a personal physical injury or where the defendant willfully, wantonly, recklessly, or
intentionally caused the mental anguish. “Nor will damages generally be awarded for
mental anguish which is not accompanied by a physical injury, at least where
maliciousness, wantonness, or intentional conduct is not involved”.
“Damages for mental anguish and suffering have been held recoverable where the
act complained of was done with such gross carelessness or recklessness as to
show an utter indifference to the consequences. We hold that the “embarrassment”
to which Mrs. Seña was exposed by the incident is not the mental anguish
contemplated in article 2217 for which moral damages can be recovered.it would not
be just and proper to include moral damages in the corporation’s vicarious liability as
employer. The award of P5,000 as exemplary or corrective damages cannot also be
sustained because there was no gross negligence in this case.
The decision of the Appellate Court was modified. The petitioner is ordered to pay
Lelisa Seña the sum of P5,000 to cover her actual damages, litigation expenses and
attorney’s fees. The award of moral and exemplary damages is eliminated.
RAMON TAN vs. CA
2. Korean Airlines v. CA
DAMAGES
FACTS:
1. Juanito Lapuz, an automotive electrician was contracted for employment in
Jeddah, Saudi Arabia for 1 year through Pan Pacific Overseas Recruiting
Services and was supposed to leave on Nov 9, 1980 via Korean Airlines
2. He was initially waitlisted but when 2 passengers did not appear, Lapuz and
Perico were given the 2 unclaimed seats
3. Lapuz was allowed to check in w/ 1 suitcase and 1 shoulder bag at the check
in counter of KAL and was cleared for departure
4. He was able to ride in the shuttle bus and proceeded to the ramp of KAL
5. When he was at the stairs, a KAL officer pointed to him and shouted “down!
Down!” and was thus barred from taking the flight
6. When he later asked for another booking, it was canceled by KAL and was
unable to report for his work w/in the stipulated 2-week period and lost his
employment
7. Contention of respondent KAL: Pan Pacific coordinated with KAL for the
departure of 30 contract workers of whom only 21 were confirmed and 9
were wait-listed. The agent of Pan Pacific after being informed that there was
a possibility of have 1 or 2 seats becoming available, gave priority to Perico
and the other seat was won through lottery by Lapuz. However, only 1 seat
became available so Perico was to given priority
8. RTC: KAL liable for damages
9. CA affirmed
Issues:
(1) Whether there is already a contract of carriage between KAL and Lapuz to hold
KAL liable for breach of contract
(2) Whether moral and exemplary damages should be awarded, and to what extent
Held: The status of Lapuz as standby passenger was changed to that of a confirmed
passenger when his name was entered in the passenger manifest of KAL for its
Flight No. KE 903. His clearance through immigration and customs clearly shows that
he had indeed been confirmed as a passenger of KAL in that flight.

 KAL thus committed a breach of the contract of carriage between them when
it failed to bring Lapuz to his destination.
 A contract to transport passengers is different in kind and degree from any
other contractual relation. The business of the carrier is mainly with the
traveling public. It invites people to avail themselves of the comforts and
advantages it offers. The contract of air carriage generates a relation
attended with a public duty.
 Passengers have the right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is that any discourteous conduct on the
part of these employees toward a passenger gives the latter an action for
damages against the carrier.
 The breach of contract was aggravated in this case when, instead of
courteously informing Lapuz of his being a "wait-listed" passenger, a KAL
officer rudely shouted "Down! Down!" while pointing at him, thus causing him
embarrassment and public humiliation.
 The evidence presented by Lapuz shows that he had indeed checked in at
the departure counter, passed through customs and immigration, boarded
the shuttle bus and proceeded to the ramp of KAL's aircraft.
 In fact, his baggage had already been loaded in KAL's aircraft, to be flown
with him to Jeddah. The contract of carriage between him and KAL had
already been perfected when he was summarily and insolently prevented
from boarding the aircraft.
(2) The Court of Appeals granted moral and exemplary damages because:
a. The findings of the court a quo that the defendant-appellant has committed
breach of contract of carriage in bad faith and in wanton, disregard of
plaintiff-appellant's rights as passenger laid the basis and justification of an
award for moral damages.
b. In the instant case, we find that defendant-appellant Korean Air Lines acted
in a wanton, fraudulent, reckless, oppressive or malevolent manner when it
"bumped off" plaintiff-appellant on November 8, 1980, and in addition treated
him rudely and arrogantly as a "patay gutom na contract worker fighting
Korean Air Lines," which clearly shows malice and bad faith, thus entitling
plaintiff-appellant to moral damages.
DAMAGES
c. Considering that the plaintiff-appellant's entitlement to moral damages has
been fully established by oral and documentary evidence, exemplary
damages may be awarded. In fact, exemplary damages may be awarded,
even though not so expressly pleaded in the complaint. By the same token,
to provide an example for the public good, an award of exemplary damages
is also proper.
A review of the record of this case shows that the injury suffered by Lapuz is not so
serious or extensive as to warrant an award of P1.5 million. The assessment of
P100,000 as moral and exemplary damages in his favor is, in our view, reasonable
and realistic.
Case: ABS-CBN BROADCASTING CORP. v. CA, REPUBLIC BROADCASTING
CORP., VIVA PRODUCTIONS, INC., and VICENTE DEL ROSARIO (301 SCRA
589)
Date: January 21, 1999
Ponente: C.J. Davide, Jr.
Facts: In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby
VIVA gave ABS-CBN an exclusive right to exhibit some VIVA films. According to the
agreement, ABS-CBN shall have the right of first refusal to the next 24 VIVA films for
TV telecast under such terms as may be agreed upon by the parties, however, such
right shall be exercised by ABS-CBN from the actual offer in writing.
Sometime in December 1991, VIVA, through Vicente Del Rosario (Executive
Producer), offered ABS-CBN through VP Charo Santos-Concio, a list of 3 film
packages from which ABS-CBN may exercise its right of first refusal. ABS-CBN,
however through Mrs. Concio, tick off only 10 titles they can purchase among which is
the film “Maging Sino Ka Man” which is one of the subjects of the present case,
therefore, it did not accept the said list as per the rejection letter authored by Mrs.
Concio sent to Del Rosario.
Subsequently, Del Rosario approached Mrs. Concio with another list consisting
of 52 original movie titles and 104 re-runs, proposing to sell to ABS-CBN airing rights
for P60M (P30M in cash and P30M worth of television spots). Del Rosario and
ABS-CBN’s General Manager, Eugenio Lopez III, met at the Tamarind Grill
Restaurant in QC to discuss the package proposal but to no avail.

Four days later, Del Rosario and Mr. Graciano Gozon, Senior VP of Finance of
Republic Broadcasting Corporation (RBS/Channel 7) discussed the terms and
conditions of VIVA’s offer. A day after that, Mrs. Concio sent the draft of the contract
between ABS-CBN and VIVA which contained a counter-proposal covering 53 films
for P35M. VIVA’s Board of Directors rejected the counter-proposal as it would not sell
anything less than the package of 104 films for P60M. After said rejection, ABS-CBN
closed a deal with RBS including the 14 films previously ticked off by ABS-CBN.
Consequently, ABS-CBN filed a complaint for specific performance with prayer
for a writ of preliminary injunction and/or TRO against RBS, VIVA and Del Rosario.
RTC then enjoined the latter from airing the subject films. RBS posted a P30M
counterbond to dissolve the injunction. Later on, the trial court as well as the CA
dismissed the complaint holding that there was no meeting of minds between
ABS-CBN and VIVA, hence, there was no basis for ABS-CBN’s demand, furthermore,
the right of first refusal had previously been exercised.
Hence, the present petition, ABS-CBN argued that an agreement was made
during the meeting of Mr. Lopez and Del Rosario jotted down on a “napkin” (this was
never produced in court). Moreover, it had yet to fully exercise its right of first refusal
since only 10 titles were chosen from the first list. As to actual, moral and exemplary
damages, there was no clear basis in awarding the same.
Issue: WON a contract was perfected between ABS-CBN and VIVA and WON moral
damages may be awarded to a corporation
Held: Both NO.
Ratio: Contracts that are consensual in nature are perfected upon mere meeting of
the minds. Once there is concurrence between the offer and the acceptance upon the
subject matter, consideration, and terms of payment a contract is produced. The offer
must be certain. To convert the offer into a contract, the acceptance must be absolute
and must not qualify the terms of the offer; it must be plain, unequivocal,
unconditional, and without variance of any sort from the proposal. A qualified
acceptance, or one that involves a new proposal, constitutes a counter-offer and is a
rejection of the original offer. Consequently, when something is desired which is not
exactly what is proposed in the offer, such acceptance is not sufficient to generate
consent because any modification or variation from the terms of the offer annuls the
offer.
After Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN to discuss the
package of films, ABS-CBN, sent through Ms. Concio, counter-proposal in the form a
draft contract. This counter-proposal could be nothing less than the counter-offer of
Mr. Lopez during his conference with Del Rosario. Clearly, there was no acceptance
DAMAGES
of VIVA’s offer, for it was met by a counter-offer which substantially varied the terms of
the offer.
In the case at bar, VIVA through its Board of Directors, rejected such
counter-offer. Even if it be conceded arguendo that Del Rosario had accepted
the counter-offer, the acceptance did not bind VIVA, as there was no proof
whatsoever that Del Rosario had the specific authority to do so.
Under the Corporation Code, unless otherwise provided by said Code,
corporate powers, such as the power to enter into contracts, are exercised by
the Board of Directors. However, the Board may delegate such powers to
either an executive committee or officials or contracted managers. The
delegation, except for the executive committee, must be for specific purposes.
Delegation to officers makes the latter agents of the corporation; accordingly, the
general rules of agency as to the binding effects of their acts would apply. For such
officers to be deemed fully clothed by the corporation to exercise a power of the Board,
the latter must specially authorize them to do so. That Del Rosario did not have the
authority to accept ABS-CBN’s counter-offer was best evidenced by his
submission of the draft contract to VIVA’s Board of Directors for the latter’s
approval. In any event, there was between Del Rosario and Lopez III no
meeting of minds.
The testimony of Mr. Lopez and the allegations in the complaint are clear
admissions that what was supposed to have been agreed upon at the Tamarind Grill
between Mr. Lopez and Del Rosario was not a binding agreement. It is as it should
be because corporate power to enter into a contract is lodged in the Board of
Directors. (Sec. 23, Corporation Code). Without such board approval by the
Viva board, whatever agreement Lopez and Del Rosario arrived at could not
ripen into a valid contact binding upon Viva.
However, the Court find for ABS-CBN on the issue of damages. 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 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. The statement that 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.

SANTIAGO SYJUCO, INC. VS CASTRO
Facts: The private respondents, Eugenio Lim, et al., borrowed from petitioner
Santiago Syjuco, Inc., the sum of P800,000.00. The loan was given on the security of
a first mortgage on property registered in the names of said borrowers as owners in
common under Transfer Certificates of Title Numbered 75413 and 75415 of the
Registry of Deeds of Manila. Thereafter, additional loans on the same security were
obtained by the private respondents from Syjuco, so that as of May 8, 1967, the
aggregate of the loans stood at P2,460,000.00, exclusive of interest, and the security
had been augmented by bringing into the mortgage other property, also registered as
owned pro indiviso by the private respondents under two titles: TCT Nos. 75416 and
75418 of the Manila Registry.
The private respondents failed to pay it despite demands therefore; that Syjuco
consequently caused extra-judicial proceedings for the foreclosure of the mortgage
to be commenced by the Sheriff of Manila; and that the latter scheduled the auction
sale of the mortgaged property on December 27, 1968. The attempt to foreclose
triggered off a legal battle that has dragged on for more than twenty years now,
fought through five (5) cases in the trial courts, two (2) in the Court of Appeals, and
three (3) more in the Supreme Court.
One of the complaints filed by the private respondents was filed not in their
individual names, but in the name of a partnership of which they themselves were the
only partners: "Heirs of Hugo Lim." The complaint advocated the theory that the
mortgage which they, together with their mother, had individually constituted (and
thereafter amended during the period from 1964 to 1967) over lands standing in their
names in the Property Registry as owners pro indiviso, in fact no longer belonged to
them at that time, having been earlier deeded over by them to the partnership, "Heirs
of Hugo Lim," more precisely, on March 30, 1959, hence, said mortgage was void
because executed by them without authority from the partnership. Syjuco filed an
instant petition for certiorari, prohibition and mandamus. It prays in its petition that the
DAMAGES
default judgment rendered against it by Judge Castro be annulled on the ground of,
among others, estoppel, res judicata, and Article 1819 of the Civil Code.
Issue: Whether or not the private respondents are estopped to avoid the
aforementioned mortgage.
Held: Yes. The Supreme Court ruled that the respondent partnership was
inescapably chargeable with knowledge of the mortgage executed by all the partners
thereof, its silence and failure to impugn said mortgage within a reasonable time, let
alone a space of more than 17 years, brought into play the doctrine of estoppel to
preclude any attempt to avoid the mortgage as allegedly unauthorized. Equally or
even more preclusive of the respondent partnership’s claim to the mortgaged
property is the last paragraph of Art. 1819 of the Civil Code, which contemplates a
situation similar to the case at bar. It states that ‘where the title to real property is in
the names of all the partners, a conveyance executed by the entire partners pass all
their rights in such property. Consequently, those members' acts, declarations and
omissions cannot be deemed to be simply the individual acts of said members, but in
fact and in law, those of the partnership. Finally, the Supreme Court emphasizes that
the right of the private respondents to assert the existence of the partnership could
have been stressed at the time they instituted their first action, considering that the
actions involved property supposedly belonging to it, and therefore, the partnership
was the real party in interest. What was done by them was to split their cause of
action in violation of the well-known rule that only one suit may be instituted for a
single cause of action.