842 TORTS AND DAMAGES
shall be observed insofar as they are not in conflict with this Code.
CHAPTER 14
DAMAGES
The Code Commission included a Title on Damages in the draft
of the New Civil Code to see to it that whenever a right is trans-
gressed, every manner of loss or injury is compensated for in some
way or another. The Commission further explained that:
The subject of Damages is introduced in the Project. The
present Code has but few general principles on the measure of
damages. Moreover, practically the only damages in the present
Code are compensatory ones and those agreed upon in a penal
clause. Moral damages are not expressly recognized in the present
Civil Code, although in one instance injury to reputation
such damages have been allowed by the Supreme Court of Spain,
and some Spanish jurists believe that moral damages are allow-
able. The Supreme Court of the Philippines has awarded moral
damages in a few cases.
The measure of damages is of far-reaching importance in
every legal system. Upon it depends the just compensation for
every wrong or breach of contract.
The Commission has, therefore, deemed it advisable to
include in the Project a Title on Damages which embodies some
principles of the American Law on the subject. The American
courts have developed abundant rules and principles upon the
adjudication of damages.
The Civil Code expressly provides that the provisions of this
Title (on Damages) shall be respectively applicable to all obligations
mentioned in Article 1157 (Article 2195, Civil Code), that is, obliga-
tions arising from delict, quasi-delict, contract, and quasi-contract.
Article 2196 of the Civil Code states that the rules under the
Title on Damages are without prejudice to special provisions on dam-
ages formulated elsewhere in the Code. Compensation for workmen
and other employees in case of death, injury or illness is regulated
by special laws. Rules governing damages laid down in other laws
842
DAMAGES
On the other hand, Article 2198 provides that the principles of
general law on damages are adopted insofar as they are not inconsist-
ent with the New Civil Code.
1. DEFINITION AND CONCEPT
Damage has been defined by Escriche as the detriment, in-
jury, or loss which are occasioned by reason of fault of another in the
property or person. (Escriche, Diccionario Razonado de Legislacion
y Jurisprudencia, vol. 2, p. 597). Of whatsoever nature the damage
be, and from whatsoever cause it may proceed, the person who has
done the injury ought to repair it by an indemnity proportionate to
his fault and to the loss caused thereby. (1 Cushing, Domats Civil
Law, p. 741, cited in Simona Manzanares vs. Rafael Moreta, G.R. No.
12306, October 22, 1918).
The Supreme Court defined the word damages in one case as
the pecuniary compensation, recompense, or satisfaction for an injury
sustained, or as otherwise expressed, the pecuniary consequences
which the law imposes for the breach of some duty or violation of
some rights. (People vs. Ballesteros, 285 SCRA 438, 448 [1998]).
A complaint for damages is a personal action and may be com-
menced and tried where the defendant or any of the defendant resides
or may be found, or where the plaintiff or any of the plaintiffs resides
at the election of the plaintiff. (Baritua vs. Court of Appeals, 267 SCRA
331 [1997]).
In actions for damages, courts should award an amount to the
winning party and not its equivalent in property. The damages that
should be awarded should be the money value of such damages. In
one case, the plaintiffs were ordered jointly and solidarily liable to
defendants the quantity of one hundred (100) cavans of palay every
year from 1972. The Supreme Court deleted such award explaining
that one hundred (100) cavans of palay as a form of damages cannot
be sustained because palay is not legal currency in the Philippines
(Heirs of Simeon Borlado v. Court of Damages, 363 SCRA 753, 757).
2. DAMNUM ABSQUE INJURIA
Almost all conduct may, under certain circumstances, be con-
sidered tortious. In all theses cases, the presence of damage caused
to the defendant is required. It does not mean however that a person
is always liable in each and every case that there is damage. In some
844 TORTS AND DAMAGES
cases, there is no liability even if there is damage because there was
no injury Damnum Absque Injuria. (Custodio vs. Court of Appeals,
253 SCRA 483 [1996]; Philippine Racing Club vs. Bonifacio, 109 Phil.
233; Auyong Hiyan vs. Court of Tax Appeals, 59 SCRA 110; Farolan
vs. Solma, March 13, 1991). Where the case is one of damnum absque
injuria, the conjunction of damages and wrong is absent there can
be no actionable wrong if either one or the other is wanting. Thus, if
the damage resulted because a person exercised his legal rights (like
the filing of a Complaint in good faith) it is damnum absque injura.
In the above-cited Custodio case which is reproduced hereunder,
Justice Florenz D. Regalado explained the difference between dam-
age and injury. He explained that mere damage without injury does
not result in liability. The explanation in Custodio was reiterated in
a fairly recent case in this wise:
x x x However, there is a material distinction between
between damages and injury. Injury is the legal invasion of a
legal right; damage is the loss, hurt, or harm which results from
the injury; and damages are the recompense or compensation
awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was
not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone, the law
affords no remedy for damages resulting from an act which does
not amount to a legal injury or wrong. These situations are often
called damnum absque injuria.
In other words, in order that a plaintiff may maintain an ac-
tion for the injuries of which he complains, he must establish that
such injuries resulted from a breach of duty which the defendant
owed to the plaintiff a concurrence of injury to the plaintiff and
legal responsibility by the person causing it. The underlying basis
for the award of tort damages is the premise that an individual
was injured in contemplation of law. Thus, there must first be a
breach before damages may be awarded; and the breach of such
duty should be the proximate cause of the injury. (BPI Express
Card Corporation vs. Court of Appeals, 296 SCRA 260, 272-273).
The rule was applied in Farolan vs. Salmac Marketing Corpora-
tion (G.R. No. 83589, March 13, 1991). In the said case, the Commis-
sioner of Customs withheld the release of certain importation because
of an erroneous interpretation of law. The Supreme Court explained
that the damage that resulted because of such act was in the nature
of damnum absque injuria. The Court believed that it is its duty to
see to it that public officers are not hampered in the performance of
their duties or in making decisions for fear of personal liability for
DAMAGES
damages due to honest mistakes.
Related to such rule is the maxim qui jure suo utitur nullum
damnum facit one who exercises a right does no injury. This maxim
is often applied to cases where the Court rejects claims for damages
of the winning defendant in a case. The Court often reiterates the
rule that the adverse result of an action does not per se make the
action wrongful and subject the actor to payment of damages. (Saba
vs. Court of Appeals, 189 SCRA 50 [1990]).
CASE:
SPOUSES CRISTINO AND BRIGIDA CUSTODIO, et al.
vs. COURT OF APPEALS, et al.
253 SCRA 483
On August 26, 1982, Civil Case No. 47466 for the grant of an easement
of right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida
R. Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos
before the Regional Trial Court of Pasig and assigned to Branch 22 thereof.
The generative facts of the case, as synthesized by the trial court and
adopted by the Court of Appeals, are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico
Mabasa died during the pendency of this case and was substituted by Ofelia
Mabasa, his surviving spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected
thereon situated at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro
Manila. The plaintiff was able to acquire said property through a contract
of sale with spouses Mamerto Rayos and Teodora Quintero as vendors last
September 1981. Said property may be described to be surrounded by other
immovables pertaining to defendants herein. Taking P. Burgos Street as the
point of reference, on the left side, going to plaintiffs property, the row of
houses will be as follows: That of defendants Cristino and Brigido Custodio,
then that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa.
On the right side (is) that of defendant Rosalina Morato and then a Septic
Tank (Exhibit D). As an access to P. Burgos Street from plaintiffs property,
there are two possible passageways. The first passageway is approximately
one meter wide and is about 20 meters distant from Mabasas residence to
P. Burgos Street. Such path is passing in between the previously mentioned
row of houses. The second passageway is about 3 meters in width and length
from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters.
In passing thru said passageway, a less than a meter wide path through the
septic tank and with 5-6 meters in length has to be traversed.
When said property was purchased by Mabasa, there were tenants
846 TORTS AND DAMAGES
occupying the premises and who were acknowledged by plaintiff Mabasa as
tenants. However, sometime in February, 1982, one of said tenants vacated
the apartment and when plaintiff Mabasa went to see the premises, he saw
that there had been built an adobe fence in the first passagewav making it
narrower in width. Said adobe fence was first constructed by defendants
Santoses along their property which is also along the first passageway. De-
fendant Morato constructed her adobe fence and even extended said fence
in such a way that the entire passageway was enclosed (Exhibit I-Santoses
and Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and 1-E). And it
was then that the remaining tenants of said apartment vacated the area.
Defendant Ma. Cristina Santos testified that she constructed said fence
because there was an incident when her daughter was dragged by a bicycle
pedalled by a son of one of the tenants in said apartment along the first pas-
sageway. She also mentioned some other inconveniences of having (at) the
front of her house a pathway such as when some of the tenants were drunk
and would bang their doors and windows. Some of their footwear were even
lost. . . . (Underscoring in original text; corrections in parentheses supplied)
[Judgment was rendered by the trial court ordering the defendants to give
the plaintiff permanent access and to pay damages. The said decision was
affirmed by the Court of Appeals.]
xxx
However, with respect to the second issue, we agree with petitioners
that the Court of Appeals erred in awarding damages in favor of private re-
spondents. The award of damages has no substantial legal basis. A reading of
the decision of the Court of Appeals will show that the award of damages was
based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred
losses in the form of unrealized rentals when the tenants vacated the leased
premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give
rise to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant,
and damage resulting to the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause of action, since damages
are merely part of the remedy allowed for the injury caused by a breach or
wrong.
There is a material distinction between damages and injury. Injury is
the illegal invasion of a legal right; damage is the loss, hurt, or harm which
results from the injury, and damages are the recompense or compensation
awarded for the damage suffered. Thus, there can be damage without injury
in those instances in which the loss or harm was not the result of a violation
of a legal duty. These situations are often called damnum absque injuria.
In order that a plaintiff may maintain an action for the injuries of which
he complains, he must establish that such injuries resulted from a breach of
DAMAGES
duty which the defendant owed to the plaintiff a concurrence of injury to
the plaintiff and legal responsibility by the person causing it. The underlying
basis for the award of tort damages is the premise that an individual was
injured in contemplation of law. Thus, there must first be the breach of some
duty and the imposition of liability for that breach before damages may be
awarded, it is not sufficient to state that there should be tort liability merely
because the plaintiff suffered some pain and suffering.
Many accidents occur and many injuries are inflicted by acts or omis-
sions which cause damage or loss to another but which violate no legal duty
to such other person, and consequently create no cause of action in his favor.
In such cases, the consequences must be borne by the injured person alone.
The law affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong.
In other words, in order that the law will give redress for an act caus-
ing damage, that act must be not only hurtful, but wrongful. There must be
damnum et injuria. If, as may happen in many cases, a person sustains actual
damage, that is, harm or loss to his person or property, without sustaining
any legal injury, that is, an act or omission which the law does not deem an
injury, the damage is regarded as damnum absque injuria.
In the case at bar, although there was damage, there was no legal in-
jury. Contrary to the claim of private respondents, petitioners could not be
said to have violated the principle of abuse of right. In order that the principle
of abuse of right provided in Article 21 of the Civil Code can be applied, it
is essential that the following requisites concur: (1) The defendant should
have acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury to
the plaintiff. The act of petitioners in constructing a fence within their lot is
a valid exercise of their right as owners, hence not contrary to morals, good
customs or public policy. The law recognizes in the owner the right to enjoy
and dispose of a thing, without other limitations than those established by
law. It is within the right of petitioners, as owners, to enclose and fence their
property. Article 430 of the Civil Code provides that (e)very owner may en-
close or fence his land or tenements by means of walls, ditches, live or dead
hedges, or by any other means without detriment to servitudes constituted
thereon.
At the time of the construction of the fence, the lot was not subject to
any servitudes. There was no easement of way existing in favor of private
respondents, either by law or by contract. The fact that private respondents
had no existing right over the said passageway is confirmed by the very
decision of the trial court granting a compulsory right of way in their favor
after payment of just compensation. It was only that decision which gave
private respondents the right to use the said passageway after payment of
the compensation and imposed a corresponding duty on petitioners not to
interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their
848 TORTS AND DAMAGES
property and their act of fencing and enclosing the same was an act which
they may lawfully perform in the employment and exercise of said right.
To repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners is
damnum absque injuria.
A person has a right to the natural use and enjoyment of his own prop-
erty, according to his pleasure, for all the purposes to which such property
is usually applied. As a general rule, therefore, there is no cause of action
for acts done by one person upon his own property in a lawful and proper
manner, although such acts incidentally cause damage or an unavoidable
loss to another, as such damage or loss is damnum absque injuria. When the
owner of property makes use thereof in the general and ordinary manner in
which the property is used, such as fencing or enclosing the same as in this
case, nobody can complain of having been injured, because the inconvenience
arising from said use can be considered as a mere consequence of community
life.
The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie, although the act may result in damage to another,
for no legal right has been invaded. One may use any lawful means to accom-
plish a lawful purpose and though the means adopted may cause damage to
another, no cause of action arises in the latters favor. Any injury or damage
occasioned thereby is damnum absque injuria. The courts can give no redress
for hardship to an individual resulting from action reasonably calculated to
achieve a lawful end by lawful means.
3. KINDS OF DAMAGES
The word damages involve any and all manifestations of life:
physical or material, moral or psychological, mental or spiritual,
financial, economic, social, political and religious. (Castro vs. Acro
Taxicab Co., 82 Phil. 359, 381). It is in recognition of these different
facets of damages that the Civil Code identified and defined all the
different kinds of damages that may be awarded in this jurisdiction.
Thus, Article 2197 of the Civil Code provides:
Art. 2197. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.
DAMAGES
Proof of pecuniary loss is necessary to successfully recover actual
damages from the defendant. 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, Civil Code).
A. ACTUAL OR COMPENSATORY DAMAGES.
Article 2199 of the Civil Code provides that 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 dam-
ages. The Supreme Court described this type of damage in Algarra
vs. Sandejas (supra, at p. 32):
The purpose of the law in awarding actual damages is to
repair the wrong that has been done, to compensate for the injury
inflicted, and not to impose a penalty. Actual damages are not
dependent on nor graded by the intent with which the wrongful
act is done. (Field vs. Munster, 11 Tex. Civ. Appl., 341, 32 S. W.,
417). The words actual damages shall be construed to include all
damages that the plaintiff may show he has suffered in respect
to his property, business, trade, profession, or occupation, and
no other damages whatever. (Gen. Stat. Minn., 1894, sec. 5418).
Actual damages are compensatory only. (Lord, Owen & Co. vs.
Wood, 120 Iowa, 303, 94 N. W., 842.) Compensatory damages
as indicated by the word employed to characterize them, simply
make good or replace the loss caused by the wrong. They proceed
from a sense of natural justice, and are designed to repair that
of which one has been deprived by the wrong of another. (Reid
vs. Terwilliger, 116 N. Y., 530; 22 N. E., 1091). Compensatory
damages are such as are awarded to compensate the injured
party for injury caused by the wrong, and must be only such as
make just and fair compensation, and are due when the wrong
is established, whether it was committed maliciously that is,
with evil intention or not. (Wimer vs. Allbaugh, 78 Iowa, 79;
42 N.W., 587; 16 Am. St. Rep., 422).
a. Kinds.
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). This principle proceeds
from a sense of natural justice and is designed to repair the wrong that
has been done. Indemnification is meant to compensate for the injury
inflicted and not to impose a penalty. (PNOC Shipping and Transport
850 TORTS AND DAMAGES
Corp. vs. Honorable Court of Appeals, 297 SCRA 402 [1998]).
Actual or compensatory damages under the prevailing law may
be classified into two. One is the loss of what a person already pos-
sesses (dao emergente), and the other is the failure to receive as a
benefit that would have pertained to him (lucro cesante). (ibid.; see
also Integrated Packing Corporation v. Court of Appeals, 333 SCRA
170 [2000]). The latter type of damage includes those mentioned in
Article 2205 of the Civil Code which states:
Art. 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases
of temporary or permanent personal injury;
(2) For injury to the plaintiffs business standing or com-
mercial credit.
b. Extent and Measure of Damages.
The Civil Code expressly provides for the rule regarding the
limit of liability in cases involving quasi-delicts. (See Chapter 5).
The extent of recovery is likewise expressly provided for in case of
contractual breach. Thus, Articles 2201 and 2202 provide:
Art. 2201. In contracts and quasi-contracts, the damages
for which the obligor who acted in good faith is liable shall be
those that are the natural and probable consequences of the
breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was
constituted.
In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be reason-
ably attributed to the non-performance of the obligation. (1107a)
Art. 2202. In crimes and quasi-delicts, the defendant shall
be liable for all damages which are the natural and probable con-
sequences of the act or omission complained of. It is not necessary
that such damages have been foreseen or could have reasonably
been foreseen by the defendant.
It should be emphasized that the rule in crimes and quasi-delicts
is the same as the rule in breach of contracts and quasi-contracts
where the breach was accompanied by fraud, bad faith, malice or
wanton attitude on the part of the obligor.
The basic principle for the measure of damages in tort is that
there should be restitutio in integrum. The amount to be awarded to
DAMAGES
the plaintiff should be that sum of money which will put the party
who has been injured or who has suffered in the same position as he
would have been in if he had not sustained the wrong for which he is
now getting his compensation or reparation. (Winfield and Jolowich,
p. 757). The primary object of an award in civil action, and the funda-
mental principle or theory on which it is based, is just compensation,
indemnity or reparation for the loss or injury sustained by the injured
party so that he may be made whole or restored as nearly as possible
prior to the injury. (25 C.J.S. 626).
Consequently, the damages is measured on plaintiffs loss and
not on defendants gain. (25 C.J.S. 628). By way of exception, dam-
ages is measured by the benefit that has accrued to the defendant in
certain cases. The theory is that the benefits derived by the defendant
pertain to or could have been received by the plaintiff because only the
plaintiff is supposed to profit from the activity involved. For instance,
the Intellectual Property Code allows recovery of the amount that
was earned by the defendant who infringed the right of the owner of
the mark. (Section 156, R.A. No. 8293).
c. Certainty.
A party is entitled to adequate compensation only for such pe-
cuniary loss actually suffered and duly proved. It is a basic rule that
to recover damages, the amount of loss must not only be capable of
proof but must actually be proven with a reasonable degree of cer-
tainty, premised upon competent proof or best evidence obtainable of
the actual amount thereof. The claimant is duty-bound to point out
specific facts that afford a basis for measuring whatever compensatory
damages are borne. (PNOC Shipping and Transport Corporation vs.
Court of Appeals, supra; Bernardo vs. Court of Appeals, 275 SCRA
413 [1997]; Kierulf vs. Court of Appeals, 269 SCRA 433 [1997]; Devel-
opment Bank of the Philippines vs. Court of Appeals, 249 SCRA 331
[1995]; Lufthansa German Airlines vs. Court of Appeals, 243 SCRA
600 [1995]).
A court cannot rely on speculations, conjectures, or guesswork
as to the fact and amount of damages. It cannot also rely on hearsay
or uncorroborated testimony, the truth of which is suspect. (Develop-
ment Bank of the Philippines vs. Court of Appeals, G.R. No. 118367,
January 5, 1998; Bargaza vs. Court of Appeals, 268 SCRA 105 [1997];
People vs. Gutierrez, 258 SCRA 70 [1996]; Baliwag Transit, Inc. vs.
Court of Appeals, 256 SCRA 746 [1996]; Gatchalian vs. Delim, 203
SCRA 126 [1991]; Guilatco vs. City of Dagupan, 171 SCRA 382 [1989];
Raagas vs. Traya, 22 SCRA 839 [1968]; Executive Secretary vs. Court
of Appeals, 162 SCRA 51 [1988]).
852 TORTS AND DAMAGES
The burden of proof is on the party who would be defeated if no
evidence would be presented on either side. He must establish his
case by a preponderance of evidence which means that evidence, as
a whole, adduced by one side is superior to that of the other. In other
words, damages cannot be presumed and courts, in giving an award,
must point out specific facts that could afford a basis for measuring
whatever compensatory or actual damages are borne. (PNOC Ship-
ping and Transport Corporation vs. Court of Appeals, supra; Fuentes,
Jr. vs. Court of Appeals, 323 Phil. 508 [1996]; Summa Insurance Corp.
vs. Court of Appeals, 323 Phil. 214, 227 [1996]; Del Mundo vs. Court of
Appeals, 310 Phil. 367 [1995]; Sales vs. Court of Appeals, 192 SCRA
526 [1990]).
It should be emphasized however that uncertainty as to the
precise amount is not necessarily fatal. (Talisay-Silay Milling, Inc.
vs. Associacion de Agricultores de Talisay-Silay, Inc., 247 SCRA 361
[1996]). Mere difficulty in the assessment of damages is not suf-
ficient reason for refusing them where the right to them has been
established. (Ball vs. Pardy CT.J. Construction Co., 63 ALR 139, 108
Conn. 549, 143 A 855).
d. Damage to Property.
Where goods were destroyed by the wrongful act of the defend-
ant, the plaintiff is entitled to their value at the time of destruction.
Normally, the award is the sum of money which plaintiff would have
to pay in the market for identical or essentially similar good, plus in
proper cases, damages for the loss of use during the period before re-
placement. In case of profit-earning chattels, what has to be assessed
is the value of the chattel to its owner as a going concern at the time
and place of the loss. (PNOC Shipping and Transport Corporation
vs. Court of Appeals, supra).
For instance, the loss of a ship would require payment of its
assessed value at the time and place of the loss. In determining such
value, regard must be made to existing and pending engagements.
Thus:
x x x If the market value of the ship reflects the fact that
it is in any case virtually certain of profitable employment, then
nothing can be added to that value in respect of charters actually
lost, for to do so would be pro tanto to compensate the plaintiff
twice over. On the other hand, if the ship is valued without ref-
erence to its actual future engagements and only in the light of
its profit-earning potentiality, then it may be necessary to add
to the value thus assessed the anticipated profit on a charter or
other engagement which it was unable to fulfill. What the court
DAMAGES
has to ascertain in each case is the capitalized value of the ves-
sel as a profit-earning machine not in the abstract but in view of
the actual circumstances, without, of course, taking into account
considerations which were too remote at the time of the loss.
(ibid., citing Clerk & Lindsell on Torts, 17th Ed., pp. 1489-1490).
With respect to real property, the measure of damage for a per-
manent injury is ordinarily the difference between the reasonable
market value of the property immediately before and after the injury.
(Reed vs. Mercer County Fiscal Ct., 54 ALR 1275, 220 Ky. 646, 295
SW 995). In case of total loss, the value of the real property at the
time and place of the loss must also be assessed and such assessed
value is the measure of the damage due to the plaintiff.
Where the plaintiff was merely deprived of his possession, said
plaintiff is entitled to the value of use of the premises. (Daywalt vs. La
Corporacion de los Padres Agustinos Recoletos, 39 Phil. 587; Ching vs.
Court of Appeals, 181 SCRA 9 [1990]). Thus, the rental value should
be assessed against the plaintiff for trespass or illegal occupation of a
house. (Saldivar vs. Municipality of Talisay, 18 Phil. 362). This rule
is equally applicable in cases involving deprivation of possession of
personal property. (Luzon Concrete Products vs. Court of Appeals,
135 SCRA 455; Kairuz vs. Pacio, 108 Phil. 1097).
The plaintiff is also entitled to damages equivalent to rentals
even if the trespass is intermittent. Thus, in Daywalt vs. La Corpora-
cion de los Padres Agustinos Recoletos proper rent was awarded to the
plaintiff who sought to recover damages for the use and occupation of
the land in question by reason of the pasturing of cattle thereon. It
was established that wrongful use of the land by the defendant was
not continuous throughout the year but was confined mostly to the
season when the forage obtainable on the land of the defendant was
not sufficient to maintain the cattle.
e. Personal Injury and Death.
If the plaintiff is asking for damages for his own injury or for
the death of his relative, said plaintiff is entitled to the amount of
medical expenses as well as other reasonable expenses that he in-
curred to treat his or his relatives injuries. Courts may also award
monthly payments to the person who was injured to answer for his
future medical expenses. Thus, in Rogelio E. Ramos, et al. vs. Court
of Appeals, et al. (G.R. No. 124354, December 29, 1999) the Court
sustained the award of monthly compensation of P8,000.00 to answer
for the medical expenses that will be incurred by a comatose victim of
the negligent act of the defendants. The Court even awarded temper-
854 TORTS AND DAMAGES
ate damages to compensate for the increase in cost of such medical
expenses through time.
In proper cases, the award of damages may likewise include the
amount spent for the plastic surgery of the plaintiff or any procedure
to restore the part of the body that was affected. (Gatchalian vs. De-
lim, 203 SCRA 126; Spouses Renato Ong vs. Court of Appeals, G.R.
No. 117103, January 21, 1999).
In case of death, the plaintiff is entitled to the amount that
he spent during the wake and funeral of the deceased. However, it
has been ruled that expenses after the burial are not compensable.
The heirs are not entitled to an award of damages for the expenses
incurred relating to the 9th day, 40th day and 1st year death anniver-
saries (Victory Liner, Inc. v. Heirs of Andres Malecdan, No. 154278,
December 27, 2002; People v. Mangahas, 311 SCRA 384 [1999]).
The damages that may be awarded for death caused by a crime
or quasi-delict include the following:
Art. 2206. The amount of damages for death caused by
a crime or quasi-delict shall be at least three thousand pesos,
even though there may have been mitigating circumstances. In
addition:
(1) The defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter; such indemnity shall in every case
be assessed and awarded by the court, unless the deceased
on account of permanent physical disability not caused by
the defendant, had no earning capacity at the time of his
death;
(2) If the deceased was obliged to give support according to the
provisions of Article 291, the recipient who is not an heir
called to the decedents inheritance by the law of testate or
intestate succession, may demand support from the person
causing the death, for a period not exceeding five years, the
exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages
for mental anguish by reason of the death of the deceased.
Justice Malcolm discussed the historical background, as well
as philosophical background, of the rule regarding payment of dam-
ages for wrongful death in his concurring opinion in Mansanares vs.
Moreta (38 Phil. 823).
DAMAGES
CASE:
MANZANARES vs. MORETA
38 PHIL. 823
The facts are few and simple. A male child, 8 or 9 years of age, was
killed through the negligence of the defendant in driving his automobile.
The mother of the dead boy is a widow, a poor washerwoman. She brings ac-
tion against the defendant to recover damages for her loss in the amount of
P5,000. Without there having been tendered any special proof of the amount
of damages suffered, the trial court found the defendant responsible and
condemned him to pay to plaintiff the sum of P1,000. The decision of this
Court handed down by Justice Torres, affirms the judgment of the Court of
First Instance. If necessary, the decision of the Supreme Court of Louisiana
in the case of Burvant vs. Wolfe ([1910], 126 La., 787), could be cited as cor-
roborative authority.
The principles of law which measure the pecuniary responsibility of
the defendant, not discussed in the main opinion, are more difficult. Since
the time of Grotius and even before, lawyers and publicists have speculated
as to whether the loss of a human life should be compensated in money, and
if so, as to the amount which should be allowed.
At Common Law, no civil action lies for damages caused by the death
of a human being by the wrongful or negligent act of another. The maxim is
actio personalis moritur cum persona. (Mobile Life Ins. Co. vs. Brame, [1878],
95 U. S., 754; Baker vs. Bolton, 1 Campb., 493). Two different modes of rea-
soning have arrived at this result. The first and older theory was the merger
of the private right in the public wrong. (The E. B. Ward, Jr. [1883], 16 Fed.,
255). The second and younger theory was that the death of a human being
cannot be complained of as a civil injury. Under the latter doctrine, it has
been repeatedly held that a civil action by a parent for the death of a minor
child cannot be maintained. (Kramer vs. San Francisco Market Street R. Co.,
[1864], 25 Cal., 434; Jackson vs. Pittsburg, C. C. & St. L. R. Co. [1894], 140
Ind., 241; Wilson vs. Bumstead [1881], 12 Neb., 1; Sullivan vs. Union P. R.
Co. [1880], 2 Fed., 447; Osborn vs. Gillett [1873], L. R. 8 Exch., 88; Weems vs.
Mathieson, 4 Macq. H. L. Cas. 215; Gulf, C. & S. F. Ry. Co. vs. Beall [1897],
91 Tex., 310. See 41 L. R. A., 807, Note).
By the Civil Law, particularly as existing in Spain, France, Porto Rico,
and Louisiana, the true principle is somewhat beclouded. Thus, in Louisiana,
a State favored by French and Spanish antecedents, the exact question of
whether an action for damages caused by the homicide of a human being can
be maintained, was presented by able counsel for the opinion of distinguished
jurists. And it was held in a decision, later expressly affirmed, that, under
the Civil Law, the action could not be maintained by the surviving wife or
children. (Hubgh vs. New Orleans & Carrollton R. R. Co. [1851], 6 La. Ann.,
495; Hermann vs. New Orleans & Carrollton R. R. Co. [1856], 11 La. Ann.,
856 TORTS AND DAMAGES
5; 24 Pothier Pandectes, p. 279; law 13; 7 Partida, title 15, law 3).
The same question has arisen in Porto Rico. It has there been held
that by the Civil Law in force in Porto Rico a civil action lies for negligence
resulting in death. (Borrero vs. Cia. Anonyma de la Luz Electriea de Ponce
[1903], 1 Porto Rico Fed., 144; Diaz vs. San Juan Light & Transit Co. [1911],
17 Porto Rico, 64). The right to sue for death from negligence of a defendant,
by persons entitled to support by the deceased has not been changed by the
new Civil Code of Porto Rico. (Torres vs. Ponce Railway & Light Co. [1903],
1 Porto Rico Fed., 476).
In Spain, from which both the civil law of Porto Rico and the Philippines
were derived, it has been decided that such an action could be maintained.
(Decision of the Supreme Court of Spain of December 14, 1894). In France,
the highest court has interpreted the Code Napoleon as sanctioning actions
by those damaged by the death of another against persons by whose fault the
death happened. (Chavoix vs. Enfants Duport [1853], 1 Journal du Palais
614; Rollonds case, 19 Sirey, 269).
That even in those jurisdictions in which the Common Law has force,
the observance of the principle has been resisted, is disclosed by the action
of Hawaii in holding that there can be a recovery for death by wrongful act.
(The Schooner Robert Lewers Co. vs. Kekauoha [1902], 114 Fed., 849). That
the impropriety of the judge-made rule was early disclosed, is shown by the
numerous statutes, beginning with Lord Campbells Act, which were enacted
to cover the deficiency by permitting of a right of action to recover damages for
death caused by wrongful act. Even in Louisiana, a State partially governed
by the Civil Law, because of a statute, an action will now lie for pecuniary
and other damages caused by death. (McCubbin vs. Hastings [1875], 27 La.
Ann., 713). And finally, that eminent authorities recognize liability in case
of death by negligence is disclosed by the mere mention of such names as
Grotius, Puffendorif, and Domat. For instance, Grotius in his Rights of War
and Peace said:
Exemplo hc sint. Homicida injustus, tenetur solvere impensas,
si u fact sunt in medicos, et iis uos occisus alere e officio solebat,
puta parentibus, uxoribus liberis dare tantum, quantum illa spes
alimentorum, ratione habita tatis occissi, valebat sicuti Hercules
legitur Iphiti a se occissi leberis mulctam pependissi, quo facilius expi-
aretur. Michael Ephesius ad quintum Nicomachiorum Aristotilis; Alla
kai o Phoneuthies elabe tropon tina O gare e gune e oi paides, e oi
suggenies tou phoneuthentos elabe tropon tina ekeino dedotai. Sed et qui
occisus est accipit aliquo modo. Quae enim uxor ejus et liberi et cognati
accipiunt, ipse quodammodo accipit. Loquimur de homicida injusto id
est, qui non habuit jus id faciendi unde mors sequitur. Quare si quis jus
haburit sed in caritatem peccavirit ut qui fugere noluit, non tenebitur.
Vitae autem in libero homine aestimatio non fit, secus in servo
qui vendi potuit. [11 La. Ann., 5].
The following may be for example: Any man slaying another,
DAMAGES
unjustly, is bound to discharge the expenses, if any are contracted, for
physicians, and to give to those whom the slain was in duty accustomed
to maintain such as parents, wives, children as much as that hope
of maintenance regard being had to the age of the deceased was
worth: thus, Hercules is said to have made reparation (paid a fine) to
the children of Iphitus, slain by him, in order that expiation might more
easily be made.
Michael, the Ephesian, says upon the 5th of the Nicomachii of
Aristotle: but also the person slain receives, in some sort, for what the
wife or children or relations of the person slain receive is, in some sort
given him. We are speaking of an unjust manslayer: that is, one who
had not the right of doing that from whence death follows. Wherefore,
if any one may have had the right; but has sinned against charity, as
when one (being assaulted) has been unwilling to flee, he shall not be
bound. But of life, in case of a free man, no valuation is made, otherwise,
in case of a slave who can be sold.
Both because of the civil origin of the applicable law in the Philippines,
because we are not fettered by the harsh common law rule on the subject,
because it is the modern and more equitable principle, and because reason and
natural justice are eloquent advocates, we hold that an action for damages
can be maintained in this jurisdiction for the death of a person by wrongful
act. It can be admitted, since objection has not been made, that the primary
right of action is in the parent.
The second phase of our enquiry, pertaining to the amount of compen-
sation for the loss of a human life, must now be settled.
Damage has been defined by Escriche as the detriment, injury, or
loss which are occasioned by reason of fault of another in the property or
person. (Escriche, Diccionario Razonado de Legislacion y Jurisprudencia,
vol. 2, p. 597). Of whatsoever nature the damage be, and from whatsoever
cause it may proceed, the person who has done the injury ought to repair it
by an indemnity proportionate to his fault and to the loss caused thereby.
(1 Cushing, Domats Civil Law, p. 741). Damnum. (dao or a loss) must be
shown to sustain an action for damages.
Philippine law as found in the well known Article 1902 of the Civil
Code, derived from Partida VII, Title V, is to this effect. In order to give rise
to the obligation imposed by this article of the Civil Code, the coincidence
of two distinct requisites is necessary, viz.: (1) That there exist an injury or
damage not originating in acts or omissions of the prejudiced person himself,
and its existence be duly proven by the person demanding indemnification
therefore; (2) that said injury or damage be caused by the fault or negligence
of a person other than the sufferer. (12 Manresa, Comentarios al Codigo Civil,
p. 604).
Those seeking to recoup damages must ordinarily establish their pe-
cuniary loss by satisfactory proof. (Decisions of the Supreme Court of Spain,
December 14, 1894; November 13 and 26, 1895; December 7, 1896; September
30, 1898, and December 16, 1903; Sanz vs. Lavin [1906], 6 Phil., 299; To
858 TORTS AND DAMAGES
Guioc-Co vs. Del Rosario [1907], 8 Phil., 546; Diaz vs. San Juan Light &
Transit Co. [1911], 17 Porto Rico, 64). The customary elements of damages
must be shown. But in certain cases, the law presumes a loss because of the
impossibility of exact proof and computation in respect to the amount of the
loss sustained. In other words, the loss can be proved either by evidence or
by presumption. For instance, where the relation of husband and wife or
parent and child exist, provided the child is shown to be a minor, the law
presumes a pecuniary loss to the survivor from the fact of death, and it is not
necessary to submit proof as to such loss. (Chicago vs. Scholten [1874], 75 Ill.,
468; Rockford, etc. R. Co. vs. Delaney [1876], 82 Ill., 198; Chicago vs. Hesing
[1876], 83 Ill., 204; Delaware, etc. R. Co. vs. Jones [1889], 128 Pa. St. 308;
Atrops vs. Costello [1894], 8 Wash., 149; Mason vs. Southern R. Co. [1900],
58 S. C., 70; McKechney vs. Redmond, 94 Ill. App., 470; Joliet vs. Weston, 22
Ill. App., 225; Kelly vs. Twenty-third St. R. Co., 14 N. Y. St., 699; Dunhene
vs. Ohio L. Ins. etc. Co., 1 Disn., 257; Diaz vs. San Juan Light & Transit Co.,
supra).
In one of the cited cases (City of Chicago vs. Hesing), on an action to
recover damages resulting to the parents, laboring people, by the death of
their child four years old through negligence on the part of the City of Chicago,
the court said:
Only pecuniary damages can be recovered in such actions as
this. Nothing can be given as solace or for bereavement suffered. Un-
der instructions declaring the true rule for estimating the damages,
the jury found for plaintiff, in the sum of $800, but one of the errors
assigned is, the amount found is excessive. As a matter of law, we can-
not so declare, and as a matter of fact, how can we know the amount
is in excess of the pecuniary damages sustained? When proof is made
of the age and relationship of the deceased to next of kin, the jury may
estimate the pecuniary damages from the facts proven, in connection
with their own knowledge and experiences in relation to matters of
common observation. It is not indispensable there should be proof of
actual services of pecuniary value rendered to next of kin, nor that any
witness should express an opinion as to the value of services that may
have been or might be rendered. Where the deceased was a minor, and
left a father who would have been entitled to his services had he lived,
the law implies a pecuniary loss, for which compensation, under the
statute, may be given.
The discretion of a jury, where there is a jury, or of the trial court, where
the court possesses such faculty, in fixing the amount of damages, will not be
interfered with by the appellate court unless this discretion has been palpably
abused. Since in the very nature of things, the value of a human life cannot
be exactly estimated in money, and since the elements which go to make up
any value are personal to each case, much must depend on the good sense
and sound judgment of the jury or judge. The rule has been applied to the
death of minor children where there was nothing to show passion, prejudice,
or ignorance on the part of the jury. (See 13 Cyc., 375-377).
DAMAGES
The right of action for death and the presumption in favor of compensa-
tion being admitted, the difficulty of estimating in money the worth of a life
should not keep a court from judicially compensating the injured party as
nearly as may be possible for the wrong. True, man is incapable of measur-
ing exactly in the delicate scales of justice the value of a human life. True,
the feelings of a mother on seeing her little son torn and mangled expir-
ing dead could never be assuaged with money. True, all the treasure
in natures vaults could not begin to compensate a parent for the loss of a
beloved child. Nevertheless, within the bounds of human powers, the negli-
gent should make reparation for the loss.
Attempts at approximation in money for death have been made.
Many American statutes have arbitrarily limited the amounts that could
be recovered to five thousand dollars or ten thousand dollars. The federal
Courts have intimated that these statutory limits should only be taken as a
guide to the permissible amount of damages. (Cheatham vs. Red River Line
[1893], 56 Fed., 248; The Oceanic [1894], 61 Fed., 338; Farmers L. & T. Co.
vs. Toledo A. A. & N. M. Ry. Co. [1895], 67 Fed., 73). In Louisiana, $2,500,
3,000, 4,000, and 6,000 were allowed in the respective cases for the death
of a child. In Porto Rico, $1,000 and $1,500 has been allowed for such a loss.
In the Philippines, the rule has been in criminal cases to allow as a matter
of course P1,000 as indemnity to the heirs of the deceased.
The foregoing is believed to be a fair statement of the pertinent general
principles. Before closing, notice should be taken of the leading decisions of
the supreme court of Spain and the supreme court of Porto Rico. The first is
the decision of the Supreme Court of Spain of December 14, 1894.
Eulogio Santa Maria died in Madrid in 1891, in consequence of a fall
from the wall of the racket known as Jai-Alai, which he was climbing for
the purpose of placing the customary flags to announce the opening of the
game. The facts were investigated through criminal proceedings which were
discontinued, and then the widow of the deceased, in her own behalf and on
behalf of her infant daughter, Teodora, instituted a civil action in the proper
court, alleging that the cause of the fatal accident resided in the fault and
omission of the owners of the racket, because, as they knew and saw, neither
the place for the raising of the flags nor the road that had to be gone over to
reach it were in a condition to insure safety; that at his death her husband
had left two children, one named Anastasio, of 14 years, had by his first mar-
riage, and another named Teodora, of 3 years had by his second marriage
with the plaintiff; that the damages caused and for which the defendants
should be held responsible were of a two-fold character that is, one hav-
ing reference to affection and the other to the loss of the modest pay which,
capitalized at 5 percent and added to the sum demandable for the first men-
tioned consideration, amounted to 21,425 pesetas. The defendants alleged
that the death of the plaintiffs husband could not be ascribed to any fault,
omission, or negligence on their part, etc., and prayed that the complaint be
dismissed. After hearing the case the court rendered judgment condemning
the defendants to pay the sum of 5,000 pesetas to the heirs of the deceased
as indemnification for the latters death. An appeal from said judgment hav-
860 TORTS AND DAMAGES
ing been taken by the plaintiff, the defendants joined in said appeal and the
Audiencia territorial, in deciding the case, adjudged the defendants to pay
the plaintiff in her own right and as representative of her daughter, Teodora,
5,000 pesetas, as indemnification for the death of her husband, affirming in
these terms, the judgment appealed from, and reserving to the other child of
the deceased, who was not a party in this case, his right likewise to demand
indemnification. The defendants then took an appeal for annulment of judg-
ment to the supreme court, alleging that various laws had been violated
and, among other particulars, that the judgment did not state the amount
at which the court valued the life of Santa Maria, nor was anything allowed
the plaintiffs on the score of affection or for damages, nor was the principle
mentioned upon which the court had acted to fix the sum of 5,000 pesetas.
The Supreme Court of Spain affirmed the judgment appealed from in
its opinion of December 14, 1894, the grounds whereof are the following:
As to the ground the court had for concluding, in view of the
evidence, that the death of the unfortunate Eulogio Santa Maria
was due to the omission on the part of the appellants, owners, and
managers of the racket (ball game) known as Jai-Alai, of such
precautions as were called for to forestall the dangers attending
the placing and removal of the streamers, which the deceased
had been doing with their knowledge and consent, and for their
benefit, we find that said court has correctly applied Articles
1093, 1902, and 1903, and that it has not violated Articles 1101,
1103, and 1104 of the Civil Code, because, according to the first-
mentioned article, obligations arising from acts or omissions, in
which faults or negligence, not punished by law, occur, are subject
to the provisions of said Articles 1902 and 1903, and, according
to the latter, indemnification for the damage done lies whenever
the act or omission has been the cause of the damage and all the
diligence of a good father of a family has not been observed, either
when the act or omission is personal with the party, or when it
has reference to persons for whom he should be responsible; and
because the provisions of Articles 1101, 1103, and 1104 are of a
general character and applicable to all kinds of obligations and
do not come in conflict with the special provisions of Articles 1902
and 1903;
The indemnification corresponding to the damage caused
by a guilty act or omission, not constituting a crime, should be
declared, as are all indemnifications, in every suit, in accordance
with the particular damage caused to the claimants, and as in the
judgment this has been done with respect to Juana Alonzo Celada
and her daughter, the only plaintiffs, by fixing the sum due them,
said judgment does not violate Article 1902 of the code, and much
less does it violate Article 360 of the Law of Civil Procedure;
The amount of the indemnification adjudged is based on
the evidence taken and on the facts admitted by both parties in
DAMAGES
their pleadings at the trial, wherefore there has been no violation
of Article 1211, through lack of proof, as alleged.
As has heretofore been intimated, the Civil Law in Porto Rico, derived
from the same source as that of the Philippines, can well be looked to for
persuasive authority. Thus, as disclosed by the facts in the decision coming
from the pen of Justice Del Toro, one Diaz brought a suit against the San Juan
Light Transit Co. to recover the sum of 6,000 as damages. The district
court of San Juan rendered judgment declaring that the facts and the law
were in favor of the plaintiff and against the defendant, and decreeing that
the former should obtain from the latter the sum of $3,000 as damages. The
supreme court of Porto Rico said the issue was, that inasmuch as plaintiff has
failed to produce any evidence of the amount of damage sustained, judgment
should not be rendered in this form. After setting forth the decision of the
supreme court of Spain of December 14, 1894, hereinbefore described, and
other authorities, the court said:
Applying the foregoing principles and those contained in
Section 1804 of the Revised Civil Code to the specific case under
consideration, we find that in the complaint it is alleged that the
complainant sustained damages which he estimates at $6,000,
and that the immediate and natural cause of said damages was
the careless act of one of the employees of the defendant, who
was in its service and while in the discharge of his duties.
The evidence taken does not show that the complainant
failed to earn, as a result of the injuries received, a stated sum
of money, or that he had to pay the physician who attended him
another stated sum, etc.; but it does show that the complainant,
a man of 51 years of age, who worked as a farmer and hawked
about his products, supporting himself and his family with his
labor, while stepping out of one of the electric cars of the defend-
ant, at Stop 7 of the San Juan-Rio Piedras line, fell to the ground
owing to the carelessness and inattention of the motorman in
starting the car before it, was time; that he received a severe blow
which rendered him unconscious for some moments, fractured
his lower jaw, and caused abrasions on his legs and other parts
of his body; that he remained at the hospital, having his injuries
nursed, for more or less one month, and that, on being examined
at the trial that is, one year and five months after his fall
he presented on the right side of his face, as a consequence of
the fracture, a contraction which means a paralysis, and could
speak, but hardly masticate, and only with difficulty could open
and close his mouth. It does not appear from the evidence that
the complainant has been disabled, but it does appear that at
the time the evidence was taken he was suffering from nervous
illness, according to the opinion of Dr. Stahl, one of the experts
who testified at the trial.
Under these circumstances the judge, in accordance with
862 TORTS AND DAMAGES
the law and jurisprudence, had to estimate for himself the dam-
age caused and determine the amount of indemnification which
the defendant should pay the complainant. And in so doing, the
court did not commit the errors attributed to it by the appellant.
The question in the present case is not one of punitive or
exemplary damages, but of compensation for damages sustained.
In order to allow such compensation it is not necessary that the
complainant should prove his loss in terms of dollars and cents, it
being sufficient, in cases of this nature to prove that the plaintiff,
through the fault or negligence of the defendant and not through
his own fault and negligence, had sustained a real damage, con-
sisting of physical pains, loss of work, confinement in a hospital,
mental suffering, etc.
The indemnification in this case was fixed by the lower
court at $2,000, and although it could perhaps have been calcu-
lated at less, we do not find that it is immoderately inadequate,
and this being so we should not alter it. (Diaz vs. San Juan Light
& Transit Co., supra).
In another case, that of Gonzalez vs. The San Juan Light & Transit
Co. ([1911], 17 Porto Rico, 115) recovery for damages was not permitted. In
the latter case, it was said:
This is an appeal from the first section of the district court
of San Juan seeking to reverse a judgment therein rendered
on December 1, 1909, in favor of the defendant. This suit was
initiated in the district court of San Juan through a complaint
presented by Ramona Gonzalez Soto, alleging therein that the
defendant company, the San Juan Light and Transit Co., had
negligently caused the death of Juan Cordova Soto, son of the
plaintiff, in the ward of Santurce, between stops 21 and 22, on
the trolley line of defendant, about December 2, 1904, the father
of the deceased not appearing also as a complainant on account
of his death having occurred after that of his son but previous to
the filing of the complaint.
We have stated said first ground alleged for reversal in the
form in which it has been expressed by counsel for the defend-
ant; but possibly it might also have been set forth more clearly
as follows: Even supposing that the plaintiff had shown that
the death of her son had been caused through the negligence of
the defendant company, could damages be awarded her without
showing by proof their existence and the amount there-of ?
Our Civil Code now in force, in Section 1803, reads as fol-
lows:
A person who by an act or omission causes damage to
another, when there is fault or negligence, shall be obliged to
DAMAGES
repair the damage so done.
So that the claim of the plaintiff herein is sustained by this
precept of the law which establishes her right to be indemnified
by the defendant for the damage caused her on account of the
death of her son, if said death was brought about by any act or
omission of said company, through its fault or negligence.
This is our substantive law in the matter of damages and
it is in accordance with its provisions, as interpreted by the ruling
jurisprudence, that courts should decide questions submitted to
them for decision, and therefore the plaintiff is entitled, in cases
where there may exist fault or negligence on the part of the
defendant company, to recover from the defendant company the
damages that may have been actually caused to her, whatever
they may be.
xxx xxx xxx
As may be seen, this jurisprudence (of Spain ) is in accord-
ance with the legal precept of the code that only those damages
actually caused may be awarded, and, therefore, to enable the
court to decide what damages have been caused, it is necessary
to prove the real existence of the damages and the corresponding
facts from which the court can deduce the amount thereof.
Of course, the plaintiff makes a claim only for herself for
pecuniary loss sustained by her on account of the death of her
son, and the boy himself does not make any claim because he
did not live to do so; hence the mother would never have been
entitled to any other damages than those arising out of the loss
of the services of her son, and never to those damages which he
himself might have been entitled to claim had he not died, or
arising from the injuries that he himself might have suffered
on account of the accident. The damages which would give the
plaintiff in this case a right to recovery against the defendant are
only the loss of support, or contributions thereto, which the son
was accustomed to make to his mother from his earnings and of
which she may have been deprived by his death. But does the
evidence introduced by the plaintiff support her claim to recover
such damages? We are of the opinion that it does not, because
she has not proven that her son was really earning the amount
alleged in the complaint, nor any other sum whatever, nor how
much money he was earning by his work either in Arecibo or in
San Juan during the days immediately preceding his death or
at any time. And we are of the opinion that this is a necessary
requisite, because, as the Civil Code declares that recovery may be
had for the damage caused, the damages accruing to the plaintiff
must be shown so that the trial judge may have data on which to
base his decision.
864 TORTS AND DAMAGES
In this action no evidence whatever has been produced
in this respect. The only fact proven in regard to this point is
that Juan Cordova Soto was killed by a collision with the trolley
car; that he was earning something when he was previously in
Arecibo. It is not shown what occupation he had, nor how much
money he earned while he was there nor while he was in San
Juan, nor is it shown that his mother derived any benefit from
his wages; and from this evidence the court cannot consider as
proven the amount of the damages, nor even their existence. It
has not been shown that the death of her son caused any material
or pecuniary damages to his mother, the plaintiff herein, nor the
amount thereof.
Therefore, an essential requisite for a judgment against
the defendant company is lacking, and even supposing that she
had an action for damages through negligence of the company
in the death of the boy, we could not find a judgment against the
defendant company, for lack of evidence in regard to the existence
of the pecuniary damages sustained and facts from which to infer
the amount thereof. Therefore, the defendants motion for a judg-
ment in its favor on this first ground was properly sustained.
As will be readily perceived, having dug out the applicable authori-
ties, and having set them before us, our task still is far from complete. On
the one hand, the obvious conclusion would be that, inasmuch as plaintiff
has failed to prove her pecuniary loss, she cannot recover, or, for the same
reason, to return the case to the lower court for further evidence. This is the
obvious way. To one trained in the Common Law, and inculcated with all
the doctrines of the American law of damages, it is the logical way. Is it the
just and natural way?
The first reply would be that the civil law authorities are, like the com-
mon law cases, against recovery without proof of loss. If necessary, however,
the three decisions just described, could be differentiated from the present
facts. The decision of the supreme court of Spain, it is to be remembered,
involved an action for the death of a man of mature years. The first decision
of the supreme court of Porto Rico recognizes the principle of presumptive
recovery. The second decision of the supreme court of Porto Rico concerned
an action for the death of a son of sufficient age to have an earning capacity.
None of these is our case. Here present is the case of a young child whose
death is caused by wrongful act, leaving a poor mother to be the loser.
To answer in a different way, let us make a comparison. The facts before
us, and the facts before the supreme court of Illinois in analogous cases, are
substantially identical. We have proof of the age of the deceased, proof of
the name of the next of kin, and proof that the mother is a laboring woman.
Under both the Common Law and the Civil Law, plaintiffs damage, broadly
speaking, is for the loss of the services of the deceased, or for support by the
deceased. Plaintiff having shown that the deceased was her son and that he
DAMAGES
was 8 or 9 years of age at the time of death, it was neither necessary nor
possible to prove loss of services or support, or to prove special damage as if
the object of the loss had been a horse or other animal. No doubt the dam-
age could be greatly enhanced by showing the personal characteristics of the
deceased. Outside of this, however, the pecuniary loss may be estimated from
the facts at hand with reference to the general knowledge which all possess.
To force the plaintiff to prove her loss exactly would be to ask the
impossible would be in effect to return to the old common law rule which
prohibits a recovery Physical and gross criteria, as the hewing of wood and
carrying of water, are indeed no standards at all. Even if the case was to
be reopened, the plaintiff could with extreme difficulty present any better
evidence than that now before us. As we have the basis of satisfactory facts
from which to infer the amount of damage, as the law presumes a pecuni-
ary loss because of the death, and as the trial judge has made an intelligent
computation, we should rest here, with knowledge that, within the ken of
human wisdom, justice has been done.
On a careful consideration of the entire field of the law on the subject
of damages, we come to the conclusion that the amount, in the nature of an
indemnity allowed by the trial court, is neither excessive nor immoderately
inadequate, and should stand.
(1) Fixed Damages.
The law also requires payment of the amount of P3,000.00 to
the heirs of the deceased. The fixed amount of three thousand pesos
(P3,000) is in addition to any damage that may have resulted because
the act or omission of the defendant including medical expenses and
loss of earning capacity. It should be noted, however that the Supreme
Court had repeatedly increased the amount of indemnity from three
thousand pesos (P3,000.00) in order to reflect the current value of
currency and prevailing inflation. The current amount of fixed dam-
ages as increased by the Court is P50,000.00. (Gregorio Pestano et al.
v. Spouses Paz, G.R. No. 139875, December 4, 2000, 346 SCRA 870).
(2) Loss of Earning Capacity.
Formula.
The formula for the computation of the awarded damages for
loss of earning capacity was laid down in the landmark case of Villa
Rey Transit vs. Court of Appeals. (31 SCRA 511 [1963]; reiterated in
People vs. Daniel, 136 SCRA 92; Dangwa Trans. Co., Inc. vs. CA, 202
SCRA 574; Davila vs. Phil. Airlines, 49 SCRA 497 [1973]; Monson vs.
Intermediate Appellate Court, 169 SCRA 76 [1989]; People vs. Suitos,
220 SCRA 420, 430 [1993]; People vs. Teehankee, Jr., 249 SCRA 54;
Baliwag Transit, Inc. vs. Court of Appeals, 262 SCRA 230 [1996];
866 TORTS AND DAMAGES
People vs. Cordero, 263 SCRA 122, 141 [1996]; People vs. Aringue, 283
SCRA 291, 306 [1997]). The Supreme Court observed in the said case
that the important variables taken into account in determining the
compensable amount of lost earnings are: (1) the number of years for
which the victim would otherwise have lived (life expectancy); and (2)
the rate of loss sustained by the heirs of the deceased (net income).
The following formula should therefore be used:
Net Earning Capacity = Life Expectancy x [Gross Annual In-
come less Necessary Living Expenses]
The first factor, i.e., life expectancy is computed by applying
the formula (2/3 x [80 age at death]) adopted in the American
Expectancy Table of Mortality or the Actuarial Combined Experience
Table of Mortality.
For example, in a case (People v. Galvez, 355 SCRA 266 [2001]
See also Pleyto v. Lomboy, No. 14737, June 16, 2004) where it was
established that the deceased was 21 years old at the time of his
death and was working as a construction worker five days a week
earning P150.00 per day, the Supreme Court computed the victims
lost earning capacity as follows:
2/3 x [80-21 (age of the victim at time of death)] = 39.33
P150 (daily wage) x 261 (number of working days in a year) =
P39,150.00 (gross annual salary)
P39,150.00 x .50 (allocation for living expenses) = P19,575.00
(net income)
39.33 x P19,575.00 = P769,884.75 (loss of earning capacity)
Net Earnings.
The Court considered as an important element in measuring
loss of earning capacity, the net earnings of the deceased as well as
the latters potentiality and capacity to increase his future income.
The Supreme Court explained in Villa Rey Transit:
At this juncture, it should be noted, also, that We are
mainly concerned with the determination of the losses or damages
sustained by the Private respondents, as dependents and intes-
tate heirs of the deceased, and that said damages consist, not of
the full amount of his earnings, but of the support they received
or would have received from him had he not died in consequence
DAMAGES
of the negligence of petitioners agent. In fixing the amount of
that support, We must reckon with the necessary expenses of
his own living, which should be deducted from his earnings.
Thus, it has been consistently held that earning capacity, as an
element of damages to ones estate for his death by wrongful act
is necessarily his net earning capacity or his capacity to acquire
money, less the necessary expense for his own living. Stated
otherwise, the amount recoverable is not loss of the entire earn-
ing, but rather the loss of that portion of the earnings which the
beneficiary would have received. In other words, only net earn-
ings, not gross earning, are to be considered that is, the total of
the earnings less expenses necessary in creation of such earnings
or income and less living and other incidental expenses.
It is therefore not the net monthly income that is actually re-
ceived by the deceased that will serve as basis of the computation.
The proper computation should be based on the gross income of the
victim minus the necessary and incidental living expenses which the
victim would have incurred if he were alive (People v. Arnel Mataro,
et al., G.R. No. 130378, March 8, 2001, 354 SCRA 27, 38-39; People
v. Nullan, 305 SCRA 679, 706-707 [1999]). Needless to state, suf-
ficient evidence should be presented by the plaintiff to establish the
net earnings of the deceased. In this connection, it was ruled that the
payroll of companies and the Income Tax Returns constitute the best
evidence of the salary of the deceased (Phil. Airlines, Inc. vs. Court
of Appeals, 185 SCRA 110 [1990]).
There were instances when proof of income of the deceased
was an issue that the Supreme Court required unbiased proof of the
average income of the deceased (People v. Agapito Listerio, G.R. No.
122099, July 5, 2000; People v. Sanchez, 313 SCRA 694 [1999]. The
Court rejects mere estimates and bare testimonies as proof of such
income even if the testimony was given by the widow (See: People v.
Efren Mindanao, G.R. No. 123095, July 6, 2000).
Nevertheless, it is not correct to state that the award for lost
income should always be supported by documentary evidence. (In
fact, as will be explained hereunder, the heirs of the deceased may
be entitled to lost earnings even if the deceased was not working).
Hence, the testimonies of the officers of the employer of the deceased
may also suffice. (Phil. Airlines, Inc. vs. Court of Appeals, supra).
Similarly, the testimonies of the widows of the victims were held ac-
ceptable where a reasonable estimate of the income can be made on
the basis of such testimonies (People v. Gutierrez, Jr. 302 SCRA 643;
People v. Verde 302 SCRA 690 [1999]; People v. Quilang 312 SCRA 314
[1999]; People v. Antonio, G.R. No. 128900, July 14, 2000, 302 SCRA
868 TORTS AND DAMAGES
690; People v. Daroy et. al., G.R. No. 118942, July 18, 2000; People v.
Villorbam G.R. No. 132784, October 30, 2000, 344 SCRA 464; People
v. Banrado, G.R. No. 132330, November 28, 2000, 346 SCRA 189).
Mere testimonies unsupported by documentary evidence were
accepted in some cases because of the nature of the work of the de-
ceased. Thus, testimonial evidence was deemed sufficient in People v.
Pedro Perreras (G.R. No. 139622, July 31, 2001) because the victim
was a waiter in a restaurant who was only earning P130.00 per day.
In another case, no documentary evidence was required because the
deceased was a daily wage earner who worked in a hacienda and was
even receiving less than the minimum wage (People v. Uganap, G.R.
No. 130605, June 19, 2001, 358 SCRA 674, 687; see also People v.
Dizon, 320 SCRA 513 [1999]). A self-employed tricycle driver cannot
likewise be expected to present documentary evidence and proof of his
income must necessarily be testimonial (People v. Leonilo Villarba,
G.R. No. 132784, October 30, 2000).
Therefore, the heirs can recover despite the non-availability of
documentary evidence if there is testimony that: (a) the victim was
self-employed earning less than the minimum wage under the cur-
rent labor laws and judicial notice was taken of the fact that in the
victims line of work, no documentary evidence is available; and (b)
the victim was employed as a daily wage worker earning less than
the minimum wage under the current labor laws (People v. Muyco,
331 SCRA 192 [1999]; People v. Dindo Pajotal, et al, G.R. No. 142870,
November 14, 2001).
Living Expenses.
The amount of the living expenses must also be established to
determine the net earning. However, the Supreme Court has consist-
ently ruled that, the amount thereof is fixed at fifty percent (50%)
of the gross income in the absence of proof of the amount of living
expenses to be deducted from the gross income (Metro Manila Tran-
sit Corporation et al. v. Court of Appeals, et al., G.R. Nos. 116617 &
126395, November 16, 1998; People v. Templo, 346 SCRA 626 [2000];
People v. Agapito Listerio, G.R. No. 122099, July 5, 2000;People v.
Elger Guzman, G.R. No. 132750, December 14, 2001;People v. Angelito
Yatco, G.R. No. 138388, March 19, 2002;People v. Ireneo Godoy, G.R.
No. 140545, May 29, 2002; Smith Bell Dodwell Shipping Agency Cor-
poration v. Catalino Borja, et al., G.R. No. 143008, June 10, 2002).
While an amount less than fifty percent (50%) of the gross income
may indeed be the actual living expenses of the deceased, courts
DAMAGES
cannot use a lesser amount in the absence of proof thereof or in the
absence of other circumstances that would justify the reduction of the
living expenses (Smith Bell Dodwell Shipping Agency Corporation v.
Catalino Borja, et al., ibid.).
Non-working victims.
The inclusion of net earnings or income as a variable in com-
puting the loss of earning capacity sometimes gives the erroneous
impression that if the victim was not earning any income at the
time of his death, his heirs will not be entitled to damages for loss
of earning capacity. The simplistic reasoning that is being applied is
that income or earnings must be established and proof thereof can
never be presented by the claimants if the victim was not gainfully
employed at the time of the accident.
However, such position disregards the fact that the liability
under Article 2206 is for loss of earning capacity rather than loss of
actual earnings. Earning capacity may be impaired even if no actual
earning is lost in the meantime.
In a number of cases, the Supreme Court recognized the entitle-
ment of the heirs of the deceased for loss of earning capacity of the
deceased even if the said deceased was not working at the time of
the accident. What is important is that there is proof of loss of earn-
ing capacity and not necessarily actual loss of income. Section 2206
of the Civil Code provides that the defendant shall be liable for the
loss of the earning capacity of the deceased, and the indemnity shall
be paid to the heirs of the latter unless the deceased on account of
permanent physical disability not caused by the defendant, had no
earning capacity at the time of his death. Thus, the heirs of the
deceased may still be entitled to damages even if the actual income
of the latter as a farmer was not duly established so long as there is
indication that the said deceased had earning capacity at the time of
his death (People of the Philippines v. Elger Guzman, G.R. No. 132750,
December 14, 2001).
In Metro Manila Transit Corporation et al. v. Court of Appeals
et al. (G.R. Nos. 116617/126395, November 16, 1998), the Supreme
Court awarded damages in favor of the plaintiffs for the death of their
non-working minor child who was killed because of the negligent driv-
ing of a bus driver. The Supreme Court used the minimum wage for
non-agricultural workers in computing the net earnings. The Court
explained:
Compensation for Loss of Earning Capacity. Art. 2206 of the
870 TORTS AND DAMAGES
Civil Code provides that in addition to the indemnity for death
caused by a crime or quasi delict, the defendant shall be liable for
the loss of the earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; . . . . Compensation of this
nature is awarded not for loss of earnings but for loss of capacity
to earn money. [People v. Teehankee, 249 SCRA 54, 118 (1995)]
Evidence must be presented that the victim, if not yet employed
at the time of death, was reasonably certain to complete training
for a specific profession. [E.g., Cariaga v. Laguna Tayabas Bus
Company, 110 Phil. 346 (1960)] In People v. Teehankee, [249
SCRA 54, 118-119 (1995)] no award of compensation for loss of
earning capacity was granted to the heirs of a college freshman
because there was no sufficient evidence on record to show that
the victim would eventually become a professional pilot. [Supra
note 35, at 119.] But compensation should be allowed for loss of
earning capacity resulting from the death of a minor who has not
yet commenced employment or training for a specific profession if
sufficient evidence is presented to establish the amount thereof.
In the United States it has been observed:
This raises the broader question of the proper measure of
damages in death cases involving children, housewives, the old,
and others who do not have market income so that there is no
pecuniary loss to survivors or to the estate of the decedent. The
traditional approach was to award no or merely nominal dam-
ages in such cases. . . . Increasingly, however, courts allow expert
testimony to be used to project those lost earnings. [RICHARD
A. POSNER, TORT LAW: CASES AND ECONOMIC ANALYSIS
123-25 (1982)]
Thus, in Haumersen v. Ford Motor Co., 40 [257 N.W. 2d
7, 17 (1977)] the court allowed the heirs of a seven-year-old boy
who was killed in a car accident to recover compensation for loss
of earning capacity:
Considerable evidence was presented by plaintiffs in an
effort to give the jury a foundation on which to make an award.
Briefly stated, this evidence showed Charles Haumersen was a
seven-year-old of above average characteristics. He was described
as very intelligent and all-American. He received high marks
in school. He was active in church affairs and participated in
recreational and athletic events, often with children older than
himself. In addition, he had an unusual talent for creating nu-
merous cartoons and other drawings, some of which plaintiffs
introduced at trial.
The record does not disclose passion and prejudice. The key
question is whether the verdict of $100,000 has support in the
evidence.
Upon analysis of the record, we conclude that we should
DAMAGES
not disturb the award.
The argument for allowing compensation for loss of earning
capacity of a minor is even stronger if he or she was a student,
whether already training for a specific profession or still engaged
in general studies. In Krohmer v. Dahl, 41 [402 P. 2d 979, 982
(1965)] the court, in affirming the award by the jury of $85,000.00
to the heirs of an eighteen-year-old college freshman who died of
carbon monoxide poisoning, stated as follows:
There are numerous cases that have held admissible evi-
dence of prospective earnings of a student or trainee. . . . The
appellants contend that such evidence is not admissible unless
the course under study relates to a given occupation or profession
and it is shown that the student is reasonably certain to follow
that occupation or profession. It is true that the majority of these
decisions deal with students who are studying for a specific oc-
cupation or profession. However, not one of these cases indicate
that evidence of ones education as a guide to future earnings is
not admissible where the student is engaged in general studies
or whose education does not relate to a specific occupation.
In sharp contrast with the situation obtaining in People v.
Teehankee, where the prosecution merely presented evidence to
show the fact of the victims graduation from high school and the
fact of his enrollment in a flying school, the spouses Rosales did
not content themselves with simply establishing Liza Rosalies
enrollment at UP Integrated School. They presented evidence to
show that Liza Rosalie was a good student, promising artist, and
obedient child. She consistently performed well in her studies
since grade school. [TSN, pp. 8-9, Aug. 27, 1987.] A survey taken
in 1984 when Liza Rosalie was twelve years old showed that she
had good study habits and attitudes. [Exh. DD, Records, p. 263.]
Cleofe Chi, guidance counselor of the University of the Philip-
pines Integrated School, described Liza Rosalie as personable,
well-liked, and with a balanced personality.44 [TSN, pp. 9-11,
Aug. 27, 1987.] Professor Alfredo Rebillon, a faculty member
of the University of the Philippines College of Fine Arts, who
organized workshops which Liza Rosalie attended in 1982 and
1983, testified that Liza Rosalie had the potential of eventually
becoming an artist. [TSN, pp. 1-7, June 22, 1987.] Professor
Rebillons testimony is more than sufficiently established by
the 51 samples of Liza Rosalies watercolor, charcoal, and pencil
drawings submitted as exhibits by the spouses Rosales. [Exhs.
U-1 to U-51, Records, pp. 46-96.] Neither MMTC nor Pedro Musa
controverted this evidence.
Considering her good academic record, extra-curricular
activities, and varied interests, it is reasonable to assume that
Liza Rosalie would have enjoyed a successful professional career
872 TORTS AND DAMAGES
had it not been for her untimely death. Hence, it is proper that
compensation for loss of earning capacity should be awarded to
her heirs in accordance with the formula established in decided
cases47 [E.g., Negros Navigation Co., Inc. v. Court of Appeals,
281 SCRA 534 (1997)] for computing net earning capacity x x x
The case cited by the Supreme Court in the above-quoted case,
Edgardo Cariaga et al. v. Laguna Tayabas Bus Company (G.R. No.
L-11037, December 29, 1960), involved a victim who was a student
studying medicine. The negligence of the bus driver caused physical
injuries to the student, and as a result, he became virtually invalid
physically and mentally. The Supreme Court sustained the award
of compensatory damages explaining that the income which the stu-
dent could earn if he should finish the medical course and pass the
corresponding board examinations must be deemed to be within the
same category as the actual damages for medical expenses and the
like because they could have reasonably been foreseen by the parties
at the time he boarded the bus owned and operated by the respond-
ent bus company. The Court explained: At that time he was already
a fourth-year student in medicine in a reputable university. While
his scholastic record may not be first rate (Exhibits 4, 4-A to 4-C),
it is, nevertheless, sufficient to justify the assumption that he could
have finished the course and would have passed the board test in due
time. As regards the income that he could possibly earn as a medical
practitioner, it appears that, according to Dr. Amado Doria, a witness
for the LTB, the amount of P300.00 could easily be expected as the
minimum monthly income of Edgardo had he finished his studies.
Damages for loss of earning capacity was also awarded in People
of the Philippines v. Gonzalez Jr. (G.R. No. 139542, June 21, 2001,
359 SCRA 352, 380) although the victim was not working at the time
of her death. The victim was not working at that time because she
was pregnant although it was established that she was a registered
nurse who used to work in Saudi Arabia. The Court concluded that
earning capacity was duly established:
x x x while there is no evidence as to Felibers actual income at
the time of her death, in view of her temporary separation from
work because of pregnancy, we do not consider it reversible error
for the trial court to peg her earning capacity to that of the salary
of a government nurse under the salary standardization law as
fair estimate or reasonable assessment of her earning capacity
at the time of her death. It would be grossly iniquitous to deny
her spouse and her children damages for support that they would
have received, considering clear evidence on record that she did
have earning capacity at the time of her death. (pp. 380-381)
DAMAGES
In People of the Philippines v. Mayor Antonio L. Sanchez et al.
(G.R. Nos. 121039-45, October 18, 2001), the Supreme Court rejected
the argument that proof of the actual income of the victims is neces-
sary holding that it is well-settled that to be compensated for loss
of earning capacity, it is not necessary the victims was gainfully
employed at the time of his or her death. Compensation is awarded
not for loss of earnings but for loss of capacity to earn money. The
victims in the case were senior agriculture students in the countrys
leading educational institution in agriculture and the Supreme Court
believed that it would not be unreasonable to assume that in 1993,
they would have earned more than the minimum wage. Thus, the
Court believed that it would be fair and reasonable to fix the monthly
income that each of the victims would earn in 1993 at P8,000.00 per
month and their deductible living and other incidental expenses at
P3,000.00 per month.
Life Expectancy.
The formula used in Villa Rey Transit shows that life expectancy
of the deceased is not only relevant but also an important element in
fixing the amount recoverable. It is important to emphasize in this
connection that it is the life of the deceased or victim that is the ele-
ment of the formula for computing loss of earning capacity and not
that of the heirs (Gregorio Pestano et al. v. Spouses Teotimo & Paz
C. Sumayang, G.R. No. 139875, December 4, 2000).
In determining the life expectancy of the victim, the Supreme
Court had repeatedly used the American Expectancy Table of Mortal-
ity or the Actuarial of Combined Experience Table of Mortality that
are used by insurers. The table being used by insurance companies is
adopted because there is a link here with actuarial tables, which were
created by life assurance companies for the purpose of determining
what capital sum should be charged for an annuity, since the insurer
is obviously vitally concerned to make the estimate of the annuitants
life expectancies. Since the table are concerned with assessing the
capital price of a future stream of income, the information on which
they are based can easily be used to determine the present capital
value of a future stream of loss. (Winfield and Jolowich, p. 770).
In this jurisdiction, the multiplier that corresponds to the life
expectancy of the victim may be reduced depending on the circum-
stances. The reduction is usually made for two (2) reasons. First, some
allowance must be made for the general vicissitudes of life, that is to
say, damaging events like early death or unemployment which might
have affected the plaintiff even if the defendant had not injured him.
874 TORTS AND DAMAGES
Second, account must also be taken of the fact that the lump sum
of damage will itself produce an investment income. The theoretical
aim of the process is to provide a lump sum sufficient, if invested,
to produce an income equal to the lost income when the interest is
supplemented by withdrawal of capital. (Winfield and Jolowich, p.
769).
Several factors were considered by the Supreme Court in reduc-
ing the life expectancy multiplier in some of the cases that it decided.
For instance, the Supreme Court reduced the multiplier in one case
because it considered the fact that a man does not expect to work
up to the final month or year of his life in reducing the multiplier.
(People vs. Quilaton, p. 289). The multiplier can likewise be reduced
by considering the medical history of the deceased. Thus, in one case,
the Supreme Court considered the fact that the deceased underwent
a major surgery such as a caesarian section. From 24 years, the life
expectancy was reduced to 20 years. (MD Transit vs. Court of Ap-
peals, p. 546). In another case, the multiplier was reduced from 33
years to 25 years because the medical history of the deceased showed
that he had complained of and had been treated for such ailments as
backaches, chest pains and occasional feeling of tiredness. (Davila
vs. PAL, p. 504).
The nature of the work may likewise result in the reduction
of the multiplier. Thus, a reduction was made in a case where the
deceased was a jeepney driver. The Supreme Court observed that
drivers of passenger jeepneys cannot continue the backbreaking
pace and unnerving nature of their work for many years. (People vs.
Daniel, p. 104 [1985]). In another case, the Supreme Court likewise
suggested that habit and manner of life should be taken into account.
Thus, a reduction can be made if the deceased had been consistently
engaged in a dangerous and risky activity tending to shorten his life.
(Rodriguez-Luna vs. Intermediate Appellate Court, 135 SCRA 242,
248 [1985]).
If there is no circumstance that may be used to reduce the
multiplier representing the life expectancy of the victim, the amount
is computed based on the prescribed formula: 2/3 x 80 age at
death. The resulting amount should be used as multiplier even if
the computed life expectancy goes beyond the victims retirement
age. The life expectancy of a victim is not based on the retirement age
prescribed by law for regular employees in the government or in the
private sector. The presumption is that the victim could have earned
income even if he is beyond his retirement age (Smith Bell Dodwell
Shipping Agency Corporation v. Catalino Borja, et al., supra.).
DAMAGES
Alternative Formula for Life Expectancy.
In People vs. Gumercindo Quilaton y Ebarola (205 SCRA 279
[1992]), Justice Feliciano proposed a new formula for life expectancy
based on the 1980 Commissioners Standard Ord. Mortality Table.
The formula states:
(Lx 1, Lx 2, . . . Lx n), where n 100 x
x age upon death
L number of people sur-
viving after number
of years
Justice Feliciano explained that the formula adopted in Villa-Rey
is already obsolete because it was based on the prevailing situation
in the 1970s. Actuarial experience subsequent to 1970 has, however,
changed and indicates a longer life expectancy in the Philippines
due to conditions including, among other thins, advances in medical
science, improved nutrition and food supply, diet consciousness and
health maintenance. (People vs. Quilaton, p. 289). However, the pro-
posed formula of Justice Feliciano did not gain acceptance in subse-
quent cases and the Supreme Court reverted to the Villa-Rey formula
in the cases that it decided after People vs. Guercindo Quilaton was
promulgated. (See People vs. Suitos, 220 SCRA 420 [1993]; Baliwag
Transit, Inc. vs. Court of Appeals, 262 SCRA 230 [1996]; People vs.
Cordero, 263 SCRA 122, 141 [1996]; People vs. Aringue, 283 SCRA
291, 306 [1997]).
n ation and eduction to Present ort .
A basic rule in American law is that the award in favor of the
plaintiff should be reduced to its present worth. Thus, the total
amount of actual income of the deceased up to the time of his death
will not be all given to the plaintiff. The aim is to provide a lump
sum sufficient, if invested, to produce an income equal to the lost
income when the interest is supplemented by withdrawal of capital.
It was also observed that the object of discounting lost future wages
to present value is to give the plaintiff an amount of money which,
invested safely, will grow to a sum equal to wages. (OShea vs. River-
way Towing Co., 677 F. 2d 1194, 7th Circuit, [1982]). For example, if
the court believes that but for the accident, the plaintiff would have
earned P200,000.00 in the year 2000 and the court was computing
in 1990 his damages based on lost earnings, the court would need to
determine the sum of money which if invested safely for a period of
876 TORTS AND DAMAGES
ten (10) years, would grow to P200,000.00.
In this jurisdiction, it appears that there are two (2) ways that
reduction to the present worth of the award is accomplished. First it
is accomplished by reducing the multiplier that corresponds to the
life expectancy. Another method of reduction is by maintaining the
amount of income at the last income of the deceased or the perma-
nently disabled. As observed in Villa-Rey Transit:
With respect to the rate at which the damages shall be
computed, petitioner impugns the decision appealed from upon
the ground that the damages awarded therein will have to be
paid now, whereas most of those sought to be indemnified will be
suffered years later. This argument is basically true, and this is,
perhaps, one of the reasons why the Alcantara case points out the
absence of a fixed basis for the ascertainment of the damages
recoverable in litigations like the one at bar. Just the same, the
force of the said argument of petitioner herein is offset by the
fact that, although payment of the award in the case at bar will
have to take place upon the finality of the decision therein, the
liability of petitioner herein had been fixed at the rate only of
P2,184.00 a year, which is the annual salary of Policronio Quin-
tos, Jr. at the time of his death, as a young training assistant
in the Bacnotan Cement Industries, Inc. In other words, unlike
the Alcantara case, on which petitioner relies, the lower courts
did not consider, in the present case, Policronios potentiality and
capacity to increase his future income. Indeed, upon the conclu-
sion of his training period, he was supposed to have a better job
and be promoted from time to time, and, hence, to earn more, if
not considering the growing importance of trade, commerce and
industry and the concomitant rise in the income level of officers
and employees therein much more.
It is noticeable however that no provision for inflation is made
in the prevailing formula. In some jurisdictions, a similar rule is in
force, that is, the award is not increased to provide for the contingent
inflation. Money is treated as retaining its value at the date of judg-
ment. This approach has been justified on the ground that protection
against inflation is built into the system because there is a tendency
for high inflation to be accompanied by high rates of interest. (Winfield
and Jolowich, p. 771).
f. Permanent Incapacity.
The plaintiff is also entitled to damages for loss of earning capac-
ity when the defendants act or omission resulted in his permanent
incapacity. Thus, in Borromeo vs. Manila Electric Railroad & Light
DAMAGES
Co. (44 Phil. 165, 167 [1922]), the Supreme Court awarded in favor
of the plaintiff an amount for his loss of earning capacity because he
lost his left foot. The Court observed that because of such loss, the
plaintiff could no longer be employed as a marine engineer on any
vessel as evidenced by the fact that the Collector of Customs has
refused to grant him a license to follow his profession as a marine
engineer.
g. oss of Profits.
Under the Old Civil Code, there was, early on, doubt if the
plaintiff can sue for loss of profits in his business. Whatever doubt
was, however, removed in the case of Algarra vs. Sandejas (27 Phil.
284) where the Supreme Court adopted the principles then being
enforced by American Courts.
The right to recover lost profits is now expressly recognized
under the New Civil Code. This may take the form of commissions
that were lost by reason of the acts or omissions of the defendant.
(General Enterprises, Inc. vs. Lianga Bay Logging Co., Inc.). This may
also take the form of income that was stipulated in the contract that
was terminated in a wanton and fraudulent manner. (Consolidated
Dairy Products, et al. vs. Court of Appeals, 212 SCRA 810, 822 [1992]).
The Supreme Court explained in Consolidated Dairy Products
(ibid.) that the amount of lost profits may be determined by consid-
ering the average profit for the preceding years multiplied by the
number of years during which the business is affected by the wrongful
act or breach. In the said case, the Supreme Court ruled that it was
reasonable to award as lost profit the average of the yearly profit for
five (5) years preceding the closure of the business multiplied by the
number of remaining year of the contract.
In G.A. Machineries, Inc. vs. Yaptinchay (126 SCRA 78, 88
[1983]), the Supreme Court ruled that the income of similar busi-
nesses or activities may be considered. Thus, if the question is loss
of profit of a freight truck, the average income of other trucks can be
considered.
However, it is basic that unrealized profit cannot be awarded if
the basis is too speculative and conjectural to show actual damages
for a future period. The plaintiff must therefore present reports and
documents that may show the average actual profits earned by the
business as well as other evidence of profitability which are neces-
sary to prove plaintiffs claim for said amount. (BA Finance Corp. vs.
Court of Appeals, 161 SCRA 608, 622; Gaw vs. IAC, 220 SCRA 405,
418 [1993]). In Pedro Velasco vs. Manila Electric Co. (42 SCRA 556,
878 TORTS AND DAMAGES
559-560 [1971]), the Supreme Court ruled that lost profit was not suf-
ficiently established where the plaintiff merely showed that he lost a
chance to sell his house for a certain price. The Court explained that
there was no adequate proof of loss since there was no evidence of
the depreciation in the market value of the house in question caused
by the acts of the defendant.
CASE:
ALGARRA vs. SANDEJAS
27 PHIL. 284
x x x In this respect the law of damages under Article 1902, as laid
down by the decisions of the supreme court of Spain, has been indirectly
modified by the present Code of Civil Procedure so that the finding of the
lower court as to the amount of damages is not conclusive on appeal.
Actual damages, under the American system, include pecuniary recom-
pense for pain and suffering, injured feelings, and the like. Article 1902, as
interpreted by this court in Meralco vs. Velasco (11 Phil. Rep., 287), does not
extend to such incidents. Aside from this exception, actual damages, in this
jurisdiction, in the sense that they mean just compensation for the loss suf-
fered, are practically synonymous with actual damages under the American
system.
This court has already gone some distance in incorporating into our
jurisprudence those principles of the American law of actual damages which
are of a general and abstract nature. In Baer Senior & Co.s Successors vs.
Compaia Maritima (6 Phil. Rep., 215), the American principle of admiralty
law that the liability of the ship for a tow is not so great as that for her cargo
was applied in determining the responsibility of a ship, under the Code of
Commerce, for her tow. In Rodriguez vs. Findlay & Co. (14 Phil. Rep., 294),
which was an action for breach of contract of warranty, the following prin-
ciple, supported entirely by American authority, was used in computing the
amount of damages due the plaintiff:
The damages recoverable of a manufacturer or dealer for the
breach of warranty of machinery, which he contracts to furnish, or
place in operation for a known purpose are not confined to the differ-
ence in value of the machinery as warranted and as it proves to be, but
includes such consequential damages as are the direct, immediate, and
probable result of the breach.
In Aldaz vs. Gay (7 Phil. Rep., 268), it was held that the earnings or
possible earnings of a workman wrongfully discharged should be considered
in mitigation of his damages for the breach of contract by his employer, with
the remark that nothing had been brought out to the attention to the contrary
under Spanish jurisprudence.
In Fernandez vs. M. E. R. & L. Cl. (14 Phil. Rep., 274), a release or
DAMAGES
compromise for personal injury sustained by negligence attributed to the
defendant company was held a bar to an action for the recovery of further
damages, on the strength of American precedents.
In Taylor vs. M. E. R. & L. Co., supra, in the course of an extended
reference to American case law, the doctrine of the so-called Turntable
and Torpedo cases was adopted by this court as a factor in determining
the question of liability for damages in such cases as the one the court then
had under consideration.
In Martinez vs. Van Buskirk (18 Phil. Rep., 79), this court, after remark-
ing that the rules under the Spanish law by which the fact of negligence is
determined are, generally speaking, the same as they are in Anglo-Saxon
countries, approved the following well-known rule of the Anglo-Saxon law
of negligence, relying exclusively upon American authorities: . . . acts, the
performance of which has not proven destructive or injurious and which
have been generally acquiesced in by society for so long a time as to have
ripened into a custom, cannot be held to be unreasonable or imprudent and
that, under the circumstances, the driver was not guilty of negligence in so
leaving his team while assisting in unloading his wagon.
This court does not, as a rule, content itself in the determination of
cases brought before it, with a mere reference to or quotation of the articles
of the codes or laws applicable to the questions involved, for the reason that
it is committed to the practice of citing precedents for its rulings wherever
practicable. (See Ocampo vs. Cabangis, 15 Phil. Rep., 626). No better example
of the necessity of amplifying this treatment of a subject given in the code is
afforded than Article 1902 of the Civil Code. That article requires that the
defendant repair the damage done. There is, however, a world of difficulty
in carrying out the legislative will in this particular. The measure of dam-
ages is an ultimate fact, to be determined from the evidence submitted to
the court. The question is sometimes a nice one to determine, whether the
offered evidence is such as ought to be considered by the court in fixing the
quantum of damages; and while the complexity of human affairs is such that
two cases are seldom exactly alike, a thorough discussion of each case may
permit of their more or less definite classification, and develop leading princi-
ples which will be of great assistance to a court in determining the question,
not only of damages, but of the prior one of negligence. We are of the opinion
that as the Code is so indefinite (even though from necessity) on the subject
of damages arising from fault or negligence, the bench and bar should have
access to and avail themselves of those great, underlying principles which
have been gradually and conservatively developed and thoroughly tested in
Anglo-Saxon courts. A careful and intelligent application of these principles
should have a tendency to prevent mistakes in the rulings of the court on
the evidence offered, and should assist in determining damages, generally,
with some degree of uniformity.
The law of damages has not, for some reason, proved as favorite a
theme with the civil-law writers as with those of the common-law school.
The decisions of the supreme court of Spain, though numerous on damages
880 TORTS AND DAMAGES
arising from contractual obligations, are exceedingly few upon damages for
personal injuries arising ex delicto. The reasons for this are not important
to the present discussion. It is sufficient to say that the law of damages has
not received the elaborate treatment that it has at the hands of the Anglo-
Saxon jurists. If we in this jurisdiction desire to base our conclusions in
damage cases upon controlling principles, we may develop those principles
and incorporate them into our jurisprudence by that difficult and tedious
process which constitutes the centuries-old history of Anglo-Saxon jurispru-
dence; or we may avail ourselves of these principles in their present state
of development without further effort than it costs to refer to the works and
writings of many eminent text-writers and jurists. We shall not attempt to
say that all these principles will be applicable in this jurisdiction. It must
be constantly borne in mind that the law of damages in this jurisdiction was
conceived in the womb of the civil law and under an entirely different form
of government. These influences have had their effect upon the customs and
institutions of the country. Nor are the industrial and social conditions the
same. An act which might constitute negligence or damage there might not
constitute negligence or damage here, and vice versa. As stated in Story on
Bailments, Section 12, It will thence follow that, in different times and in
different countries, the standard (of diligence) is necessary variable with
respect to the facts, although it may be uniform with respect to the principle.
So that it may happen that the same acts which in one country or in one age
may be deemed negligent acts, may at another time or in another country
be justly deemed an exercise of ordinary diligence.
The abstract rules for determining negligence and the measure of dam-
ages are, however, rules of natural justice rather than man-made law, and
are applicable under any enlightened system of jurisprudence. There is all
the more reason for our adopting the abstract principles of the Anglo-Saxon
law of damages, when we consider that there are at least two important laws
on our statute books of American origin, in the application of which we must
necessarily be guided by American authorities: they are the Libel Law (which,
by the way, allows damages for injured feelings and reputation, as well as
punitive damages, in a proper case), and the Employers Liability Act.
The case at bar involves actual incapacity of the plaintiff for two months,
and loss of the greater portion of his business. As to the damages resulting
from the actual incapacity of the plaintiff to attend to his business there is no
question. They are, of course, to be allowed on the basis of his earning capac-
ity, which in this case, is P50 per month. The difficult question in the present
case is to determine the damage which has resulted to his business through
his enforced absence. In Sanz vs. Lavin Bros. (6 Phil. Rep., 299), this court,
citing numerous decisions of the supreme court of Spain, held that evidence
of damages must rest upon satisfactory proof of the existence in reality of the
damages alleged to have been suffered. But, while certainty is an essential
element of an award of damages, it need not be a mathematical certainty.
That this is true is adduced not only from the personal injury cases from the
supreme court of Spain which we have discussed above, but by many cases
decided by this court, reference to which has already been made. As stated
DAMAGES
in Joyce on Damages, Section 75, But to deny the injured party the right
to recover any actual damages in cases of torts because they are of such a
nature as cannot be thus certainly measured, would be to enable parties to
profit by and speculate upon their own wrongs; such is not the law.
As to the elements to be considered in estimating the damage done
to plaintiffs business by reason of his accident, this same author, citing
numerous authorities, has the following to say: It is proper to consider the
business the plaintiff is engaged in, the nature and extent of such business,
the importance of his personal oversight and superintendence in conducting
it, and the consequent loss arising from his inability to prosecute it.
The business of the present plaintiff required his immediate supervi-
sion. All the profits derived therefrom were wholly due to his own exertions.
Nor are his damages confined to the actual time during which he was physi-
cally incapacitated for work, as is the case of a person working for a stipulated
daily or monthly or yearly salary. As to persons whose labor is thus compen-
sated and who completely recover from their injuries, the rule may be said to
be that their damages are confined to the duration of their enforced absence
from their occupation. But the present plaintiff could not resume his work
at the same profit he was making when the accident occurred. He had built
up an established business which included some twenty regular customers.
These customers represented to him a regular income. In addition to this he
made sales to other people who were not so regular in their purchases. But
he could figure on making at least some sales each month to others besides
his regular customers. Taken as a whole his average monthly income from
his business was about P50. As a result of the accident, he lost all but four of
his regular customers and his receipts dwindled down to practically nothing.
Other agents had invaded his territory, and upon becoming physically able
to attend to his business, he found that it would be necessary to start with
practically no regular trade, and either win back his old customers from his
competitors or else secure others. During this process of reestablishing his
patronage his income would necessarily be less than he was making at the
time of the accident and would continue to be so for some time. Of course, if
it could be mathematically determined how much less he will earn during
this rebuilding process than he would have earned if the accident had not
occurred, that would be the amount he would be entitled to in this action.
But manifestly this ideal compensation cannot be ascertained. The question
therefore resolves itself into whether this damage to his business can be so
nearly ascertained as to justify a court in awarding any amount whatever.
When it is shown that a plaintiffs business is a going concern with a
fairly steady average profit on the investment, it may be assumed that had
the interruption to the business through defendants wrongful act not oc-
curred, it would have continued producing this average income so long as
is usual with things of that nature. When in addition to the previous aver-
age income of the business it is further shown what the reduced receipts of
the business are immediately after the cause of the interruption has been
882 TORTS AND DAMAGES
removed, there can be no manner of doubt that a loss of profits has resulted
from the wrongful act of the defendant. In the present case, we not only have
the value of plaintiffs business to him just after the accident. At the trial, he
testified that his wife had earned about fifteen pesos during the two months
that he was disabled. That this almost total destruction of his business was
directly chargeable to defendants wrongful act, there can be no manner of
doubt; and the mere fact that the loss can not be ascertained with absolute
accuracy, is no reason for denying plaintiffs claim altogether. As stated in
one case, it would be a reproach to the law if he could not recover damages
at all. (Baldwin vs. Marqueze, 91 Ga., 404).
Profits are not excluded from recovery because they are profits; but
when excluded, it is on the ground that there are no criteria by which to es-
timate the amount with the certainty on which the adjudications of courts,
and the findings of juries should be based. (Brigham vs. Carlisle [Ala.], 56
Am. Rep., 28, as quoted in Wilson vs. Wernwag, 217 Pa., 82).
The leading English case on the subject is Phillips vs. London &
Southwestern Ry. Co. (5 Q. B. D., 78; 41 L. T., 121; 8 Eng. Raul. Cases, 447).
The plaintiff was a physician with a very lucrative practice. In one case, he
had received a fee of 5,000 guineas; but it appeared that his average income
was between 6,000 and 7,000 pounds sterling per year. The report does not
state definitely how serious plaintiffs injuries were, but apparently he was
permanently disabled. The following instruction to the jury was approved,
and we think should be set out in this opinion as applicable to the present
case:
You cannot put the plaintiff back again into his original position,
but you must bring your reasonable common sense to bear, and you
must always recollect that this is the only occasion on which compen-
sation can be given. Dr. Phillips can never sue again for it. You have,
therefore, now to give him compensation, once for all. He has done no
wrong; he has suffered a wrong at the hands of the defendants, and
you must take care to give him full, fair compensation for that which
he has suffered.
The jurys award was seven thousand pounds. Upon a new trial, on the
ground of the insufficiency of the damages awarded, plaintiff received 16,000
pounds. On the second appeal, Bramwell, L.J., put the case of a laborer earn-
ing 25 shillings a week, who, on account of injury, was totally incapacitated
for work for twenty-six weeks, and then for ten weeks could not earn more
than ten shillings a week, and was not likely to get into full work for another
twenty weeks. The proper measure of damages would be in that case 25
shillings a week for twenty-six weeks, plus 15 shillings a week for the ten
and twenty weeks, and damages for bodily suffering and medical expenses.
Damages for bodily suffering, of course, are not, for reasons stated above,
applicable to this jurisdiction; otherwise, we believe this example to be the
ideal compensation for loss of profits which courts should strive to reach, in
cases like the present.
DAMAGES
In Joslin vs. Grand Rapids Ice & Coal Co. (53 Mich., 322), the court
said: The plaintiff, in making proof of his damages, offered testimony to the
effect that he was an attorney at law of ability and in good standing, and
the extent and value of his practice, and that, in substance, the injury had
rendered him incapable of pursuing his profession. This was objected to as
irrelevant, immaterial and incompetent. We think this was competent. It
was within the declaration that this standing in his profession was such as
to command respect, and was proper to be shown, and his ability to earn,
and the extent of his practice, were a portion of the loss he had sustained by
the injury complained of. There was no error in permitting this proof, and
we further think it was competent, upon the question of damages under the
evidence in this case, for the plaintiff to show, by Judge Hoyt, as was done,
that an interruption in his legal business and practice for eight months was
a damage to him. It seems to have been a part of the legitimate consequences
of the plaintiffs injury.
In Luck vs. City of Ripon (52 Wis., 196), plaintiff was allowed to prove
that she was a midwife and show the extent of her earnings prior to the ac-
cident in order to establish the damage done to her business.
The pioneer case of Goebel vs. Hough (26 Minn., 252) contains perhaps
one of the clearest statements of the rule and is generally considered as one
of the leading case on this subject. In that case the court said:
When a regular and established business, the value of which
may be ascertained, has been wrongfully interrupted, the true general
rule for compensating the party injured is to ascertain how much less
valuable the business was by reason of the interruption, and allow that
as damages. This gives him only what the wrongful act deprived him
of. The value of such a business depends mainly on the ordinary profits
derived from it. Such value cannot be ascertained without showing
what the usual profits are; nor are the ordinary profits incident to such
a business contingent or speculative, the sense that excludes profits
from consideration as an element of damages. What they would have
been, in the ordinary course of the business, for a period during which
it was interrupted, may be shown with reasonable certainty. What
effect extraordinary circumstances would have had upon the business
might be contingent and conjectural, and any profits anticipated from
such causes would be obnoxious to the objection that they are merely
speculative; but a history of the business, for a reasonable time prior to
a period of interruption, would enable the jury to determine how much
would be done under ordinary circumstances, and in the usual course,
during the given period; and the usual rate of profit being shown, of
course the aggregate becomes only a matter of calculation.
In the very recent case of Wellington vs. Spencer (Okla., 132 S.W., 675),
plaintiff had rented a building from the defendant and used it as a hotel.
Defendant sued out a wrongful writ of attachment upon the equipment of
the plaintiff, which caused him to abandon his hotel business. After remark-
ing that the earlier cases held that no recovery could be had for prospective
profits, but that the later authorities have held that such damages may be
884 TORTS AND DAMAGES
allowed when the amount is capable of proof, the court had the following to
say:
Where the plaintiff has just made his arrangements to begin
business, and he is prevented from beginning either by tort or a breach
of contract, or where the injury is to a particular subject matter, profits
of which are uncertain, evidence as to expected profits must be excluded
from the jury because of the uncertainty. There is as much reason to
believe that there will be no profits as to believe that there will be prof-
its, but no such argument can be made against proving a usual profit
of an established business. In this case the plaintiff, according to his
testimony, had an established business, and was earning a profit in the
business, and had been doing that for a sufficient length of time that
evidence as to prospective profits was not entirely speculative. Men who
have been engaged in business calculate with a reasonable certainty
the income from their business, make their plans to live accordingly,
and the value of such business is not such a matter of speculation as
to exclude evidence from the jury.
A good example of a business not established for which loss of profits
will not be allowed may be found in States vs. Durkin (65 Kan., 101). Plain-
tiffs formed a partnership and entered the plumbing business in the city of
Topeka in April. In July of the same year, they brought an action against a
plumbers association on the ground that the latter had formed an unlawful
combination in restraint of trade and prevented them from securing supplies
for their business within a reasonable time. The court said:
In the present case the plaintiffs had only in business a short
time not so long that it can be said the they had an established
business. They had contracted three jobs of plumbing, had finished
two, and lost money on both; not, however, because of any misconduct
or wrongful acts on the part of the defendants or either of them. They
carried no stock in trade, and their manner of doing business was to
secure a contract and then purchase the material necessary for its com-
pletion. It is not shown that they had any means or capital invested in
the business other than their tools. Neither of them had prior thereto
managed or carried on a similar business. Nor was it shown that they
were capable of so managing this business as to make it earn a profit.
There was little of that class of business being done at that time, and
little, if any, profit derived therefrom. The plaintiffs business lacked
duration, permanency, and recognition. It was an adventure, as dis-
tinguished from an established business. Its profits were speculative
and remote, existing only in anticipation. The law, with all its vigor
and energy in its effort to right wrongs award damages for injuries
sustained, may not enter into the domain of speculation or conjecture.
In view of the character and condition of the plaintiffs business, the
jury had no sufficient evidence from which to ascertain profits.
Other cases which hold that the profits of an established business may
be considered in calculating the measure of damages for an interruption of it
are: Wilkinson vs. Dunbar (149 N. C., 20); Kinney vs. Crocker (18 Wis., 80);
DAMAGES
Sachra vs. Manilla (120 Ia., 562); Kramer vs. City of Los Angeles (147 Cal.,
668); Mugge vs. Erkman (161 Ill. App., 180); Fredonia Gas Co. vs. Bailey (77
Kan., 296); Morrow vs. Mo. Pac. R. Co. (140 Mo. App., 200); City of Indian-
apolis vs. Gaston (58 Ind., 224); National Fibre Board vs. Auburn Electric
Light Co. (95 Me., 318); Sutherland on Damages, Sec. 70.
We have now outlined the principles which should govern the meas-
ure of damages in this case. We are of the opinion that the lower court had
before it sufficient evidence of the damage to plaintiffs business in the way
of prospective loss of profits to justify it in calculating his damages as to
this item. That evidence has been properly elevated to this court for review.
Under Section 496 of the Code of Civil Procedure, we are authorized to enter
final judgment or direct a new trial, as may best subserve the ends of justice.
We are of the opinion that the evidence presented as to the damage done to
plaintiffs business is credible and that it is sufficient and clear enough upon
which to base a judgment for damages. Plaintiff having had four years experi-
ence in selling goods on commission, it must be presumed that he will be able
to rebuild his business to its former proportions; so that at some time in the
future his commissions will equal those he was receiving when the accident
occurred. Aided by his experience, he should be able to rebuild this business
to its former proportions in much less time than it took to establish it as it
stood just prior to the accident. One year should be sufficient time in which
to do this. The profits which plaintiff will receive from the business in the
course of its reconstruction will gradually increase. The injury to plaintiffs
business begins where these profits leave off, and, as a corollary, there is
where defendants liability begins. Upon this basis, we fix the damages to
plaintiffs business at P250.
h. Attorneys Fees.
The Code Commission believes that a provision for the award of
attorneys fees should be included in the Civil Code. The Commission
explained:
In the matter of attorneys fees and expenses of litiga-
tion, the Commission believes that, following the example of
the statutes of some States of the American Union, such fees
and expenses should be allowed in certain special cases. These
are enumerated in Article 2228 of the Project. No fear need be
entertained that litigation would be encouraged by this article.
On the contrary, it may be said that this article will lessen litiga-
tion because the obligors referred to will be more likely to satisfy
claims extra-judicially if they are advised that they would other-
wise have to pay the fees of the opposing counsel and reimburse
the other party for expenses of litigation. In all the exceptional
cases enumerated, it is but just that the losing party should pay
the attorneys fees and expenses of litigation.
Article 2208 enumerates all the cases when the award of at-
886 TORTS AND DAMAGES
torneys fees in the concept of damages is justified. The damages
contemplated by such article is an amount that is due to the plaintiff
and not to his counsel. (Quirante vs. The Hon. Intermediate Appel-
late Court, G.R. No. 73886, January 31, 1989). Consequently, the
amount agreed upon by the plaintiff and his counsel does not control
the amount of attorneys fees that should be awarded. In the same
vein, the plaintiffs counsel does not have a right to enforce the award
of attorneys fees because, as stated earlier, the same is due to the
plaintiff and not to his counsel. The governing statute provides:
Art. 2208. In the absence of stipulation, attorneys fees
and expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendants 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 proceed-
ing against the plaintiff;
(5) Where the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) In actions for indemnity under workmens compensa-
tion and employers liability laws;
(9) In a separate civil action to recover civil liability aris-
ing from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and
equitable that attorneys fees and expenses of litigation should
be recovered.
In all cases, the attorneys fees and expenses of litigation
must be reasonable.
The amount of attorneys fees to be awarded is left to the discre-
tion of the courts. Necessarily, the award must be reasonable under
DAMAGES
the circumstances. (Tongoy vs. Court of Appeals, June 28, 1983). The
plaintiff must allege the basis of his claim for attorneys fees in the
complaint. In making such award, the court must state in its decision
the legal and factual basis for the award. Needless to state, the basis
should be one of the eleven cases specified in Article 2208 of the Civil
Code. (Agustin vs. Court of Appeals, June 6, 1990; Bicarme vs. Court
of Appeals, June 6, 1990; People v. Bergante, 286 SCRA 629 [1998]).
i. Interests.
The Code Commission included provisions in the Civil Code al-
lowing interest on damages because they believed that such interest
is in fact a part of the loss suffered. The pertinent articles of the Code
provides:
Art. 2209. If the obligation consists in the payment of a
sum of money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be
the payment of the interest agreed upon, and in the absence of
stipulation, the legal interest, which is six per cent per annum.
(1108)
Art. 2210. Interest may, in the discretion of the court, be
allowed upon damages awarded for breach of contract.
Art. 2211. In crimes and quasi-delicts, interest as a part of
the damages may, in a proper case, be adjudicated in the discre-
tion of the court.
Art. 2212. Interest due shall earn legal interest from the
time it is judicially demanded, although the obligation may be
silent upon this point. (1109a)
Art. 2213. Interest cannot be recovered upon unliquidated
claims or damages, except when the demand can be established
with reasonable certainty.
The rules on the award of interest on damages was explained
in Crismina Garments, Inc. vs. Court of Appeals (G.R. No. 128721,
March 9, 1999) by the Supreme Court:
x x x In Reformina vs. Tomol Jr., this Court stressed that
the interest rate under CB Circular No. 416 applies to (1) loans;
(2) forbearance of money, goods or credits; or (3) a judgment in-
volving a loan or forbearance of money, goods or credits. Cases
beyond the scope of the said circular are governed by Article 2209
of the Civil Code, which considers interest a form of indemnity
for the delay in the performance of an obligation.
888 TORTS AND DAMAGES
In Eastern Shipping Lines, Inc. vs. Court of Appeals, the
Court gave the following guidelines for the application of the
proper interest rates:
I. When an obligation, regardless of its source, i.e., law,
contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under
Title XVIII on Damages of the Civil Code govern in determining
the measure of recoverable damages.
II. With regard particularly to an award of interest in the
concept of actual and compensatory damages, the rate of interest,
as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of money,
the interest due should be that which may have been stipulated
in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence
of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbear-
ance of money, is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand
can be established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the interest
shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judg-
ment of the court is made (at which time the quantification of
damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any
case, be . . . the amount finally adjudged.
3. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2, above,
shall be 12% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to
a forbearance of credit.
In Keng Hua Paper Products Co., Inc. vs. CA, we also ruled
that the monetary award shall earn interest at twelve percent
(12%) per annum from the date of the finality of the judgment un-
til its satisfaction, regardless of whether or not the case involves
a loan or forbearance of money. The interim period is deemed to
DAMAGES
be equivalent to a forbearance of credit.
Because the amount due in this case arose from a contract
for a piece of work, not from a loan or forbearance of money, the
legal interest of six percent (6%) per annum should be applied.
Furthermore, since the amount of the demand could be estab-
lished with certainty when the Complaint was filed, the six per-
cent (6%) interest should be computed from the filing of the said
Complaint. But after the judgment becomes final and executory
until the obligation is satisfied, the interest should be reckoned
at twelve percent (12%) per year.
Private respondent maintains that the twelve percent (12%)
interest should be imposed, because the obligation arose from a
forbearance of money. This is erroneous. In Eastern Shipping, the
Court observed that a forbearance in the context of the usury
law is a contractual obligation of lender or creditor to refrain,
during a given period of time, from requiring the borrower or
debtor to repay a loan or debt then due and payable. Using this
standard, the obligation in this case was obviously not a forbear-
ance of money, goods or credit.
j. Mitigation of Liability.
Chapter 6 of this work discusses the different partial defenses
that result in mitigation of liability of the defendant. The Title on
Damages likewise contains provisions allowing mitigation of liability.
Thus, Articles 2203, 2204, 2214 and 2215 provides:
Art. 2203. The party suffering loss or injury must exercise
the diligence of a good father of a family to minimize the damages
resulting from the act or omission in question.
Art. 2204. In crimes, the damages to be adjudicated may be
respectively increased or lessened according to the aggravating
or mitigating circumstances.
Art. 2214. In quasi-delicts, the contributory negligence of
the plaintiff shall reduce the damages that he may recover.
Art. 2215. In contracts, quasi-contracts, and quasi-delicts,
the court may equitably mitigate the damages under circum-
stances other than the case referred to in the preceding article,
as in the following instances:
(1) That the plaintiff himself has contravened the terms
of the contract;
(2) That the plaintiff has derived some benefit as a result
of the contract;
(3) In cases where exemplary damages are to be awarded,
890 TORTS AND DAMAGES
that the defendant acted upon the advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant has
done his best to lessen the plaintiffs loss or injury.
(1) Avoidable Consequences.
Article 2203 of the Civil Code embodies what is known as the
doctrine of avoidable consequences. The principle is that a party
cannot recover damages flowing from consequences which the party
could reasonably have avoided. It has a reasonable corollary, that
is, a person who reasonably attempts to minimize his damages can
recover the expenses that he incurred. (22 Am. Jur. 2d 579). Although
the result is the same, it should be differentiated from contributory
negligence because in the latter, the plaintiffs act or omission occurs
before or at the time of the act or omission of the defendant. The acts
of the plaintiff under the doctrine of avoidable consequences occur
after the act or omission of the defendant.
In Lina vs. Purisima (82 SCRA 344, 359), the Supreme Court
explained that the law on damages imposes upon the claimant, re-
gardless of the unquestionability of his or her entitlement thereto, the
obligation to minimize the same as much as possible. Such indeed is
the demand of equity, for the juridical concept of damages is nothing
more than to trespass what has been lost materially and morally.
It may not be taken advantage of to allow unjust enrichment. Any
relevant act of unfairness on the part of the claimant correspondingly
writes off the moral wrong involved in the juridical injury inflicted
upon him or her.
The test that should be applied in determining if mitigation
should result is the test of a reasonable man. The Supreme Court
explained in one case that it is the duty of one injured by the unlawful
act of another to take such measures as prudent man usually takes
under such circumstances to reduce the damages as much as possible.
The burden of proof rests upon the defendant to show that the plaintiff
might have reduced the damages. (Cerrano vs. Tan Chuco, 38 Phil.
392, 399 [1918]). It does not mean that the injured party must make
extraordinary efforts or do what is unreasonable or impracticable in
his efforts to minimize damages; reasonable diligence and ordinary
care are all that is required to allow full recovery of all damages
caused by the defendants wrongful activity. (22 Am. Jur. 2d 53). It
does not include yielding to a wrongful demand of wrongdoer to save
the wrongdoer himself. (ibid., p. 55).
In Lasam vs. Smith (45 Phil. 657, 663 [1924]), one of the plain-
DAMAGES
tiffs claimed damages resulting from the fracture of a bone of a wrist
and from her objections to having a decaying splinter of the bone
removed by a surgical operation. As a consequence of her refusal to
submit to such operation, a series of infections ensued which required
constant and expensive medical treatment for several years. The
Supreme Court ruled that the defendant should not be charged with
those expenses. It sustained the discretionary power of the courts to
moderate the liability of the defendant according to the circumstances.
CASE:
PEDRO J. VELASCO vs. MANILA ELECTRIC CO.
40 SCRA 342, 357 [1971]
[Defendant corporation was found to have maintained nuisance in the form
of a sub-station that emitted noise at unreasonable levels to the detriment of
the plaintiff. The Supreme Court ordered defendant Manila Electric Company
to either transfer its substation at South D and South 6 Streets, Diliman,
Quezon City, or take appropriate measures to reduce its noise at the property
line between the defendant companys compound and that of the plaintiff-
appellant to an average of forty (40) to fifty (50) decibels within 90 days from
finality of this decision; and to pay the said plaintiff-appellant P20,000.00
in damages and P5,000.00 for attorneys fees. The complete facts of this case
were reproduced in Chapter 10.]
Regarding the amount of damages claimed by appellant, it is plain
that the same are exaggerated. To begin with, the alleged loss of earnings
at the rate of P19,000 per annum is predicated on the Internal Revenue as-
sessment, Exhibit QQ-1, wherein appellant was found to have undeclared
income of P8,338.20 in additional to his declared gross income of P10,975.00
for 1954. There is no competent showing, however, that the source of such
undeclared income was appellants profession. In fact, the inference would be
to the contrary, for his gross income from the previous years 1951 to 1953 [Ex-
hibits QQ-1(d) to QQ-1(f)] was only P8,085.00, P5,860.00 and P7,120.00,
respectively, an average of P7,000.00 per annum. Moreover, while his 1947
and 1948 income was larger (P9,995.00 and P11,900.00), it appears that
P5,000 thereof was the appellants annual salary from the Quezon Memorial
Foundation, which was not really connected with the usual earnings derived
from practice as a physician. Considering, therefore, his actual earnings, the
claimed moral damages of P100,000.00 are utterly disproportionate. The al-
leged losses for shortening of appellants life expectancy are not only inflated
but speculative.
As to the demand for exemplary or punitive damages, there appears
no adequate basis for their award. While the appellee Manila Electric Com-
pany was convicted for erecting the substation in question without permit
892 TORTS AND DAMAGES
from the Public Service Commission, We find reasonable its explanation
that its officials and counsel had originally deemed that such permit was
not required as the installation was authorized by the terms of its franchise
(as amended by Republic Act No. 150) requiring it to spend within 5 years
not less than forty million pesos for maintenance and additions to its electric
system, including needed power plants and substations. Neither the absence
of such permit from the Public Service Commission nor the lack of permit
from the Quezon City authorities (a permit that was subsequently granted)
is incompatible with the Companys good faith, until the courts finally ruled
that its interpretation of the franchise was incorrect.
There are, moreover, several factors that mitigate defendants liability
in damages. The first is that the noise from the substation does not appear
to be an exclusive causative factor of plaintiff-appellants illnesses. This is
proved by the circumstance that no other person in Velascos own household
nor in his immediate neighborhood was shown to have become sick despite
the noise complained of. There is also evidence that at the time the plaintiff-
appellant appears to have been largely indebted to various credit institutions,
as a result of his unsuccessful gubernatorial campaign, and this court can take
judicial cognizance of the fact that financial worries can affect unfavorably
the debtors disposition and mentality.
The other factor militating against full recovery by the petitioner Ve-
lasco in his passivity in the face of the damage caused to him by the noise
of the substation. Realizing as a physician that the latter was disturbing or
depriving him of sleep and affecting both his physical and mental well being,
he did not take any steps to bring action to abate the nuisance or remove
himself from the affected area as soon as the deleterious effects became notice-
able. To evade them, appellant did not even have to sell his house; he could
have leased it and rented other premises for sleeping and maintaining his
office and thus preserve his health as ordinary prudence demanded. Instead,
he obstinately stayed until his health became gravely affected, apparently
hoping that he would thereby saddle appellee with large damages.
The law in this jurisdiction is clear. Article 2203 prescribes that The
party suffering loss or injury must exercise the diligence of a good father
of a family to minimize the damages resulting from the act or omission in
question. This codal rule, which embodies the previous jurisprudence on the
point, clearly obligates the injured party to undertake measures that will
alleviate and not aggravate his condition after the infliction of the injury,
and places upon him the burden of explaining why he could not do so. This
was not done.
Appellant Velasco introduced evidence to the effect that he tried to sell
his house to Jose Valencia, Jr., in September, 1953, and on a 60-day option, for
P95,000.00, but that the prospective buyer backed out on account of his wife
objecting to the noise of the substation. There is no reliable evidence, however,
how much were appellants lot and house worth, either before the option was
given to Valencia or after he refused to proceed with the sale or even during
DAMAGES
the intervening period. The existence of a previous offer for P125,000.00, as
claimed by the plaintiff, was not corroborated by Valencia. What Valencia
testified to in his deposition is that when they were negotiating on the price
Velasco mentioned to him about an offer by someone for P125,000.00. The
testimony of Valencia proves that in the dialogue between him and Velasco,
part of the subject of their conversation was about the prior offer, but it does
not corroborate or prove the reality of the offer for P125,000.00. The testimony
of Velasco on this point, standing alone, is not credible enough, what with
his penchant for metaphor and exaggeration, as previously adverted to. It
is urged in appellants brief, along the lines of his own testimony, that since
one (1) transformer was measured by witness Jimenez with a noise intensity
of 47.2 decibels at a distance of 30.48 meters, the two (2) transformers of the
substation should create an intensity of 94.4 decibels at the same distance.
If this were true, then the residence of the plaintiff is more noisy than the
noisiest spot at the Niagara Falls, which registers only 92 decibels. (Exhibit
15-A).
Since there is no evidence upon which to compute any loss or damage
allegedly incurred by the plaintiff by the frustration of the sale on account of
the noise, his claim therefore was correctly disallowed by the trial court. It
may be added that there is no showing of any further attempts on the part
of appellant to dispose of the house, and this fact suffices to raise doubts as
to whether he truly intended to dispose of it. He had no actual need to do so
in order to escape deterioration of his health, as heretofore noted.
Despite the wide gap between what was claimed and what was proved,
the plaintiff is entitled to damages for the annoyance and adverse effects
suffered by him since the substation started functioning in January, 1954.
Considering all the circumstances disclosed by the record, as well as appel-
lants failure to minimize the deleterious influences from the substation, this
Court is of the opinion that an award in the amount of P20,000.00, by way
of moderate and moral damages up to the present, is reasonable. Recovery
of attorneys fees and litigation expenses in the sum of P5,000.00 is also
justified the factual and legal issues were intricate (the transcript of the
stenographic notes is about 5,000 pages, aside from an impressive number
of exhibits), and raised for the first time in this jurisdiction.
The last issue is whether the City Engineer of Quezon City, Anastacio
A. Agan, a co-defendant, may be held solidarily liable with Meralco.
Agan was included as a party defendant because he allegedly: (1) did
not require the Meralco to secure a building permit for the construction of
the substation; (2) even defended its construction by not insisting on such
building permit; and (3) did not initiate its removal or demolition and the
criminal prosecution of the officials of the Meralco.
The record does not support these allegations. On the first plea, it
was not Agans duty to require the Meralco to secure a permit before the
construction but for Meralco to apply for it, as per Section 1, Ordinance
No. 1530, of Quezon City. The second allegation is not true, because Agan
894 TORTS AND DAMAGES
wrote the Meralco requiring it to submit the plan and to pay permit fees.
(t.s.n., 14 January 1960, pages 2081-2082). On the third allegation, no law
or ordinance has been cited specifying that it is the city engineers duty to
initiate the removal or demolition of, or for the criminal prosecution of, those
persons who are responsible for the nuisance. Republic Act 537, Section 24
(d), relied upon by the plaintiff, requires an order by, or previous approval
of, the mayor for the city engineer to cause or order the removal of buildings
or structures in violation of law or ordinances, but the mayor could not be
expected to take action because he was of the belief, as he testified, that the
sound did not have any effect on his body.
B. MORAL DAMAGES.
a. Concept.
The Civil Code provides that moral damages include physical
suffering, mental anguish, fright, serious anxiety, besmirched reputa-
tion, wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral damages
may be recovered if they are the proximate result of the defendants
wrongful act for omission. (Article 2217, Civil Code).
The award of moral damages is designed to compensate the
claimants for actual injury and is not meant to enrich the complain-
ant at the expense of the defendant. They are awarded only to enable
the injured party to obtain means, diversions or amusement that will
serve to alleviate the moral suffering he has undergone by reason of
the defendants culpable action. (Kierulf vs. Court of Appeals, 269
SCRA 433 [1997]; Zenith Insurance Corporation vs. Court of Appeals,
185 SCRA 308 [1990]). Its aim is the restoration within the limits of
the possible the spiritual status quo ante. (Visayan Sawmil Co., Inc.
vs. Court of Appeals, 219 SCRA 378 [1993]).
It must be understood to be in the concept of grants not punitive
or corrective in nature, calculated to compensate the claimant for
the injury suffered. In other words, moral damages are not awarded
to punish the defendant but to compensate the victim. (People vs.
Aringue, 283 SCRA 291 [1997]; Morales vs. Court of Appeals, 274
SCRA 282 [1997]; Del Mundo vs. Court of Appeals, 240 SCRA 348
[1996]; De la Serna vs. Court of Appeals, 233 SCRA 325 [1994]; Bau-
tista vs. Mangaldan Rural Bank, Inc., 230 SCRA 16 [1994]; Zenith
Insurance Corp. vs. Court of Appeals, 185 SCRA 398 [1990]; Simex
International (Manila), Inc. vs. Court of Appeals, 183 SCRA 360
[1990]; Robleza vs. Court of Appeals, 174 SCRA 354 [1989]).
The Code Commission observed that moral damages were not
DAMAGES
expressly recognized in the Old Civil Code, although it was observed
in one case involving injury to reputation that such damages
have been allowed by the Supreme Court of Spain, and some Span-
ish jurists believe that moral damages are allowable. Likewise, the
Supreme Court of the Philippines has awarded moral damages in a
few cases decided prior to the adoption of the New Civil Code. The
Commission explained the provision allowing moral damages:
Denial of the award of moral damages has been predicated
on the idea that physical suffering, mental anguish and similar
injury are incapable of pecuniary estimation. But it is unquestion-
able that the loss or injury is just as real as in other cases. The
ends of justice are better served by giving the judge discretion
to adjudicate some definite sum as moral damages. That is more
equitable than that the sufferer should be uncompensated. The
wrongdoer cannot complain because it was he who caused the
injury. In granting moral damages, the Project proceeds upon the
ancient maxim that when there is a wrong there is a remedy.
Justice Capistrano, one of the members of the Code Commis-
sion, gave the following background on the inclusion of a chapter on
moral damages in the New Civil Code in his concurring opinion in
Macondray & Co., Inc. vs. Villarosa, Inc., et al. (1 CAR 2s 413, July
14, 1961):
The law on moral damages found in Arts. 2217 to 2220 (Sec.
1, Chapter 3, Title XVII, Book IV) of the Civil Code is new. The
Spanish Civil Code of 1889 contained no provisions on moral dam-
ages. The Code Commission, however, was aware that two recent
and progressive decisions of the Supreme Court (Lilius vs. Manila
Railroad Co., 59 Phil. 758; Castro vs. Acro Taxicab Co., Inc., 82
Phil. 359) had held that damages could be recovered in case of a
wrongful act resulting in physical injuries for the physical pain
suffered by the offended party and that the American jurispru-
dence contains a big and rich field of law on moral damages. In
view of its duty to codify the laws in accord- ance . . . with
modern trends in legislation and the progressive principles of
law (Exec. Order No. 48), the Commission resolved to include a
section (Sec. 2) on moral damages in Chapter 3, Title XVIII on
Damages in the Project of Civil Code.
After consulting the American jurisprudence on moral
damages, the Code Commission formulated Art. 2217 as the
basic rule or principle giving, in the first sentence, the concept of
moral damages or what it includes, and, in the second sentence,
the requisite that the moral damages be the proximate result of
the guilty partys wrongful act or omission. x x x
It is clear from the article that moral moral damages can be
896 TORTS AND DAMAGES
recovered in every case of wrongful act or omission (a broad term
which includes delict, quasi-delict, and breach of contract which
is sui generis) causing, as the proximate result thereof, physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation,
and similar injury.
b. Proof and Proximate Cause.
No proof of pecuniary loss is necessary in order that moral dam-
ages may be adjudicated. The assessment of such damages is left to
the discretion of the court, according to the circumstances of each
case. (Article 2216, Civil Code). However, there must be proof that
the defendant caused physical suffering, mental anguish, fright, seri-
ous anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injury to the plaintiff. Without allega-
tion and proof of such sufferings, no moral damages can be awarded.
(Compania Maritima vs. Allied Free Workers Union, 77 SCRA 24).
Nevertheless, the language of the law need not be used to warrant
the award of moral damages. (Mirana-Ribaya vs. Carbonell, 95 SCRA
672). So long as there is satisfactory proof of the psychological and
mental trauma actually suffered by a party, the grant to him of moral
damages is warranted. (Del Rosario vs. Court of Appeals, 267 SCRA
58 [1997]).
Aside from the fact that there is a need for the claimant to sat-
isfactorily prove the existence of the factual basis of the damages, it
is also necessary to prove its causal relation to the defendants act.
(Raagas vs. Traya, 22 SCRA 839 [1968]). While moral damages is
incapable of pecuniary estimation, they are recoverable if they are
the proximate cause of the defendants wrongful act or omission.
(Enervida vs. De la Torre, 55 SCRA 339; Yutuk vs. Manila Electric
Co., 2 SCRA 337 [1961]).
The exception to the rule that the factual basis for moral dam-
ages must be alleged are criminal cases. Moral damages may be
awarded to the victim in criminal proceedings in such amount as the
court deems just without the need for pleading or proof of the basis
thereof. (People vs. Prades, G.R. No. 127569, July 30, 1998; People
vs. Moreno, G.R. No. 126921, August 28, 1998; People vs. Bagayong,
G.R. No. 126518, December 2, 1998).
c. Cases when Moral Damages are allowed.
Articles 2219 and 2220 of the Civil Code enumerate the cases
DAMAGES
when moral damages may be awarded by the courts:
Art. 2219. Moral damages may be recovered in the follow-
ing 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.
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 fraudu-
lently or in bad faith.
The different cases identified by law when moral damages may
be awarded are discussed elsewhere in this work. It is well to point
out however certain basic rules on the award of moral damages. For
instance, it is well settled that no moral damages may be awarded
in the absence of a wrongful act or omission or of fraud or bad faith.
(Ong Yui vs. Court of Appeals, 91 SCRA 223; Castillo vs. Castillo, 95
SCRA 40; St. Peter Memorial Park, Inc. vs. Cleofas, 92 SCRA 389).
The same rule applies to cases involving breach of contract, that is,
no moral damages may be awarded where the breach of contract is
not malicious. (Francisco vs. GSIS, 7 SCRA 577 [1963]; Mercado vs.
Lira, 3 SCRA 124 [1961]; Martinez vs. Gonzales, 6 SCRA 331 [1962]).
The presence of contractual negligence is insufficient for such
award. (Phil. National Railways vs. Court of Appeals, 139 SCRA
898 TORTS AND DAMAGES
87). Although the enumeration in Article 2119 is not exclusive, the
analogous cases mentioned in the said Article does not include a
case where a passenger suffered physical injuries because of the car-
riers negligence. (Mercado vs. Lira, 3 SCRA 124 [1961]).
Justice Vitug summarized the rules regarding the award of
moral damages in Expert Travel & Tours, Inc. vs. The Hon. Court of
Appeals and Ricardo Lo (G.R. No. 130030, June 25, 1999):
Moral damages are not punitive in nature but are de-
signed to compensate and alleviate in some way the physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation,
and similar injury unjustly caused to a person. Although inca-
pable of pecuniary computation, moral damages, nevertheless,
must somehow be proportional to and in approximation of the
suffering inflicted. Such damages, to be recoverable, must be the
proximate result of a wrongful act or omission the factual basis
for which is satisfactorily established by the aggrieved party. An
award of moral damages would require certain conditions to be
met, to wit: (1) First, there must be an injury, whether physical,
mental or psychological, clearly sustained by the claimant; (2)
second, there must be a culpable act or omission factually estab-
lished; (3) third, the wrongful act or omission of the defendant
is the proximate cause of the injury sustained by the claimant;
and (4) fourth, the award of damages is predicated on any of the
cases stated in Article 2219. Under the provisions of this law, in
culpa contractual or breach of contract, moral damages may be
recovered when the defendant acted in bad faith or was guilty of
gross negligence (amounting to bad faith) or in wanton disregard
of his contractual obligation and, exceptionally, when the act of
breach of contract itself is constitutive of tort resulting in physi-
cal injuries. By special rule in Article 1764, in relation to Article
2206, of the Civil Code, moral damages may also be awarded in
case the death of a passenger results from a breach of carriage.
In culpa aquiliana, or quasi-delict, (a) when an act or omission
causes physical injuries, or (b) where the defendant is guilty of
intentional tort, moral damages may aptly be recovered. This rule
also applies, as aforestated, to contracts when breached by tort.
In culpa criminal, moral damages could be lawfully due when
the accused is found guilty of physical injuries, lascivious acts,
adultery or concubinage, illegal or arbitrary detention, illegal
arrest, illegal search, or defamation. Malicious prosecution can
also give rise to a claim for moral damages. The term analogous
cases, referred to in Article 2219, following the ejusdem generis
rule, must be held similar to those expressly enumerated by the
law.
DAMAGES
In Macondray & Co., Inc. vs. Villarosa, et al. (1 CAR 2s 402,
415 [1961]), Justice Capistrano explained that moral damages can
be recovered in every case of wrongful act or omission causing, as the
proximate result thereof physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation and similar injury. In view of the fact that
the question of moral damages is a novel one in the civil law, the
Code Commission considered it advisable, for the convenience of the
bar and the bench, to mention some cases as examples of wrongful
acts where moral damages may be recovered. It was not prepared at
that time to make a complete and exclusive enumeration of all such
wrongful acts and omissions. The Commission purposely added the
words and analogous cases in the opening sentence of the article in
order to avoid a possible erroneous interpretation that the enumera-
tion made therein was intended by the Commission to mean other
cases of wrongful act or omission, causing, as the proximate result
thereof the sufferings mentioned earlier.
Justice Capistrano also noted in the said case that the enumera-
tion does not mention any wrongful omission. This is so because, as
pointed out, the enumeration was not intended to be complete and
exclusive. The cases of wrongful acts mentioned, enumerated merely
for purposes of style, were those which the Commission could readily
give at the time of its deliberation (about two hours) on the formula-
tion of the article. Justice Capistrano went on further to explain
that it is obvious from a reading of the enumeration that those
mentioned are clearly cases which immediately suggest physical or
moral suffering. Thus, the delicts or crimes mentioned in Nos. (1) and
(2) immediately suggest physical suffering. But it was not meant that
other crimes and quasi-delicts not resulting in, or causing physical
injuries were to be excluded. This is apparent from the fact that Nos.
(3) to (7) involve crimes not resulting in physical injuries, and No. (8)
a quasi-delict (malicious prosecution is no longer punished as a crime
in the Revised Penal Code) not causing physical injuries, all of which,
however, immediately suggest moral suffering; and the fact that No.
(9) involves quasi-delicts clearly causing moral suffering, while No.
(1) covers quasi-delicts immediately suggesting moral suffering. The
Commission did not resolve to make an exclusive enumeration, for
that would have required an examination of all the provisions of the
Project of the Civil Code and of the Revised Penal Code in order to
determine all the cases where moral damages could be recovered. It
did not have the time nor the inclination to do so. The Commission
also felt that the analogous cases for recovery of moral damages
should be left to the courts to determine. There was no good reason to
900 TORTS AND DAMAGES
narrow the coverage of the law to the few cases mentioned in Article
2219 considering that the field of moral injury is a vast one in the civil
and criminal laws, and that the field of moral damages in American
jurisprudence is equally extensive. (ibid., pp. 415-416).
(1) Unfounded Suits.
It is also well settled that moral damages (and attorneys fees
under paragraph [4] of Article 2208 of the Civil Code) cannot be
assessed against the plaintiff by the mere fact that he filed a case
against the defendant so long as the same was done in good faith.
(Grapilon vs. Mun. Council of Carigara, 2 SCRA 103 [1961]; National
Rice and Corn Corporation vs. Antonio, 2 SCRA 643 [1961]; Solis &
Yarisantos vs. Salvador, 14 SCRA 887 [1965]; Francel Realty Corp.
vs. Court of Appeals, 252 SCRA 156 [1996]; Mijares vs. Court of Ap-
peals, 271 SCRA 558 [1997]). The rule applies even if the plaintiffs
case is declared to be unfounded. (De la Pena vs. Court of Appeals,
231 SCRA 456 [1994]). No damages can be charged on those who may
exercise the right to litigate in good faith even if done erroneously
(J Marketing Corporation v. Sia, Jr., 285 SCRA 580 [1998]).
Nevertheless, there are instances when award of moral damages
(as well as attorneys fees) is justified if there is clear abuse of court
processes. There can be no blanket clearance against the filing of all
types of cases (Cometa v. Court of Appeals, 301 SCRA 459 [1999]).
Although no person should be penalized for the exercise of the right
to litigate, this right must be exercised in good faith. Absence of
good faith is established if the plaintiff clearly has no cause of action
against the defendant but he recklessly filed the suit anyway and
wantonly pursued pointless appeals, thereby causing the defendant
to spend valuable time, money and effort in unnecessarily defending
himself, incurring damages in the process (Industrial Insurance Co.
v. Pablo Bondad, G.R. No. 136722, April 12, 2000, 330 SCRA 706,
707).
(2) Labor Cases.
Moral damages may be recovered where the dismissal of the
employee was attended by bad faith or fraud or constitute an act op-
pressive to labor, or was done in a manner contrary to morals, good
customs, or public policy. (Triple Eight Integrated Services, Inc. vs.
NLRC, 299 SCRA 608, 620-621 [1998]; Hilario vs. NLRC, 252 SCRA
555 [1996]; Estiva vs. NLRC, 225 SCRA 169 [1993]). For example, the
award of moral damages was warranted under the following factual
circumstances:
DAMAGES
According to the facts of the case as stated by public re-
spondent, Osdana was made to perform such menial chores, as
dishwashing and janitorial work, among others, contrary to her
job designation as waitress. She was also made to work long hours
without overtime pay. Because of such arduous working condi-
tions, she developed Carpal Tunnel Syndrome. Her illness was
such that she had to undergo surgery twice. Since her employer
determined itself that she was no longer fit to continue working,
they sent her home posthaste without as much as separation pay
or compensation for the months when she was unable to work
because of her illness. (Panay Electric Co., Inc. vs. NLRC, 248
SCRA 688).
Criminal Taking of Life.
In a number of cases, the Supreme Court upheld the rule that
in the present stage of our case law involving criminal taking of
human life, evidence must be adduced by the offended party to war-
rant an award of moral damages (See: People v. Acaya, 327 SCRA
269 [2000];People v. Pirame, 327 SCRA 552 [2000]). However, the
rule was clarified by stating that no such proof is necessary in case
of violent death. The Supreme Court explained in Carlos Arcona y
Moban v. The Court of Appeals and the People of the Philippines (G.R.
No. 134784, December 9, 2002; see also People v. Cabote, G.R. 136143,
November 15, 2001 and People v. Panado, 348 SCRA 679, 690-691
[2000]; People v. Cortez, 348 SCRA 663 [2000]) that as borne out by
human nature and experience, a violent death invariably and neces-
sarily brings about emotional pain and anguish on the part of the
victims family. It is inherently human to suffer sorrow, torment, pain
and anger when a loved one becomes the victim of a violent or brutal
killing. Such violent death or brutal killing not only steals from the
family of the deceased his precious life, deprives them forever of his
love, affection and support, but often leaves them with the gnawing
feeling that an injustice has been done to them. For this reason, moral
damages must be awarded even in the absence of any allegation and
proof of the heirs emotional suffering.
d. Factors to Consider in Determining Amount.
There is no hard and fast rule in the determination of what
would be a fair amount of moral damages, since each case must be
governed by its own peculiar circumstances. (Philippine National
Bank vs. Court of Appeals, 266 SCRA 136). The Court should take
into consideration the circumstances obtaining in the case and assess
damages according to its discretion (Fule v. Court of Appeals, 286
SCRA 698 [1998]).
902 TORTS AND DAMAGES
There are, however, factors specified by law and established
by jurisprudence that could affect the amount to be recovered. An
example of these is Article 2218 of the Civil Code which provides
that in the adjudication of moral damages, the sentimental value of
property, real or personal, may be considered.
(1) Extent of Humiliation
The extent of humiliation may also determine the amount of
moral damages that can be awarded. Thus, in one case, moral dam-
ages was awarded and fixed because of the humiliation caused by
the dicriminatory acts of an airline company. (Philippine Airlines vs.
Court of Appeals, 275 SCRA 621 [1997]). In another, moral damages
was awarded because the plaintiff was slapped in the face. (Ford vs.
Court of Appeals, 186 SCRA 21 [1990]).
(2) Pain and Suffering
The extent of pain and suffering likewise determines the award
(Valenzuela vs. Court of Appeals, supra at p. 37). For instance, an in-
crease in the amount of moral damages was justified in an attempted
homicide case where the accused bit the ear of the complainant caus-
ing mutilation. The nature of the injuries and the degree of physical
suffering endured by the complainant warrants an increase. The
tragic incident left indelible marks on the complainants body and
will serve as a constant reminder of his traumatic experience. (Su-
maplong vs. Court of Appeals, 268 SCRA 764, 776 [1997]). The award
was also justified in another case because of the pain and disfigure-
ment suffered by the respondent, a pretty girl of 16 whose left arm
was scraped of flesh from shoulder to elbow (De Leon Brokerage Co.
v. Court of Appeals, No. L-15247, February 28, 1962; see also Ong v.
Court of Appeals, 301 SCRA 387 [1999]; Salao v. Court of Appeals,
284 SCRA 493 [1998]).
In Valenzuela vs. Court of Appeals (supra), the Supreme Court
was confronted with a situation where the injury suffered by the
plaintiff would have led to expenses which were difficult to estimate
because while they would have been a direct result of the injury
(amputation), and though certain to be incurred by the plaintiff, they
were likely to arise only in the future. The amount P1,000,000.00 in
moral damages was awarded in the said case. Describing the nature
of the injury, the Court therein stated:
As a result of the accident, Ma. Lourdes Valenzuela under-
went a traumatic amputation of her left lower extremity at the
distal left thigh just above the knee. Because of this, Valenzuela
DAMAGES
will forever be deprived of the full ambulatory functions of her
left extremity, even with the use of state of the art prosthetic
technology. Well beyond the period of hospitalization (which was
paid for by Li), she will be required to undergo adjustments in
her prosthetic devise due to the shrinkage of the stump from the
process of healing.
These adjustments entail costs, prosthetic replacements and
months of physical and occupational rehabilitation and therapy.
During her lifetime, the prosthetic devise will have to be replaced
and readjusted to changes in the size of her lower limb effected
by the biological changes of middle-age, menopause and aging.
Assuming she reaches menopause, for example, the prosthetic
will have to be adjusted to respond to the changes in bone result-
ing from a precipitate decrease in calcium levels observed in the
bones of all post-menopausal women. In other words, the damage
done to her would not only be permanent and lasting, it would
also be permanently changing and adjusting to the physiologic
changes which her body would normally undergo through the
years. The replacements, changes, and adjustments will require
corresponding adjustive physical and occupational therapy. All
of these adjustments, it has been documented, are painful.
xxx xxx xxx
A prosthetic devise, however technologically advanced,
will only allow a reasonable amount of functional restoration of
the motor functions of the lower limb. The sensory functions are
forever lost. The resultant anxiety, sleeplessness, psychological
injury, mental and physical pain are inestimable.
In Ramos vs. Court of Appeals (G.R. No. 124354, Dec. 29, 1999),
the victim, petitioner Erlinda Ramos, was in her mid-forties when the
incident occurred. She has been in a comatose state for over fourteen
years at the time the Supreme Court promulgated its decision in De-
cember 1999. In the meantime, the burden of care has been heroically
shouldered by her husband and children, who, in the intervening
years have been deprived of the love of a wife and a mother. Thus,
the Court justified the award of moral damages in the amount of
P2,000,000.00 stating that:
Meanwhile, the actual physical, emotional and financial
cost of the care of petitioner would be virtually impossible to
quantify. Even the temperate damages herein awarded would be
inadequate if petitioners condition remains unchanged for the
next ten years.
We recognized, in Valenzuela that a discussion of the
victims actual injury would not even scratch the surface of the
resulting moral damage because it would be highly speculative
904 TORTS AND DAMAGES
to estimate the amount of emotional and moral pain, psychologi-
cal damage and injury suffered by the victim or those actually
affected by the victims condition.
The husband and the children, all petitioners in this case,
will have to live with the day to day uncertainty of the patients
illness, knowing any hope of recovery is close to nil. They have
fashioned their daily lives around the nursing care of petitioner,
altering their long term goals to take into account their life with
a comatose patient. They, not the respondents, are charged with
the moral responsibility of the care of the victim. The familys
moral injury and suffering in this case is clearly a real one. For
the foregoing reasons, an award of P2,000,000.00 in moral dam-
ages would be appropriate.
(3) Official political social and financial standing.
Official, political, social and financial standing of the offended
party and the business and financial position of the offender affect
the amount of damages. (Lopez vs. Pan American World Airways, 16
SCRA 431; Zulueta vs. Pan American World Airways, Inc., 43 SCRA
397; Kierulf vs. Court of Appeals, 269 SCRA 133 [1997]). In another
case, the Supreme Court ruled that the age of the claimant is mate-
rial in the determination of the amount of moral damages due to the
plaintiff. (Zamboanga Trans Co., Inc. vs. Court of Appeals, 30 SCRA
717 [1969]; Domingding vs. Ng, 103 Phil. 111; Yutuk v. Manila Elec-
tric Co., May 31, 1961).
The Court considered the credit standing of the plaintiff in
awarding moral damages in Producers Bank of the Philippines v.
Court of Appeals (G.R. No. 111584, September 17, 2001, 365 SCRA
326). The wrongful dishonor of a check that was issued by the plaintiff
affected his credit standing. The plaintiff was a businessman engaged
in several businesses and his suppliers discontinued the credit line
that they extended causing his businesses to collapse. The Court
quoted Leopoldo Araneta v. Bank of America (40 SCRA 144 [1971])
where it was explained that: The financial credit of a businessman is
a prized and valuable asset, it being a significant part of the founda-
tion of his business. Any adverse reflection thereon constitutes some
financial loss to him.
There are those who believe that financial standing of the of-
fended party does not affect the amount of recoverable moral damages
(Layda vs. Court of Appeals, 90 SCRA 724). The theory is that moral
sufferings of a rich person is the same as the intensity of suffering
of a poor litigant. Hence, the pain and suffering of a person who lost
DAMAGES
his limb is the same whether the victim is rich or poor. However,
Supreme Court continues to consider financial standing in a number
of cases that it decided.
e. Persons who may Recover.
Generally, the person who endured physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feel-
ings, moral shock, social humiliation, and similar injury is the person
who can recover moral damages. If the basis of the claim is physical
suffering, only the one who suffered and not his or her spouse may
recover. (Sobereno vs. Manila Railroad Co., Nov. 23, 1966). In the
same manner, a person who symphatized with an injured relative is
not entitled to recover for the physical suffering of another. (Strebel
vs. Figueros, 96 Phil. 321).
The exception to said rule (where only the victim can recover)
is found in the last two paragraphs of Article 2219:
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.
It should be noted however that in those cases, the relatives have
also suffered although they are not the victims of the assault. They
must also have suffered mental anguish, serious anxiety, wounded
feelings, moral shock and other similar injuries.
f. Corporations.
Corporations and other artificial being are not entitled to recover
moral damages. There was confusion before regarding the right of
corporation because of the obiter of the Supreme Court in a number
of cases. However, the rule was finally clarified in ABS-CBN Broad-
casting Corporation vs. Honorable Court of Appeals (G.R. No. 128690,
January 21, 1999):
Moral damages are in the category of an award designed
to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer. The award is not meant to
enrich the complainant at the expense of the defendant, but to en-
able the injured party to obtain means, diversion, or amusements
that will serve to obviate the moral suffering he has undergone.
It is aimed at the restoration, within the limits of the possible,
906 TORTS AND DAMAGES
of the spiritual status quo ante, and should be proportionate to
the suffering inflicted. Trial courts must then guard against the
award of exorbitant damages; they should exercise balanced,
restrained and measured objectivity to avoid suspicion that it
was due to passion, prejudice, or corruption on the part of the
trial court.
The award of moral damages cannot be granted in favor of
a corporation because, being an artificial person and having exist-
ence only in legal contemplation, it has no feelings, no emotions,
no senses. It cannot, therefore, experience physical suffering and
mental anguish which can be experienced only by one having a
nervous system. The statement in People vs. Manero and Mam-
bulao Lumber Co. vs. PNB that a corporation may recover moral
damages if it has a good reputation that is debased, resulting in
social humiliation is an obiter dictum. On this score alone the
award for damages must be set aside, since RBS is a corporation.
In another case, the Supreme Court explained that while it is
true that besmirched reputation is included in moral damages, it
cannot cause mental anguish to a corporation, unlike in the case of
a natural person, for a corporation has no reputation in the sense
that an individual has, and besides, it is inherently impossible for
a corporation to suffer mental anguish. 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 per-
son and having existence only in legal contemplation, has no feelings,
no emotions and no senses; therefore, it cannot experience physical
suffering and mental anguish. Mental suffering can be experienced
only by one having a nervous system and it flows from real ills, sor-
rows, and griefs of life all of which cannot be suffered by respondent
bank as an artificial person (National Power Corporation v. Philipp
Brothers Oceanic, Inc., G.R. No. 126204, November 20, 2001).
C. NOMINAL DAMAGES.
The allowance of nominal damages is generally based on the
ground that every injury from its very nature legally imports damage,
or that the injury complained of would in the future be evidence in
favor of the wrongdoer, especially where, if continued for a sufficient
length of time, the invasion of the plaintiffs rights would ripen into
a prescriptive right in favor of the defendant. (22 Am. Jur. 2d 20).
In this jurisdiction, the award of nominal damages was justified
by the Code Commission by stating that there are instances when
DAMAGES
the vindication or recognition of the plaintiffs right is of the utmost
importance to him, as in the case of trespass upon real property.
The Commission observed that in those instances, the awarding of
nominal damages does not run counter to the maxim, De minimis
non curate lex. (Report). The pertinent provisions of the Civil Code
on nominal damages are as follows:
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 pre-
clude further contest upon the right involved and all accessory
questions, as between the parties to the suit, or their respective
heirs and assigns.
The assessment of nominal damages is left to the discretion of
the court according to the circumstances of the case. (Ventanilla vs.
Centeno, 1 SCRA 215 [1961]). Generally, nominal damages by their
nature are small sums fixed by the court without regard to the extent
of the harm done to the injured party. However, it is generally held
that a nominal damage is a substantial claim, if based upon the viola-
tion of a legal right; in such case, the law presumes damage although
actual or compensatory damages are not proven. In truth, nominal
damages are damages in name only and not in fact, and are allowed,
not as an equivalent of wrong inflicted, but simply in recognition
of the existence of a technical injury. (Robes-Francisco Realty and
Development Corporation vs. Court of First Instance, 86 SCRA 59).
The view is that for every actionable injury, there is a corre-
sponding right to damages and such injury arises whenever a legal
right of the plaintiff is violated; if there is no injury as to actual dam-
ages or none appears on inquiry, the legal implication of damages
remains and nominal damages are given. (Wente vs. Shaver, 145 ALR
1176, 350 Mo 1143, 169 SW 2d 947).
For instance, only nominal damages can be recovered by a
manufacturer that was injured by a conspiracy to prevent use of
his product, where the actual damages cannot be determined and
whatever he suffered was also suffered by others in the same line of
business so that he suffered no special damages whatsoever. (A.T.
908 TORTS AND DAMAGES
Stearns Lumber Co. vs. Howlett, 25 ALR 1125, 260 Mass 45, 157 NE
82).
The award of nominal damages is also justified in the absence of
competent proof of the specific amounts of actual damages suffered.
(People vs. Dianos, 297 SCRA 191; Sumaplong vs. Court of Appeals,
268 SCRA 764 [1997]; People v. Gopio, 346 SCRA 408 [2000]). Thus,
nominal damages were awarded in Sumaplong vs. Court of Appeals
(268 SCRA 764, 775-776 [1997]), an attempted homicide case where
the victims left ear was mutilated and a permanent scar remained
in the latters forearm. In the said case, the Supreme Court observed
that nominal damages is proper whenever there has been a violation
of an ascertained legal right, although no actual damages resulted or
none are shown. The Court observed further that there is no room
to doubt that some species of injury was caused to the complainant
because of the medical expenses he incurred in having his wounds
treated, and the loss of income due to his failure to work during his
hospitalization. However, only nominal damages were awarded
because there was absence of competent proof of the same actual
damages.
Nominal damages were also awarded in Japan Airlines vs. Court
of Appeals (294 SCRA 19, 25-26 [1998]) where the plaintiffs sued the
airline because the latter failed to transport them to Manila. The
Supreme Court acknowledged that the Mount Pinatubo eruption
prevented JAL from proceeding to Manila on schedule. However,
the award was justified because JAL failed to make necessary ar-
rangement to transport the plaintiffs on the first available connect-
ing flight to Manila. It even declassified the plaintiffs from transit
passengers to new passengers as a result of which plaintiffs were
obliged to make the necessary arrangements themselves. However,
only nominal damages were awarded in the absence of proof of actual
damages.
Similarly, nominal damages were awarded in Northwest Air-
lines, Inc. vs. Nicolas L. Cuenca (14 SCRA 1063, 1066 [1965]). The
plaintiff was the holder of a first class ticket from Manila to Tokyo
who was rudely compelled by an agent of the airlines to move to the
tourist class notwithstanding the agents knowledge that the plaintiff
was a Commissioner of Public Highways of the Republic of the Philip-
pines who was travelling in his official capacity as a delegate of the
country to a conference in Tokyo. There was also no proof of actual
damages in the said case.
It follows however that nominal damages cannot co-exist with
actual or compensatory damages. (Armovit vs. Court of Appeals, 184
DAMAGES
SCRA 476 [1990]). The purpose of nominal damages is to vindicate or
recognize a right that has been violated, in order to preclude further
contest thereof; and not for the purpose of indemnifying the plaintiff
for any loss suffered by him. An award of compensatory damages is a
vindication of a right. It is in itself a recognition that plaintiffs right
was violated, hence, the award of nominal damages is unnecessary
and improper. (Vda. De Medina vs. Cresencia, 99 SCRA 506, 510
[1956]).
In Erlinda Francisco v. Ricardo Ferrer, Jr. (G.R. No. 142029,
February 28, 2001), nominal damages was imposed for the insensitiv-
ity, inadvertence and inattention of the defendant to the plaintiffs
anxiety and need of the hour. The defendant was sued because she
failed to deliver the wedding cake of the plaintiffs on time for the re-
ception. The delivery was not only late but the cake that was delivered
was different from what was agreed upon. The defendant initially
gave the lame excuse that delivery was probably delayed because of
traffic when in truth defendant knew that no cake would be delivered
because the order slip got lost.
D. TEMPERATE OR MODERATE DAMAGES.
The Civil Code includes provisions allowing temperate and
moderate damages. Articles 2224 and 2225 state:
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.
The Code Commission justified the adoption of the above-quoted
provisions by citing the law in the United States:
In some States of the American Union, 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. For instance,
injury to ones commercial credit or to the goodwill of a business
firm is often hard to show with certainty in terms of money.
Should damages be denied for that reason? The judge should be
empowered to calculate moderate damages in such cases, rather
than that the plaintiff should suffer, without redress, from the
defendants wrongful act.
910 TORTS AND DAMAGES
The Supreme Court explained in Pleno vs. Court of Appeals (G.R.
No. 56505, May 9, 1988; see also People v. Singh, G.R. No. 129782,
360 SCRA 404, 408 [2001]; People v. Plazo, 350 SCRA 433 [2001])
that:
Temperate damages are included within the context of
compensatory damages. In arriving at a reasonable level of
temperate damages to be awarded, courts are guided by the rul-
ing that x x x there are cases where from the nature of the case,
definite proof of pecuniary loss can not be offered, although the
court is convinced that there has been such loss. For instance,
injury to ones commercial credit or to the goodwill of a business
firm is often hard to show certainly in terms of money. Should
damages be denied for that reason? The judge should be empow-
ered to calculate moderate damages in such case, rather than
the plaintiff should suffer, without redress from the defendants
wrongful act.
Thus, temperate damages to the heirs of the victim under Article
2224 of the Civil Code where it has been shown that they suffered
pecuniary loss but the amount thereof cannot be proved with certainty
(People v. Singh, et al., 360 SCRA 404, 408 [2001]; People v. Plazo,
350 SCRA 433 [2001]; People v. Briones, 344 SCRA 149 [2000]; People
v. De la Tongga, 336 SCRA 687 [2000]).
In Rogelio E. Ramos, et al. vs. Court of Appeals, et al. (G.R. No.
124354, December 29, 1999), the Supreme Court sustained the award
of temperate damages to answer for the anticipated increase in future
medical expenses. The Supreme Court observed that our present laws
on actual damages cannot cover such adjustments because 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 situa-
tions, where the resulting injury might be continuing and possible
future complications directly arising from the injury, while certain
to occur, are difficult to predict. The Court concluded that temper-
ate damages should be awarded to 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. And because of the unique
nature of such cases, no incompatibility arises when both actual and
temperate damages are provided for.
DAMAGES
CASES:
ROGELIO RAMOS vs. COURT OF APPEALS
G.R. No. 124354, December 29, 1999
[The victim in this case was rendered comatose by medical malpractice. 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 November 1985 up to 15 April 1992, based on monthly
expenses for the care of the patient estimated at P8,000.00. The High Court
observed that at current levels, the P8,000/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 e penses incurred and
proved by the petitioners after they were forced to bring home the patient to
avoid mounting hospital bills. The Court further explained.]
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 for the
purpose of providing a proper milieu adequate to meet minimum standards
of care. In the instant case for instance, Erlinda has to be constantly turned
from side to side to prevent bedsores and hypostatic pneumonia. Feeding
is done by nasogastric tube. Food preparation should be normally made by
a dietitian to provide her with the correct daily caloric requirements and
vitamin supplements. Furthermore, she has to be seen on a regular basis by
a physical therapist to avoid muscle atrophy, and by a pulmonary therapist
to prevent the accumulation of secretions which can lead to respiratory
complications.
Given these considerations, the amount of actual damages re-
coverable in suits arising from negligence should at least reflect the
correct minimum cost of proper care, not the cost of the care the fam-
ily 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.
Well-settled is the rule that actual damages which may be
claimed by the plaintiff are those suffered by him as he has duly
proved. The Civil Code provides:
ARTICLE 2199. Except as provided by law or by stipula-
tion, one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such com-
pensation is referred to as actual or compensatory damages.
912 TORTS AND DAMAGES
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,
if they are to adequately and correctly respond to the injury caused,
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. And because
of the unique nature of such cases, no incompatibility arises when
both actual and temperate damages are provided for. The reason is
that these damages cover two distinct phases.
As it would not be equitable and certainly not in the best in-
terests of the administration of justice 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 the instant 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 compen-
satory 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 peti-
tioners to provide optimal care for their loved one in a facility which
generally specializes in such care. They should not be compelled by
dire circumstances to provide substandard care at home without the
aid of professionals, for anything less would be grossly inadequate.
Under the circumstances, an award of P1,500,000.00 in temperate
damages would therefore be reasonable.
ARANETA vs. BANK OF AMERICA
40 SCRA 144 [1971]
Leopoldo Araneta, the petitioner herein, was a local merchant engaged
in the import and export business. On June 30, 1961 he issued a check for
500 payable to cash and drawn against the San Francisco main office of
DAMAGES
the Bank of America, where he had been maintaining a dollar current ac-
count since 1948. At that time he had a credit balance of 523.81 in his ac-
count, confirmed by the banks assistant cashier in a letter to Araneta dated
September 7, 1961. However, when the check was received by the bank on
September 8, 1961, a day after the date of the letter, it was dishonored and
stamped with the notation Account Closed.
Upon inquiry by Araneta as to why his check had been dishonored,
the Bank of America acknowledged that it was an error, explaining that for
some reason the check had been encoded with wrong account number, and
promising that we shall make every effort to see that this does not reoc-
cur. The bank sent a letter of apology to the payee of the check, a Mr. Harry
Gregory of Hongkong, stating that the check was returned through an error
on our part and should not reflect adversely upon Mr. Araneta. In all prob-
ability the matter would have been considered closed, but another incident
of a similar nature occurred later.
On May 25, and 31, 1962 Araneta issued Check No. 110 for $500 and
Check No. 111 for $150, respectively, both payable to cash and drawn against
the Bank of America. These two checks were received by the bank on June
3, 1962. The first check appeared to have come into the hands of Rufina
Saldaa, who deposited it to her account with the First National City Bank
of New York, which in turn cleared it through the Federal Reserve Bank. The
second check appeared to have been cleared through the Wells Fargo Bank.
Despite the sufficiency of Aranetas deposit balance to cover both checks,
they were again stamped with the notation Account Closed and returned
to the respective clearing banks.
In the particular case of Check No. 110, it was actually paid by the
Bank of America to the First National City Bank. Subsequently, however,
the Bank of America, claiming that the payment had been inadvertently
made, returned the check to the First National City Bank with the request
that the amount thereof be credited back to the Bank of America. In turn, the
First National City Bank wrote to the depositor of the check, Rufina Saldaa,
informing her about its return with the notation Account Closed and ask-
ing her consent to the deduction of its amount from her deposit. However,
before Mrs. Saldaas reply could be received, the Bank of America recalled
the check from the First National City Bank and honored it.
In view of the foregoing incidents, Araneta, through counsel, sent a
letter to the Bank of America demanding damages in the sum of 20,000.
While admitting responsibility for the inconvenience caused to Araneta, the
bank claimed that the amount demanded was excessive, and offered to pay
the sum of P2,000.00. The offer was rejected.
On December 11, 1962 Araneta filed the complaint in this case against
the Bank of America for the recovery of the following:
1. Actual or compensatory damages P30,000.00
2. Moral damages 20,000.00
914 TORTS AND DAMAGES
3. Temperate damages 50.000.00
4. Exemplary damages 10,000.00
5. Attorneys fees 10,000.00
TOTAL P120,000.00
The judgment of the trial court awarded all the items prayed for, but
on appeal by the defendant the Court of Appeals eliminated the award of
compensatory and temperate damages and reduced the moral damages to
P8,000.00, the exemplary damages to P1,000.00 and the attorneys fees to
P1,000.00.
Not satisfied with the decision of the appellate court, the plaintiff filed
the instant petition for review, alleging two reasons why it should be allowed,
as follows:
(1) The Court of Appeals erred in holding that temperate
damages cannot be awarded without proof of actual pecuniary
loss. There is absolutely no legal basis for this ruling; worse yet,
it runs counter to the very provisions of ART. 2216 of the New
Civil Code and to the established jurisprudence on the matter;
(2) The Court of Appeals erred in not holding that moral
damages may be recovered as an item separate and distinct from
the damages recoverable for injury to business standing and
commercial credit. This involves the application of paragraph
(2) of Art. 2205 of the New Civil Code which up to now has not
yet received an authoritative interpretation from the Supreme
Court . . .
In his brief, however, the petitioner assigned five (5) errors commit-
ted by the appellate court, namely: (1) in concluding that the petitioner, on
the basis of the evidence, had not sufficiently proven his claim for actual
damages, where such evidence, both testimonial and documentary, stands
uncontradicted on the record; (2) in holding that temperate damages cannot
be awarded to the petitioner without proof of actual pecuniary loss; (3) in not
granting moral damages for mental anguish, besmirched reputation, wounded
feelings, social humiliation, etc., separate and distinct from the damages
recoverable for injury to business reputation; (4) in reducing, without any
ostensible reason, the award of exemplary damages granted by the lower
court; and (5) in reducing, without special reason, the award of attorneys
fees by the lower court.
We consider the second and third errors, as they present the issues
raised in the petition for review and on the basis of which it was given due
course.
In disallowing the award of temperate damages, the Court of Appeals
ruled:
DAMAGES
In view of all the foregoing considerations we hold that
the plaintiff has not proven his claim that the two checks for
$500 each were in partial payment of two orders for jewels worth
P50,000 each. He has likewise not proven the actual damage
which he claims he has suffered. And in view of the fact that he
has not proven the existence of the supposed contract for him to
buy jewels at a profit there is not even an occasion for an award
of temperate damages on this score.
This ruling is now assailed as erroneous and without legal basis. The
petitioner maintains that in an action by a depositor against a bank for
damages resulting from the wrongful dishonor of the depositors checks,
temperate damages for injury to business standing or commercial credit may
be recovered even in the absence of definite proof of direct pecuniary loss to
the plaintiff, a finding as it was found by the Court of Appeals that the
wrongful acts of the respondent had adversely affected his credit being suf-
ficient for the purpose. The following provisions of the Civil Code are invoked:
ART. 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases
of temporary or permanent personal injury;
(2) For injury to the plaintiffs business standing or com-
mercial credit.
xxx xxx xxx
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.
Also invoked by the petitioner is the case of Atlanta National Bank
vs. Davis, 96 Ga 334, 23 SE 190; 1 and the following citations in American
Jurisprudence:
In some states what are called temperate damages are allowed
in certain classes of cases, without proof of actual or special damages,
where the wrong done must in fact have caused actual damage to the
plaintiff, though from the nature of the case, he cannot furnish inde-
pendent, distinct proof thereof. Temperate damages are more than
nominal damages, and, rather, are such as would be a reasonable
compensation for the injury sustained . . . (15 Am. Jur. 400)
. . . It has been generally, although not universally, held, in an
action based upon the wrongful act of a bank in dishonoring checks of
a merchant or trader having sufficient funds on deposit with the bank,
that substantial damages will be presumed to follow such act as a neces-
sary and natural consequence, and accordingly, that special damages
need not be shown. One of the reasons given for this rule is that the
916 TORTS AND DAMAGES
dishonor of a merchants or traders check is tantamount or analogous,
to a slander of his trade or business, imputing to him insolvency or bad
faith . . . (10 Am. Jur. 2d. 545).
On the other hand the respondent argues that since the petitioner
invokes Article 2205 of the Civil Code, which speaks of actual or compensa-
tory damages for injury to business standing or commercial credit, he may
not claim them as temperate damages and thereby dispense with proof of
pecuniary loss under Article 2216. The respondent cites Article 2224, which
provides that 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 cannot, from the
nature of the case, be proved with certainty, and contends that the petitioner
failed to show any such loss in this case.
The question, therefore, is whether or not on the basis of the findings
of the Court of Appeals, there is reason to conclude that the petitioner did
sustain some pecuniary loss although no sufficient proof of the amount thereof
has been adduced. In rejecting the claim for temperate damages the said
Court referred specifically to the petitioners failure to prove the existence
of a supposed contract for him to buy jewels at a profit, in connection with
which he issued the two checks which were dishonored by the respondent.
This may be true as far as it goes, that is, with particular reference to the
alleged loss in that particular transaction. But it does not detract from the
finding of the same Court that actual damages had been suffered, thus:
. . . Obviously, the check passed the hands of other banks since
it was cleared in the United States. The adverse reflection against the
credit of Araneta with said banks was not cured nor explained by the
letter of apology to Mr. Gregory.
xxx xxx xxx
. . . This incident obviously affected the credit of Araneta with
Miss Saldaa.
xxx xxx xxx
However, in so far as the credit of Araneta with the First Na-
tional City Bank, with Miss Rufina Saldaa and with any other persons
who may have come to know about the refusal of the defendant to honor
said checks, the harm was done . . .
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 re-
flection thereon constitutes some material loss to him. As stated in the case
Atlanta National Bank vs. Davis, supra, citing 2 Morse Banks, Sec. 458, it
can hardly be possible that a customers 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 inde-
pendent, distinct proof thereof.
DAMAGES
The Code Commission, in explaining the concept of temperate damages
under Article 2224, makes the following comment:
In some States of the American Union, 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. For instance, injury to ones commercial
credit or to the goodwill of a business firm is often hard to show with
certainty in terms of money. Should damages be denied for that reason?
The judge should be empowered to calculate moderate damages in such
cases, rather than that the plaintiff should suffer, without redress from
the defendants wrongful act.
The petitioner, as found by the Court of Appeals, is a merchant of
long standing and good reputation in the Philippines. Some of his record is
cited in the decision appealed from. We are of the opinion that his claim for
temperate damages is legally justified. Considering all the circumstances,
including the rather small size of the petitioners account with the respond-
ent, the amounts of the checks which were wrongfully dishonored, and the
fact that the respondent tried to rectify the error soon after it was discovered,
although the rectification came after the damage had been caused, we believe
that an award of P5,000 by way of temperate damages is sufficient.
Under the third error assigned by the petitioner in his brief, which
is the second of the two reasons relied upon in his petition for review, he
contends that moral damages should have been granted for the injury to
his business standing or commercial credit, separately from his wounded
feelings and mental anguish. It is true that under Article 2217 of the Civil
Code. Besmirched reputation is a ground upon which moral damages may
be claimed, but the Court of Appeals did take this element into consideration
in adjudging the sum of P8,000 in his favor. We quote from the decision:
. . . the damages to his reputation as an established and well
known international trader entitled him to recover moral damages.
xxx xxx xxx
. . . It was likewise established that when plaintiff learned that
his checks were not honored by the drawee Bank, his wounded feelings
and the mental anguish suffered by him caused his blood pressure to
rise beyond normal limits, thereby necessitating medical attendance
for an extended period.
E. LIQUIDATED DAMAGES.
Liquidated damages are those agreed upon by the parties to
a contract, to be paid in case of breach thereof. (Article 2226, Civil
Code). Ordinarily, the court cannot change the amount of liquidated
damages agreed upon by the parties. However, Article 2227 of the
Civil Code provides that liquidated damages, whether intended as
918 TORTS AND DAMAGES
an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable. In addition, Article 2228 provides that
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.
F. EXEMPLARY OR CORRECTIVE DAMAGES.
Corrective damages are called exemplary or punitive damages
in American law. The Code Commission used the term corrective,
in lieu of punitive, in harmony with the modern theory of penology.
(Report of the Code Commission). The Commission further explained
that exemplary damages are required by public policy to suppress
wanton acts. They are antidotes so that the poison of wickedness may
not run through the body politic. (ibid.).
Exemplary or corrective damages are imposed, by way of ex-
ample or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages. (Article 2229, Civil
Code; Zenith Insurance Corporation vs. Court of Appeals, 185 SCRA
398 [1990]; Del Rosario vs. Court of Appeals, 267 SCRA 158 [1997]).
They are designed to reshape behavior that is socially deleterious in
its consequence. (Mevenas vs. Court of Appeals).
Also known as punitive or vindictive damages, exemplary
or corrective damages are intended to serve as a deterrent to serious
wrongdoings and as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment for those guilty
of outrageous conduct. 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 as-
sociated 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 con-
duct. In either case, these damages are intended in good measure to
deter the wrongdoer and others like him from similar conduct in the
future (People v. Catubig, No. 137842, August 23, 2001, 363 SCRA
621, 634).
DAMAGES
In Philippine National Bank vs. Court of Appeals (256 SCRA 44
[1996], citing Octot vs. Ybanez, 111 SCRA 79 [1982]; De Leon vs. Court
of Appeals, 165 SCRA 166 [1988]), the Supreme Court enumerated
the following requisites for the award of exemplary damages:
1. They may be imposed by way of example in addition to
compensatory damages, and only after the claimants right
to them has been established;
2. They cannot be recovered as a matter of right, their de-
termination depending upon the amount of compensatory
damages that may be awarded to the claimant;
3. The act must be accompanied by bad faith or done in wan-
ton, fraudulent, oppressive or malevolent manner.
The award of exemplary damages is governed by the following
statutory provisions:
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 addi-
tion 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.
Consistent with the above-stated statutory and juris-
920 TORTS AND DAMAGES DAMAGES

prudential rules, the Supreme Court sustained the award Civil Code (People v. Catubig, supra.).
of exemplary damages where there was gross carelessness
Nevertheless, the award of exemplary damages is
or negligence amounting to wanton misconduct. (Radio
also justified, not only due to the presence of aggravat-
Communications of the Philippines vs. Court of Appeals,
ing circumstance, but also if the circumstances show the
195 SCRA 147 [1991]). It was also awarded due to the
depravity of the mind of the accused. Hence, exemplary
presence of a fraudulent conduct. (Geraldez vs. Court of
damages was awarded against an accused who assaulted
Appeals, 230 SCRA 320 [1994]). In a case involving contract
a pregnant woman. By sexually assaulting a pregnant
of carriage of passengers, the Court justified the award of
woman, the accused has shown moral corruption, perver-
exemplary damages to deter the airlines from the com-
sity and wickedness. (People vs. Cristobal, 252 SCRA 507
mission of acts of discourtesy to passengers. (Northwest
[1996]). It was also imposed to deter fathers with perverse
Airlines vs. Court of Appeals, 186 SCRA 440 [1990]).
tendencies or aberrant sexual behavior from abusing their
own daughters. (People vs. Matrimonio, 215 SCRA 613
[1992]).
a. Criminal Cases.
The Civil Code authorizes the imposition of exemplary
damages in criminal cases where there is an aggravating
circumstance. The term aggravating circumstances used
by the Civil Code, the law not having specified otherwise,
is to be understood in its broad or generic sense.
The commission of an offense has a two-pronged ef-
fect, one on the public as it breaches the social order and
the other upon the private victim as it causes personal
sufferings, each of which is addressed by, respectively, the
prescription of heavier punishment for the accused and by
an award of additional damages to the victim. The increase
of the penalty or a shift to a graver felony underscores the
exacerbation of the offense by the attendance of aggravat-
ing circumstances, whether ordinary or qualifying, in its
commission. Unlike the criminal liability which is basi-
cally a State concern, the award of damages, however, is
likewise, if not primarily, intended for the offended party
who suffers thereby. It would make little sense for an
award of exemplary damages to be due the private offended
party when the aggravating circumstance is ordinary but
to be withheld when it is qualifying. Withal, the ordinary
or qualifying nature of an aggravating circumstance is
a distinction that should only be of consequence to the
criminal, rather than to the civil, liability of the offender.
In fine, relative to the civil aspect of the case, an aggravat-
ing circumstance, whether ordinary or qualifying, should
entitle the offended party to an award of exemplary dam-
ages within the unbridled meaning of Article 2230 of the