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A. General Considerations

1. Classification

NB: N/A

2. Kinds of damages

1) Actual or compensatory

2) Moral

3) Nominal

4) Temperate or moderate

5) Liquidated

6) Exemplary or corrective (Article 2197, Civil Code)

a. Actual and Compensatory

1. CONCEPT

Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages. (Article 2199, Civil Code)

Actual or compensatory damages are those damages which the injured party is entitled to recover for the wrong done and injuries received when none were intended. These are compensation for an injury and will supposedly put the injured party in the position in which he was before he was injured. (Yamauchi v. Suñiga, G.R. No. 199513, 18 April 2018)

The terms “actual damages” and “consequential damages” are dealt with in the Civil Code of the Philippines under the same Chapter; thereof, the two (2) terms are used therein as equivalent to one another (M.D. Transit & Taxi Co., Inc. v. CA, En Banc, G.R. No. L-23882, 17 February 1968)

a. Requisites

Since actual damages are awarded to compensate for a pecuniary loss, the injured party is required to prove two things:

1) The fact of the injury or loss; and

2) The actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. (Yamauchi v. Suñiga, supra.)

1) Actual proof, required

Actual or compensatory damages cannot be presumed, but must be duly proved, and proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture or guess work as to the fact and amount of damages, but must depend upon competent proof that they have suffered and on evidence of the actual amount thereof. If the proof is flimsy and unsubstantial, no damages will be awarded. (Seven Brothers Shipping Corporation v. DMC-Construction Resources, Inc., G.R. No. 193914, 26 November 2014)

Jurisprudence has consistently held, that to justify an award of actual damages, credence can be given only to claims which are duly supported by receipts. (Ibid.)

Actual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement. (Duenas v. Guce-Africa, G.R. No. 165679, 05 October 2009)

Before actual damages can be awarded, there must be competent proof of the actual amount of loss, and credence can be given only to claims which are duly supported by receipts. (Ibid.)

2) Best evidence available

Actual damages cannot be presumed. The claimant must prove the actual amount of loss with a reasonable degree of certainty premised upon competent proof and on the best evidence obtainable. Specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne must be pointed out. Actual damages cannot be anchored on mere surmises, speculations or conjectures. (Republic v. Looyuko, G.R. No. 170966, 22 June 2016)

a) Testimonial evidence, insufficient

The award of actual damages cannot be simply based on the mere allegation of a witness without any tangible claim, such as receipts or other documentary proofs to support such claim. (Now Mountain Dairy Corporation v. GMA Veterans Force, Inc., G.R. No. 192446, 19 November 2014)

b) Quotation, insufficient

In one case, all that petitioners submitted was a quotation of Phpl60,000.00 for a unit of elbow prosthesisand nothing more. It has been held that actual proof of expenses incurred for medicines and other medical supplies necessary for treatment and rehabilitation must be presented by the claimant, in the form of official receipts, to show the exact cost of his medication and to prove that he indeed went through medication and rehabilitation. In the absence of the same, such claim must be negated. (Sps. Estrada v. Philippine Rabbit Bus Lines, Inc., G.R. No. 203902, 19 July 2017)

b. Scope of indemnification

1) Value of loss

2) Profits

Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain. (Article 2200, Civil Code)

3) Loss of earning capacity

Damages for loss or impairment of earning capacity is in the nature of actual damages. (Sps. Estrada v. Philippine Rabbit Bus Lines, Inc., supra.)

a) Exempt on the rule of actual proof

GENERAL RULE: As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. (Ibid.)

EXCEPTION: By way of exception, damages for loss or impairment of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased or the injured was self-employed and earning less than the minimum wage under current labor laws, in which case, judicial notice may be taken of the fact that in the deceased’s line of work no documentary evidence is available; or (2) the deceased was employed as a daily worker earning less than the minimum wage under current labor laws. (Ibid.)

EXCEPTION TO THE EXCEPTION: Documentary proof of the decedent/injured’s actual income cannot be dispensed with if the situation does not fall under any of the two exceptions aforementioned. (Ibid.)

(1) In lieu, moderate or temperate damages

Temperate damages are awarded in lieu of actual damages for loss of earning capacity where earning capacity is plainly established but no evidence was presented to support the allegation of the injured party’s actual income. (Tan v. OMC Carriers, Inc., G.R. No. 190521, 12 January 2011)

In Pleno v. Court of Appeals, temperate damages were awarded in the amount of Php200,000.00 instead of actual damages for loss of earning capacity because the plaintiff’s income was not sufficiently proven. (Ibid.)

In People v. Singh, and People v. Almedilla, temperate damages were granted in place of actual damages for the failure of the prosecution to present sufficient evidence of the deceased’s income. (Ibid.)

In Victory Liner, Inc. v. Gammad, the award of damages for loss of earning capacity was deleted for lack of evidentiary basis of the actual extent of the loss. Nevertheless, because the income-earning capacity lost was clearly established, the heirs were awarded Php500,000.00 as temperate damages. (Ibid.)

b. Effect of insurance

If the plaintiff’s property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. (Article 2207, Ibid.)

c. What may be recovered

Damages may be recovered:

1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury;

2) For injury to the plaintiff’s business standing or commercial credit. (Article 2205, Ibid.)

2. ATTORNEY’S FEES

In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except:

1) When exemplary damages are awarded;

2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;

3) In criminal cases of malicious prosecution against the plaintiff;

4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;

6) In actions for legal support;

7) In actions for the recovery of wages of household helpers, laborers and skilled workers;

8) In actions for indemnity under workmen’s compensation and employer’s liability laws;

9) In a separate civil action to recover civil liability arising from a crime;

10) When at least double judicial costs are awarded;

11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered. (Article 2208, Ibid.)

1) Reasonable attorney’s fees

In all cases, the attorney’s fees and expenses of litigation must be reasonable. (Paragraph 2, Article 2208, Ibid.)

3. INTEREST

a. Delay in obligation to pay sum of money

1) Stipulated interest as indemnity for damages

2) If not stipulated: legal interest at 6% per annum

If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum. (Article 2209, Ibid.)

b. Breach of contract

Interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract. (Article 2210, Ibid.)

b. Crimes and quasi-delicts

In crimes and quasi-delicts, interest as a part of the damages may, in a proper case, be adjudicated in the discretion of the court.(Article 2211, Ibid.)

c. Effect of judicial demand

Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point.(Article 2212, Ibid.)

d. Unliquidated claims or damages

Interest cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonably certainty. (Article 2213, Ibid.)

b. Moral

1. CONCEPT

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. (Article 2217, Ibid.)

Moral damages are not punitive in nature, but are instead a type of award designed to compensate the claimant for actual injury suffered. (Guy v. Tulfo, G.R. No. 213023, 10 April 2019)

a. Requisites

Moral damages may only be awarded when the claimant has sufficiently proved:

1) The factual foundation of the award; and

2) The causal connection of petitioner’s suffering to respondents’ act. (Guy v. Tulfo, G.R. No. 213023, 10 April 2019)

In order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like. While no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of the court, it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis of damages and its causal connection to defendant’s acts. (Keirulf v. CA, G.R. No. 99301, 13 March 1997)

1) Factual foundation

Moral damages are recoverable only if the party from whom it is claimed has acted fraudulently or in bad faith or in wanton disregard of his contractual obligations. (Yamauchi v. Suñiga, supra.)

a) Bad faith

Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or ill will that partakes of the nature of fraud. It is, therefore, a question of intention, which can be inferred from one’s conduct and/or contemporaneous statements. (Adriano v. Lasala, G.R. No. 197842, 09 October 2013)

b) Gross negligence of common carriers amount to bad faith

Moral damages may be awarded where gross negligence on the part of the common carrier is shown. (Gatchalian v. Delim, G.R. No. L-56487, 21 October 1991)

In earlier cases, common carriers have been held liable for breach of contract of carriage and awarded moral damages to the injured passengers on the ground that the common carrier committed gross negligence, which amounted to bad faith. (Darines v. Quiñones, G.R. No. 206468, 02 August 2017)

2) Proximate cause

Moral damages are recoverable only when physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shocks, social humiliation, and similar injury are the proximate result of a criminal offense resulting in physical injuries, quasi-delicts causing physical injuries, seduction, abduction, rape or other lascivious acts, adultery or concubinage, illegal or arbitrary detention or arrest, illegal search, libel, slander or any other form of defamation, malicious prosecution, disrespect for the dead or wrongful interference with funerals, violation of specific provisions of the Civil Code on human relations, and willful injury to property. (Ventanilla v. Centeno, En Banc, G.R. No. L-14333, 28 January 2961)

To this we may add that where a mishap occurs resulting in the death of a passenger being transported by a common carrier, the spouse, descendants and ascendants of the deceased passenger are entitled to demand moral damages for mental anguish by reason of the passenger’s death. (Ibid.)

b. No actual proof required

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.(Article 2216, Ibid.)

Unlike actual and temperate damages, moral damages may be awarded even if the injured party failed to prove that he has suffered pecuniary loss. As long as it was established that complainant’s injury was the result of the offending party’s action, the complainant may recover moral damages. (Guy v. Tulfo, supra.)

c. Sentimental value

In the adjudication of moral damages, the sentimental value of property, real or personal, may be considered. (Article 2218, Ibid.)

2. WHEN RECOVERABLE

a. In general

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. (Article 2219, Ibid.)

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. (Paragraph 2, Article 2219, Ibid.)

The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named. (Paragraph 3, Article 2219, Ibid.)

Cross-referenced articles

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. (Article 21, Ibid.)

Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief:

1) Prying into the privacy of another’s residence;

2) Meddling with or disturbing the private life or family relations of another;

3) Intriguing to cause another to be alienated from his friends;

4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition. (Article 26, Ibid.)

Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against he latter, without prejudice to any disciplinary administrative action that may be taken.(Article 27, Ibid.)

Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers damage. (Article 28, Ibid.)

When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted. Such action requires only a preponderance of evidence.  Upon motion of the defendant, the court may require the plaintiff to file a bond to answer for damages in case the complaint should be found to be malicious.(Article 29, Ibid.)

If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In the absence of any declaration to that effect, it may be inferred from the text of the decision whether or not the acquittal is due to that ground.(Paragraph 2, Article 29, Ibid.)

When a separate civil action is brought to demand civil liability arising from a criminal offense, and no criminal proceedings are instituted during the pendency of the civil case, a preponderance of evidence shall likewise be sufficient to prove the act complained of.(Article 30, Ibid.)

Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

1)  Freedom of religion;

2)  Freedom of speech;

3)  Freedom to write for the press or to maintain a periodical publication;

4)  Freedom from arbitrary or illegal detention;

5)  Freedom of suffrage;

6)  The right against deprivation of property without due process of law;

7)  The right to a just compensation when private property is taken for public use;

8)  The right to the equal protection of the laws;

9) The right to be secure in one’s person, house, papers, and effects against unreasonable searches and seizures;

10)  The liberty of abode and of changing the same;

11)  The privacy of communication and correspondence;

12) The right to become a member of associations or societies for purposes not contrary to law;

13) The right to take part in a peaceable assembly to petition the government for redress of grievances;

14) The right to be free from involuntary servitude in any form;

15) The right of the accused against excessive bail;

16) The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witness in his behalf;

17) Freedom from being compelled to be a witness against one’s self, or from being forced to confess guilt, or from being induced by a promise of immunity or reward to make such confession, except when the person confessing becomes a State witness;

18) Freedom from excessive fines, or cruel and unusual punishment, unless the same is imposed or inflicted in accordance with a statute which has not been judicially declared unconstitutional; and

19)  Freedom of access to the courts. (Article 32, Ibid.)

In any of the cases referred to in this article, whether or not the defendant’s act or omission constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and mat be proved by a preponderance of evidence.(Paragraph 2, Article 32, Ibid.)

The indemnity shall include moral damages. Exemplary damages may also be adjudicated. (Paragraph 3, Article 32, Ibid.)

The responsibility herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute.(Paragraph 4, Article 32, Ibid.)

When a member of a city or municipal police force refuses or fails to render aid or protection to any person in case of danger to life or property, such peace officer shall be primarily liable for damages, and the city or municipality shall be subsidiarily responsible therefor. The civil action herein recognized shall be independent of any criminal proceedings, and a preponderance of evidence shall suffice to support such action. (Article 34, Ibid.)

When a person, claiming to be injured by a criminal offense, charges another with the same, for which no independent civil action is granted in this Code or any special law, but the justice of the peace finds no reasonable grounds to believe that a crime has been committed, or the prosecuting attorney refuses or fails to institute criminal proceedings, the complaint may bring a civil action for damages against the alleged offender.  Such civil action may be supported by a preponderance of evidence.  Upon the defendant’s motion, the court may require the plaintiff to file a bond to indemnify the defendant in case the complaint should be found to be malicious.(Article 35, Ibid.)

If during the pendency of the civil action, an information should be presented by the prosecuting attorney, the civil action shall be suspended until the termination of the criminal proceedings.(Paragraph 2, Article 35, Ibid.)

b. Quasi-delict or tor

In culpa aquiliana, or quasi-delict, moral damages may aptly be recovered:

1) When an act or omission causes physical injuries; or

2) Where the defendant is guilty of intentional tort. (Expertravel & Tours, Inc. v. CA, G.R. No. 130030, 25 June 1999)

c. Breach of contract

In an action for breach of contract, moral damages may be recovered only when:

1) Death of a passenger results; or

2) The carrier was guilty of fraud and bad faith even if death does not result. (Darines v. Quiñones, G.R. No. 206468, 02 August 2017)

The principle that, in an action for breach of contract of carriage, moral damages may be awarded only in case (1) an accident results in the death of a passenger; or (2) the carrier is guilty of fraud or bad faith, is pursuant to Article 1764, in relation to Article 2206(3) of the Civil Code, and Article 2220 thereo (Ibid.)

Fraud or bad faith connotes deliberate or wanton wrong doing or such deliberate disregard of contractual obligations while negligence amount to sheer carelessness. (Ibid.)

More particularly, fraud includes inducement through insidious machination. In turn, insidious machination refers to such deceitful strategy or such plan with an evil purpose. On the other hand, bad faith does not merely pertain to bad judgment or negligence but relates to a dishonest purpose, and a deliberate doing of a wrongful act. Bad faith involves breach of a known duty through some motive or interest or ill will that partakes of the nature of fraud. (Ibid.)

1) Case Law

1) In Viluan v. Court of Appeals, and Bulante v. Chu Liante,  the Court disallowed the recovery of moral damages in actions for breach of contract for lack of showing that the common carrier committed fraud or bad faith in performing its obligation. (Ibid.)

2) In Verzosa v. Baytan, the Court did not also grant moral damages in an action for breach of contract as there was neither allegation nor proof that the common carrier committed fraud or bad faith. The Court declared that 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 Article 2220 of the Civil Code, would be to violate the clear provisions of the law, and constitute unwarranted judicial legislation. (Ibid.)

3) In Gatchalian v. Delim, and Mr. & Mrs. Fabre, Jr. v. Court of Appeals, the Court found the common carriers liable for breach of contract of carriage and awarded moral damages to the injured passengers on the ground that the common carrier committed gross negligence, which amounted to bad faith. (Ibid.)

Particularly, in Mr. & Mrs. Fabre, Jr., the gross negligence of the common carrier was determined from the fact that its driver was not engaged to drive long distance travels; he was also unfamiliar with the area where he detoured the bus as it was his first time to ply such route; the road was slippery because it was raining, yet the bus was running at 50 kilometers per hour resulting in its skidding to the left shoulder of the road; and the bus hit the steel brace on the road at past 11:30 p.m. The Court also noted that other than the imputation of gross negligence, the injured passengers therein pursued their claim not on the theory of breach of contract of carriage alone but also on quasi-delicts. (Ibid.)

d. Willful injury to property

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. (Article 2220, Ibid.)

c. Nominal

1. CONCEPT

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. (Article 2221, Ibid.)

Nominal damages are ‘recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. (Seven Brothers Shipping Corporation v. DMC-Construction Resources, Inc., supra.)

a. No actual proof required

No proof of pecuniary loss is necessary in order that… nominal… 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. (Article 2216, Ibid.)

2. WHEN MAY BE AWARDED

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. (Article 2222, Ibid.)

3. EFFECT OF ADJDUICATION

a. Precludes further contest

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. (Article 2223, Ibid.)

d. Temperate

1. CONCEPT

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. (Article 2224, Ibid.)

In the absence of competent proof on the amount of actual damages suffered, a party is entitled to temperate damages. (Yamauchi v. Suñiga, supra.)

a. No actual proof required

No proof of pecuniary loss is necessary in order that temperate 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.(Article 2216, Ibid.)

2. COURT TO DECIDE

Temperate damages are usually left to the discretion of the courts but the same should be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory. (Yamauchi v. Suñiga, supra.)

Temperate damages may be allowed in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced that the aggrieved party suffered some pecuniary loss. (Now Mountain Dairy Corporation v. GMA Veterans Force, Inc., supra.)

a. Required to be reasonable

Temperate damages must be reasonable under the circumstances. (Article 2225, Ibid.)

3. CASE LAW

1) In Tan v. OMC Carriers, Inc., temperate damages were rightly awarded because plaintiff suffered a loss, although definitive proof of its amount cannot be presented as the photographs produced as evidence were deemed insufficient. Established in that case, however, was the fact that respondent’s truck was responsible for the damage to petitioner’s property and that petitioner suffered some form of pecuniary loss. (Seven Brothers Shipping Corporation v. DMC-Construction Resources, Inc., supra.)

2) In Canada v. All Commodities Marketing Corporation, temperate damages were also awarded wherein respondent’s goods did not reach the Pepsi Cola Plant at Muntinlupa City as a result of the negligence of petitioner in conducting its trucking and hauling services, even ifthe amount of the pecuniary loss had not been proven.  (Ibid.)

3) In Philtranco Services Enterprises, Inc. v. Paras, the respondent was likewise awarded temperate damages in an action for breach of contract of carriage, even if his medical expenses had not been established with certainty. (Ibid.)

4) In People v. Briones, in which the accused was found guilty of murder, temperate damages were given even if the funeral expenses for the victim had not been sufficiently proven. (Ibid.)

5) In Pacific Basin Securities Co., Inc. v. Oriental Petroleum and Minerals Corp., the Supreme Court awarded temperate damages to petitioner in the amount of ₱1,000;000.00 for respondents’ refusal to record the transfer of stocks in the stock and transfer book and to issue new certificates of stock in the name of petitioner Pacific Basin, which refusal prevented petitioner from re-selling its shares in the market. The Court held: “By this non-performance of a ministerial function, the Court is convinced that Pacific Basin suffered pecuniary loss, the amount of which cannot be proved with certainty.” (Republic v. Looyuko, supra.)

6) In Newsounds Broadcasting Network, Inc. v. Dy, petitioners were corporations authorized by law to operate radio stations in Cauayan City. Respondents, in their respective capacities as local elected officials, took actions that impeded the ability of petitioners to freely broadcast. These actions ranged from withholding permits to operate to the physical closure of the stations. According to the Supreme Court, the lost potential income during that one and a half year of closure can only be presumed as substantial enough warranting the award of Php4 Million as temperate damages.

e. Liquidated

1. CONCEPT

Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. (Article 2226, Ibid.)

a. When breach is not the one stipulated

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. (Article 2228, Ibid.)

b. No actual proof required

No proof of pecuniary loss is necessary in order that… liquidated… 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.(Article 2216, Ibid.)

2. EQUITABLE REDUCTION

a. Iniquitous

b. Unconscionable

Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable. (Article 2227, Ibid.)

f. Exemplary

1. CONCEPT

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. (Article 2229, Ibid.)

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 against the repetition of this kind of underhanded actions. (Yamauchi v. Suñiga, supra.)

a. Not a right

Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. (Article 2233, Ibid.)

1) Purpose is to serve as a deterrent

The purpose of exemplary damages is 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. (Lim v. Tan, supra.)

Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. (Del Rosario v. CA, G.R. No. 118325, 29 January 1997)

b. Pre-requisite: moral, temperate or compensatory damage

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. (Article 2234, Civil Code)

The rule is that exemplary damages are awarded in addition to moral damages. (Lim v. Tan, supra.)

c. If with liquidated damages

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.(Article 2234, Ibid.)

d. No waiver of exemplary damages

A stipulation whereby exemplary damages are renounced in advance shall be null and void. (Article 2235, Ibid.)

d. No actual proof required

No proof of pecuniary loss is necessary in order that… 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.(Article 2216, Ibid.)

2. CRIMINAL OFFENSES

a. Separate and distinct from fines

b. Paid to offended party

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. (Article 2230, Ibid.)

3. QUASI-DELICTS

a. Gross negligence, required

In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. (Article 2231, Ibid.)

4. CONTRACTS AND QUASI-CONTRACTS

In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. (Article 2232, Ibid.)

3. Attorney’s FeesAdded

a. Stipulation on attorney’s fees

As a general rule, the parties may stipulate the recovery of attorney’s fees. In the absence of such stipulation, Article 2208 of the Civil Code enumerates the legal grounds which justify or warrant the grant of attorney’s fees and expenses of litigation. (Lim v. Tan, supra.)

b. The exception than the rule

It is settled that the award of attorney’s fees is the exception rather than the rule and counsel’s fees are not to be awarded every time a party wins. (Scott Consultants and Resource Development Corp., Inc. vs. CA, G.R. No. 112916, 16 March 1995)

c. Basis for awarding required to be explicitly stated

The power of the court to award attorney’s fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis cannot be left to speculation or conjecture. Where granted. the court must explicitly state in the body of the decision, and not only in the dispositive portion thereof, the legal reason for the award of attorney’s fees. (Scott Consultants and Resource Development Corp., Inc. vs. CA, G.R. No. 112916, 16 March 1995)

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