C.

Moral Damages
Art. 2216. No proof of pecuniary loss is necessary in order that moral,
nominal, temperate, liquidated or exemplary damages, may be adjudicated.
The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case.
Reservations for first class accommodations in Pan American World Airways
(PAN-AM) from Tokyo to San Francisco were made by "Your Travel Guide"
agency for then Senator Fernando Lopez and his family. PAN-AM's San
Francisco head office confirmed the reservations. First class tickets for the
abovementioned flight were subsequently issued by PAN-AM in favor of
Senator Lopez and his party.

SECTION 1. - Moral Damages
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 for omission.
Art. 2218. In the adjudication of moral damages, the sentimental value of
property, real or personal, may be considered.
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;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to
in No. 3 of this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring
the action mentioned in No. 9 of this article, in the order named.
When they arrived in Tokyo, they were informed that PAN-AM could not
accommodate Senator Lopez and party in that trip as first class passengers
as the first class seats were all booked up. Senator Lopez and party were
constrained to take the Tokyo-San Francisco flight as tourist passengers,
doing so "under protest" and without prejudice to further action against the
airline.
Suit for damages was filed by Senator Lopez and party against PAN-AM
with the CFI of Rizal. Alleging breach of contracts in bad faith by defendant,
plaintiffs asked for P500k actual and moral damages, P100k exemplary
damages, P25k attorney's fees plus costs.
CFI rendered a decision in favor of the plaintiffs and against the defendant. It
ordered defendant to pay the plaintiffs the ff: (a) P100k as moral damages;
(b) P20k as exemplary damages; (c) P25k as attorney's fees, and the costs.
Upon MR, CFI ordered PAN-AM to pay the plaintiffs the ff: (a) P150k as
moral damages; (b) P25k as exemplary damages; with legal interest on both
from the date of the filing of the complaint until paid; and (c) P25k as
attorney's fees; and the costs.
PAN-AM, while admitting that it breached its contract with the plaintiffs, takes
issue with the finding of CFI that it acted in bad faith in the breach of said
contracts. Plaintiffs, on the other hand, raise questions on the amount of
damages awarded in their favor, seeking that the same be increased to a
total of P650k.
The contentions of the parties wrt the issue of bad faith:

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.
When Recoverable
FERNANDO LOPEZ, ET AL., plaintiffs-appellants, vs. PAN AMERICAN
WORLD AIRWAYS, defendant-appellant.
March 30, 1966 (BENGZON, J.P., J.)
FACTS
Plaintiffs
class accommodations to plaintiffs, out of racial prejudice against Orientals.
Such is an oftrepeated practice of defendant, as there were previous
instances of the same, supported by evidence.
Defendants
honest mistake, thus:
The first class reservations of Senator Lopez and party were made together
with members of the Rufino family as shown in their joint reservation card.
Subsequently, "Your Travel Guide" agency cancelled the reservations of the
Rufinos. A telex message was then sent to PAN-AM's San Francisco office
by Mariano Herranz, PAN-AM's reservations employee. In said message,
however, Herranz mistakenly cancelled all the seats that had been reserved,
that is, including those of Senator Lopez and party.
The next day Herranz discovered his mistake, so he sent another telex wire
to the San Francisco head office, stating his error and asking for the
reinstatement of the first class seats reserved for Senator Lopez and party
San Francisco head office replied that Senator Lopez and party are waitlisted
and that said office is unable to reinstate them. Subsequently, Herranz forgot
the matter and told no one about it except his co-employee.
PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's
mistake after "Your Travel Guide" phoned to state that Senator Lopez and
party were going to depart as scheduled. Accordingly, Jose sent a telex wire
on that date to PAN-AM's head office at San Francisco to report the error and
asked said office to continue holding the reservations of Senator Lopez and
party. San Francisco head office replied on that it regrets being unable to
confirm Senator Lopez and party for the reason that the flight was solidly
booked.
Expecting that some cancellations of bookings would be made before the
flight time, Jose decided to withhold from Senator Lopez and party, or their
agent, the information that their reservations had been cancelled.
ISSUE
W/N Pan-Am acted in BF as to warrant the award of moral damages,
exemplary damages, and attorney’s fees in plaintiffs’ favor
RULING: YES
DISCUSSION ON DEFENDANT’S BAD FAITH
From the foregoing evidence of defendant it is in effect admitted that
defendant — through its agents — first cancelled plaintiffs’ reservations
by mistake and thereafter deliberately and intentionally withheld from
plaintiffs or their travel agent the fact of said cancellation, letting them
go on believing that their first class reservations stood valid and
confirmed. In so misleading plaintiffs into purchasing first class tickets in the
conviction that they had confirmed reservations for the same, when in fact
they had none, defendant willfully and knowingly placed itself into the
position of having to breach its a foresaid contracts with plaintiffs should
there be no last-minute cancellation by other passengers before flight time,
as it turned out in this case. Such actuation of defendant may indeed have
been prompted by nothing more than the promotion of its self-interest in
holding on to Senator Lopez and party as passengers in its flight and
foreclosing on their chances to seek the services of other airlines that may
have been able to afford them first class accommodations. All the time, in
legal contemplation such conduct already amounts to action in bad
faith. For bad faith means a breach of a known duty through some
motive of interest or ill-will.
At the time plaintiffs bought their tickets, defendant, therefore, in breach of its
known duty, made plaintiffs believe that their reservation had not been
cancelled. An additional indication of this is the fact that upon the face of the
two tickets, the reservation status is stated as "OK". Such willful-non-
disclosure of the cancellation or pretense that the reservations for
plaintiffs stood — and not simply the erroneous cancellation itself — is the
factor to which is attributable the breach of the resulting contracts. And,
as above-stated, in this respect defendant clearly acted in bad faith.
As if to further emphasize its bad faith on the matter, defendant subsequently
promoted the employee who cancelled plaintiffs' reservations and told them
nothing about it.
At any rate, granting all the mistakes advanced by the defendant, there
would at least be negligence so gross and reckless as to amount to
malice or bad faith (See events in defendant’s theory of honest mistake –
inulit lang ng court).
DISCUSSION ON DAMAGES
Moral damages are recoverable in breach of contracts where the defendant
acted fraudulently or in bad faith. In addition to moral damages,
exemplary or corrective damages may be imposed by way of example or
correction for the public good, in breach of contract where the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
And, third, a written contract for an attorney's services shall control the
amount to be paid therefor unless found by the court to be unconscionable or
unreasonable (Sec. 24, Rule 138, ROC).
1.) As to moral damages- As a proximate result of defendant's
breach in bad faith of its contracts with plaintiffs, the latter suffered social
humiliation, wounded feelings, serious anxiety and mental anguish. For
plaintiffs were travelling with first class tickets issued by defendant and yet
they were given only the tourist class. It may not be humiliating to travel as
tourist passengers; it is humiliating to be compelled to travel as such,
contrary to what is rightfully to be expected from the contractual undertaking.
Senator Lopez was then Senate President Pro Tempore. International
carriers like defendant know the prestige of such an office. And he was
former Vice-President of the Philippines. For the moral damages sustained
by him, therefore, an award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and
therefore his humiliation. In addition she suffered physical discomfort during
the 13-hour trip, as she was also sick when she left the Philippines. In her
condition then a physical discomfort sustained for thirteen hours may well be
considered a physical suffering. Also, the fact that the seating spaces in the
tourist class are quite narrower than in first class, and that in tourist class
there is very little space for reclining in view of the closer distance between
rows, will suffice to show that the aforesaid passenger indeed experienced
physical suffering during the trip. Added to this, of course, was the painful
thought that she was deprived by defendant of the most suitable, place for
her, the first class, where evidently the best of everything would have been
given her. Hence, an award to Mrs. Maria J. Lopez of P50,000.00 for
moral damages will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members
of the family of Senator Lopez. As such they likewise shared his prestige and
humiliation. Although a few weeks before the flight they had asked their
reservations to be charged from first class to tourist class — the same does
not mean they suffered no shared in having to take tourist class during the
flight. For by that time they had already been made to pay for first class seats
and therefore to expect first class accommodations. For their social
humiliation, therefore, the award to them of P25,000.00 each is reasonable.
2.) as to exemplary damages - it should be imposed in such an
amount as to sufficiently and effectively deter similar breach of contracts in
the future by defendant or other airlines. So, P75,000.00 as exemplary or
corrective damages.
3.) as to attorney's fees - plaintiffs-appellants engaged the
services of their counsel and agreed to pay the sum of P25,000.00 as
attorney's fees upon the termination of the case in the CFI, and an
additional sum of P25,000.00 in the event the case is appealed to the SC.
Factors considered: subject matter of the present controversy + professional
standing of the attorney for plaintiffs-appellants + extent of the service
rendered by him, shows that said amount provided for in the written
agreement is reasonable.
RAFAEL ZULUETA, ET AL. v. PAN AMERICAN WORLD AIRWAYS, INC.
29 February 1972 | Concepcion, C.J.
FACTS: Spouses Rafael and Telly Albert Zulueta and their daughter were
passengers aboard a PANAM plane on a flight from Honolulu to Manila, the
first leg of which was Wake Island. As the plane landed on said Island, the
passengers were advised that they could disembark for a stopover of about
30 minutes. Plaintiff testified that, having found the need to relieve himself,
he went to the men's comfort room at the terminal building, but found it full of
soldiers, in view of which he walked down the beach some 100 yards away.
Meanwhile, the flight was called and when the passengers had boarded the
plane, plaintiff's absence was noticed. The take-off was, accordingly, delayed
and a search for him was conducted by Mrs. Zulueta, Miss Zulueta and other
persons. Minutes later, plaintiff was seen walking back from the beach
towards the terminal. Heading towards the ramp of the plane, plaintiff
remarked, "You people almost made me miss your flight. You have a
defective announcing system and I was not paged." Thereafter, one of
defendant's employees — Mr. Sitton, according to plaintiffs; Mr. Pendleton
according to defendants — asked plaintiffs to turn over their baggage claim
checks.
Plaintiffs did so, handing him four (4) claim checks. However, only three (3)
bags were located and segregated from the rest of the passenger's luggage.
The items hand-carried by plaintiffs, except for plaintiff's overcoat, were also
brought down. These hand-carried items, however, were not opened or
inspected; later, plaintiffs Mrs. Zulueta and Miss Zulueta were permitted to
reboard the plane with their hand-carried luggage; and when the plane took
off, about two and a half hours later, it carried plaintiff's fourth bag, his
overcoat and the hand-carried luggage. Once three bags had been
identified, and while the search was going on for the fourth bag, Mr. Sitton,
defendant's airport manager, demanded that plaintiffs open the bags
(actually, they were closed, but not locked) and allow defendant's employees
to inspect them.
Plaintiff Rafael Zulueta refused and warned that defendant could open the
bags only by force and at its peril of a lawsuit. Mr. Sitton, PANAM’s manager,
then told plaintiff that he would not be allowed to proceed to Manila on board
the plane and handed him a letter saying that PANAM is ‘forced to off-load
him due to the fact that he has refused to open his checked baggage for
inspection. During his stay on Wake Island, for a minimum of one week, he
will be charged $13.30 per day per person.’ All of these happened in plain
view and within earshot of the other passengers on the plane, many of whom
were Filipinos who knew plaintiffs. Plaintiff then requested that his wife and
daughter be permitted to continue with the flight. Upon arrival at Manila, Mrs.
Zulueta demanded to PANAM’s Manila Office that it re-route Rafael Zulueta
at the earliest possible time, by the fasters route, and at its expense, to which
defendant refused. Plaintiffs were then forced to pay for his ticket and to
send him money as he was out of funds. Rafael Zulueta finally arrived at
Manila after spending two nights at Wake Island, going back to Honolulu,
and from Honolulu flying thru Tokyo to Manila. Plaintiffs demand that
defendant reimburse them in the sum of P1,505,502.85 for damages but
defendants refused to do so; hence this action.
ISSUE: W/N plaintiffs may recover moral damages
HELD: Yes. The records amply establish plaintiffs' right to recover both
moral and exemplary damages. Indeed, the rude and rough reception
plaintiff received at the hands of Sitton or Captain Zentner when the latter
met him at the ramp ("what in the hell do you think you are? Get on that
plane"); the menacing attitude of Zentner or Sitton and the supercilious
manner in which he had asked plaintiff to open his bags ("open your bag,"
and when told that a fourth bag was missing, "I don't give a damn"); the
abusive language and highly scornful reference to plaintiffs as monkeys by
one of PANAM's employees (who turning to Mrs. Zulueta and Miss Zulueta
remarked, "will you pull these three monkeys out of here?"); the unfriendly
attitude, the ugly stares and unkind remarks to which plaintiffs were
subjected, and their being cordoned by men in uniform as if they were
criminals, while plaintiff was arguing with Sitton; the airline officials' refusal to
allow plaintiff to board the plane on the pretext that he was hiding a bomb in
his luggage and their arbitrary and high-handed decision to leave him in
Wake; Mrs. Zulueta's having suffered a nervous breakdown for which she
was hospitalized as a result of the embarrassment, insults and humiliations
to which plaintiffs were exposed by the conduct of PANAM's employees;
Miss Zulueta's having suffered shame, humiliation and embarrassment for
6
the treatment received by her parents at the airport — all these justify an
award for moral damages resulting from mental anguish, serious anxiety,
wounded feelings, moral shock, and social humiliation thereby suffered by
plaintiffs.
To some extent, however, plaintiff had contributed to the gravity of the
situation because of the extreme belligerence with which he had reacted on
the occasion. We do not over-look the fact that he justly believed he should
uphold and defend his dignity and that of the people of this country that the
discomfort, the difficulties, and, perhaps, the ordeal through which he had
gone to relieve himself — which were unknown to PANAM's agents — were
such as to put him in no mood to be understanding of the shortcoming of
others; and that said PANAM agents should have first inquired, with an open
mind, about the cause of his delay instead of assuming that he was at fault
and of taking an arrogant and overbearing attitude, as if they were dealing
with an inferior. Just the same, there is every reason to believe that, in all
probability, things would not have turned out as bad as they became had he
not allowed himself, in a way, to be dragged to the level or plane on which
PANAM's personnel had placed themselves.
In view of this circumstance, We feel that the moral and exemplary damages
collectible by the plaintiffs should be reduced to one-half of the amounts
awarded by the lower court, that is, to P500,000 for moral damages, and
P200,000 for exemplary damages, aside from the attorney's fees which
should, likewise, be reduced to P75,000.
MAMBULAO LUMBER COMPANY, vs. PHILIPPINE NATIONAL BANK and
ANACLETO HERALDO Deputy Provincial Sheriff of Camarines Norte
(superduper summary)
Facts: On May 5, 1956 P applied for an industrial loan of P155,000 with the
Naga Branch of defendant PNB and the former offered real estate,
machinery, logging and transportation equipments as collaterals. The
application, however, was approved for a loan of P100,000 only. To secure
the payment of the loan, the plaintiff mortgaged to defendant PNB a parcel of
land, together with the buildings and improvements existing thereon, situated
in the poblacion of Jose Panganiban (formerly Mambulao), province of
Camarines Norte.
P failed to pay the amortization on the amounts released to and received by
it. Repeated demands were made upon the plaintiff to pay its obligation but it
failed or otherwise refused to do so. Upon inspection and verification made
by employees of the PNB, it was found that the plaintiff had already stopped
operation about the end of 1957.
In a letter dated December 16, 1961, the plaintiff advised the Provincial
Sheriff of Camarines Norte that it had fully paid its obligation to the PNB, and
enclosed therewith a copy of its letter to the latter dated December 14, 1961.
On December 18, 1961, the Attorney of the Naga Branch of the PNB, wrote
to the plaintiff acknowledging the remittance of P738.59 with the advice,
however, that as of that date the balance of the account of the plaintiff was
P9,161.76, to which should be added the expenses of guarding the
mortgaged chattels at the rate of P4.00 a day beginning December 19, 1961.
It was further explained in said letter that the sum of P57,646.59, which was
stated in the request for the foreclosure of the real estate mortgage, did not
include the 10% attorney's fees and expenses of the sale. Accordingly, the
plaintiff was advised that the foreclosure sale scheduled on the 21st of
December would be stopped if a remittance of P9,161.76, plus interest
thereon and guarding fees, would be made.
Basically the mortgage was foreclosed, and at the public auction PNB was
the highest bidder. There was a right to repurchase, and PNB suggested to P
that they exercise this right; instead, P made its intention known to file
appropriate actions to protect its interests.
Held: In favor of P.
Examining the terms of the promissory note executed by the appellant in
favor of the PNB, we find that the agreed interest on the loan of P43,000.00
was six per cent (6%) per annum from the respective date of said notes "until
paid". It appears the PNB had compounded the principal of the loan and the
accrued 6% interest thereon each time the yearly amortizations became due,
and on the basis of these compounded amounts charged additional
delinquency interest on them up to September 22, 1961; and to this
erroneously computed total of P57,646.59, the trial court added 6% interest
per annum from September 23, 1961 to November 21 of the same year. In
effect, the PNB has claimed, and the trial court has adjudicated to it, interest
on accrued interests from the time the various amortizations of the loan
became due until the real estate mortgage executed to secure the loan was
extra-judicially foreclosed. This is an error. Section 5 of Act No. 2655
expressly provides that in computing the interest on any obligation,
promissory note or other instrument or contract, compound interest shall not
be reckoned, except by agreement, or in default thereof, whenever the debt
is judicially claimed. This is also the clear mandate of Article 2212 of the new
Civil Code which provides that interest due shall earn legal interest only from
the time it is judicially demanded, and of Article 1959 of the same code which
ordains that interest due and unpaid shall not earn interest. Of course, the
parties may, by stipulation, capitalize the interest due and unpaid, which as
added principal shall earn new interest; but such stipulation is nowhere to be
found in the terms of the promissory notes involved in this case. Clearly
therefore, the trial court fell into error when it awarded interest on accrued
interests, without any agreement to that effect and before they had been
judicially demanded.
RE MORAL DAMAGES (ito lang ‘to): P’s claim for moral damages,
however, seems to have no legal or factual basis. Obviously, an artificial
person like herein appellant corporation cannot experience physical
sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral
shock or social humiliation which are basis of moral damages. A corporation
may have a good reputation which, if besmirched, may also be a ground for
the award of moral damages. The same cannot be considered under the
facts of this case, however, not only because it is admitted that herein
appellant had already ceased in its business operation at the time of the
foreclosure sale of the chattels, but also for the reason that whatever
adverse effects of the foreclosure sale of the chattels could have upon its
reputation or business standing would undoubtedly be the same whether the
sale was conducted at Jose Panganiban, Camarines Norte, or in Manila
which is the place agreed upon by the parties in the mortgage contract.
But for the wrongful acts of herein bank and the deputy sheriff of Camarines
Norte in proceeding with the sale in utter disregard of the agreement to have
the chattels sold in Manila as provided for in the mortgage contract, to which
their attentions were timely called by herein appellant, and in disposing of the
chattels in gross for the miserable amount of P4,200.00, herein appellant
should be awarded exemplary damages in the sum of P10,000.00. The
circumstances of the case also warrant the award of P3,000.00 as attorney's
fees for herein appellant.
FIRST LEPANTO-TAISHO INSURANCE CORPORATION vs CHEVRON
PHILIPPINES INC.
Facts
Fumitechniks, a distributor of Chevron Philippines (formerly Caltex), was
verbally granted a credit line by the latter for oil and petroleum purchases.
The credit line was secured by a surety bond issued by petitioner, First
Lepanto-Taisho Insurance Corp. (FLT Insurance).
The check issued by Fumitechniks to Chevron was dishonored. Chevron
thus notified FLT Insurance of Fumitechniks' default in the amount of
P15,084,030.30. However, FLT Insurance claimed that there was no written
distributorship agreement between Chevron and Fumitechniks for which the
supposed surety bond is issued. Being an accessory contract, FLT's surety
bond can only exist when there is an existing principal agreement which it
secures. Since there is none, FLT is not liable to Chevron for any amount.
Chevron prays for judgment ordering petitioner to pay the P15, 084,030.30,
as well as for moral damages and attorney's fees.
Issue: w/n Chevron can recover moral damages
Held: NO, it cannot. The filing alone of a civil action should not be a ground
for an award of moral damages in the same way that a clearly unfounded
civil action should not be a ground for an award of moral damages.
Moreover, a juridical person such as Chevron is generally not entitled to
moral damages, because, unlike a natural person, it cannot experience
physical suffering or such sentiments as wounded feelings, serious anxiety,
mental anguish, or moral shock. Recently however, the Court has awarded
moral damages to corporations, but such grant is not automatic and relies on
proof of the existence of the damage and its causal relation to the
defendant's acts. Moral damages are designed to compensate claimant for
actual injury suffered; thus injury must be proven.
(In this case, it was ruled that Chevron cannot recover the amount from FLT
Insurance as well since there was no written principal agreement for which
the surety bond is issued. Surety bonds are strictly construed against the
creditor since they are onerous undertakings. Here, the surety bond makes
clear reference to a written agreement; where the terms of a contract are
clear and leave no doubt upon the intention of the parties, the literal meaning
of its stipulations shall control. Chevron was bound to reduce the agreement
to writing, or to at least communicate its terms to FLT Insurance, which it did
not do. It must thus bear the cost of its non-compliance.)
SWEETLINES v CA (1983)
April 28, 1983
Melencio-Herrera, J
FACTS:
- Private respondents Quintoz, Bacatan, Cabras and Veloso purchased
first class tickets from Sweetlines at the latter’s office in Ceby City
o They were to board petitioner’s vessel M/V Sweet Grace bound for
Catbaloga, Western Samar
o Instead of departing at the scheduled hour of about midnight on July
8, 1972, the vessel set sail at 3AM of July 9, 1972 only to be towed
back to Cebu due to engine trouble
o Repairs having been accomplished, the vessel lifted anchor again on
July 10, 1972
- Instead of docking at Catbalogan, the vessel proceeded to direct to
Tacloban at around 9PM of July 10, 1972. PRs had no recourse but to
disembark and board a ferryboat to Catbalogan
- PRs sued Sweetlines for damages for having by-passed a port of call
w/o previous notice
- CFI, affirmed by CA: held liable for breach of contract of carriage
o Awarded moral damages- P175k divided among the 4 (Quintos –
30k, Fr. Batacan – 26k, 10k Veloso, 10k Cabras)
o 30k as exemplary or corrective damages
o Interest at the rate of 6% per annum
o 5k as atty’s fees
o costs
ISSUE/HELD: WON moral damages should
Sweet Lines’ bad faith
RATIO:
1
- Art. 614 and 698 of the Code of Commerce that in case of interruption
of a voyage, the presence of a fortuitous event or force majeure is
necessary to exempt a common carrier/captain from liability to damages
1
ART. 614. A captain who, having agreed to make a voyage, fails to fulfill his undertaking,
without being prevented by fortuitous event or force majeure, shall indemnify all the losses which
his failure may cause, without prejudice to criminal penalties which may be proper.
ART. 698. In case of interruption of a voyage already begun, the passengers shall only be
obliged to pay the fare in proportion to the distance covered, without right to recover damages if the
interruption is due to fortuitous event or force majeure, but with a right to indemnity, if the
interruption should have been caused by the captain exclusively. If the interruption should be caused
by the disability of the vessel, and the passenger should agree to wait for her repairs, he may not be
required to pay any increased fare of passage, but his living expenses during the delay shall be for his
own account.
due to his failure to fulfill his undertaking
- In this case, there was no fortuitous event or force majeure as found out
by the lower courts. Mechanical defects in the carrier are not considered
as fortuitous events that will exempt a common carrier from liability
- Granting arguendo that the engine failure was a fortuitous event, it
accounted only for the delay in departure
o The reason for bypassing the port of Catbalogan, as admitted by the
General Manager was to enable the vessel to catch up with its
schedule for next week
o There were 50 passengers to Tacloban compared to only 20 for
Catbalogan
2
- There is also a small print at the back of their ticket which Sweet Lines
could not rely to because it did not cancel the tickets nor refunded the
tickets to PR. Besides, it was not the delayed departure but the
bypassing of Catbalogan, their destination
o Further, express provision of the Code of Commerce prevails
- The voyage to Catbalogan was “interrupted” by the petitioner upon
orders of the management, and such interruption was not due to
On Moral Damages
- should be awarded because they acted in bad faith but reduced to 3k
each
o did not give notice to the change of schedule
o knowing that it would be repaired no less than 15 hours, they still
gave the assurance that it will leave in a short while
o did not offer refunds nor provide them with transportation from
Tacloban to Catbalogan
- Court defined bad faith as: Bad faith means a breach of a known duty
through some motive or interest or illwill. Self-enrichment or fraternal interest,
and not personal illwill may have been the motive, but it is malice
2
The passenger's acceptance of this ticket shall be considered as an acceptance of the
following conditions:
3. In case the vessel cannot continue or complete the trip for any cause whatsoever, the
carrier reserves the right to bring the passenger to his/her destination at the expense of the carrier
or to cancel the ticket and refund the passenger the value of his/her ticket;
xxx xxx xxx
11. The sailing schedule of the vessel for which this ticket was issued is subject to change
without previous notice. (Exhibit "l -A")
nevertheless
Other damages
- 5k attorney’s fees
- exemplary damages NOT awarded
Vasquez Vda. De Arroyo vs CA
Facts: Plaintiff Juana T. de la Viña (private respondent) and defendant
Dolores Vasquez Vda. de Arroyo (petitioner), entered into an agreement in
Manila whereby plaintiff agreed to redeem the mortgage of the real property
of defendant from the Development Bank of the Philippines and that after
such redemption, defendant will mortgage the same in favor of any banking
or lending institution to which said plaintiff may apply for a loan using the
same property as collateral.
Thus, defendant executed a special power of attorney naming plaintiff as her
lawful attorney-in-fact to mortgage her real property. Defendant also
executed a special power of attorney in favor of plaintiff authorizing the latter
to redeem the former's real property which has been mortgaged to the
Development Bank of the Philippines(DBP).
In order to comply with her obligation under plaintiff executed a chattel
mortgage in favor of Adrian Fong over her personal properties to secure the
payment of personal loan in the amount of P20,000.00. With this amount,
plaintiff paid to the DBP the sum of P12,391.08 representing the redemption
price of defendant's property.
In accordance with the agreement of the plaintiff and defendant, the former
applied for a loan with the SSS in the amount of P120,000.00. The special
power of attorney, however, signed and executed by defendant in favor of
plaintiff authorizing the latter to mortgage the property was incomplete
because it did not contain the technical description of the land. Plaintiff went
to the defendant in Iloilo for the latter to execute a proper SPA. After some
persuasion, she was able to get the special power of attorney prepared but
the same was eventually revoked by the defendant. Defendant even caused
the publication of the revocation in the ‘Iloilo Times’ newspaper.
Hence, plaintiff commenced this suit for specific performance and damages.
Defendant in return filed a complaint for estafa against plaintiff.
RTC: Pay plaintiff the sum of P15,000 (redemption price paid) w/ legal
interest and P30,000 for moral damages arising from 1) violation of the
contract 2)publishing the notice of revocation and 3) filing an estafa case
CA: At first CA deleted the award of moral damage since it found no
substantial evidence of bad faith. But on reconsideration, it modified its
decision and reinstated the trial court’s judgment.
Issue: W/N moral damages is recoverable (ito lang talaga ang issue talaga)
Held: YES.
Since the established facts clearly sustain the conclusion that the petitioner
has acted in bad faith, as found by both the trial court and the Court of
Appeals, the Resolution under review must be affirmed. Nevertheless, we
feel that under the circumstances, a reduction of the award of moral
damages from P30,000.00 to P15,000.00. (Bait ng SC)
Attorney’s fees also reduced from 10k to 5k.
AGAPITO MAGBANUA, INENIAS MARTIZANO, CARLITO HERRERA,
SR., PAQUITO LOPEZ, AND FRANCISCO HERRERA vs. HON.
INTERMEDIATE APPELLATE COURT (SECOND SPECIAL CASES
DIVISION), EDUARDO, BUTCH, DIEGO AND NENA All Surnamed PEREZ
FACTS: Petitioners allege that they are share tenants of the defendants and
that the defendants caused the diversion of the free flow of water from their
farm lots which caused portions of their landholdings to dry to their great
damage and prejudice. Petitioners also allege that they were told by the
defendants' overseer to vacate their respective areas for they could not plant
palay any longer due to lack of water.
They prayed that they be declared as leasehold tenants and that the
defendants be ordered to pay attorney's fees and different kinds of damages.
In praying for said damages, they attached photographs of their dried up and
wilted crops
The Trial Court granted all the prayer to be maintained in the property and
ordered the defendants to pay all the petitioners moral and exemplary
damages in the amount of 10,000 pesos and attorney’s fees worth 5,000
pesos. Said ruling was based on the fact that the pictures that was submitted
by the petitioners as evidence were never rebutted by the defendants. Also, it
held that under the law, the landowner has an obligation to keep the tenant in
the peaceful and continuous cultivation of his landholding. The respondents
violated this obligation when they disrupted the flow of water to the palay of
the petitioners.
The IAC deleted the award of moral and exemplary damages and attorney’s
fees to the petitioner. Said ruling was based on the fact that “there is no
evidence showing that, in dealing with the plaintiffs, respondents acted
fraudulently or in bad faith”.
ISSUE: WON petitioners must be awarded moral and exemplary damages?

HELD: YES.
Under the facts of the case, the petitioners are entitled to a measure of moral
damages. Article 2219 of the Civil Code permits the award of moral damages
for acts mentioned in Article 21 of the same code and the latter stipulates
that: "Any person who wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate
the latter for the damage."
It appears that the petitioners were denied irrigation water for their farm
lots in order to make them vacate their landholdings. The defendants
violated the plaintiffs' rights and caused prejudice to the latter by the
unjustified diversion of the water.
The petitioners are also entitled to exemplary damages because the
defendants acted in an oppressive manner. (See Art. 2232. Civil Code.)
It follows from the foregoing that the petitioners are also entitled to attorney's
fees but the size of the fees as well as the damages is subject to the sound
discretion of the court.
WHEREFORE, the petition is granted; the decision under review is modified
and each of the plaintiffs is entitled to the following to be paid by the
defendants jointly and severally:
Moral damages — P1,000.00
Exemplarly damages — 500.00
Attorney's fees — 1,000.00
P2,500.00
G.R. No. 91201 December 5, 1991 EUSTAQUIO MAYO Y AGPAOA vs.
PEOPLE OF THE PHILIPPINES (GUTIERREZ, JR., J)
MEGA DIGEST: Bus driver recklessly hits lancer car. Linda was in lancer
car. Linda scarred for life (physically, mentally, etc). Linda asks for 500k-1M
moral damages. Mostly for her physical injuries AND iniwan kasi siya ng
boyfriend niya. Court awarded 700k moral damages. SC says Linda may
recover moral damages. HOWEVER, Article 2719 of the New Civil Code
quoted earlier enumerates cases wherein moral damages may be granted.
Loss of a boyfriend as a result of physical injuries suffered after an
accident is not one of them. Neither can it be categorized as
an analogous case. Excessive yung 1M. Gusto mo 500k pero 200k na lang,
gurl.
FACTS: P seeks to review the decision of the CA insofar as CA affirmed the
decision of the RTC Angeles City awarding the amount Php700,000 as moral
damages in favor of Linda Navarette, complainant in Criminal Case No.
5633, entitled "People of the Philippines v. Eustaquio Mayo y Agpaoa." P
Mayo was charged with the crime of "Reckless Imprudence Resulting in
Damage to Property with Multiple Serious, Less Serious, and Slight Physical
Injuries". June Navarette was driving a Mitsubishi Lancer, owned by Linda
Navarette, her sister, along MacArthur Highway in Bo. Mamatitang, travelling
towards the general direction of Manila on board the Lancer car were Linda
Navarette, Legionaria Panopio, Mae Custodio, Noel Reynaldo Navarette,
Raymond Asprer (aged 6 years), Antonette Asprer (aged 4 years), and Mercy
Panopio. Noel Reynaldo Navarette and Raymond Asprer were seated on the
front seat at the right side of the driver. Linda and the rest of the passengers
were all seated at the back seat. The Lancer car was then cruising steadily at
the right lane of the road in Bo. Mamatitang, Mabalacat, Pampanga at a rate
of speed of about forty kilometers per hour (40 kph), southbound for Manila.
It was established that before the accident took place, the Tamaraw jeep was
first ahead, followed by the Lancer car, and behind the Lancer car was the
Rabbit bus, travelling towards the direction of Manila. The Lancer car as well
as the Rabbit bus following one after the other overtook the Tamaraw jeep
(driven by Danilo Concepcion). The Rabbit bus, still trailing behind the
Lancer car, then tried to overtake the Lancer car. And when the Rabbit bus,
was abreast with the Lancer car, there was an oncoming vehicle
approaching and signalling through the flash of its headlights from the
opposite direction. The Rabbit bus, to avoid a head-on collision with the
vehicle, tried to get back to its lane to the right, and in the process it bumped
the left rear portion of the Lancer car, which was then cruising on the right
lane of the road. Thus because of the impact, precipitated by the reckless
imprudence of the accused, a chain reaction occurred; the driver of the
Lancer car lost control of the wheel and the car swerved to the left and
darted across the road, hitting thereat Narciso Yandan, a pedestrian, and
stopped only when it crashed against the concrete fence of Mr. Bernie
Reyes. The Lancer car was heavily damaged. It was almost a total wreck;
the passengers, including the driver, sustained physical injuries in varying
degrees. On the basis of these factual findings, the Pwas convicted as
charged. The civil aspect of the case was heard in the criminal case. Hence,
3
the complainants in the criminal case were awarded damages . P filed an
3
1. Linda Navarette the sum of —
(a) P192,236.07 as actual damages;
(b) P700,000.00 as moral damages;
(c) P67,925.41 for the repair of the Lancer car; and
(d) P80,000.00 as attorney's fees.
2. Noel Reynaldo Navarette the sum of P60,000.00 as moral damages.
3. Mae Custodio the sum of —
(a) P2,032.00 as actual damages; and
(b) P50,000.00 as moral damages.
4. June Navarette the sum of —
(a) P495.00 as actual damages; and
(b) P5,000.00 as moral damages.
appeal with CA. The trial court's decision was affirmed with the modification
that the appellant suffer a straight penalty of three months which was
recommended by the Solicitor General on the ground that the Indeterminate
Sentence Law is not applicable in the instant case, the maximum penalty
imposable not exceeding one year. MR denied for lack of merit. Hence, this
petition
ISSUE: whether or not findings of TRIAL COURT (and CA) justify the award
of moral damages in the amount of P700,000.00 in favor of complainant
Linda Navarette.
HELD: P summarizes its objections to the award of moral damages in favor
of Linda Navarette as follows: (1) CA did not cite the factual basis for such an
award and without giving the justification for granting such an arbitrary and
exorbitant amount of over One Million Pesos (700k lang ‘tey) and the
complainant had placed a value of only P500,000.00 for her mental,
psychological and moral sufferings, and b) the complainant's claim for moral
damages for the loss of her boyfriend in the amount of P1,000.000.00 can
have no legal or factual basis.
and finds it replete with facts, with the details, the anguish, the fright, the
anxieties, the shock and loss, that the victims had gone through and
suffered. As to legal provisions, the law is specific concerning the award of
moral damages. ...” citing specifically Articles 2217 and 2219 to justify the
legal basis for the award of moral damages.
propriety of the award of moral damages in favor of Linda Navarette. (job,
medical treatment here and in the States, loss of boyfriend, eye had to be
removed, permanent scar on face, UP (Home) Economist profession,
anaesthesia impaired her memory, etc.)
[WHY DID LINDA ASK FOR 500K???] She placed a value of her mental,
psychological and moral sufferings in the amount of P500,000.00 as
moral damages, and for the loss of her boyfriend she asked to double
the amount giving as a reason that her boyfriend would have been her
lifetime partner and her guide of her eye forever had she not lost him.
SC: There is no question that 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. (Article 2217,
New Civil Code; People v. Baylon, 129 SCRA 62 [1984]; Prudenciado v.
Alliance Transport System, Inc., 148 SCRA 440 [1987]). Re RECOVERY
4
SEE Article 2219 of NCC. ART. 2219 . We agree that complainant Linda
Navarette is entitled to moral damages. She suffered injuries as a result of
the criminal offense of the petitioner. Moreover, her injuries resulting in a
permanent scar at her forehead and the loss of her right eye undoubtedly
gave her mental anguish, wounded feelings and shock. The psychological
effect on her as regards the scar on her forehead and her false eye must
have devastated her considering that women in general are fastidious on
how they look.
More important, however, was the loss of vision of her right eye which was
severely injured as a result of the accident. Since the accident, Linda
Navarette had to contend with the loss of her eyesight on her right eye which
necessarily hampers her not only physically but also professionally for the
rest of her life. Before the accident, Linda Navarette who is a home
economist by profession was doing well in her career. A graduate of the UP
with the degree of Home Economics, she is the Assistant-Vice President as
well as Resident Manager of Club Solviento receiving a gross income of
P10,000.00 a month. Simultaneously with her work at Club Solviento, she
served as Food Consultant of Food City where she received a monthly salary
of P7,000.00. She, however, had to give up her consultancy job after the
accident not only because of her prolonged absences but because of the
physical handicap she suffered. Nevertheless, we find no justification to
award moral damages in favor of Linda Navarette for the loss of her
boyfriend. No doubt, the loss of her boyfriend after the accident added to
her mental and emotional sufferings and psychologically affected and
disturbed her. However, there is no clear evidence on record to show
that her boyfriend left her after the accident due to her physical injuries.
He may have left her even if she did not suffer the slightest injury. The
reasons for the break-up of a courtship are too many and too complicated
such that they should not form the basis of damages arising from a vehicular
accident. Moreover, granting that her boyfriend left her due to her
physical injuries, we still find no legal basis for the award of moral
4
Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries.
(2) Quasi-delicto causing physical injuries.
(3) Seduction, abduction, rape or other lascivious acts.
(4) Adultery or concubinage.
(5) Illegal search.
(6) Libel, slander or any other form of defamation.
(7) Malicious prosecution.
(8) Acts mentioned in article 309.
(9) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.
damages in favor of complainant Navarette because of the loss of a
boyfriend. Article 2719 of the New Civil Code quoted earlier enumerates
cases wherein moral damages may be granted. Loss of a boyfriend as
a result of physical injuries suffered after an accident is not one of
them. Neither can it be categorized as an analogous case. With the
foregoing findings we now resolve the issue as regards the amount of moral
damages to which Linda Navarette is entitled. The well-entrenched principle
is that moral damages depend upon the discretion of the trial courts based
on the facts and circumstances of each case. (Prudenciado v. Alliance
Transport System, supra; Pleno v. Court of Appeals, 161 SCRA 208 [1988]).
In determining the amount of moral damages, the actual losses
sustained by the aggrieved party and the gravity of the injuries must be
considered. (Pleno v. Court of Appeals, supra; Prudenciado v. Alliance
Transport System, Inc. supra; Siguenza v. Court of Appeals; supra) Finally,
"moral damages are emphatically not intended to enrich a complainant
at the expense of the defendant. They are awarded only to enable the
injured party to obtain means, diversion or amusements that will serve
to alleviate the moral suffering he has undergone, by reason of the
defendant's culpable action." (R & B Surety & Insurance Co., Inc. v.
Intermediate Appellate Court, 129 SCRA 736 [1984]; citing Grand Union
Super- market, Inc. v. Espino, Jr., 94 SCRA 953 [1979], citedin Prudenciado
v. Alliance Transport System, Inc. supra) Applying these principles in the
instant case, we rule that the award of P700,000.00 as moral damages
in favor of complainant Linda Navarette is unconscionable and
excessive. We rejected Navarette's claim for the amount of P1,000,000.00
as moral damages for the loss of her boyfriend. We note that she asked for
the amount of P500,000.00 as moral damages due to her personal injuries.
Therefore, the award for moral damages should not exceed the amount of
P500,000.00 (Makabali v. Court of Appeals, 157 SCRA 253 [1988]) We rule
that under the circumstances of the instant case, the amount of
P200,000.00 as moral damages in favor of complainant Linda Navarette
is reasonable, just and fair.
JOSE DOMINGDING and RAUL ARANAS vs TRINIDAD and CHEE NG
G.R. No. L-10872 | February 28, 1958 | J. Labrador
FACTS:
On May 25, 1953, Trinidad Ng purchased from plaintiffs some 1950 baskets
(kaings) of mangoes for export to Japan. Plaintiffs claim that actually 400
baskets were purchased. On the evening of that same day, Trinidad Ng went
again to the place of business, looking for her brother-in-law. David Arañas
was present at the bodega and having informed Trinidad Ng that her brother-
in-law was not in the place, offered to accompany her home in a taxi, which
she accepted, having known Arañas for the past 10 years. So Arañas called
a "Golden" taxi at the corner of M. de Santos and Elcano Streets, San
Nicolas and both of them embarked therein.
Arañas ordered the driver to proceed to Luneta, but Trinidad objected, telling
the driver to bring her to Tenessee, her home and not to the Luneta. At that
instant, Arañas immediately embraced her and after embracing her subjected
her to indignities: “He kissed, me and trying to push my private panty (what’s
thaaaaat) and held my private parts, and when I was trying to struggle
against him I hit him. He embraced my back and kissed me on the neck and
also on the breast.”
She asked the taxi driver to stop the car but he didn’t. However, the car was
going at a slow place so she opened the door, got off at Elcano st. and rode
a “Liberty” taxi going home. She reported the incident to her husband who
suggested that she file a complaint. The complaint was filed three days later
for acts of lasciviousness, but the complaint could not be investigated
promptly and on September 28, 1953, the case was dropped.
This case was brought by Jose Domingding, owner of the mango store and
plaintiff Arañas, his manager, to recover from Trinidad Ng and her husband
the value of 400 baskets of mangoes claimed to have been delivered on May
25, 1953. Allegation is made in the complaint that the purchasers had agreed
to pay the following day but that they failed to do so.
Defendants also put up a counterclaim against, David Arañas for the amount
of P50,000 as moral damages for the incident, indignities to which Trinidad
Ng, was subjected by plaintiff Arañas, for P10,000 as exemplary damages,
and for P1,000 attorneys fees. In the Judgment rendered defendants were
sentenced to pay the value of 150 baskets of mangoes on plaintiffs'
complaint; but on the other hand, plaintiff Arañas was sentenced to pay to
defendant the, amount of P50,000 as moral damages, and the further
sum of P1,000 as attorney's fees. The owner of the store, Jose
Domingding withdraw his appeal, so the present case concerns David
Arañas alone.
ISSUE: WON the moral damages awarded were proper – No
HELD:
The decision appealed from states no reasons or facts or circumstances why
the moral damages had been fixed at P50,000 so this amount is erroneous.
From the record, however, we note that the offended party is a married
woman, a business woman, and so is the offender; the occasion was during
nighttime, so the indignities suffered by the offended party could not have
been witnessed by many people; the assault on the person's dignity did not
last because before covering Elcano Street, where the parties embarked, the
offended party was able to get out of the taxi and save from the indignities
being made by the offender; and the only persons that learned of the assault
were the two taxi drivers, the offended party's husband and the offender.
In cases like the present, the social and financial standings of the
offender and the offended party are additional elements which should
be taken into account in the determination of the amount of moral
damages. While it is true that social dignity does not depend upon the
wealth or poverty of a person the amount necessary to repair the
damage thereto depends upon her owned social and financial means.
The financial and means the offender is also a convenient gauges for
the determination of the amount necessary to repair the injury caused.
What is considered is not only what might be right for plaintiff to
receive in order to afford just compensation, but also by what is just to
compel defendant to pay. In the determination of moral damages, the
human value and the dignity of man are of paramount consideration.
From the record we also understand that the offended party is an exporter of
mangoes who, evidently, does not seem to have much capital because she
only pays for the mangoes when the same is sold. Neither does the offender
seem or appear to be of much financial consequence because he was only
the overseer or manager of a mango store.
With all the above circumstances in mind, the Tribunal believes that the sum
of P50,000, assessed by the court a quo, is excessive. P1,000 should be
sufficient as moral damages, but the offender should be required to pay
punitive damages in the amount of P2,000 because of his act in abusing the
confidence of a customer belonging to the weaker sex, which bespeaks of a
perverse nature dangerous to the community. The attorney’s fees of P1,000
may stand.
San Andres v. CA
G.R. No. L-59493 | Aug 21, 1982 | J. Melencio-Herrera
FACTS
On April 16, 1971, plaintiff Filomeno Aguila purchased from defendant
Manuel San Andres 38 hogs, 2 goats and 10 chickens with a total value of
P5,571.50. Of said amount, plaintiff paid defendant P2,927.55.
Subsequently, plaintiff paid another P1,100.00, leaving a balance of
Pl,543.95. Plaintiff brought said livestock with him to Manila on April 16, 1971
accompanied by Eligio Callada, a representative of defendant Manuel San
Andres to whom plaintiff was supposed to pay the balance of the purchase
price of said livestock. However, plaintiff was not able to give to Callada the
full balance which he had promised defendant San Andres.
San Andres filed a complaint against Aguila with the Chief of Police of
Pasacao, Camarines Sur for estafa claiming that on April 16, 1971, Aguila
received from him 29 hogs, 2 goats and 10 chickens valued at P3,681.30
which he brought with him to Manila promising that the costs of said livestock
will be paid by him within three or four days, but notwithstanding said
promise, he failed to do so. On the basis of said complaint, the chief of police
filed with the municipal court of Pasacao, Camarines Sur a criminal
complaint for estafa. In the preliminary examination before Judge Daniel O.
Banks, San Andres executed a sworn statement in addition to his sworn
statement before the chief of police. In addition, the municipal judge took the
statements of witnesses. On the basis of the sworn statements of
complainant San Andres and his three witnesses, the municipal judge issued
an order for the arrest of Filomeno Aguila.
Three policemen from Pasacao, Camarines Sur, accompanied by a
policeman from the City of Manila, arrested Aguila inside his store at the
Paco Market, Manila. He was brought first to the police outpost of the Paco
Market and later to the police precinct of the Manila Police Department at the
United Nations where he was confined from 9:30 AM to 4:30 PM. In the
afternoon, he was brought to the Tutuban Railroad Station accompanied by
the arresting police officers from Pasacao, Camarines Sur where he boarded
the train bound for Naga City, arriving at Pasacao at 7:00 the following
morning of July 7, 1971. He was brought to the municipal jail where he was
detained. The following day, he appeared before the municipal judge who
asked him whether he was going to file a bond. On the same day, the chief
of police filed a motion praying for the dismissal of the complaint since Aguila
and San Andres have arrived at an amicable settlement under which the
former agreed to pay the balance of his obligation of P1,543.95 plus an
additional sum of P320.00 representing incidental expenses incurred by San
Andres in collecting said amount. Aguila paid on said date P1,000.00 and
promised to pay the balance before July 15, 1971. Subsequently, the
balance of Aguila's obligation was finally paid.
Respondent Aguila filed civil suit for damages against petitioner San Andres,
the Chief of Police, and the Municipal Judge.
TC dismissed the complaint.
San Andres – filing of estafa case was understandable because the
behavior of Aguila in forgetting his obligation to San Andres naturally
made the latter conclude that Aguila had deceived him
Chief of Police and Municipal Judge – only performing their
respective duties
CA held San Andres liable to Aguila in the sum of P30,000.00 as moral
damages, and P5,000.00 as attorney's fees, but affirmed the dismissal of the
complaint against the Chief of Police and the Municipal Judge San Andres
in BAD FAITH for misrepresenting facts to make it appear that plaintiff had
induced him to deliver to him some livestock upon his representation that the
costs of said livestock would be paid by plaintiff some three days after when
he would have disposed of said livestock in Manila, thereby showing a prima
facie case of estafa that would justify the filing of a case of estafa against
Aguila.
ISSUE
Whether or not San Andres should be held liable to pay moral damages
HELD
YES, but reduced to 10,000 for moral damages and 3,000 for atty’s fees
because previous amounts were excessive.
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 wrong-doer.
Respondent Court's finding of bad faith and malice in the filing of the Estafa
charge by petitioner-vendor is supported by law and the evidence showing
that petitioner-vendor failed to disclose all matters within his knowledge
which had attended their transaction and which would have affected the
Chief of Police's assessment of the facts charged as having resulted in a
criminal act.
Sps. Jose Tan Kapoe & Concepcion Ngo Kan vs. Silvestre Masa,
Enrique Masa, Jesus Masa, Francisco Masa, Rogelio Masa, Aurelia
Hernandez, Angel Malunay, Prescila Hernandez, Simplicia Hernandez,
Minors Enrico Masa and Brigido Masa, and CA
GR No. L-50473 | Jan. 21, 1985 | J. Melencio-Herrera
Facts:
Rs are Ps’ tenants of a parcel of land in Bay, Laguna. R Silvestre Masa, a
tenant for 10 years, wanted to convert his share tenancy relationship with Ps
to a leasehold one, but Ps rejected it so Masa filed before the Court of
Agrarian Relations a petition for conversion. Ps opposed this and then filed
their own petition for ejectment against the Rs.
Aside from the ejectment, Ps filed one criminal case after another against
Rs, totaling 6 cases in all – Grave Threats, Oral Defamation, violation of Sec.
39 of RA 1199 (harvesting landholding without prior notice to Ps), Usurpation
of Real Rights, and 2 for Malicious Mischief. On the same day the last
complaint was filed, PRs were arrested and jailed; they were only released
after posting bail. However, all these cases were either dismissed or the Rs
acquitted.
So Rs filed a complaint for moral & exemplary damages against Ps for
Malicious Prosecution.
CFI: Ps ordered to pay Rs moral & exemplary damages (the 2 kinds of
damages were aggregated in a single amount) and attorney’s fees
CA: affirmed
Issues:
WON moral damages can be awarded absent any testimony as to
physical suffering, mental anguish, etc – Yes
WON moral damages and exemplary damages can be merged in 1
award/amount – Yes
Held:
It is true that the award of moral damages was made on the basis of
documentary evidence consisting of court orders in the 6 cases filed against
PRs without supporting oral testimonies as to physical suffering, mental
anguish, and the like, which is what Ps were arguing against. However, the
Court finds that the results of the filing of the 6 successive unfounded
complaints satisfactorily prove the existence of factual basis for moral
damages and the causal relation to Ps’ acts. Case after case was filed
and PRs even suffered the humiliation of incarceration. Without a doubt, Ps’
motive was for harassment and embarrassment and as a retaliatory measure
for the agrarian case for conversion PRs filed.
Ps also contend that moral damages and exemplary damages cannot be
merged in 1 award. Though awarding them in an aggregate amount may not
be the usual way of awarding such, there can be no question that entitlement
to moral damages has already been established; thus, exemplary damages
may be awarded, even though not expressly pleaded for nor proved (Art
2234).
Attorney’s fees are also recoverable because exemplary damages are
awarded, as well as in criminal cases of malicious prosecution (Art 2208).
Reasonable attorney’s fees of P3K, but the aggregate amount of damages is
excessive – modified
For Silvestre Masa against whom 6 criminal cases were filed – P7,000.00
For Jesus Masa and Enrique Masa against whom 2 criminal cases were filed
– 3,000.00 each
For Angel Malunay, Prescilla Hernandez, Aurelia Hernandez, Francisco
Masa, Simplicia Hernandez and Rogelio Masa against whom one criminal
case each was filed – P2,000.00 each
For Enrico Masa and Brigido Masa, as representatives of the deceased
Felipe Masa against whom one criminal case was filed – 2,000.00
PRs are likewise awarded the sum of P200.00 each as exemplary damages.
When Not Recoverable
Mercado v. Lira
Facts:
Gonzalo Mercado and others were the owners and operators of the
Laguna Transportation Company. In the afternoon of April 21, 1951, while its
passenger bus No. 39 was making the trip from Batangas to Manila on the
concrete highway at barrio Tulo, Calamba, Laguna, the left front tire of the
bus blew out and sent it swerving gradually toward the left side of the road,
over the shoulder and into a ravine some 270 meters away. From the
wreckage, the bodies of the passengers, several dead, others injured, were
recovered, and among the fatalities was Ramon Lira, Jr. (24), son of Mr. and
Mrs. Ramon Lira, Sr. and injured Nita Lira. Two cases for recovery of
damages were commenced against the owners and operators in the Court of
First Instance of Batangas: No. 104 by the parents of deceased Ramon Lira,
Jr. and No. 107 by Nita Lira. After a joint-trial, defendants, Mercado and
others were sentenced to pay, among others, moral damages.
Both parties appealed, and upon appeal, in the case involving the
death of Ramon Lira the Court of Appeals granted moral damages, and in
the case involving physical injuries caused upon Nita Lira, moral damages of
P5,000.00 awarded her, were eliminated.
Nita Liraalleges that the respondent Court of Appeals erred in its
resolution dated December 19, 1957, in not awarding moral damages to
petitioner Nita Lira for physical injuries and mental suffering sustained by
her, resulting from breach of the special contract of carriage caused by the
negligence of the respondents, contending that her case is analogous to
cases of "quasi delicts causing physical injuries" for which the new Civil
Code authorizes indemnification for moral damages in favor of the injured
party.
Issue:
WON moral damages should be awarded to Lira - NO
Held:
Anent the moral damages ordered to be paid to the respondent, the
same must be discarded. We have repeatedly ruled that moral damages are
not recoverable in damage actions predicated on a breach of the contract of
transportation, in view of Articles 2219 and 2220 of the new Civil Code,
which provide as follows:
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;
xxx xxx xxx
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.
By contrasting the provisions of these two articles it immediately
becomes apparent that:
(a) In cases of breach of contract (including one transportation) proof of bad
faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is
essential to justify an award of moral damages; and
(b) That a breach of contract can not be considered included in the
descriptive term 'analogous cases used in Art. 2219; not only because Art.
2220 specifically provides for the damages that are caused by contractual
breach, but because the definition of quasi-delict in Art. 2176 of the Code
expressly excludes the cases where there is a 'preexisting contractual
relation between the parties.'
The exception to the basic rule of damages now under consideration
is a mishap resulting in the death of a passenger, in which case Art. 1764
makes the common carrier expressly subject to the rule of Art. 2206, that
entitles the spouse, descendants and ascendants of the deceased
passenger to 'demand moral damages for mental anguish by reason of the
death of the deceased. But the exceptional rule of Art. 1764 makes it all the
more evident that where the injured passenger does not die, moral damages
are not recoverable unless it is proved that the carrier was guilty of malice or
bad faith. We think it is clear that the mere carelessness of the carrier's
driver does not per se constitute or justify an inference of malice or bad faith
on the part of the carrier. To award moral damages for breach of contract,
therefore, without proof of bad faith or malice on the part of the defendant, as
required by Art. 2220 would be to violate the clear provisions of the law, and
constitute unwarranted judicial legislation.
We gleaned, therefore, from the above mentioned decisions, (1) that
the case of a passenger of a carrier who suffered physical injuries "because
of the carrier's negligence (culpa contractual), cannot be considered in the
descriptive expression 'analogous cases', used in Art. 2219"; and (2) that in
cases of breach of contract (including one of transportation) proof of bad
faith or fraud (dolus) i.e., wanton or deliberate injurious conduct is essential
to justify an award of moral damages. There being no evidence of fraud,
malice or bad faith, contemplated by law, on the part of the respondents,
because the cause of the accident was merely the bursting of a tire while the
bus was overspeeding, the cause of petitioner Nita Lira should fail, as far as
moral damages is concerned. Moral damages was, therefore, correctly
eliminated by the Court of Appeals.
Philippine Rabbit Bus Lines, Inc. vs. Esguerra, 117 SCRA 741(1982)
No. L-31420. October 23, 1982.*
Note: This is a short decision. Read in the original if you want
Civil Law; Damages; Moral Damages; Moral damages, not recoverable in
actions for damages predicated on breach of contract of transportation;
Exceptions.—The contention of petitioners with respect to the award of moral
damages is meritorious. This Court has repeatedly held (Cachero v. Manila
Yellow Taxicab, Inc., G. R. No. L-8721, promulgated May 23, 1957; Necesito
v. Paras, et al., G. R. No. L-10605-10606, promulgated June 30, 1958; Fores
v. Miranda, G. R. No. L-12163, promulgated March 4, 1959; Tamayo v.
Aquino, et al., G. R. No. L-12634, promulgated May 29, 1959) that moral
damages are not recoverable in actions for damages predicated on a breach
of the contract of transportation, as in the instant case, in view of the
provisions of Articles 2219 and 2220 of the New Civil Code. The exceptions
are (1) where the mishap results in the death of a passenger, and (2) where
it is proved that the carrier was guilty of fraud or bad faith, even if death does
not result. (Rex Taxicab Co., Inc. vs. Jose Bautista, et al., G. R. No. L-15392,
Sept. 30, 1960).
Civil Law; Damages; Attorney's fees, allowable in the discretion of the
court; Reason.—However, with respect to attorney's fee of P2,000.00, the
same need not be proved as herein petitioners contended. The same is
allowed in the discretion of the court after considering several factors which
are discernible from the facts brought out during the trial. In this case, plaintiff
was compelled to litigate and incur expenses in order to protect his interest.
Facts:
Esguerra boarded a bus owned by Phil Rabbit Bus Lines from Manila to
Pampanga. He boarded the said bus at the Manila terminal about four
o'clock in the afternoon of November 6, 1961, bound for San Fernando,
Pampanga. He sat at the left-end of the fourth row behind the driver, close to
he window.
As the bus approached barrio San Marcos, Calumpit, Bulacan, a freight truck
owned and operated by the Transport Contractors, Inc. was coming from the
opposite direction. The vehicles sideswiped each other. The window glass
near the driver's seat of the Rabbit Bus was detached and the left side of its
body was damaged. The left forearm of Patrocinio Esguerra was hit by a
hard blunt object, breaking the bones into small fragments while the soft
tissues of the muscles and the skin were mascerated. He was immediately
brought to the Bulacan Provincial Hospital in Malolos, Bulacan for treatment.
The left arm was amputated.
The trial court awarded Esguerra moral damages and attorney’s fees.
The Court of Appeals sentenced the Philippine Rabbit Bus Lines, Inc. to pay
solidarity the sum of P5,000.00 as moral damages and sentencing both
petitioners to pay respondent Patrocinio Esguerra the sum of P2,000.00 as
attorney's fees
Hence this petition.
Issue: WON the award of moral damages is proper.
Held:
No.
Petitioners, Philippine Rabbit Bus Lines, Inc. and Nicasio de los Reyes,
contend the that the award of P5,000.00 moral damages is contrary to law
and violates the prevailing jurisprudence; and that the award of P2,000.00
attorney's fees is bereft of legal and factual basis;
Petitioners aver that moral damages are not allowable against the carrier, if
ex-contracto, except when the mishap results in death and where it is proved
that the carrier was guilty of fraud or bad faith even if death did not result;
that as passenger Esguerra did not die and no fraud or bad faith had been
imputed, much less proved, against the carrier, they cannot be adjudged to
pay moral damages. Further, petitioners claim that there is no evidence
adduced by passenger Esguerra showing actual proof of expenses for
attorney's fees.
Court finds petition meritorious citing law and jurisprudence that Moral
damages are not recoverable in actions for damages predicated on a breach
of the contract of transportation, as in the instant case. The exceptions are
(1) where the mishap results in the death of a passenger, and (2) where it is
proved that the carrier was guilty of fraud or bad faith, even if death does not
result.
The Court of Appeals found that the two vehicles sideswiped each other at
the middle of the road. In other words, both vehicles were in their respective
lanes and that they did not invade the lane of the other. It cannot be said
therefore that there was fraud or bad faith on the part of the carrier’s driver.
This being the case, no moral damages are recoverable. However, with
respect to attorney's fee of P2,000.00, the same need not be proved as
herein petitioners contended. The same is allowed in the discretion of the
court after considering several factors which are discernible from the facts
brought out during the trial. In this case, plaintiff was compelled to litigate and
incur expenses in order to protect his interest.
BAGUMBAYAN CORPORATION, petitioner, vs.
 INTERMEDIATE APPELLATE COURT, LELISA SEÑA and ARTURO
SEÑA respondents.
G.R. No. L-66274 | September 30, 1984 | AQUINO, J.:
FACTS:
One night, Lelisa Sena and family went to see the Reycard Duet Show at the
Tropical Palace Hotel where they occupied a table and ordered drinks and
excitement was everywhere. When the waiter was going to serve the drinks,
the tray overturned drenching Lelisa destroying her dress, handbag and
shoes (Total Cost P1,000). She alleged that she was shocked and that
people were laughing at or pitying her. She had to go to the ladies’ room and
remove her dress and underwear. She returned to the table 30 minutes later
when the show had started.
Lelisa was claiming moral damages of P100,000 for herself and her husband
due to embarrassment and the fact that the management did not even
offer any apology on that night. She was claiming exemplary damages in
the same amount to teach the management a lesson.
Senas sued the corporation as employee of waiter (Cause of Action: QD
based on Art 2176 and 2180)
TC: Awarded P1,540 Actual (Outfit and tickets), P50,000 Moral, P10,000
Exemplary, P5,000 Atty Fees.
IAC: Modified. P15,000 Moral and P5,000 Exemplary.
The trial court sensibly noted that court action could have been avoided had
the matter been taken up directly with the corporation before the action was
filed. No extrajudicial demand preceded the action.
ISSUE: WON Moral Damages was properly awarded. NO MORAL
DAMAGES DENIED (Awarded P5,000 actual damages)
RATIO:
Case not specifically mentioned in Art 2219 (QD 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.
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.
Generally, there can be no recovery of moral damages if the case is
not mentioned in articles 2219 and 2220
Mental suffering means distress or serious pain as distinguished
from annoyance, regret or vexation. Mental anguish is intense
mental suffering
Generally, damages for mental anguish are limited to cases in which
there has been a personal physical injury or where the defendant
wilfully, 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
Where the act is wanton or willful there may be a recovery for
humiliation and mental suffering without any physical injury. It was
further held that in negligence cases, where there is no willful or
wanton wrong, there can be no recovery for mental suffering unless
there is also physical injury. (US Jurisprudence)
Equitable Bank Corp v. IAC
FACTS
Bank sued their debtors for the collection of the remaining P250 balance +
interest of their total P1000 debt. The debtor-respondents paid off the
balance a day after the suit was filed but without interest. By reason of the
payment, the lower court summarily dismissed the collection suit even before
sending summons to the parties.
Thereafter, the respondents sued the bank for malicious prosecution. They
claimed that the collection suit greatly disturbed them and caused them
mental anguish, besmirched reputation, wounded feelings, social humiliation
and sleepless nights. Lower court and IAC awarded moral and exemplary
damages of P40k and P6k AF and litigation expenses.
ISSUE
Was the award for moral damages proper
HELD
NO. IAC reversed and set aside. Case dismissed.
We hold that the trial court and the Appellate Court erred in holding that there
was malicious prosecution within the meaning of articles 2217 and 2219(8)
of the Civil Code. The action to collect the P250 was filed with uberrima
fides. It was not an act of malevolence designed to harass or embarrass. The
amount was overdue.
A long catena of cases supports the proposition that moral /damages are not
recoverable for unsuccessful suits filed in good faith. As observed by Chief
Justice Fernando, the expenses and annoyance of litigation form part of the
social burden of living in a society which seeks to attain social control
through law
Bank contends though that if anything, it should be the respondents who
should be liable for moral damages as they were motivated by malevolence
or ill-will in bringing this action. The dictates of justice do not sanction that
contention. As a rule, there should be no penalty on the right to litigate. The
bank's counterclaim is dismissed.
Tiburcio Guita v CA, Luz Soriano Haguisan and Cesar Benedicto
Haguisan
GR No. L-60409, November 11, 1985 | Plana, J.
Facts: Cesar Haguisan was a security guard of MMIC. All security guards
were subjected to psychiatric exam after death of MMIC GM. Haguisan was
found psychiatrically unfit for the job position of security guard. Based on the
psychiatric report, he was terminated.
Haguisan requested from Guita, the MMIC Admin Officer, a certification
regarding his service in order to look for another job. In the certificate, Guita
certified Haguisan was employed as security guard from 1956-1971 with a
monthly rate of P371.06 after he was found mentally unfit to work.
Haguisan and wife filed complaint for damages based on the alleged false
and derogatory statements regarding his mental state, which was designed
to ease Haguisan out of MMIC and ruin his chances of obtaining
employment elsewhere.
RTC: dismissed complaint, no malice in preparation of report
CA: affirmed dismissal, but Guita to pay P10k MD
Issue: WoN moral damages are recoverable
Held: No, Guita is not guilty of any wrongful act so he cannot be liable for
MD.
CA’s finding that Guita, in issuing the disputed certification, acted with
malice, is bereft of factual support.
Moral damages may be awarded to compensate one for diverse injuries
such as mental anguish, besmirched reputation, wounded feelings and social
humiliation. It is however not enough that such injuries have arisen; it is
essential that they have sprung from a wrongful act or omission of the
defendant which was the proximate cause thereof.
As to “ mental unfitness to work”, the certification should be read and
construed as a whole. So viewed, it is clear that the statement can refer only
to unfitness to work as security guard, for it was that position, and no other,
from which Haguisan was separated. The said position was the only subject
matter of the certification.
Finally, the certification was made by Guita upon the request of Haguisan
himself and was given to no one but the latter.
WHEREFORE, the decision under review is set aside. The trial court's
decision dismissing the complaint is reinstated.
LBC EXPRESS, INC., petitioner, vs. CA, ADOLFO M. CARLOTO, and
RURAL BANK OF LABASON, INC., respondents.
G.R. No. 108670 | September 21, 1994
FACTS: Private Respondent Adolfo Carloto, President-Manager of Rural
Bank of Labason, purchased a round trip plane ticket to Manila. He also
phoned his sister Elsie Carloto-Concha to send him P1K for his pocket
money in going to Manila and some rediscounting papers thru LBC Office at
Dipolog City. As instructed, Mrs. Concha consigned thru LBC Dipolog Branch
the pertinent documents and P1K.
The documents arrived without the cashpack. Respondent Carloto made
personal follow-ups at LBC's office in Cebu but petitioner failed to deliver to
him the cashpack. Consequently, he was compelled to go to Dipolog to claim
the money at LBC's office. His effort was once more in vain. He went back
LBC's office at Cebu City. He was, again, advised that the money has been
returned to LBC's office in Dipolog. Again, he demanded for the P1K and
refund of P49 LBC revenue charges. He received the money, only after
about a month, less the revenue charges.
Respondent Carloto claimed that because of the delay in the transmittal of
the cashpack, he failed to submit the rediscounting documents to Central
Bank on time (this is the business transaction he was supposed to do in
Manila). As a consequence, his rural bank was made to pay the Central Bank
P32K as penalty interest. He allegedly suffered embarrassment and
humiliation.
Petitioner LBC, on the other hand, alleged that the cashpack was forwarded
and delivered at respondent Carloto's residence. However, he was not
around to receive it. The delivery man served instead a claim notice to insure
he would personally receive the money. Notwithstanding the said notice,
respondent Carloto did not claim the cashpack at LBC Cebu. Hence, it was
returned to the shipper, Elsie Carloto-Concha at Dipolog City.
Claiming that petitioner LBC wantonly and recklessly disregarded its
obligation, respondent Carloto (and the bank) instituted an action for
Damages. He also prayed for the reimbursement of P32K.

TC and CA granted his petition, awarded moral damages in the amount of
P32K.
ISSUE: Whether or not the award of P32K was made with grave abuse of
discretion
HELD: YES.
The respondent court erred in awarding moral damages to the Rural Bank of
Labason, Inc., an artificial person. 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.
We can neither sustain the award of moral damages in favor of Carloto. The
right to recover moral damages is based on equity. Moral damages are
recoverable only if the case falls under Article 2219 of the Civil Code in
relation to Article 21.
Here, respondent Carloto is not without fault. He was fully aware that his
rural bank's obligation would mature on November 21, 1984 and his bank
has set aside cash for these bills payable. He was all set to go to Manila to
settle this obligation. He has received the documents necessary for the
approval of their rediscounting application with the Central Bank. He has also
received the plane ticket to go to Manila. Nevertheless, he did not
immediately proceed to Manila but instead tarried for days allegedly claiming
his P1K pocket money. Due to his delayed trip, he failed to submit the
rediscounting papers to the Central Bank on time and his bank was
penalized P32K.The undue importance given by him to his P1K pocket
money is inexplicable for it was not indispensable for him to follow up his
bank's rediscounting application with Central Bank. According to said
respondent, he needed the money to "invite people for a snack or dinner."
The attitude of said respondent speaks ill of his ways of business dealings
and cannot be countenanced by this Court. (HAHAHAHA)
We also hold that respondents failed to show that petitioner LBC's late
delivery of the cashpack was motivated by personal malice or bad faith,
whether intentional or thru gross negligence. Bad faith under the law cannot
be presumed; it must be established by clearer and convincing evidence.
Prescinding from these premises, the award of exemplary damages made by
the respondent court would have no legal leg to support itself. [Art 2232]
Exemplary damages may be awarded only if the defendant had acted in "a
wanton, fraudulent, reckless, oppressive, or malevolent manner." The
established facts of not so warrant the characterization of the action of
petitioner LBC.
IN VIEW WHEREOF, complaint dismissed.
LUFTHANSA GERMAN AIRLINE, petitioner,
vs.
COURT OF APPEALS and DON M. FERRY, respondents.
FACTS: Lufthansa was ordered by CA which affirmed the RTC in toto to pay
actual, moral, exemplary damages and attorney’s fees in favor of Don ferry.
Background: (Don Ferry) purchased from Lugthansa a San Francisco/ New
York/ Paris/ Frankfurt/Manila first class open dated ticket.
There was no carrier indicated for the San Francisco/New York/Paris
portions of the journey.
The carrier box for the Paris/ Frankfurt/Manila portion of the ticket
shows the letter "LH" which indicates Lufthansa agreed to fly those
portions or legs of his journey.
Don went to Lufthansa's San Francisco office allegedly to get Lufthansa to
endorse the San Francisco/New York portion of his journey to Trans World
Airlines. He was told by Mrs. Ingrid Egger Lufthansa's ticket agent in its San
Francisco office, that no endorsement was required or necessary and that he
should go back to TWA and request them to accept the ticket without any
endorsement.
Instead of going to TWA as advised, plaintiff requested Mrs. Egger
for a different routing which omitted the New York/Paris leg of his
original itinerary.
Said new routing would require the endorsement of the ticket.
Don could not wait so he settled on a new routing of
SanFrancisco/Frankfurt/Cologne/Frankfurt/Manila thereby omitting the New
York/Paris legs of his original itinerary. Mrs. Egger simplified matters by
indicating on the restriction box the phrase "LH only".
Don then went to Baden-Baden GmbH, a travel agency, to make
arrangements for his return to Manila on June 12,1985. Since no Lufthansa
flights were scheduled to leave for Manila on June 12, 1985; plaintiff made a
booking on a Cathay Pacific Airlines flight ("CPA") which was supposed to
leave the Frankfurt Airport for Hong Kong at noon at 12 June 1985.
When he got to the Frankfurt airport, the CPA ticket agent informed the
plaintiff that an endorsement from the defendant-appellant Lufthansa was
required for him to travel on CPA. SO Don went to meet with Miss Petra
Wilhelm, Lufthansa's ticket agent therein.
Miss Wilhelm reiterated Ms. Egger's previous advise that due to
 currency restrictions, authorization from Lufthansa's Manila office
was required before she could endorse plaintiffs ticket to CPA
The reason for the need to get an endorsement from Lufthansa's
Manila office and the procedure for obtaining such endorsement was
fully explained to the plaintiff-appellee for the second time by Miss
Wilhelm
Since it would take Miss Wilhelm sometime to communicate and
obtain the endorsement from the defendant's Manila office, it was
obvious at that time that plaintiff-appellee would be unable to board
the CPA flight which he booked. (*Don claims moral damages from
being humiliated in the Manner Wilhelm answered him)
Don was able to book upon his request, a Lufthansa flight to Bangkok and a
Thai airways flight from Bangkok to Manila
Don Ferry filed a complaint against Lufthansa on April 1,1986 in the Regional
Trial Court of Makati, for recovery of damages arising from breach of
contract.
TC and CA awarded damages to Don.
ISSUE: WON Lufthansa is liable for breach and what damages can be
awarded: - Yes, liable.
Ratio: Private respondent having previously obtained a flight confirmation
from a Lufthansa-appointed travel agent, there was no reason why the
Frankfurt Lufthansa office should not give the endorsement needed by
private respondent fly Cathay Pacific Airways (he booked via Baden-Baden
GMBH, a Lufthansa-appointed travel agent, authorized to make reservations
and confirmations). That confirmation necessarily carried with it the prior
approval of Lufthansa for private respondent to employ another airline so that
all that was needed was the actual, physical signification of said approval
through an endorsement which should have been given as a matter of
course. Petitioner's failure in this regard constituted breach of its contract of
carriage with private respondent.
The endorsement was not a requirement in his previous open ticket (at least
in the Frankfurt/Manila, but was subsequently being required because of the
added “FH Only” in the new arrangement.
On Damages: Where the defendant is not shown to have acted fraudulently
or in bad faith in breaching the contract, liability for damages is limited to the
natural and probable consequences of the breach of the obligation, and
which the parties had foreseen or could reasonably have foreseen. In such a
case, liability would not include the payment of moral and exemplary
damages.
No Moral Damages. The breach was not attended by fraud or bad faith,
however. When Petra Wilhelm; petitioner airline's ticket agent at its Frankfurt
Airport office, informed private respondent that an authorization from Manila
was needed before she could give an endorsement, what was foremost in
her mind was the policy regarding currency restrictions in effect at that time,
which was made known and explained to private respondent in San
Francisco. Apparently, the significance of the previously confirmed
reservation completely escaped Mrs. Wilhelm on that occasion. The
omission or failure of petitioner airline then to give private respondent the
required endorsement was thus evidently due to a misappreciation of the
significance of private respondent's previously confirmed reservation, and
not to any willful desire to deny private respondent the night to utilize another
airline.
No actual damages. The trial Court's award of actual damages for
unrealized profits in the amount of US$75,000.00, must also be disallowed,
private respondent's claim thereto being highly speculative.
"Actual or compensatory damages cannot be presumed, but must be duly
proved, and proved with reasonable degree of certainty. A court cannot rely
on speculations, conjecture or guesswork as to the fact and amount of
damages, but must depend upon competent proof that they have (been)
suffered and on evidence of the actual amount thereof.
BUT. Nominal Damages, yes! 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 the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered
An award of P20,000.00 for and as attorney's fees is likewise just and
equitable, private respondent having been compelled to incur expenses to
protect his interests.
Dispositive: WHEREFORE, the decision of the Court of Appeals in CA-G.R.
CV No. 22494 dated January 29, 1993 is hereby MODIFIED by the deletion
of the awards of actual, moral and exemplary damages, as well as the
interest thereon. Petitioner Lufthansa German Airlines is hereby ORDERED
to pay private respondent Don Ferry the amount of P50,000.00 as nominal
damages and the amount of P20,000.00 as and for attorney's fees. No
pronouncement as to costs.
D. NOMINAL DAMAGES
Art. 2216. No proof of pecuniary loss is necessary in order that moral,
nominal, temperate, liquidated or exemplary damages, may be adjudicated.
The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case.
Art. 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.
Art. 2222. The court may award nominal damages in every obligation arising
from any source enumerated in Article 1157, or in every case where any
property right has been invaded.
Art. 2223. The adjudication of nominal damages shall preclude further
contest upon the right involved and all accessory questions, as between the
parties to the suit, or their respective heirs and assigns.
July 11, 1956; EMERENCIANA M. VDA. DE MEDINA, ET AL., Plaintiffs-
Appellees, vs. GUILLERMO CRESENCIA, ET AL., Defendants.
GUILLERMO CRESENCIA, Appellant. REYES, J.B.L., J.:
FACTS:
May 31, 1953: A passenger jeepney driven by Brigido Avorque smashed into
a Meralco post resulting in the death of Vicente Medina, one of its
passengers. Guillermo Cresencia is the registered owner of the jeepney as
well as the registered operator. On the other hand, Rosario Avorque, after
the jeepney having been repeatedly sold from one buyer after another, is its
current absolute owner as well as the employer of driver Brigido. CFI:
compensatory-6K, moral 30K, exemplary 10K, nominal 10K, atty’s fee 5K.
ISSUES:
(1) Who should be held liable for the death of Medina – the
registered owner or the absolute owner?
(2) WON nominal damages should be awarded
HELD:
(1) The registered owner.
The requires the approval of the Public Service Commission in order that a
franchise, or any privilege pertaining thereto, may be sold or leased without
infringing the certificate issued to the grantee x x x As the sale of the jeepney
was admittedly without the approval of the Public Service Commission,
Guillermo Cresencia, who is the registered owner and operator thereof,
continued to be liable to the Commission and the public for the
consequences incident to its operation.
Also, Medina is not subsidiarily liable. Medina’s action for damages
is independent of the criminal case filed against Brigido Avorque,
and based, not on the employer’s subsidiary liability under the
Revised Penal Code, but on a breach of the carrier’s contractual
obligation to carry his passengers safely to their destination (culpa
contractual). And it is also for this reason that there is no need of first
proving the insolvency of the driver Brigido Avorque before damages
can be recovered from the carrier, for in culpa contractual, the
liability of the carrier is not merely subsidiary or secondary, but direct
and immediate (Articles 1755, 1756, and 1759, New Civil Code).
(2) NO.
Nominal damages cannot exist with compensatory damages. Purpose:
vindicate or recognize a right that has been violated, in order to preclude
further contest thereon; and not for the purpose of indemnifying the plaintiff
for any loss suffered by him. Where the court has already awarded
compensatory and exemplary damages that are in themselves a judicial
recognition that plaintiff’s right was violated, the award of nominal
damages is unnecessary and improper. Anyway, ten thousand pesos
cannot, in common sense, be deemed “nominal”. (Note: This was decided in
1956.)
NORTHWEST AIRLINES, INC., petitioner,
vs. NICOLAS L. CUENCA and COURT OF APPEALS (SPECIAL SIXTH
DIVISION), respondents.
GR L-22425 ; 31 Aug 1965 ; J. Concepcion
Facts: This case arose when R Cuenco, then Commissioner of Public
Highways, purchased a first class ticket from Manila to Tokyo via Petioner
Airlines (NAL) to attend an official conference at Tokyo. Cuenco paid in full
the price of the ticket. When he boarded NAL’s plane at Mla, he was seated
first class.
However, upon arrival at Okinawa, he was asked to transfer to the tourist
class, and when he refused, stating that he was an official of the Philippines
to said conference in Tokyo, he was rudely compelled to transfer to the
tourist class, in view of the other passengers. Hence, Cuenco filed an action
for damages against P NAL.
RTC: Awarded 20k moral damages, 5k exemplary damages, 2k atty fees
CA: 20k moral damages CONVERTED into NOMINAL DAMAGES
Issue: WON award of nominal damages was correct
Held: Yes
Ratio: Although P Cuenco’s ticket bore the marks “W/L”, meaning
“waitlisted”, P Cuenco was entitled to believe that his seat was already
confirmed, considering that he has already paid the ticket in full, and he was
allowed to take such seat when he boarded the plane at Manila. Also, NAL
was already informed about R Cuenca’s OFFICIAL GOVERNMENTAL
BUSINESS at Tokyo. Still, he was rudely compelled to transfer to the tourist
class, without even an explanation as to why he had to transfer, or if there
was someone to replace him at his seat who had a better right to said seat.
Since the offense had been committed with full knowledge of the fact
that respondent was an official representative of the Republic of the
Philippines, the sum of P20,000 awarded as damages may well be
considered as merely nominal.
Cogeo-Cubao Operators and Drivers Assoc. vs CA
FACTS: A certificate of public convenience to operate a jeepney service was
ordered to be issued in favor of Lungsod Silangan to ply the Cogeo-Cubao
route sometime in 1983. On the other hand, defendant-Association was
registered as a non-stock, non-profit organization with the main purpose of
representing plaintiff-appellee for whatever contract and/or agreement it will
have regarding the ownership of units, and the like.
Perturbed by plaintiffs' Board Resolution No. 9 adopting a Bandera' System
under which a member of the cooperative is permitted to queue for
passenger at the disputed pathway in exchange for the ticket worth twenty
pesos, the proceeds of which shall be utilized for Christmas programs of the
drivers and other benefits, and on the strength of defendants' registration as
a collective body with the Securities and Exchange Commission, defendants-
appellants, led by Romeo Oliva decided to form a human barricade and
assumed the dispatching of passenger jeepneys. This development as
initiated by defendants-appellants gave rise to the suit for damages.
Defendant-Association's Answer contained vehement denials to the
insinuation of take over and at the same time raised as a defense the
circumstance that the organization was formed not to compete with plaintiff-
cooperative. It, however, admitted that it is not authorized to transport
passengers.
TC: In favor of respondent Lungsod Corp.,
1. Ordering defendants to pay plaintiff the amount of
P50,000.00 as actual damages;
2. Ordering the defendants to pay the plaintiffs the amount of
P10,000.00 as attorney's fees.
CA: Affirming the findings of the trial court except with regard to the award of
actual damages in the amount of P50,000.00 and attorney's fees in the
amount of P10,000.00. The Court of Appeals however, awarded nominal
damages to petitioner in the amount of P10,000.00.
ISSUE: WON petitioner usurped the property right of the respondent which
shall entitle the latter to the award of nominal damages.
HELD: We find the petition devoid of merit.
In the instant case, a certificate of public convenience was issued to
respondent corporation on January 24, 1983 to operate a public utility
jeepney service on the Cogeo-Cubao route. A certification of public
convenience is included in the term "property" in the broad sense of the term.
Under the Public Service Law, a certificate of public convenience can be sold
by the holder thereof because it has considerable material value and is
considered as valuable asset. Although there is no doubt that it is private
property, it is affected with a public interest and must be submitted to the
control of the government for the common good.
In the case at bar, the trial court found that petitioner association forcibly took
over the operation of the jeepney service in the Cogeo-Cubao route without
any authorization from the Public Service Commission and in violation of the
right of respondent corporation to operate its services in the said route under
its certificate of public convenience.
Although there is no question that petitioner can exercise their constitutional
right to redress their grievances with respondent Lungsod Corp., the manner
by which this constitutional right is to be, exercised should not undermine
public peace and order nor should it violate the legal rights of other persons.
Article 21 of the Civil Code provides that any person who wilfully causes loss
or injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage. The provision
covers a situation where a person has a legal right which was violated by
another in a manner contrary to morals, good customs or public policy. It
presupposes loss or injury, material or otherwise, which one may suffer as a
result of such violation. It is clear from the facts of this case that petitioner
formed a barricade and forcibly took over the motor units and
personnel of the respondent corporation. This paralyzed the usual
activities and earnings of the latter during the period of ten days and
violated the right of respondent Lungsod Corp. To conduct its operations
thru its authorized officers.
No compelling reason exists to justify the reversal of the ruling of the
respondent appellate court in the case at bar. Article 2222 of the Civil Code
states that the court may award nominal damages in every obligation arising
from any source enumerated in Article 1157, or in every case where any
property right has been invaded. Considering the circumstances of the case,
the respondent corporation is entitled to the award of nominal damages.
ACCORDINGLY, the petition is DENIED and the assailed decision of the
respondent appellate court dated May 27, 1991 is AFFIRMED.
.
E. TEMPERATE OR MODERATE DAMAGES
Art. 2224. Temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount can not,
from the nature of the case, be provided with certainty.
Art. 2225. Temperate damages must be reasonable under the
circumstances.
LEOPOLDA ARANETA VS BANK OF AMERICA
FACTS:
Petitioner was a local merchant engaged in the import and export business.
He issued a check of $500 payabanle to cash and drawn against San
Francisco main office of the Bank of America, where he had been
maintaining a dollar currect account. At that time he had a credit balance.
However, when the check was received by the bank, a day after the date of
the letter, it was dishonered with notation “Account Closed”
When he inquired, bank acknowledged that it was an error, explaining that
for some reason the check had been encoded with wrong account number
and promising to make every effort to see that this does not reoccur. Bank
sent apology to payee, a Mr. Gregory of HK, stating that the check was
returned through an error on their part and should not reflect adversely upon
Mr. Araneta. However, the same thing happened. TWICE.
One of the checks was actually paid by the Bank to the First National City
Bank. However, the Bank claimed that the payment had been inadvertenylu
made, returned the check the First National wiuth request that the amount be
st
credited back to the Bank. The 1 National wrote to the depositor of the
check, Saldana, informing her about its return with the notion “Account
Closed” and asking her consent to the deduction of its amount from her
deposit. But before Mrs Saldana’s reply could be received, the Bank recalled
st
the check from 1 National and honored it.
Araneta then demanding $20k as damages. But bank said it was too much
and that $2k should be the damages. But it was rejected. Araneta then filed
recovery against the Bank for the ff:
1. Actual or compensatory damages P30,000.00
2. Moral damages 20,000.00
3. Temperate damages 50,000.00
4. Exemplary damages 10,000.00
5. Attorney's fees 10,000.00
TOTAL P120,000.00
TC awarded all items prayed for but on appeal, eliminated the award of
compensatory and tempreate damages and reduced moral damages to P8k,
exemplary P1k and atty’s fees to P1k
ISSUE: WON there is reason to conlude that the petitioner did sustain
some pecuniary loss although no sufficient proof of the amount has
been adduced
HELD:
The financial credit of a businessman is a prized and valuable asset, it being
a significant part of the foundation of his business. Any adverse reflection
constitutes some material loss to him. Jurisprudence states that it can hardly
be possible that a customer’s check can be wrongfully refused payment
without some impeachment of his credit, which must in fact be an actual
injury, though he cannot, from the nature of the case, furnish independent,
distinct proof thereof.
The Code Commission in explaining the concept of temperate damages
under 2224, states that in some states, temperate damages are allowed.
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.
SC found petitioner a mercant of long standing and good reputation in the
Phils. SC hled that his claim for temperate damages is legally justified.
Considering everything, even if rectification came after the damage had been
cause, an award of P5k by way of temperate damages is sufficient.
(ANOTHER ISSUE) Petitioner contends that moral damages should have
been granted for the injury to his business standing, separately from his
woulded feelings and mental anguish. True, under CC 2217, “bescmirched
reputation” is a ground upon which moral damages may be claimed/, but the
CA did take this element into consideration in adjuging P8k.
TC awarded atty’s fees of P10k. It was reduced by CA to only P1k.
Considering the nature and extent of services rendered, the amount shouls
be increased to P4k. This may be motu proprio by the Court under CC2208
which provides that atty’s fees may be recovered in the instances
enumerated and “in any other case where the Court deems, it first and
equitable that atty’s fees should be recovered,” provided the amount be
reasonable in all cases.
WHEREFORE, the judgment of the Court of Appeals is modified by awarding
temperate damages to the petitioner in the sum of P5,000 and increasing the
attorney's fees to P4,000; and is affirmed in all other respects. Costs against
the respondent
THE MANILA BANKING CORPORATION, petitioner, vs. INTERMEDIATE
APPELLATE COURT AND WILFREDO J. RIVERA, respondents.
G.R. No. L-66123 || August 22, 1984 || RELOVA, J.:
FACTS:

PR deposited with P P80,189.19. On the same day, he issued a check
payable to Collins with whom he had a business transaction. However,
Collins sent PR a demand letter saying that the check was dishonored. Upon
receipt of the letter, PR complained to P with regard to the dishonor of the
check. After investigation by the bank's PRO, it was found that the money
deposited was credited into another account. But then, in four hours the
mistake was rectified.
PR now claims for damages:
1) P75,000.00 as actual damages, to compensate plaintiff for
the loss of business and business opportunities;
2) P25,000.00 as moral damages, to compensate plaintiff for
the embarrassment, humiliation and mental anguish
suffered;
3) P10,000.00 as exemplary damages;
4) P25,000.00 as and for attorney's fees; and
5) Cost of suit.
IAC: eliminated actual damages (no proof), awarded P10,000.00 as
temperate damages and P15,000.00 for atty's fees; affirmed as to moral
damages and exemplary damages.
P contested the award for damages
ISSUE: W/N the award of damages was proper
RATIO:
Moral damages: Not entitled to it bcause the mistake was immediately
rectified and Collins was paid the full amount.
Temperate/ Moderate damages: proper not for indemnification of loss
suffered but for the vindication or recognition of a right violated or invaded.
Considering the facts of the case under appeal, the sum of P5,000.00 as
temperate or moderate damages would suffice, plus attorney's fees of
P5,000.00.
WHEREFORE, the judgment appealed from is modified in the sense that
petitioner bank is hereby sentenced to pay private respondent Wilfredo J.
Rivera the sums of P5,000.00, as temperate or moderate damages and
P5,000.00, as attorney's fees, apart from the costs.
PEOPLE VS EDILBERTO AND JOSE TORRES
G.R. No. 176262 || September 11, 2007 || CHICO-NAZARIO, J:
FACTS:
The defendants were found guilty of the crime of murder and was sentenced
to reclusion perpetua. (Actually, ito lang yung mahalaga. Haha.)
Background: Witness was passing through a rice field. He saw defendants
(and Rodolfo Torres who is still at-large) attacking the victim Noel Yumang.
While Rodolfo held both arms of Noel behind his back, Edilberto seized
Noel's head and stabbed him on the neck.
TC convicted the appellants of murder, qualified by treachery and imposed
upon each of them the penalty of reclusion perpetua. Damages: P60,000.00
as civil indemnity, P50,000.00 as moral damages and P20,000.00 as
exemplary damages, and to pay the costs.
ISSUE: W/N the appelants are liable for damages – YES (Actually, wala
talagang issue as to damages kasi ang focus talaga is yung murder. Minodify
lang ng Court yung award of damages ng LC)
RATIO:
SC affirmed the penalty imposed and the P50,000.00 moral damages.
However, the civil indemnity in the amount of P60,000.00 needs to be
reduced to P50,000.00 in accordance with the prevailing jurisprudence.
The award of exemplary damages is likewise in order, since the qualifying
circumstance of treachery was proven. When a crime is committed with an
aggravating circumstance, either qualifying or generic, an award of
P25,000.00 as exemplary damages is justified under Article 2230 of the New
Civil Code. This kind of damage is intended to serve as deterrent to serious
wrongdoings, and as a vindication for undue sufferings and wanton invasion
of the rights of an injured or as punishment for those guilty of outrageous
conduct.
The award of temperate damages in the amount of P25,000.00 to
the heirs of the victim is justified. Temperate damages are awarded where no
documentary evidence of actual damages was presented in the trial because
it is reasonable to presume that, when death occurs, the family of the victim
incurred expenses for the wake and funeral.
ROGELIO E. RAMOS and ERLINDA RAMOS, in their own behalf and as
natural guardians of the minors, ROMMEL RAMOS, ROY RODERICK
RAMOS and RON RAYMOND RAMOS, petitioners, vs. COURT OF
APPEALS, DELOS SANTOS MEDICAL CENTER (DLSMC), DR. ORLINO
HOSAKA and DRA. PERFECTA GUTIERREZ, respondents (1999; J.
Kapunan; GR No. 124354)
**We took this up already!
Erlinda Ramos underwent an operation on June 17, 1985 for the removal of
a stone in her gall bladder. Something went wrong during the intubation.
Thus, Erlinda stayed at the ICU for a month.
- During the whole period of her confinement, she incurred hospital
bills amounting to P93,542.25 which is the subject of a promissory
note and affidavit of undertaking executed by Rogelio, Erlinda’s
husband, in favor of De Los Santos Medical Center (DLSMC).
- Since the operation, she has been in a comatose condition. She is
living on mechanical means. She suffered brain damage as a result
of the absence of oxygen in her brain for four to five minutes.
- After being discharged from the hospital, she has been staying in
their residence, still needing constant medical attention, with her
husband Rogelio incurring a monthly expense ranging from
P8,000.00 to P10,000.00.
- She was also diagnosed to be suffering from "diffuse cerebral
parenchymal damage"
Petitioners filed a civil case for damages with the RTC of QC against private
respondents alleging negligence in the management and care of Erlinda
Ramos.
RTC: in favor of petitioners; damages awarded as follows:
1) P8,000.00 as actual monthly expenses for the plaintiff Erlinda Ramos
reckoned from Nov. 15, 1985 or in the total sum of P632,000.00 as of April
15, 1992, subject to its being updated;
2) P100,000.00 as reasonable attorney's fees;
3) P800,000.00 by way of moral damages and the further sum of
P200,000,00 by way of exemplary damages; and,
4) the costs of the suit.
CA: reversed RTC; directed petitioners to pay their unpaid medical bills
amounting to P93,542.25 to private respondents
Re. Compensatory/Actual and Temperate Damages
The trial court awarded a total of P632,000.00 pesos (should be
P616,000.00) in compensatory damages to the plaintiff, "subject to its being
updated" covering the period from 15 Nov. 1985 up to 15 April 1992, based
on monthly expenses for the care of the patient estimated at P8,000.00.
At current levels, the P8000/monthly amount established by the trial court at
the time of its decision would be grossly inadequate to cover the actual costs
of home-based care for a comatose individual. The calculated amount was
not even arrived at by looking at the actual cost of proper hospice care for
the patient. What it reflected were the actual expenses incurred and proved
by the petitioners. And yet ideally, a comatose patient should remain in a
hospital or be transferred to a hospice specializing in the care of the
chronically ill.
Given these considerations, the amount of actual damages recoverable
in suits arising from negligence should at least reflect the correct
minimum cost of proper care, not the cost of the care the family is
usually compelled to undertake at home to avoid bankruptcy. However,
the provisions of the Civil Code on actual or compensatory damages present
us with some difficulties (see CC 2199).
Our rules on actual or compensatory damages generally assume that at
the time of litigation, the injury suffered as a consequence of an act of
negligence has been completed and that the cost can be liquidated.
However, these provisions neglect to take into account those
situations, as in this case, where the resulting injury might be
continuing and possible future complications directly arising from the
injury, while certain to occur, are difficult to predict.
In these cases, the amount of damages which should be awarded
should be one which compensates for pecuniary loss incurred and
proved, up to the time of trial; and one which would meet pecuniary
loss certain to be suffered but which could not, from the nature of the
case, be made with certainty. In other words, temperate damages can
and should be awarded on top of actual or compensatory damages in
instances where the injury is chronic and continuing.
As it would not be equitable for the victim in such cases to constantly come
before the courts and invoke their aid in seeking adjustments to the
compensatory damages previously awarded — temperate damages are
appropriate. The amount given as temperate damages, though to a
certain extent speculative, should take into account the cost of proper
care.
In this case, petitioners were able to provide only home-based nursing care
for a comatose patient who has remained in that condition for over a decade.
Having premised our award for compensatory damages on the amount
provided by petitioners at the onset of litigation, it would be now much more
in step with the interests of justice if the value awarded for temperate
damages would allow petitioners to provide optimal care for their loved one
in a facility which generally specializes in such care. Under the
circumstances, an award of P1.5M in temperate damages would be
reasonable.
Re. Moral Damages

Valenzuela vs. CA: Plaintiff’s leg was amputated. Court awarded 1M in moral
damages because expenses were difficult to estimate (while they would have
been a direct result of the injury [amputation], and were certain to be incurred
by the plaintiff, they were likely to arise only in the future {like Erlinda’s
case}).
The injury suffered by Erlinda as a consequence of private respondents'
negligence is certainly much more serious than the amputation in the
Valenzuela case. Furthermore, the husband and the children will have to live
with the day to day uncertainty of the patient's illness, knowing any hope of
recovery is close to nil. The family's moral injury and suffering in this case is
clearly a real one. Thus, an award of P2M in moral damages would be
appropriate.
Re. Exemplary Damages
By way of example, exemplary damages in the amount of P100,000.00 are
hereby awarded.
Re. Attorney’s Fees
Considering the length and nature of the instant suit, attorney's fees valued
at P100,000.00 are proper.
===
Final award of damages:
1) P1,352,000.00 as actual damages computed as of the date of
promulgation of this decision plus a monthly payment of P8,000.00 up to the
time that petitioner Erlinda Ramos expires or miraculously survives;
2) P2,000,000.00 as moral damages;
3) P1,500,000.00 as temperate damages;
4) P100,000.00 each as exemplary damages and attorney's fees; and,
5) the costs of the suit.
TAN v OMC CARRIERS and ARAMBALA
12 January 2011 || Brion
FACTS
November 24, 1995, at around 6:15 a.m., Arambala was driving a truck with
a trailer owned by OMC, along Meralco Road, Sucat, Muntinlupa City. When
truck lost its brakes, he and his companion jump out. Driverless, the truck
rammed into the house and tailoring shop of P killing her husband Celedonio
who was in the doorway.
Ps claimed OMC’s gross negligence in not properly maintaining the truck,
and Arambala’s recklessness when he abandoned the moving truck. Thus,
they claimed that the Rs should be held jointly and severally liable for actual
damages, which include damage to properties, funeral expenses, as well as
the loss of his earning capacity. The petitioners also asked for moral and
exemplary damages, and attorney’s fees.
Rs claimed defense of fortuitous event: truck skidded due to spilled motor oil
on the road.
RTC ruled for P, based on res ipsa loquitur. RTC did not agree with fortuitous
event, pointing out that even with oil on the road, Arambala did not slow
down or take any precautionary measure. The oil on the road did not explain
why the truck lost its brakes. OMC should have a more rigid inspection of the
truck. RTC, held Rs jointly and severally liable based on vicarious liability in
NCC 2180. Awarded:
1. P50,000.00 for the death of Celedonio Tan;
2. P500,000.00 for loss of earning capacity of Celedonio, plus
interest from death
3. P355,895.00 as actual damages;
4. P500,000.00 as moral damages;
5. P500,000.00 as exemplary damages; and
6. P500,000.00 as attorney’s fees.
CA affirmed but reduced actual damages to P72,295.00 based on official
receipts. Deleted award for loss of earning capacity. Ps failed to substantiate
Celedonio Tan’s claimed earning capacity with reasonable certainty; no
documentary evidence was ever presented apart from Leticia’s self-serving
testimony. Reduced exemplary damages to P200,000.00, and deleted the
award of attorney’s fees because the RTC merely included the award in the
dispositive portion of the decision without discussing its legal basis.
ISSUES
1. WON CA erred when it reduced actual damages. (P: Since the
damages primarily refer to the value of their destroyed property, and
not the cost of repairing or replacing them, the value cannot be
evidenced by receipts) – NO, BUT TEMPERATE DAMAGES GIVEN
2. WON Ps entitled to damages for the loss of Celedonio Tan’s earning
capacity. (P: Celedonio Tan was undisputably a self-employed tailor
who owned a small tailor shop; in his line of work, no documentary
evidence is available) – NOT BUT TEMPERATE DAMAGES GIVEN
3. WON Ps are entitled to exemplary damages of P500,000.00 (P: RTC
and CA consistently found that the collision was caused by the Rs
gross negligence and they acted with bad faith when they fabricated
the "oil slick on the road" story which was disputed by investigating
policemen) – NO CA REDUCTION PROPER
 4. WON Ps are entitled to attorney’s fees
RULING
1. Actual damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of
certainty. Courts cannot simply rely on speculation, conjecture or
guesswork in determining the fact and amount of 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. Ps do
not deny that they did not submit any receipt. Thus, no actual
damages can be awarded. But temperate damages may be allowed
in cases where definite proof of pecuniary loss cannot be adduced
although the court is convinced that the aggrieved party suffered
some pecuniary loss. Based on NCC 2244. In this case, photos of
damage were given as proof of loss, but these fail to show pecuniary
value, so temperate damages lang pwede.
2. As a rule, documentary evidence should be presented to substantiate the
claim for loss of earning capacity. By way of exception, damages for loss of
earning capacity may be awarded despite the absence of documentary
evidence when: (1) the deceased is self-employed and earning less than the
minimum wage under current labor laws, in which case, judicial notice may
be taken of the fact that in the deceased's line of work, no documentary
evidence is available; or (2) the deceased is employed as a daily wage
worker earning less than the minimum wage under current labor laws.
According to the petitioners, prior to his death, Celedonio was a self-
employed tailor who earned approximately P156,000.00 a year,
or P13,000.00 a month. At the time of his death in 1995, the prevailing daily
minimum wage was P145.00,29 or P3,770.00 per month. Even if we take
judicial notice of the fact that a small tailoring shop normally does not issue
receipts to its customers, and would probably not have any documentary
evidence of the income it earns, Celedonio’s alleged monthly income
of P13,000.00 greatly exceeded the prevailing monthly minimum wage; thus,
the exception does not apply.
In the present case, the income-earning capacity of the deceased was never
disputed. Considering the minor children of the deceased who relied on him
and taking into account the unrebutted annual earnings of the deceased, we
hold that the petitioners are entitled to temperate damages in the amount
ofP300,000.00 [or roughly, the gross income for two (2) years]
3. Celedonio Tan’s death and the destruction of the P’s home and
tailoring shop were unquestionably caused by the R’s gross
negligence. The law allows the grant of exemplary damages in cases
such as this to serve as a warning to the public and as a deterrent.
The grant, however, should be tempered, as it is not intended to
enrich one party or to impoverish another. CA’s reduction proper.
4. Because of award of exemplary damages, we find the award of attorney’s
fees, equivalent to 10% of the total amount adjudged the petitioners, to be
just and reasonable under the circumstances.
Legal interest at the rate of 6% per annum on the amounts awarded starts to
run from May 14, 2003, when the trial court rendered judgment. From the
time this judgment becomes final and executory, the interest rate shall be
12% per annum on the judgment amount and the interest earned up to that
date, until the judgment is wholly satisfied.
FINAL AWARDS:
(1) P50,000.00 as indemnity for the death of Celedonio Tan;
(2) P72,295.00 as actual damages for funeral expenses;
(3) P200,000.00 as temperate damages for the damage to property;
(4) P300,000.00 as damages for the loss of Celedonio Tan’s earning
capacity;
(5) P500,000.00 as moral damages;
(6) P200,000.00 as exemplary damages; and
(7) 10% of the total amount as attorney’s fees; and costs of suit.
F. LIQUIDATED DAMAGES
Art. 2226. Liquidated damages are those agreed upon by the parties to a
contract, to be paid in case of breach thereof.
Art. 2227. Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or unconscionable.
Art. 2228. When the breach of the contract committed by the defendant is
not the one contemplated by the parties in agreeing upon the liquidated
damages, the law shall determine the measure of damages, and not the
stipulation.
NATIONAL POWER CORPORATION, Plaintiff-Appellant, v. NATIONAL
MERCHANDISING CORPORATION and DOMESTIC INSURANCE
COMPANY OF THE PHILIPPINES, Defendants-Appellants.
[G.R. Nos. L-33819 and L-33897. October 23, 1982.]
FACTS:
- On October 17, 1956, the National Power Corporation and National
Merchandising Corporation (Namerco) of 3111 Nagtahan Street,
Manila, as the representative and agent of the International
Commodities Corporation of 11 Mercer Street, New York City,
executed in Manila a contract for the purchase by the NPC from the
New York firm of four thousand long tons of crude sulfur for its Maria
Cristina Fertilizer Plant in Iligan City at a total price of (450,716. On
 that same date, a performance bond in the sum of P90,143.20 was
executed by the Domestic Insurance Company in favor of the NPC
to guarantee the seller’s obligations.
- It was stipulated in the contract of sale that the seller would deliver
the sulfur at Iligan City within sixty days from notice of the
establishment in its favor of a letter of credit for $212,120 and that
failure to effect delivery would subject the seller and its surety to the
payment of liquidated damages at the rate of two-fifth of one percent
of the full contract price for the first thirty days of default and four-fifth
of one percent for every day thereafter until complete delivery is
made
- In a letter dated November 12, 1956, the NPC advised John Z.
Sycip, the president of Namerco, of the opening on November 8 of a
letter of credit for $212,120 in favor of International Commodities
Corporation which would expire on January 31, 1957 (Exh. I). Notice
of that letter of credit was, received by cable by the New York firm on
November 15, 1956 (Exh. 80-Wallick). Thus, the deadline for the
delivery of the sulfur was January 15, 1957.
- The New York supplier was not able to deliver the sulfur due to
its inability to secure shipping space. During the period from
January 20 to 26, 1957 there was a shutdown of the NPC’s fertilizer
plant because there was no sulfur. No fertilizer was produced
- The Government Corporate Counsel in his letter to Sycip dated May
8, 1957 rescinded the contract of sale due to the New York supplier’s
non-performance of its obligations. The same counsel in his letter of
June 8, 1957 demanded from Namerco the payment of P360,572.80
as liquidated damages. He explained that time was of the essence of
the contract. A similar demand was made upon the surety.
- The liquidated damages were computed on the basis of the 115-day
period between January 15, 1957, the deadline for the delivery of the
sulfur at Iligan City, and May 9, 1957 when Namerco was notified of
the rescission of the contract, or P54,085.92 for the first thirty days
and P306,486.88 for the remaining eighty-five days. Total:
P360,572.80.
- On November 5, 1957, the NPC sued the New York firm, Namerco
and the Domestic Insurance Company for the recovery of the
stipulated liquidated damages (Civil Case No. 33114)
- RTC: The trial court reduced the liquidated damages to twenty
percent of the stipulated amount (P45,100). The NPC contends the it
is entitled to the full amount of liquidated damages in the sum of
P360,572.80.
- CA affirmed
ISSUE:
- [Topic] WON liquidated damages may be awarded, and from when
should it be computed
RULING:
- The rule relied upon by the defendants that every person dealing
with an agent is put upon inquiry and must discover upon his peril
the authority of the agent would apply in this case if the principal is
sought to be held liable on the contract entered into by the agent.
That is not so in this case. Here, it is the agent that sought to be held
liable on a contract of sale which was expressly repudiated by the
principal because the agent took chances, it exceeded its authority,
and, in effect, it acted in its own name.
- Manresa says that the agent who exceeds the limits of his authority
is personaly liable “porque realmente obra sin poderes” and the third
person who contracts with the agent in such a case would be
fedrauded if he would not be allowed to sue the agent.
- That rule is complemented by Art. 1898 of the Civil Code, which
states that “if the agent contracts in the name of the principal,
exceeding the scope of his authority, and the principal does not ratify
the contract, it shall be void if the party with whom the agent
contracted is aware of the limits of the powers granted by the
principal.” As priorly discussed, Namerco, as agent, exceeded the
limits of its authority in contracting with the NPC in the name of its
principal. The NPC was unaware of the limitations on the powers
granted by the New York firm to Namerco.
- No proof of pecuniary loss is required for the recovery of liquidated
damages. The stipulation for liquidated damages is intended to
obviate controversy on the amount of damages. There can be no
question that the NPC suffered damages because its production of
fertilizer was disrupted or diminished by reason of the nondelivery of
the sulfur. The parties foresaw that it might be difficult to ascertain
the exact amount of damages for nondelivery of the sulfur. So, they
fixed the liquidated damages to be paid as indemnity to the NPC.
- As to the contention that the damages should be computed on the
basis of forty-five days, the period required by a vessel leaving
Galveston, Texas to reach Iligan City, that point need not be
resolved in view of our conclusion that the liquidated damages
should be equivalent to the amount of the bidder’s bond posted by
Namerco.
- In reducing the liquidated damages, the trial court relied on article
2227 of the Civil Code which provides that "liquidated damages,
whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable."
- Apparently, the trial court regarded as an equitable consideration the
persistent efforts of Namerco and its principal to charter a steamer
and that the failure of the New York firm to secure shipping space
was not attributable to its fault or negligence.
 - The trial court also took into account the fact that the selling price of
the sulfur was P450,716 and that to award as liquidated damages
more than eighty percent of the price would not be altogether
reasonable.
- The NPC contends that Namerco was an obligor in bad faith and,
therefore, it should be responsible for all damages which could be
reasonably attributed to its nonperformance of the obligation as
provided in article 2201 of the Civil Code.
- On the other hand, the defendants argue that Namerco having acted
as a mere agent, was not liable for the liquidated damages stipulated
in the alleged unenforceable contract of sale; that, as already noted,
Namerco’s liability should be based on tort or quasi-delict and not on
the contract of sale; that if Namerco is not liable, then the insurance
company, its surety, is likewise not liable; that the NPC is entitled
only to nominal damages because it was able to secure the sulfur
from another source (58-59 tsn November 10, 1960) and that the
reduced award of stipulated damages is highly iniquitous,
considering that Namerco acted in good faith and that the NPC did
not suffer any actual damages.
- These contentions have already been resolved in the preceding
discussion. We find no sanction or justification for NPC’s claim that it
is entitled to the full payment of the liquidated damages computed by
its official.
Ruling on the amount of damages. — A painstaking evaluation of the equities
of the case in the light of the arguments of the parties as expounded in their
five briefs leads to the conclusion that the damages due from the defendants
should be further reduced to P45,100 which is equivalent to their bidder’s
bond or to about ten percent of the selling price of the sulfur
TITAN CONSTRUCTION CORPORATION, Petitioner, vs. UNI-FIELD
ENTERPRISES, INC., Respondent.
March 1, 2007 (Carpio, J.)
FACTS
Titan purchased on credit various construction supplies and materials from
Uni-Field. Out of P7,620,433.12 total purchase price, petitioner was only able
to pay P6,215,795.70, leaving a balance of P1,404,637.42. The balance
remain unpaid despite demand so Uni-Field filed a compaint for collection of
sum of money with damages against Titan. Titan filed a counterclaim.
TC rendered judgment in favor of Uni-Field. It ordered Titan to pay Uni-Field
liquidated damages - P324,147.94, aside from the principal amount
(P1,404,114.00), interest charges (P504,114.00 plus accrued interest
charges at 24% per annum compounded yearly reckoned from July 1995 up
to the time of full payment), attorney's fees (25% of whatever amount is due
and payable and accumulated appearance fees at P1,000.00 per hearing)
and costs of suit.
CA affirmed TC.
Titan contends that the TC and CA had no legal basis to award interest,
liquidated damages, and attorney’s fees because the delivery receipts and
sales invoices, which served as the basis for the award, were not formally
offered as evidence by Uni-Field. It also alleges that the delivery receipts and
sales invoices were in the nature of contracts of adhesion and Titan had no
option but to accept the conditions imposed by respondent.
ISSUE relevant to damages:
W/N there is legal basis to award interest, liquidated damages, and
attorney’s fees in favor of Uni-Field
RULING
Yes.
The delivery receipts and sales invoices (which formed part of Titan's formal
offer of evidence) expressly stipulated the payment of interest, liquidated
damages, and attorney’s fees in case of overdue accounts and collection
suits. Titan did not only bind itself to pay the principal amount, it also
promised to pay (1) interest of 24% per annum on overdue accounts,
compounded with the principal obligations as they accrue; (2) 25% liquidated
damages based on the outstanding total obligation; and (3) 25% attorney’s
fees based on the total claim including liquidated damages. Since petitioner
freely entered into the contract, the stipulations in the contract are binding on
petitioner. Thus, the TC and CA did not err in using the delivery receipts and
sales invoices as basis for the award of interest, liquidated damages, and
attorney’s fees.
On the allegation that the delivery receipts and sales invoices are in the
nature of contracts of adhesion, contracts of adhesion are as binding as
ordinary contracts. Considering that Titan and Uni-Field have been doing
business from 1990 to 1993 and that Titan is not a small time construction
company, Titan is "presumed to have full knowledge and to have acted with
due care or, at the very least, to have been aware of the terms and
conditions of the contract." Moreover, Titan failed to show that in its
transactions with Uni-Field it was the weaker party or that it was compelled to
accept the terms imposed by the respondent. The Court then upheld the
validity of the contract between the two parties.
DISCUSSION ON THE AWARD OF ATTY'S FEES IN RELATION TO
LIQUIDATED DAMAGES
Reduced by the court.

The law allows a party to recover attorney’s fees under a written
agreement. In Barons Marketing Corporation v. Court of Appeals, the Court
ruled that: "The attorney’s fees here are in the nature of liquidated damages
and the stipulation therefor is aptly called a penal clause. It has been said
that so long as such stipulation does not contravene law, morals, or public
order, it is strictly binding upon defendant. The attorney’s fees so provided
are awarded in favor of the litigant, not his counsel."
On the other hand, the law also allows parties to a contract to stipulate on
liquidated damages to be paid in case of breach. A stipulation on liquidated
damages is a penalty clause where the obligor assumes a greater liability in
case of breach of an obligation. The obligor is bound to pay the stipulated
amount without need for proof on the existence and on the measure of
damages caused by the breach.
Articles 1229 and 2227 NCC empower the courts to reduce the penalty if it is
iniquitous or unconscionable. The determination of whether the penalty is
iniquitous or unconscionable is addressed to the sound discretion of the
court and depends on several factors such as the type, extent, and purpose
of the penalty, the nature of the obligation, the mode of breach and its
consequences.
The Court notes that Uni-Field had more than adequately protected itself
from a possible breach of contract because of the stipulations on the
payment of interest, liquidated damages, and attorney’s fees. The Court finds
the award of attorney’s fees "equivalent to 25% of whatever amount is due
and payable" to be exorbitant because it includes (1) the principal; (2) the
interest charges; and (3) liquidated damages. Moreover, the liquidated
damages and the attorney’s fees serve the same purpose, that is, as penalty
for breach of the contract.
CA DECISION AFFIRMED WITH MODIFICATION AS TO THE AMOUNT
25% of the principal obligation
=P351,028.50
G. EXEMPLARY OR CORRECTIVE DAMAGES
Art. 2229. Exemplary or corrective damages are imposed, by way of
example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages as a part of the civil
liability may be imposed when the crime was committed with one or more
aggravating circumstances. Such damages are separate and distinct from
fines and shall be paid to the offended party.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence.
Art. 2232. In contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
Art. 2233. Exemplary damages cannot be recovered as a matter of right; the
court will decide whether or not they should be adjudicated.
Art. 2234. 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. In case liquidated
damages have been agreed upon, although no proof of loss is necessary in
order that such liquidated damages may be recovered, nevertheless, before
the court may consider the question of granting exemplary in addition to the
liquidated damages, the plaintiff must show that he would be entitled to
moral, temperate or compensatory damages were it not for the stipulation for
liquidated damages.
Art. 2235. A stipulation whereby exemplary damages are renounced in
advance shall be null and void.
CONRADO V. SINGSON, CAROLINA CRISOSTOMO, and FLORENTINO
DE LIMA v. CRISANTO ARAGON and MIGUEL L. LORZA
27 January 1953 | Bautista Angelo, J.
FACTS:
Miguel Lorza filed a complaint in the Municipal Court of Manila against
Conrado Singson, Carolina Crisostomo and Florentino de Lima to receover
the sum of P1,321.80 as actual damages, and P500 as attorney’s fees. He
also prayed that he be awarded such exemplary damages as the court may
deem proper, plus the costs of action. This complaint was later amended
following a motion for bills of particulars filed by petitioners by itemizing the
claim for actual damages. As no specification has been made with regard to
the exemplary damages prayed for, petitioners filed a motion to dismiss
contending that the court has no jurisdiction of the case because it involves a
prayer for an unspecified amount of exemplary damages which is beyond its
limited jurisdiction. In a separate petition, petitioners also prayed that
plaintiff’s counsel define his authority to appear, by clarifying if the
complainant is actually represented by the law firm of “Peralta and Agrava.”
Municipal Court: denied both motions
CFI Manila: dismissed petition. It held that the “Miguel Lorza is waiving
recovery of exemplary damages over and above the amount which, if added
to his claim for compensatory damages and attorney’s fees, would bring the
total to more than two thousand pesos,” which is the limit of jurisdiction of the
municipal court.
ISSUE: W/N the case is beyond the jurisdiction of the municipal court
(because the amount of exemplary damages has not been specified)
HELD: No. Exemplary damages may be imposed by way of example or
correction only in addition, among others, to compensatory damages, but
they could not be recovered as a matter of right, their determination
depending upon the discretion of the court. It further appears that the amount
of exemplary damages need not be proven, because its determination
depends upon the amount of compensatory damages that may be awarded
to the claimant. If the amount of exemplary damages need not be proven, it
need not also be alleged, and the reason is obvious because it is merely
incidental or dependent upon what the court may award as compensatory
damages. Unless and until this premises is determined and established,
what may be claimed as exemplary damages would amount to a mere
surmise or speculation. It follows as a necessary consequence that the
amount of exemplary damages need not be pleaded in the complaint
because the same cannot be predetermined by the court if in the cause of
discretion the same is warranted by the evidence, and this is just what
appellee has done.
The fact, however, that the amount of exemplary damages prayed for in the
complaint has not been specified does not necessarily mean that the case is
beyond the jurisdiction of the Municipal Court of Manila before which the
case was filed by appellee before the Municipal Court which he is presumed
to know is of limited jurisdiction, it must be understood that he has done so
with full knowledge that the totality of his claim should not exceed the sum of
P2,000. This is the limit of the Municipal Courts' jurisdiction. And the law
having placed this matter within discretion of the court, it must likewise be
understood that the court should act having due regards to its limited
jurisdiction. In other words, if the court should decide to award exemplary
damages because it is warranted by the evidence, it can only do so by
awarding the plaintiff such amount as, in addition to the actual or
compensatory damages, would not exceed the limit of its jurisdiction. As the
lower court has correctly said, the plaintiff may waived totally or partially his
claim for exemplary damages, and when he filed his case before the
municipal court he is presumed to have waived recovery of such amount as,
if added to actual damages, would exceed the amount of P2,000. We find
correct the interpretation which the lower court has placed on the law on the
matter.
LOURDES MUNSAYAC, petitioner, vs. BENEDICTA DE LARA and THE
COURT OF APPEALS, respondents.
G.R. No. L-21151 || June 26, 1968 || MAKALINTAL, J.:
FACTS:
While riding a jeepney owned by D, P suffered injuries which was the basis
of an action filed in Court. TC found D negligent : he drove at an excessive
speed, unmindful of the fact that the road was under repair and heedless of
the passengers' pleas that he go more slowly. Besides the award of
compensatory damages for actual expenses incurred and loss of income, the
defendant was ordered to pay P1,000.00 as exemplary damages and
P500.00 as attorney's fees. D appealed as to damages.
D: Such must be coetaneous (BIG WORD) with and characterizes the
breach of the contract on which the suit is based, and not one which is
subsequent to such breach and therefore has no causal relation thereto,
such as the herein defendant's failure to placate the sufferings of the plaintiff.
(IN SHORT, ANG SINASABI LANG NIYA: Wala dapat damages kung agent
niya yung gumawa at hindi siya mismo. Since damages are penal in
character, hindi proper kasi diba ang purpose of exemplary damages should
be awarded to deter the person from doing the same act, etc.)
ISSUE:
W/N the award of exemplary damages is proper – NO
RATIO:
It is difficult to conceive how the defendant in a breach of contract case could
be held to have acted in a wanton, fraudulent, reckless, oppressive or violent
manner within the meaning of Article 2232 for something he did or did not do
after the breach, which had no causal connection therewith. The law does
not contemplate a vicarious liability on his part: the breach is his as party to
the contract, and so if he is to be held liable at all for exemplary damages by
reason of the wrongful act of his agent, it must be shown that he had
previously authorized or knowingly ratified it thereafter, in effect making him a
co-participant. There is nothing to show previous authority or subsequent
ratification by appellant insofar as the recklessness of the driver was
concerned. The mere statement that the defendant failed, even refused, to
placate the suffering of the plaintiff, necessitating the filing of the action, is
too tenuous a basis to warrant the conclusion that the defendant approved of
the wrongful act of his servant with full knowledge of the facts.
It is not enough to say that an example should be made, or corrective
measures employed, for the public good, especially in accident cases where
public carriers are involved. For the causative negligence in such cases is
personal to the employees actually in charge of the vehicles, and it is they
who should be made to pay this kind of damages by way of example or
correction, unless by the demonstrated tolerance or approval of the owners
they themselves can be held at fault and their fault is of the character
described in Article 2232 of the Civil Code. Otherwise there would be
practically no difference between their liability for exemplary damages and
their liability for compensatory damages, which needs no proof of their
negligence since the suit is predicated on breach of contract and due
diligence on their part does not constitute a defense.
Award of exemplary damages deleted.
OCTOT vs YBANEZ
Diosdado Octot was a security guard in the government health office and
was summarily dismissed pursuant to PD No. 6, which directs department
heads and government agencies to weed out undesirable government
officials and employees, such as those facing charges or were notoriously
undesirable. Octot, who was convicted for libel but whose case was pending
in the CA, was one of those dismissed.
CA granted his appeal. He thus seeks to be reinstated to his job, and the
Secretary of Health referred his request to the Regional Health Office. The
Officer in Charge therein favorably recommended because of his acquittal
and satisfactory performance prior to dismissal. Octot's reinstatement was
thus granted, but he still wrote to the Secretary of Health requesting for the
same and demanding back salaries. The Regional Health Office instructed
him to come so that his appointment papers could be processed, but Octot
didn't show up. Instead, he filed this petition for mandamus for reinstatement,
payment of back salary, and payment of damages (compensatory,
exemplary, moral, attorney's fees and cost of suit).
Octot was then reappointed by the Civil Service Commission and he
reported for duty.
Issue: w/n Octot's claim for backwages and damages should be upheld
Held: Octot's claim for backwages and damages is denied.
There is no proof of bad faith and grave abuse of discretion, as the
respondent officials merely complied with the mandates of PD No. 6. As soon
as Octot was acquitted and requested for reinstatement, they were willing to
take him back and recommended his reinstatement to the concerned
authorities.
Exemplary damages are generally not recoverable in a special civil action for
mandamus unless defendant acted with vindictiveness or wantonness, and
not in the exercise of honest judgment. It is granted as an example or
correction for the public good, as required by public policy, in order to
suppress wanton acts, to prevent the poison of wickedness from running
through the body politic.
Jurisprudence sets the conditions for the award of exemplary damages:
1. Imposed only in addition to compensatory damages; amount of
compensatory damages determines how much it is. It cannot be recovered
as a matter of right.
2. Claimant must first establish right to moral, temperate, liquidated or
compensatory damages
3. act must be accompanied by bad faith, party acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.
SARKIES v IAC
September 2, 1983
Melencio-Herrera
FACTS:
- Sarkies Tours Phils advertised in newspapers its tour to Corregidor
on Independence day for a fee of P10 including the boar fare from
Manila-Corregidor-Manila, shrine tour and tour of Corregidor Island
by bus.
- A day before the private tour, the Dizons purchased six round trip
tickets from Sa
and one whote ticket
- The Dizons went with their four children and were transported to
Corregidor by M/V Edicso owned an operated by Julian Mendoza
o M/V Edicso is an oversized motorized banca with outriggers,
a streel hull, a canvas awning and rattan chairs on the deck
o Not registered to ferry passangers nor was it licensed to
operate as watercraft
o On that trip, it had 146 passengers and was overloaded and
lacked adequate lifesaving equipment
- On return trip, the weather was about the same, but there were
intermittent rains. At 2PM, disaster struck where the boat leaned
towards starboard and the chairs slid into the water
o The spouses and two children managed to climb up the hull
of the boat, and another daughter was rescued by a yacht.
o Merceditas, their 6yo daughter drowned, and was only found
after 6 days. There were also other casualties
- A case for damages was filed against Sarkies and Mendoza.
o Defenses:
Sarkies: “We’re not the owner of M/V Edisco, and we’re
only a booking agent and not a carrier. We also acted in
due diligence in relying that the vessel was sea worthy
Mendoza: “I’m only a passenger of the boat. In fact, my
 own son perished in this tragedy! The marine accident
was due to a force majeure and the contract is between
Sarkies and Dizons
- CFI: exonerated Sarkies from liability on the ground that it was “neither an
agent nor the operator of Edisco” The tragedy was attributed solely on
Mendoza who is the owner-operator of the vessel. He was negligent for
“unscrupulous conversion of a fishing boat to a ferry boat without first
securing a license to operate.”
- CA: ruled that Sarkies is jointly and severally liable with Julian Mendoza to
pay damages against the PRs
o 12k actual damages for the death of Merceditas
o 1,650 for the loss of cash and personal belongings
o 100k for moral damages
o 50k as atty’s fees
o costs of suit
ISSUE/HELD:
1.
lower courts
2. WON exemplary damages should be awar
RATIO:
- Musayac v de Lara: It is not enough to say than an example should be
made, or corrective measures be employed for the public good
especially in accident cases where public carriers are involved
o The causative negligence in this case is personal to the
employees actually in charge of the vehicles and it is they who
should be made to pay this kind of damages unless by the
demonstrative tolerance or approval of the owners they
themselves can be held at fault and their fault is of the character
described in Art. 2232.
- In this case, there was no showing that Sarkies acted in “wanton or
malevolent manger”
- Moral damages reduced to 30k
- Since the actual negligence for the drowning was the responsibility of
Mendoza, then fair that Sarkies should have a right of action against
Mendoza for reimbursement
San Miguel Brewery vs. Magno
Facts: The Municipal Board of Butuan passed Ordinance No. 11 imposing a
tax of 2% on the grosssales or receipts of those engaged in the sale, trading
in, or disposal of all alcoholic or malt beverages, wines and mixed or
fermented liquors, including tuba, basi, & tapuy. The same Municipal Board
passed Ordinance No. 110 amending Ordinance No. 11, fixing a tax on the
sale of beer at the rate of Php 0.25 per case of 24 bottles, & on thesale of
soft drinks at the rate of PhP 0.10 per case of 24 bottles of soft drinks or any
carbonated drinks.
San Miguel Brewery (San Miguel) maintains a warehouse on the city of
Butuan and although consistently & promptly paid the required taxes under
Ordinance No. 11, suddenly stopped paying & incurred back taxes. Verbal
demands were made by the City Treasurer Francisco Magno to San Miguel
and warned them that a warrant of distraint & levy will be issued against
them if they continue to refuse to pay their taxes. San Miguel answered the
demands and averred that the power of the city government to distraint
(seizure of property) & levy can only be exercised with respect to the
delinquencies in the payment of real estate taxes (so hindi sa beverages
nila).
Written demands were made by the Treasurer but failed to collect from San
Miguel taxes and penalties in the amount of Php 24,747.32.6. The Treasurer
then issued a warrant of distraint & levy against the properties of SanMiguel
and the latter voluntarily surrendered 2 delivery trucks.
San Miguel filed an action against Francisco Magno in his individual capacity
to release the delivery trucks and to pay them the amount of Php6,000 plus
Php 3,000 for each day that the trucks were impounded. Francisco Magno
filed an Answer and stated that his actions were in furtherance of his duties
as the City Treasurer of Butuan City. He set up a counterclaim of P40,000.00
and P10,000.00 as moral and exemplary damages, respectively, allegedly
sustained by him and the members of his family on account of the shock,
fright, wounded feelings, mental anguish, besmirched reputation, and social
humiliation they suffered by reason of the filing of the case against him.
During the pendency of the action, San Miguel paid under protest the taxes
assessed to them. The impounded trucks were then released.
CFI: Dismissed complaint against Magno. No evidence to support Magno’s
claim for P40,000.00 moral damages, P10,000 exemplary damages and
P2,000.00 attorney's fees. Nonetheless, SMB to pay Magno P2,000.00 in
damages, P1,000.00 as attorney's fees, and costs.
Issue1: W/N the action is filed against the wrong party? Yes, should be
against Magno in his capacity as City Treasurer.
Held: San Miguel erroneously assumes that the defendant is personally
liable for damages to the appellant, disregarding the established fact that the
defendant had issued the warrant of distraint and levy against plaintiff's
properties in his capacity as City Treasurer of Butuan who, under the law
(Ordinance 26) is empowered to issue the warrant.
Issue2: W/N Magno should be awarded Moral and Exemplary damages
and Attorney’s Fees
Moral –No. In order that moral damages may be awarded, there must be
pleading and proof of moral suffering, mental anguish, fright and the like
because it is designed to compensate the claimant for actual injury suffered
and not to impose a penalty on the wrong-doer. No proof of factual basis =
No award
Exemplary – No. Neither may we consider the award as exemplary
damages, because the mere findings that certain allegations in the complaint
are not true, and the plaintiff committed a mistake in instituting the action
against the wrong party, do not justify the award of this kind of damages.
Why? Because it infringes upon the right of a citizen to have access to the
courts. Penalty in the concept of damages should not be imposed simply
because a complaint is found unmeritorious by the courts.
Attorney’s Fees – Yes. The defendant public officer was sued in his private
capacity for acts done in the performance of official duty required by law, and
was forced to employ the services of private counsel to defend his rights.
CFI decision modified. Remove damages. Increase Attorney’s fees to
P2,000. Add P100 nominal d.
People of the Philippines v. Ricky Alfredo y Norman
FACTS: respondent was charged in two separate informations of rape for
allegedly having carnal knowledge against AAA, a 36 year old pregnant
woman, against her will and consent and by means of force, intimidation and
threats.
He pleaded not guilty to the charged. The Court gave more credence to the
version of the prosecution that AAA, after harvesting their sayote in their
plantation in Benguet, stayed in a rented shack and retired early to bed with
BBB, her child. Thereafter, AAA was awakened by a beam of light coming
from the gaps in the walls of the shack. Out of fear, AAA opened the door of
the shack and the accused immediately held her hair and ordered her to
walk uphill. Helpless and terrified, AAA obeyed him. All the while, accused-
appellant was behind her.
Upon reaching a sloping ground, the accused proceeded to rape her. After 1
round (10 minutes later), accused-appellant went on top of AAA again and
inserted his penis into her vagina and moved his buttocks up and down. The
respondent tried to have a third round but failed to do so because his penis
had already softened. The RTC convicted the accused beyond reasonable
doubt. It ordered the accused to be imprisoned and to pay 50, 000 pesos
worth of actual compensatory damages for each count of rape and another
50,000 pesos for moral damages (there was no award of exemplary
damages at this point). The CA affirmed the judgment of conviction of the
RTC.
ISSUE: 1) WON the accused is guilty beyond reasonable doubt?; 2) WON
the victim must be awarded exemplary damages?
HELD:
1) YES. Alibi is an inherently weak defense. The evidence presented by the
prosecution is sufficient to maintain, beyond reasonable doubt, the accused
is guilty of the crime of rape.
2) YES. The decision of the CA as to the damages awarded must be
modified. For rape under Art. 266-A, par. 1(d) of the Revised Penal Code,
the CA was correct in awarding PhP 50,000 as civil indemnity and PhP
50,000 as moral damages. However, for rape through sexual assault under
Art. 266-A, par. 2 of the Code, the award of damages should be PhP 30,000
as civil indemnity and PhP 30,000 as moral damages.
In People v. Cristobal (also a rape case) it was held that the basis of the
award of exemplary damages is “for sexually assaulting a pregnant
married woman, the accused has shown moral corruption, perversity,
and wickedness. He has grievously wronged the institution of marriage.
The imposition then of exemplary damages by way of example to deter
others from committing similar acts or for correction for the public
good is warranted.”
Notably, there were instances wherein exemplary damages were awarded
despite the absence of an aggravating circumstance. This is because prior to
the effectivity of the present Rules on Criminal Procedure, courts generally
awarded exemplary damages in criminal cases when an aggravating
circumstance, whether ordinary or qualifying, had been proven to have
attended the commission of the crime, even if the same was not alleged in
the information. This is in accordance with the aforesaid Article 2230.
However, with the promulgation of the Revised Rules, courts no longer
consider the aggravating circumstances not alleged and proven in the
determination of the penalty and in the award of damages. Thus, even if an
aggravating circumstance has been proven, but was not alleged, courts will
not award exemplary damages.
Nevertheless, People v. Catubig laid down the principle that courts may
still award exemplary damages based on the aforementioned Article
2230, even if the aggravating circumstance has not been alleged, so
long as it has been proven, in criminal cases instituted before the
effectivity of the Revised Rules which remained pending thereafter.
However, by focusing only on Article 2230 as the legal basis for the grant of
exemplary damages — taking into account simply the attendance of an
aggravating circumstance in the commission of a crime, courts have lost
sight of the very reason why exemplary damages are awarded.
the Philippines v. Dante Gragasin y Par, “[t]he application of Article 2230
of the Civil Code strictissimi juris in such cases, as in the present one,
defeats the underlying public policy behind the award of exemplary
damages — to set a public example or correction for the public good.”
Concomitantly, exemplary damages in the amount of PhP 30,000 should be
awarded for each count of rape, in line with prevailing jurisprudence.

Courts have lost sight of the fact that exemplary damages— Also known as
“punitive” or “vindictive” damages, exemplary or corrective damages are
intended to serve as a deterrent to serious wrong doings, and as a
vindication of undue sufferings and wanton invasion of the rights of an
injured or a punishment for those guilty of outrageous conduct. These
terms are generally, but not always, used interchangeably. In common law,
there is preference in the use of exemplary damages when the award is to
account for injury to feelings and for the sense of indignity and humiliation
suffered by a person as a result of an injury that has been maliciously and
wantonly inflicted, the theory being that there should be compensation for the
hurt caused by the highly reprehensible conduct of the defendant —
associated with such circumstances as willfulness, wantonness, malice,
gross negligence or recklessness, oppression, insult or fraud or gross fraud
— that intensifies the injury. The terms punitive or vindictive damages are
often used to refer to those species of damages that may be awarded
against a person to punish him for his outrageous conduct. In either case,
these damages are intended in good measure to deter the wrongdoer and
others like him from similar conduct in the future.

Being corrective in nature, exemplary damages, therefore, can be

awarded, not only in the presence of an aggravating circumstance, but
also where the circumstances of the case show the highly
reprehensible or outrageous conduct of the offender. In much the same
way as Article 2230 prescribes an instance when exemplary damages may
be awarded, Article 2229, the main provision, lays down the very basis of the
award. (Examples: 1) People v. Matrimonio- award of exemplary damages
against the accused to be a deterrent to other fathers with perverse
tendencies or aberrant sexual behavior from sexually abusing their own
daughetrs; 2) People v Cristobal- the Court awarded exemplary damages on
account of the moral corruption, perversity and wickedness of the accused in
sexually assaulting a pregnant married woman.

It must be noted that, in the said cases, the Court used as basis Article 2229,
rather than Article 2230, to justify the award of exemplary damages. Indeed,
to borrow Justice Carpio Morales’ words in her separate opinion in People of