ACTIONS & DAMAGES IN CASE

OF BREACH
•Passengers & shippers who suffered damages
due to breach of contractual obligation may sue
the CC for damages based on culpa
contractual.
•Same act that breaches contract may also give
rise to liability based on quasi delict under Art.
2176 of Civil Code
•Cause of action against CC may be culpa
contractual or culpa aquiliana while driver may
be liable based on culpa delictual or culpa
aquiliana
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 Actions (cont)
• The lialibility of 3rd persons who was
driving another vehicle and/or his
employer maybe based on quasi delict
• In case the negligence of the CC's driver
and a 3rd person concurs, liability of the
parties is joint and several.
• Plaintiff may allege alternative causes of
action so long as he does not recover
twice for the same injury.
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 Art. 2201 (Civil Code)
In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is
liable shall be those that are 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 reasonably be attributed to
the non-performance of the obligation
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 Carrier's Right of Recourse
• If CC is in bad faith or was guilty of gross
negligence, CC is liable for all damages,
whether they can be foreseen or not
• CC who may be held liable for damages
has the right of recourse against the
employee who committed the negligent,
intentional or fraudulent act

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 Kinds of Damages
1. Actual or Compensatory- subject to proof,
consists of loss of what one possessed
and loss of benefits that would have
pertained to him
2. Moral
3. Temperate or Moderate
4. Liquidated
5. Nominal
6. Exemplary or Corrective
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 Art. 2205 (Civil Code)
Damages may be recovered:
1. For loss or impairment of earning capacity
in cases of temporary or permanent
personal injury;
2. For injury to the plaintiff's business
standing or commercial credit
Plaintiff must adduce proof of facts that
could be the basis for measuring actual
damages
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 Art. 372 (Code of Commerce)
The value of the goods which the carrier
must pay in cases of loss or misplacement
shall be determined in accordance with
that declared in the BOL, the shipper not
being allowed to present proof that among
the goods declared therein there were
articles of greater value and money.

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 Valuation of Goods
• In international carriage of goods, COGSA
limits liability of CC to $500/package
unless value of goods was declared in
BOL
• Value of goods is the sum of money that
CC would have to pay in the market for
identical goods plus damages for the loss
of use during period before replacement

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Damages in Personal Injury/Death
• Personal injury or death entitles claimant
to all medical expenses and amount spent
for the wake, excluding those incurred
after burial.
• Medical expenses may include plastic
surgery

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 Art. 2206 (Civil Code)
The amount of damages for death caused by a
crime or quasi delict shall be at least P3,000.00,
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

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Death/Loss of Earning Capacity
• The fixed damage for death was increased
to Php 50,000.00
• Loss of Earning Capacity Formula
Net Earning Capacity=Life Expectancy x
Gross Annual Income less Necessary
Living Expenses
• Loss of earning capacity must established
by documentary evidence. May be
awarded even if unemployed because
award is for loss of ability to earn money
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 Art. 2206 (cont)
2. If the deceased was obliged to give support
according to the provisions of Art. 291, the
recipient who is not an heir called to the
decedent's 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.

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 Art. 2208 (Civil Code)
In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs,
cannot be recovered, except:
1. When exemplary damages are awarded;
2. When the defendant's act or omission has
compelled the plaintiff to litigate with 3rd persons
or to incur expenses to protect his interest
3. In criminal cases of malicious prosecution
against the plaintiff;

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 Art. 2208 (cont)
4. In case of a clearly unfounded civil action or
proceeding against plaintiff;
5. Where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff's
plainly valid, just & demandable claim;
6. In actions for legal support;
7. In actions for the recovery of wages of
household helpers, laborers and skilled workers;
8. In actions for indemnity under workmen's
compensation and employer's liability laws

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 Art. 2208 (cont)
9. In a separate civil action to recover civil
liability arising from crime;
10. When at least double judicial costs are
awarded;
11. In any other case where the court deems
it just and equitable that attorney's fees
and expenses of litigation should be
recovered;
In all cases, the attorney's fees and
expenses of litigation must be reasonable.
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 Attorney's Fees & Interest
• Attorney's fees may be awarded in actions
for breach of contract of carriage under
Par. 1,2,4,5,10 & 11 of Art. 2208.
• Damages based on breach of contract of
carriage earns interest at rate of 6% per
annum from finality of decision up to its
satisfaction.

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 Moral Damages
• Moral damages include physical suffering,
mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation
• MD is designed to compensate the claimants for
actual injury and is not meant to enrich them at
the expense of CC
• In breach of contract of carriage, MD may be
recovered (1) if mishap results in death; (2) CC
is guilty of fraud/bad faith; (3) gross negligence
of CC amounting to bad faith
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Cases where Moral Damages was
Awarded
• Luggage of passenger was lost and only
action taken were telex searches. Reason
for loss was not explained (Air France vs
Gillego)
• Off loading of passenger to another
destination without providing
accomodation & assistance (PAL vs CA)
• First class seat was given to Belgian
forcing passenger to take economy class
(Ortigas vs Lufthansa)

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 Art. 2219 (Civil Code)
Moral damages may be recovered in the following
and analogous cases:
1. A criminal offense resulting in physical injuries
2. Quasi delicts causing physical injuries
3. Seduction, abduction, rape or other lascivious
acts
4. Adultery or concubinage
5. Illegal or arbitrary detention or arrest
6. Illegal search
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 Art. 2219 (cont)
7. Libel, slander or any other form of
defamation
8. Malicious prosecution
9. Acts mentioned in Art. 309
10. Acts and actions referred to in Arts 21,
26, 27, 28, 29, 30, 32, 34 & 35

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 Art. 2220 (Civil Code)
Willfull injury to property may be a legal
ground for awarding moral damages if the
court should find that, under the
circumstances, such damages are justly
due. The same rule applies to breaches of
contract where the defendant acted
fraudulently or in bad faith.

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 Factors to Consider in Award of
Moral Damages
1. Extent of humiliation
2. Extent of pain and suffering
3. Official, political, social, financing standing
4. Business & financial position of offender
5. Age of claimant

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 Arts. 2221 (Civil Code)
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.

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 Arts. 2222 & 2223 (Civil Code)
The court may award nominal damages in
every obligation arising from any source
enumerated in Art. 1157, or in every case
where any property right has been
invaded.
The adjudication of nominal damages shall
preclude further contest upon the right
involved and all accessory questions, as
between the parties to the suit, or their
respective heirs and assigns
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 Nominal Damages
• The award of nominal damages is justified
in the absence of competent proof of
specific amount of actual damages
suffered
• Nominal damages awarded for failure of
CC to make arrangements to transport
plaintiff to first available connecting flight
to Manila (Japan Airlines vs CA)

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 Arts. 2224 & 2225 (Civil Code)
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 provided with certainty.
Temperate damages must be reasonable
under the circumstances.

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 Liquidated Damages
• Liquidated damages are those agreed
upon by the parties to be paid in case of
breach.
• The court cannot change the amount of
liquidated damages but they may be
equitably reduced if they are inquitous or
unconscionable.

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 Exemplary Damages
1. They may be imposed by way of example
in addition to compensatory damages and
only after claimant's right to ED was
established
2. They cannot be recovered as a matter of
right and will depend on amount of
compensatory damages
3. The act must be accompanied by bad
faith or done in wanton, fraudulent,
oppresive or malevolent manner

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 Arts. 2232 to 2233 (Civil Code)
In contracts and quasi-contracts, the court
may award exemplary damages if the
defendant acted in a wanton, fraudulent,
reckless, oppresive or malevolent manner.
Exemplary damages cannot be recovered
as a matter of right; the court will decide
whether or not they should be adjudicated

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 Art. 2234 (Civil Code)
While the amount of exemplary damages need not be
proved, the plaintiff must show that he is entitled to
moral, temperate or compensatory damages before the
court may consider the question of whether or not
exemplary damages should be awarded. In case
liquidated damages have been agreed upon, although
no proof of loss is necessary in order that such liquidated
damages may be recovered, nevertheless before the
court may consider the question of granting exemplary in
addition to iquidated damages, the plaintiff must show
that he would be entitled to moral, temperate or
compensatory damages were it not for the stipulation of
liquidated damages.
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 Art. 2235 (Civil Code)
A stipulation whereby exemplary damages
are renounced in advance shall be null
and void.
Exemplary damages were awarded to
deter CC from commission of acts of
discourtesy to passengers (PAL vs CA)
Exemplary damages were awarded to
injured passenger of bus which hit a tree &
house along highway as an example or as
correction for public good

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