Torts and Damages Case Digests 7

DAMAGES
A. CONCEPT/KINDS OF DAMAGES (ARTICLE
2197)
Spouses Ong vs CA and Inland Trailways
Inc and Philtranco (1999)
Facts:
Petitioners were on board a bus owned by
Inland Trailways and driven by Calvin Coronel.
The Inland bus was bumped from behind by a
bus owned by Philtranco and driven by Apolinar
Miralles. As a result, petitioners sustained
injuries. Hence, petitioners sued Inland and
Philtranco for damages.
In their Complaint, they alleged that they
suffered injuries, preventing Francia from
operating asari-sari store at Las Pias, Metro
Manila, where she derived a daily income of
P200; and Renato from continuing his work as
an overseas contract worker (pipe welder) with
a monthly salary of $690. Stating that they
incurred P10,000 as medical and miscellaneous
expenses, they also claimed moral damages of
P500,000 each, exemplary and corrective
damages of P500,000 each, and compensatory
damages of P500,000 each plus 35 percent
thereof as attorneys fees.
The RTC absolved Inland from liability,
holding that Philtrancos negligence was the
proximate cause of the damage. On appeal, the
CA held that Philtrancos liability could not be
predicated upon the Police Report which had
not been formally offered in evidence. The
report was merely annexed to the answer of
Inland, and petitioner did not adopt or offer it
as evidence. Consequently, it had no probative
value and, thus, Philtranco should be absolved
from liability. Instead, the appellate court found
that petitioners sufficiently established a claim
against Inland based on culpa contractual.
Issue:
Whether or not the CA was correct in
holding that Philtranco cannot be liable for
damages on the basis of a police report that
was not offered in evidence.
Held:
Yes. Petitioners aver that there was grave
abuse of discretion when the amount of actual
damages awarded was reduced from P10,000
to P3,977, even if the original amount did not
even include the medical expenses that Francia
continued to incur; and when the award of
P48,000 as unrealized income was deleted
despite her testimony which was given
credence by the trial court. The Court
disagrees. Granting arguendo that there was
an agreement to submit the case for decision
based on the pleadings, this does not
necessarily imply that petitioners are entitled
to the award of damages. The fundamental
principle of the law on damages is that one

injured by a breach of contract (in this case,

the contract of transportation) or by a wrongful
or negligent act or omission shall have a fair
and just compensation, commensurate with the
loss sustained as a consequence of the
defendants acts. Hence, actual pecuniary
compensation is the general rule, except where
the circumstances warrant the allowance of
other kinds of damages.
Actual damages are such compensation or
damages for an injury that will put the injured
party in the position in which he had been
before he was injured. They pertain to such
injuries or losses that are actually sustained
and susceptible of measurement. Except as
provided by law or by stipulation, a party is
entitled to adequate compensation only for
such pecuniary loss as he has duly proven.
To be recoverable, actual damages must be
pleaded and proven in Court. In no instance
may the trial judge award more than those so
pleaded and proven. Damages cannot be
presumed. The award thereof must be based
on the evidence presented, not on the personal
knowledge of the court; and certainly not on
flimsy, remote, speculative and nonsubstantial
proof. Article 2199 of the Civil Code expressly
mandates that [e]xcept 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.
B. GENERAL PRINCIPLES OF RECOVERY
Air France vs CA and Morales (1989)
Facts:
Private respondent Narciso Morales bought
an airline ticket from Air France. The ticket he
bought was for a series of flights in several
famous cities which have strict itineraries.
When he arrived in New York (the first city), he
complained of an ear infection and requested
Air France to cut short his trip and return to
Manila. The request was denied by Air France,
so respondent had to buy a new set of tickets
so he can return to manila. Thereafter,
respondent sued Air France for breach of
contract of carriage and damages. The trial
court and the CA generally ruled in favor of
respondent. An issue was raised with respect to
the propriety of the damages awarded,
considering that a recurring ear infection was
pleaded as reason necessitating urgent return
to Manila and no medical certificate was
presented to prove that respondent even had
his ear treated when he went back to Manila.
He cannot even remember what date he
arrived in Manila.
Issue:
Whether or not Air France should be liable
for damages.
Held:

No. With a claim for a large amount of

damages, the Court finds it unsual for
respondent, a lawyer, to easily forget vital
information to substantiate his plea. It is also
essential before an award of damages that the
claimant must satisfactorily prove during the
trial the existence of the factual basis of the
damages and its causal connection to
defendant's acts.

that it is planted to palay twice a year. Ramos'

share of the harvest is only one-third (1/3). In
view of his dispossession from 1964 and the
fact that his tenant has vacated the land that
same year, he cannot allege that his tenant is
entitled to his two-thirds (2/3) share.

Unlike in the KLM case where the breach of

contract was aggravated by the discourteous
and arbitrary conduct of an official of the Aer
Lingus which the KLM had engaged to transport
the respondents, here. Air France employees in
Hamburg informed private respondent that his
tickets were partly stamped "non-endorsable"
and "valid on Air France only." Mere refusal to
accede to the passenger's wishes does not
necessarily translate into damages in the
absence of bad faith. To our mind, respondent
has failed to show wanton, malevolent or
reckless misconduct imputable to petitioner in
its refusal to re-route.

Respondent Florante Miano took a PAL

flight to Frankfurt, Germany. Upon respondents
arrival at Viena, his checked baggage
containing money, documents, Nikkon camera,
suits, and clothes were missing. Miano tried to
demand for the value of his lost items but it
was unheeded. So, he sued PAL for damages.
The RTC, despite ruling that PAL was not guilty
of bad faith, awarded moral damages in favour
of Miano.

Dichoso vs CA (1990)

Held:

Facts:

No. In breach of contract of carriage by air,

moral damages are awarded only if the
defendant acted fraudulently or in bad faith.
Bad faith means a breach of a known duty
through same motive of interest or ill will.

Petitioner Ernesto Dichoso and respondent

Teodolfo Ramos were disputing over a rice land,
with both of them claiming that the rice land
was within their respective portions of land.
Respondent brought a constabulary soldier and
two policemen to seize the produce of the rice
land consisting of 50 cavans. Petitioner did the
same but only got six cavans. Thereafter,
respondent filed a complaint for quieting of
title over the rice land with the CFI. The CFI
ruled in favour of respondent and was affirmed
by the CA.
According to petitioner, the CA erred in
requiring him to deliver 40 cavans annually to
private respondent despite its finding that only
1/3 of the produce went to Ramos, 2/3 being
for his tenant. Petitioner alleged that since
respondent's share of the harvest is only onethird (1/3), the remaining two-thirds (2/3)
representing his tenant's share, only the onethird (1/3) of the annual harvest must be
awarded to respondent. Ramos, on the other
hand, argues that his tenant will be deprived of
his share if only one-third (1/3) of the harvest
will be awarded to him.
Issue:
Whether or not petitioner is correct.
Held:
Yes. Actual or compensatory damages
cannot be presumed, but must be duly proved,
and proved with reasonable degree of certainty.
A court cannot rely on speculation, conjecture
or guesswork as to the fact and amount of
damages, but must depend upon competent
proof that they have suffered and on evidence
of the actual amount thereof. It is undisputed
that the land in question yields an average of
twenty (20) sacks of palay per planting and

PAL vs Miano (1995)

Facts:

Issue:
Whether or not
damages was proper.

the

award

of

moral

C. ACTUAL DAMAGES (ARTICLES 21992203; 2207; 2209)

1.
2.
3.
4.
5.

Damnum emergens/lucrum cessans

Disability
Indemnity for death
Interest
Attorneys fees (Article 2208)

DBP vs CA (1998)
Facts:
Private respondent Lydia Cuba is a grantee
of a fishpond lease agreement from the
Government. She mortgaged the fishpond as
security of a loan she obtained from DBP.
Eventually, Lydia defaulted. But without
foreclosure proceedings, DBP appropriated the
leasehold rights over the fishpond and
thereafter executed a conditional sale of the
same leasehold rights in favour of Lydia
whereby she would pay regular amortizations.
However, Lydia again defaulted. Thereafter,
DBP sold the lease rights via public auction to
another person. Hence, Lydia filed a complaint
for the declaration of the sale for being
violative of Art. 2088 of the Civil Code (pactum
commissorium).
The trial court ruled in favour of Lydia and
awarded in her favour P1,067,500 as actual
damages consisting of P550,000 which
represented the value of the alleged lost
articles of Lydia and P517,500 which
represented the value of the 230,000 pieces of
bangus allegedly stocked in 1979 when DBP
first ejected Lydia from the fishpond and the

adjoining house. This award was affirmed by

the Court of Appeals.

Whether or not the award of damages was

proper.

Issue:

Held:

Whether or not the award of damages for

the alleged lost property was proper.

No. Under Article 2199 of the Civil Code,

actual or compensatory damages are those
awarded in satisfaction of, or in recompense
for, loss or injury sustained. They proceed from
a sense of natural justice and are designed to
repair the wrong that has been done, to
compensate for the injury inflicted and not to
impose a penalty. In actions based on torts or
quasi-delicts, actual damages include all the
natural and probable consequences of the act
or omission complained of. There are two kinds
of actual or compensatory damages: one is the
loss of what a person already possesses (dao
emergente), and the other is the failure to
receive as a benefit that which would have
pertained to him (lucro cesante).

Held:
No. Curiously, in her complaint dated 17
May 1985, CUBA included losses of property as
among the damages resulting from DBPs takeover of the fishpond. Yet, it was only in
September 1985 when her son and a caretaker
went to the fishpond and the adjoining house
that she came to know of the alleged loss of
several articles. Such claim for losses of
property, having been made before knowledge
of the alleged actual loss, was therefore
speculative. The alleged loss could have been a
mere afterthought or subterfuge to justify her
claim for actual damages. With regard to the
award of P517,000 representing the value of
the alleged 230,000 pieces of bangus which
died when DBP took possession of the fishpond
in March 1979, the same was not called for.
Such loss was not duly proved; besides, the
claim therefor was delayed unreasonably. From
1979 until after the filing of her complaint in
court in May 1985, CUBA did not bring to the
attention of DBP the alleged loss.
In view, however, of DBPs act of
appropriating CUBAs leasehold rights which
was contrary to law and public policy, as well
as its false representation to the then Ministry
of Agriculture and Natural Resources that it had
foreclosed the mortgage, an award of moral
damages in the amount of P50,000 is in order
conformably with Article 2219(10), in relation
to Article 21, of the Civil Code. Exemplary or
corrective damages in the amount of P25,000
should likewise be awarded by way of example
or correction for the public good. There being
an award of exemplary damages, attorneys
fees are also recoverable.
PNOC Shipping and Transport Corporation
vs CA (1998)
Facts:
A vessel owned by private respondent
Maria Efigenia Fishing Corporation was
navigating the waters near Fortune Island in
Nasugbu, Batangas on its way to Navotas when
it collided with a vessel which at the time was
owned by the Luzon Stevedoring Corporation
(but whose interest in the vessel was
transferred to petitioner PNOC Shipping and
Transport Corporation). Investigation revealed
that the vessel owned by Luzon Stevedoring
was at fault. Hence, respondent sued petitioner
for damages. The trial court ruled in favour of
petitioner and awarded the sum of P6,438,048
representing the value of the fishing boat. The
CA upheld the trial courts decision.
Issue:

To enable an injured party to recover actual

or compensatory damages, he is required to
prove the actual amount of loss with
reasonable degree of certainty premised upon
competent proof and on the best evidence
available. 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 the 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 making an award must point out
specific facts that could afford a basis for
measuring whatever compensatory or actual
damages are borne.
In this case, actual damages were proven
through the sole testimony of private
respondents general manager and certain
pieces of documentary evidence. Except for
Exhibit B where the value of the 1,050 baeras
of fish were pegged at their September 1977
value when the collision happened, the pieces
of documentary evidence proffered by private
respondent with respect to items and
equipment lost show similar items and
equipment with corresponding prices in early
1987 or approximately ten (10) years after the
collision. Noticeably, petitioner did not object to
the exhibits in terms of the time index for
valuation of the lost goods and equipment. In
objecting to the same pieces of evidence,
petitioner commented that these were not duly
authenticated and that the witness (Del
Rosario) did not have personal knowledge on
the contents of the writings and neither was he
an expert on the subjects thereof. Clearly
ignoring petitioners objections to the exhibits,
the lower court admitted these pieces of
evidence and gave them due weight to arrive
at the award of P6,438,048.00 as actual
damages.
The exhibits were presented ostensibly in
the course of Del Rosarios testimony. Private
respondent did not present any other witnesses
especially those whose signatures appear in

the price quotations that became the bases of

the award. We hold, however, that the price
quotations are ordinary private writings which
under the Revised Rules of Court should have
been proffered along with the testimony of the
authors thereof. Del Rosario could not have
testified on the veracity of the contents of the
writings even though he was the seasoned
owner of a fishing fleet because he was not the
one who issued the price quotations. In other
words, those price quotations are hearsay
evidence. And, the rule is that damages may
not be awarded on the basis of hearsay
evidence.
Eastern Shipping Lines Inc. vs CA (1994)
Parties:

Mercantile
Insurance
Company
Insurer (plaintiff in this case)

Eastern Shipping
Company

Metro Port Service, Inc. Arrastre

Operator

Allied Brokerage Corporation Customs

Broker

Lines

Shipping

Facts:
Two fiber drums of riboflavin were shipped
from Japan via a vessel owned by Eastern
Shipping Lines. The shipment was insured by
Mercantile Insurance Company. Upon arrival of
the shipment in Manila, it was discharged unto
the custody of Metro Port, which excepted to
one drum said to be in bar order, which
damage was unknown to the Insurer. Later on,
Allied Brokerage received the shipment, one
drum opened and without seal. It then
delivered the shipment to the consignees
warehouse, which excepted to one drum which
contained spillages, while the rest of the
contents was adulterated/fake. As a result of
the losses, Insurer paid the consignee in
accordance with its insurance policy. Exercising
its right of subrogation, the Insurer sued
Eastern Shipping Lines, Metro Port Service and
Allied Brokerage Corporation for damages.
The trial court (upheld by the CA) ruled in
favour of the Insurer and adjudged defendants
jointly and severally liable to pay:
The amount of P19,032.95, with the
present legal interest of 12% per annum
from October 1, 1982, the date of filing of
this complaints, until fully paid (the liability
of defendant Eastern Shipping, Inc. shall
not exceed US$500 per case or the CIF
value of the loss, whichever is lesser, while
the liability of defendant Metro Port
Service, Inc. shall be to the extent of the
actual invoice value of each package, crate
box or container in no case to exceed
P5,000.00 each, pursuant to Section 6.01
of the Management Contract);
Issues:

1. Whether or not the payment of legal

interest on an award for loss or damage is to
be computed from the complaint is filed or
from the date the decision appealed from is
rendered.
2. Whether the applicable rate of interest,
referred to above, is 12% or 6%.
Held:
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. 21 Furthermore, the interest due
shall itself earn legal interest from the time
it is judicially demanded. 22 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 23 of the Civil
Code.
2. When an obligation, not constituting a
loan or forbearance of money, is breached,
an interest on the amount of damages
awarded may be imposed at the discretion
of the court 24 at the rate of 6% per
annum. 25 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 judgment 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 on 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.
Francisco vs Co (2006)
Facts:
This is a land dispute which began when
respondents filed a complaint for accion
publiciana against petitioners involving a
certain land. They entered into a compromise
agreement whereby it was agreed that
petitioners were the owners of the land and
that they would lease a portion thereof to
respondents. But dispute still ensued and the
case reached the Court of Appeals which held
that the judgment of the compromise was
already final.
Later on, petitioner filed a complaint for
forcible entry against respondents, but
respondents maintained that his action is
barred by res judicata. The MTC and the RTC
ruled in favor of petitioner, but the CA
reversed, holding that the action is barred by
res judicata. Furthermore, the CA also
concluded that due to petitioners malicious
prosecution, petitioner is liable for moral
damages.
Issue:
Whether or not petitioner is liable for moral
damages.
Held:
No. In ruling that petitioner was in bad faith
in filing the instant suit, the appellate court
predicated this conclusion on the observation
that "respondent was well-aware that the
issue involved in this case has already been
settled by the courts. Due to this, petitioners
understandably suffered mental anguish and
serious anxiety, thereby entitling them to
moral damages."

We cannot agree with the appellate court

that bad faith on the part of petitioner had
been preponderantly established in this case.
Bad faith does not simply connote bad
judgment or negligence, but it imports a
dishonest purpose or some moral obliquity and
conscious doing of a wrong. It should be
established by clear and convincing evidence
since the law always presumes good faith. In
ascertaining the intention of the person
accused of acting in bad faith, the courts must
carefully examine the evidence as to the
conduct and outward acts from which the
inward motive may be determined. Certainly, it
does not appear that the Court of Appeals has
conducted the mandated careful examination
of evidence that would sustain the award of
moral damages. Nothing in the record
establishes any right to moral damages by
respondents.
Neither
should
exemplary
damages avail under the circumstances. The
plaintiff must show that he is entitled to moral,
temperate or compensatory damages before
the court may consider the question of whether
exemplary damages should be awarded. If the
court has no proof or evidence upon which the
claim for moral damages could be based, such
indemnity could not be outrightly awarded. The
same holds true with respect to the award of
exemplary damages where it must be shown
that the party acted in a wanton, oppressive or
malevolent manner. Furthermore, this specie of
damages is allowed only in addition to moral
damages such that no exemplary damages can
be awarded unless the claimant first
establishes his clear right to moral damages.
Contrary to the pronouncement of the
Court of Appeals, the mere fact that petitioners
were constrained to litigate in order to protect
and assert their rights does not ipso facto
entitle them to attorney's fees. What Article
2208 (2) of the Civil Code provides, in order
that attorney's fees may be awarded, is that
"the defendant's act or omission has compelled
the plaintiff to litigate with third persons or to
incur expenses to protect his interest". It is
settled that the fact that the party was
"compelled to litigate and incur expenses to
protect and enforce their claim does not justify
the award of attorney's fees. The general rule
is that attorney's fees cannot be recovered as
part of damages because of the public policy
that no premium should be placed on the right
to litigate. The award of attorney's fees must
be deleted where the award of moral and
exemplary damages are eliminated."

Marikina Auto Line Transport Corporation

vs People (2006)
Facts:
A bus owned by Marikina Auto Line and
driven by Freddi Suelto stuck the terrace of a
commercial apartment owned by Erlinda
Valdellon along Kamuning. Valdellon filed a
criminal complaint for reckless imprudence
against Suello. She also filed a separate civil
complaint against Suelto and the bus
company for damages. A joint trial of the two
cases was ordered by the trial court. The trial
court found Suelto guilty beyond reasonable
doubt and ordered Marikina Auto Line and
Suelto to pay jointly and severally P150,000
(representing actual damages) to Valdellon.
This was upheld by the CA but it reduced the
damages to P100,000.
Issue: Whether or not the award of damages
was proper.
Held: No. In the first place, Valdellon failed to
present sufficient evidence to support her
claim for damages. The only evidence
adduced by respondents to prove actual
damages claimed by private respondent were
the summary computation of damage made
by Engr. Jesus R. Regal, Jr. amounting to
P171,088.46 and the receipt issued by the BB
Construction and Steel Fabricator to private
respondent for P35,000.00 representing cost
for carpentry works, masonry, welding, and
electrical works. Respondents failed to present
Regal to testify on his estimation.
Furthermore, the trial court did not even
state the factual and legal bases of its award
of damages. It merely ordered payment of the
same in the dispositive portion. The same can
be said about the CA which also did not
provide a basis for reducing the damages to
P100,000.
Private respondents failed to adduce
adequate and competent proof of the
pecuniary loss they actually incurred. It is not
enough that the damage be capable of proof
but must be actually proved with a reasonable
degree of certainty, pointing out specific facts
that afford a basis for measuring whatever
compensatory damages are borne. Private
respondents merely sustained an estimated
amount needed for the repair of the roof of
their subject building. What is more, whether
the necessary repairs were caused only by

petitioners
alleged
negligence
in
the
maintenance of its school building, or included
the ordinary wear and tear of the house itself,
is an essential question that remains
indeterminable.
Magbanua vs Junsay (2007)
Facts:
Rosemarie Magbanua who worked as a
housemaid for Pilar Junsay was charged with
the latter for robbery. It was alleged that
Rosemarie robbed Pilar of her jewelries. The
RTC eventually dismissed the criminal case not
only for insufficiency of evidence but also for
failure to establish a prima facie case against
her. Later on, Rosemarie filed a civil case for
malicious prosecution against Pilar and asked
for moral damages. The RTC and CA dismissed
the case.
Issue: Whether or not Rosemaries complaint
for malicious prosecution will prosper.
Held: No. For a malicious prosecution suit to
prosper, the plaintiff must prove the following:
(1) the prosecution did occur, and the
defendant was himself the prosecutor or that
he instigated its commencement; (2) the
criminal action finally ended with an acquittal;
(3) in bringing the action, the prosecutor acted
without
probable
cause;
and
(4)
the
prosecution was impelled by legal malice -- an
improper or a sinister motive.
Applying the rule to the case at bar, we
affirm the findings of the RTC and the Court of
Appeals that there was no proof of a sinister
design on the part of the respondents to vex or
humiliate petitioner Rosemarie by instituting
the criminal case against her and her coaccused. Respondent Pilar who was robbed of
her valuable belongings can only be expected
to bring the matter to the authorities. There
can be no evil motive that should be attributed
to one, who, as victim of a crime institutes the
necessary legal proceedings. At the risk of
redundancy, we stress that the proscription
against the imposition of penalty on the right
to litigate must not be violated. Mere filing of a
suit does not render a person liable for
malicious
prosecution
should
he
be
unsuccessful, for the law could not have meant
to impose a penalty on the right to litigate.
There was no other explanation or motive as to
why respondents would institute baseless
prosecution of petitioner Rosemarie. No

evidence was shown that there was bad blood

between respondent Pilar and petitioner
Rosemarie prior to the supposed robbery

risk that the employer cannot avoid when it

continued to seek recourses against the Labor
Arbiters decision. This is also in accordance
with Article 279 of the Labor Code.

Nacar vs Gallery Frames (2013)

Facts:
Dario Nacar filed a labor case against
Gallery Frames and its owner Felipe Bordey, Jr.
Nacar alleged that he was dismissed without
cause by Gallery Frames on January 24, 1997.
On October 15, 1998, the Labor Arbiter (LA)
found Gallery Frames guilty of illegal dismissal
hence the Arbiter awarded Nacar P158,919.92
in damages consisting of backwages and
separation pay.
Gallery Frames appealed all the way to the
Supreme Court (SC). The Supreme Court
affirmed the decision of the Labor Arbiter and
the decision became final on May 27, 2002.
After the finality of the SC decision, Nacar
filed a motion before the LA for recomputation
as he alleged that his backwages should be
computed from the time of his illegal dismissal
(January 24, 1997) until the finality of the SC
decision (May 27, 2002) with interest. The LA
denied the motion as he ruled that the
reckoning point of the computation should only
be from the time Nacar was illegally dismissed
(January 24, 1997) until the decision of the LA
(October 15, 1998). The LA reasoned that the
said date should be the reckoning point
because Nacar did not appeal hence as to him,
that decision became final and executory.

Anent the issue of award of interest in the

form of actual or compensatory damages, the
Supreme Court ruled that the old case
of Eastern Shipping Lines vs CA is already
modified by the promulgation of the Bangko
Sentral ng Pilipinas Monetary Board Resolution
No. 796 which lowered the legal rate of interest
from 12% to 6%. Specifically, the rules on
interest are now as follows:
1. Monetary Obligations ex. Loans:
a. If stipulated in writing:
a.1. shall run from date of judicial
demand (filing of the case)
a.2. rate of interest shall be that
amount stipulated
b. If not stipulated in writing
b.1. shall run from date of default
(either failure to pay upon extra-judicial
demand or upon judicial demand
whichever is appropriate and subject to
the provisions of Article 1169 of the
Civil Code)
b.2. rate of interest shall be 6% per
annum
2.
Non-Monetary Obligations (such as the
case at bar)
a. If already liquidated, rate of interest shall
be 6% per annum, demandable from date
of judicial or extra-judicial
demand (Art.
1169, Civil Code)
b. If unliquidated, no interest

Issue: Whether or not LA is correct.

Held: No. There are two parts of a decision
when it comes to illegal dismissal cases
(referring to cases where the dismissed
employee wins, or loses but wins on appeal).
The first part is the ruling that the employee
was illegally dismissed. This is immediately
final even if the employer appeals but will be
reversed if employer wins on appeal. The
second part is the ruling on the award of
backwages
and/or
separation
pay.
For
backwages, it will be computed from the date
of illegal dismissal until the date of the decision
of the Labor Arbiter. But if the employer
appeals, then the end date shall be extended
until the day when the appellate courts
decision shall become final. Hence, as a
consequence, the liability of the employer, if he
loses on appeal, will increase this is just but a

Except: When later on established with

certainty. Interest shall still be 6% per
annum demandable from the date of
judgment because such on such date,
it is already deemed that the amount of
damages is already ascertained.
3. Compounded Interest
This is applicable to both monetary and
non-monetary obligations
6% per annum computed against award
of damages (interest) granted by the court.
To be computed from the date when the
courts decision becomes final and
executory until the award is fully satisfied
by the losing party.
4. The 6% per annum rate of legal interest shall
be applied prospectively:
Final and executory judgments awarding
damages prior to July 1, 2013 shall apply
the 12% rate;

 Final and executory judgments awarding

damages on or after July 1, 2013 shall
apply the 12% rate for unpaid obligations
until June 30, 2013; unpaid obligations with
respect to said judgments on or after July 1,
2013 shall still incur the 6% rate.
Citytrust
Banking
Villanueva (2001)

Corporation

vs

Facts:
Isagani Villanueva requested a new
checkbook from Citytrust Banking Corporation
(the Bank). He filled up a checkbook requisition
slip but could not remember his account
number. The customer service representative
assured him that theyll take care of it. Later
on, Villanueva made transactions with Kingly
Commodities Inc. He delivered checks to Kingly
Commodities but they were dishonored for two
times. It was discovered that the problem was
that the account number assigned to his new
checkbook was the account number of another
depositor having the same name and surname
but with a different middle initial.
Hence, Villanueva, sued the Bank for
damages, asking for actual and moral damages
plus attorneys fees. The RTC ruled in favor of
the Bank, holding that Villanuevas negligence
of not stating his account number was the
proximate cause of the damage. The CA
reversed.
Issue: Whether or not Villanueva is entitled to
actual and moral damages and attorneys fees.
Held: No. The issue of whether VILLANUEVA
suffered actual or compensatory damages in
the form of loss of profits is factual. Both the
Court of Appeals and the trial court have
ascertained that VILLANUEVA was unable to
prove his demand for compensatory damages
arising from loss. His evidence thereon was
found inadequate, uncorroborated, speculative,
hearsay and not the best evidence. Basic is the
jurisprudential principle that in determining
actual damages, the court cannot rely on mere
assertions,
speculations,
conjectures
or
guesswork but must depend on competent
proof and on the best obtainable evidence of
the actual amount of the loss. Actual damages
cannot be presumed but must be duly proved
with reasonable certainty.
Further, it is clear from the records that the
BANK was able to remedy the caveat of Kingly
Commodities to VILLANUEVA that his trading

account would be closed at 5:30 p.m. on 26

June 1986. The BANK was able to issue a
managers check in favor of Kingly Commodities
before the deadline. It was able to likewise
explain
to
Kingly
Commodities
the
circumstances surrounding the unfortunate
situation. Verily, the alleged embarrassment or
inconvenience caused to VILLANUEVA as a
result of the incident was timely and
adequately contained, corrected, mitigated, if
not entirely eradicated. VILLANUEVA, thus,
failed to support his claim for moral damages.
In short, none of the circumstances mentioned
in Article 2219 of the Civil Code exists to
sanction the award for moral damages. The
award of attorneys fees should likewise be
deleted. The general rule is that attorneys fees
cannot be recovered as part of damages
because of the policy that no premium should
be placed on the right to litigate. They are not
to be awarded every time a party wins a suit.
The power of the court to award attorneys fees
under Article 2208 of the Civil Code demands
factual, legal and equitable justification. Even
when a claimant is compelled to litigate with
third persons or to incur expenses to protect
his rights, still attorneys fees may not be
awarded where there is no sufficient showing of
bad faith in the parties persistence of a case
other than an erroneous conviction of the
righteousness of his cause.
Spouses Ong vs CA and Inland Trailways
Inc and Philtranco (1999)
Done.
Ramos vs CA (1999)
Facts:
Erlinda Ramos underwent a surgical
procedure to remove stone from her gall
bladder (cholecystectomy). They hired Dr.
Hosaka, a surgeon, to conduct the surgery at
the De Los Santos Medical Center (DLSMC).
Hosaka assured them that he would find a good
anesthesiologist. But the operation did not go
as planned, Dr. Hosaka arrived 3 hours late for
the
operation,
Dra.
Gutierrez,
the
anesthesiologist botched the administration
of the anesthesia causing Erlinda to go into a
coma and suffer brain damage. The botched
operation was witnessed by Herminda Cruz,
sister in law of Erlinda and Dean of College of
Nursing of Capitol Medical Center.
The family of Ramos (petitioners) sued the
hospital, the surgeon and the anesthesiologist
for damages. The petitioners showed expert
testimony showing that Erlinda's condition was
caused by the anesthesiologist in not
exercising reasonable care in intubating
Erlinda.
Eyewitnesses
heard
the
anesthesiologist saying Ang hirap ma-intubate

nito, mali yata ang pagkakapasok. O lumalaki

ang tiyan. Diagnostic tests prior to surgery
showed that Erlinda was robust and fit to
undergo surgery.
The RTC held that the anesthesiologist
ommitted to exercise due care in intubating the
patient, the surgeon was remiss in his
obligation to provide a good anesthesiologist
and for arriving 3 hours late and the hospital is
liable for the negligence of the doctors and for
not cancelling the operation after the surgeon
failed to arrive on time. The surgeon,
anesthesiologist and the DLSMC were all held
jointly and severally liable for damages to
petitioners. The CA reversed the decision of the
Trial Court.
Issue: Whether or not the private respondents
were negligent.
Held: Yes. Applying the doctrine of res ipsa
loquitur, the Court held private respondents to
be negligent. Brain damage, which Erlinda
sustained, is an injury which does not normally
occur in the process of a gall bladder operation,
especially considering the fact that prior to the
operation, she was relatively strong. Normally,
a person being put under anesthesia is not
rendered decerebrate as a consequence of
administering such anestheisa if the proper
procedure was followed. The Court, however,
clarified that the doctrine is not always
applicable in all anesthesia cases. Each case
must be viewed in its own light and scrutinized
in order to be within the doctrines coverage.
In the case of Dra. Gutierrez, her
negligence was apparent when she failed to
perform the required pre-operative evaluation
before administering anesthesia on Erlinda.
The head surgeon, Dr. Hosaka was also
negligent. He failed to exercise the proper
authority as the captain of the ship in
determining if the anesthesiologist observed
the proper protocols. Also, because he was
late, he did not have time to confer with the
anesthesiologist regarding the anesthesia
delivery. The hospital failed to adduce evidence
showing that it exercised the diligence of a
good father of the family in hiring and
supervision of its doctors (Art. 2180).
The hospital was negligent since they are
the one in control of the hiring and firing of
their consultants. While these consultants are
not employees, hospitals still exert significant
controls on the selection and termination of
doctors who work there which is one of the
hallmarks
of
an
employer-employee
relationship. Thus, the hospital was allocated a
share in the liability.
Issue: We now come to the amount of
damages due petitioners.
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. At
current levels, the P8000/monthly amount
established by the trial court at the time of its
decision would be grossly inadequate to cover
the actual costs of home-based care for a
comatose individual. The calculated amount
was not even arrived at by looking at the actual
cost of proper hospice care for the patient.
What it reflected were the actual expenses
incurred and proved by the petitioners after
they were forced to bring home the patient to
avoid mounting hospital bills. 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
recoverable in suits arising from negligence
should at least reflect the correct minimum
cost of proper care, not the cost of the care the
family is usually compelled to undertake at
home to avoid bankruptcy. However, the
provisions of the Civil Code on actual or
compensatory damages present us with some
difficulties.
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. (Art.
2199, Civil Code)
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 interests 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
compensatory
damages on the amount provided by
petitioners at the onset of litigation, it would be
now much more in step with the interests of
justice if the value awarded for temperate
damages would allow petitioners to provide
optimal care for their loved one in a facility
which generally specializes in such care. 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.
WHEREFORE, the decision and resolution of
the appellate court appealed from are hereby
modified so as to award in favor of petitioners,
and solidarily against private respondents the
following: 1) P1,352,000.00 as actual damages
computed as of the date of promulgation of this
decision plus a monthly payment of P8,000.00
up to the time that petitioner Erlinda Ramos
expires
or
miraculously
survives;
2)
P2,000,000.00
as
moral
damages,
3)
P1,500,000.00 as temperate damages; 4)

P100,000.00 each as exemplary damages and

attorney's fees; and, 5) the costs of the suit.
Industrial Insurance Company vs Bondad
(2000)
Facts:
A bus (owned by DM Trnasit Bus) driven by
Eduardo Mendoza hit the rear of a jeepney
driven by Ligorio Bondad which was then at full
stop due to a flat tire. As a result, the jeep
collided with a car driven by Grace Ladaw
Morales. Thereafter, Morales filed a complaint
for damages against DM Transit, Mendoza and
Bondad. In his answer, Bondad argued the bus
driver was at fault. As a counter claim, Bondad
argued that Morales had acted in bad faith in
impleading them and that, no prior demand
had been made. The RTC exonerated Bondad
and ordered Morales to pay them actual, moral
and exemplary damages, as well as attorneys
fees. The CA affirmed.
Issue: Whether or not the award of actual,
moral and exemplary damages, as well as
attorneys fees in favor of Bondad was proper.
Held: Yes. Attorneys fees may be awarded by a
court if one who claims it is compelled to
litigate with third persons or to incur expenses
to protect ones interests by reason of an
unjustified act or omission on the part of the
party from whom it is sought. In this case, the
records show that petitioners suit against
respondents was manifestly unjustified. In the
first place, the contact between the vehicles of
respondents and of Morales was completely
due to the impact of the onrushing bus. This
fact is manifest in the police investigation
report and, significantly, in the findings of facts
of
both
lower
courts.
In
impleading
respondents, petitioner clearly acted in wanton
disregard of facts that were as obvious then as
they are now. To repeat, even a cursory
examination of the police investigation report
and other pertinent data at the time would
show that there was no reason to implead
respondents. The carelessness and lack of
diligence of petitioner destroy its claim of good
faith. Accordingly, the award of attorneys fees
should be sustained.
In the same vein, we affirm the award of
moral damages. To sustain this award, it must
be shown that (1) the claimant suffered injury,
and (2) such injury sprung from any of the
cases listed in Articles 2219 and 2220 of the

Civil Code. It is not enough that the claimant

alleges mental anguish, serious anxiety,
wounded feelings, social humiliation, and the
like as a result of the acts of the other party. It
is necessary that such acts be shown to have
been tainted with bad faith or ill motive.
In the case at bar, it has been shown that
the petitioner acted in bad faith in compelling
respondents to litigate an unfounded claim. As
a result, Respondent Ligorio Bondad "could no
longer concentrate on his job." Moreover, Pablo
Bondad became sick and even suffered a mild
stroke. Indeed, respondents anxiety is not
difficult to understand. They were innocently
attending to a flat tire on the shoulder of the
road; the next thing they knew, they were
already being blamed for an accident. Worse,
they were forced to commute all the way from
Laguna to Makati in order to attend the
hearings. Under the circumstances of this case,
the award of moral damages is justified.
Likewise, we affirm the award of exemplary
damages
because
petitioners
conduct
needlessly dragged innocent bystanders into
an unfounded litigation. Indeed, exemplary
damages are imposed by way of example or
correction for the public good, in addition to
moral, temperate, liquidated or compensatory
damages.
In sum, the Court affirms the award of
moral
damages,
exemplary
damages,
attorneys fees and litigation expenses. The
facts of this case clearly show that petitioner
was motivated by bad faith in impleading
respondents. Indeed, a persons right to litigate,
as a rule, should not be penalized. This right,
however, must be exercised in good faith.
One final note. Respondents pray that the
amount of actual, moral and exemplary
damages awarded by the trial court be
reinstated. We cannot do so in this case
because they did not appeal the CA Decision.
Jurisprudentially, they are deemed to be
satisfied with it and thus cannot be allowed to
attack it belatedly in their Memorandum.
Pestao vs Sumayang (2000)
Facts:
Ananias Sumayang and his friend, Manuel
Romagos, were riding a motorcycle driven by
the former along a national highway in Cebu.
As they came upon a junction, they were hit by
a bus driven by Gregorio Pestao and owned by
Metro Cebu Autobus Corporation (Metro Cebu)
which had tried to overtake them. Both

Sumayang and Romagos died as a result.

Sumayangs heirs sued Pestao and Metro Cebu
for damages. The trial court held that Pestao
and Metro Cebu were liable. This was affirmed
by the Court of Appeals (CA) which noted that
Metro Cebus negligence is apparent when it
allowed the bus to ply its route despite its
defective speedometer.
In judgment, the lower court found
[petitioners] liable to the [respondents], in the
amounts of P30,000.00 (increased by the CA to
P50,000) for death indemnity, P829,079 for
loss of earning capacity of the deceased
Ananias Sumayang, and P36,000.00 for
necessary interment expenses. The liability of
defendant Perla Compania de Seguros, Inc.,
however, was limited only to the amount
stipulated in the insurance policy, which [was]
P12,000 for death indemnity and P4,500.00 for
burial expenses.
Issue:
Whether or not Metro Bus is vicariously
liable to the victims due to its indifference
towards the maintenance of its vehicles.
Ruling:
Yes. Under Articles 2180 and 2176 of the
Civil Code, owners and managers are
responsible for damages caused by their
employees. When an injury is caused by the
negligence of a servant or an employee, the
master or employer is presumed to be
negligent either in the selection or in the
supervision of that employee. This presumption
may be overcome only by satisfactorily
showing that the employer exercised the care
and the diligence of a good father of a family in
the selection and the supervision of its
employee. The CA said that allowing Pestao to
ply his route with a defective speedometer
showed laxity on the part of Metro Cebu in the
operation of its business and in the supervision
of its employees. The negligence alluded to
here is in its supervision over its driver, not in
that which directly caused the accident. The
fact that Pestao was able to use a bus with a
faulty speedometer shows that Metro Cebu was
remiss in the supervision of its employees and
in the proper care of its vehicles. It had thus
failed to conduct its business with the diligence
required by law.
Issue on Damages:
Petitioners aver that the CA erred in
increasing the award for life indemnity from
P30,000 toP50,000, without specifying any
aggravating circumstance to justify the
increment as provided in the Civil Code. This
contention is untenable. The indemnity for
death caused by a quasi-delict used to be

pegged at P3,000, based on Article 2206 of the

Civil Code. However, the amount has been
gradually increased through the years because
of the declining value of our currency. At
present, prevailing jurisprudence fixes the
amount at P50,000.
Petitioners contended that the CA used the
wrong basis for computation of earning
capacity. According to them, the basis should
be the life expectancy of the respondents. We
disagree. The Court has consistently computed
the loss of earning capacity based on the life
expectancy of the deceased, and not on that of
the heir.
The award for loss of earning capacity is
based on two factors: (1) the number of years
on which the computation of damages is based
and (2) the rate at which the loss sustained by
the heirs is fixed. The first factor refers to the
life expectancy, which takes into consideration
the nature of the victims work, lifestyle, age
and state of health prior to the accident. The
second refers to the victims earning capacity
minus the necessary living expenses. Stated
otherwise, the amount recoverable is that
portion of the earnings of the deceased which
the beneficiary would have received -- the net
earnings of the deceased.
D.
MORAL
2217,2220)

DAMAGES

(ARTICLES

Villanueva vs Sps Salvador (2006)

claimant; (2) there must be a culpable act or

omission factually established; (3) the wrongful
act or omission of the defendant must be the
proximate cause of the injury sustained by the
claimant; and (4) the award of damages is
predicated on any of the cases stated in Article
2219 of the Civil Code.
While there need not be a showing that the
defendant acted in a wanton or malevolent
manner, as this is a requirement for an award
of exemplary damages, there must still be
proof of fraudulent action or bad faith for a
claim for moral damages to succeed. Then, too,
moral damages are generally not recoverable
in culpa contractual except when bad faith
supervenes and is proven. Bad faith does not
simply connote bad judgment or negligence; it
imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a
breach of known duty through some motive or
interest or ill-will that partakes of the nature of
the fraud. And to the person claiming moral
damages rests the onus of proving by
convincing evidence the existence of bad faith,
for good faith is presumed.
In this case, Ever was merely guilty of
simple negligence for which award of moral
damages is not proper. The award of attorneys
fees should, likewise, be struck down, both the
CA and trial court having failed to explain
respondents entitlement thereto.
Morris vs CA (2001)
Facts:

Facts:
Spouses Salvador secured loans from Ever
Pawnshop owned by Enrico Villanueva. The
loans were secured by jewelry items. Long
story short, the spouses defaulted in their loan,
and the jewelries must be sold. But the
problem was that the spouses were not notified
of the public auction, and that the notice
appeared in the Classified Ads Section of the
Manila Bulletin on the date of the auction itself.
Hence, the spouses sued Ever and Enrico for
damages. The RTC awarded moral damages
among others. The CA affirmed.
Issue: Whether or not the award of moral
damages was proper.
Held: No. The conditions required in awarding
moral damages are: (1) there must be an
injury,
whether
physical,
mental
or
psychological, clearly sustained by the

Petitioners Collin Morris and Thomas

Whittier where American citizens and officers
of a foreign corporation with regional
headquarters in Makati. They booked a flight
with respondent Scandinavian Airline System to
Tokyo, but they were bumped off from the flight
despite a confirmed booking in the first class
section of the flight. According to the airline,
the reason for the bumping off was that
petitioners arrived late in the airport. The
airline requires passengers to check-in at one
hour prior, but petitioners arrived 10 minutes
late.
Thus, petitioners sued the airline for
damages, and the RTC ruled in their favor,
awarding moral damages in the amount of P1.5
million (for Collin) and P1 million (for Thomas).
The CA reversed and dismissed the case.
Issue: Whether or not petitioners are entitled
to moral damages.
Held: No. Moral damages are recoverable in a
damage suit predicated upon a breach of
contract of carriage only where (a) the mishap

results in the death of a passenger and (b) it is

proved that the carrier was guilty of fraud and
bad faith even if death does not result.
For having arrived at the airport after the
closure of the flight manifest, respondents
employee could not be faulted for not
entertaining petitioners tickets and travel
documents for processing, as the checking in of
passengers for SAS Flight SK 893 was finished.
There was no fraud or bad faith as would justify
the courts award of moral damages. Bad faith
does not simply connote bad judgment or
negligence, it imports a dishonest purpose or
some moral obliquity and conscious doing of a
wrong, a breach of known duty through some
motive or interest or ill will that partakes of the
nature of fraud.
Francisco vs Ferrer (2001)
Facts:
Respondents Rebecca Lo and her daughter
ordered
a
three-layered
cake
from
Fountainhead Bakeshop for a wedding. But the
cake was not delivered, because the order slip
got lost. Hence, the respondents were
compelled to buy the only cake available at the
Cebu Country Club, which was a sans rival.
Respondents thus sued the bakeshop for
breach of contract with damages. The RTC
awarded to respondents moral damages
among others. The CA affirmed.
Issue: Whether or not the award of moral
damages is proper.
Held: No. Moral damages may be awarded in
breaches of contracts where the defendant
acted fraudulently or in bad faith. Bad faith
does not simply connote bad judgment or
negligence, it imports a dishonest purpose or
some moral obliquity and conscious doing of a
wrong, a breach of known duty through some
motive or interest or ill will that partakes of the
nature of fraud.
Filipinas Broadcasting
AMEC-BCCM (2005)

Network

Inc

vs

Facts:
Expos is a radio documentary program
hosted by Carmelo Mel Rima and Hermogenes
Alegre aired over DZRC-AM which is owned by
petitioner FBNI. One day, Rima and Alegre
exposed various dark issues against Ago
Medical and Educational Center-Bicol Christian
College
of
Medicine
(AMEC)
and
its
administrators. Claiming that the broadcasts
were defamatory, the colleges administrators
filed a civil complaint for libel against FBNI and
the broadcasters. The RTC ruled in favor of the
college and awarded it P300,000 for moral
damages. This was affirmed by the CA.
Issue: Whether or not the award of moral
damages is proper.
Held: Yes. As a rule, juridical persons are not
entitled to moral damages because, unlike a

natural person, it cannot experience physical

suffering or such sentiments as wounded
feelings, serious anxiety, mental anguish or
moral shock. However, a corporation may have
a good reputation which, if besmirched, may
also be a ground for the award of moral
damages.
Also, AMECs claim for moral damages falls
under item 7 of Article 2219 of the Civil Code.
This provision expressly authorizes the
recovery of moral damages in cases of libel,
slander or any other form of defamation. Article
2219(7) does not qualify whether the plaintiff is
a natural or juridical person. Therefore, a
juridical person such as a corporation can
validly complain for libel or any other form of
defamation and claim for moral damages.
Moreover, where the broadcast is libelous
per se, the law implies damages. In such a
case, evidence of an honest mistake or the
want of character or reputation of the party
libeled goes only in mitigation of damages.
Neither in such a case is the plaintiff required
to introduce evidence of actual damages as a
condition precedent to the recovery of some
damages. In this case, the broadcasts are
libelous per se. Thus, AMEC is entitled to moral
damages. However, we find the award of
P300,000 moral damages unreasonable. The
record shows that even though the broadcasts
were libelous per se, AMEC has not suffered
any substantial or material damage to its
reputation. Therefore, we reduce the award of
moral damages from P300,000 toP150,000.
Expertravel & Tours Inc. vs CA (1999)
Facts:
Expertravel & Tours, Inc., ("Expertravel"), a
domestic corporation engaged in the travel
agency business, issued to private respondent
Ricardo Lo four round-trip plane tickets for
Hongkong,
together
with
hotel
accommodations and transfers, for a total cost
of P39,677.20. Alleging that Lo had failed to
pay the amount due, Expertravel caused
several demands to be made. Since the
demands were ignored by Lo, Expertravel filed
a court complaint for recovery of the amount
claimed plus damages.
Respondent Lo explained, in his answer,
that his account with Expertravel had already
been fully paid. The outstanding account was
remitted to Expertravel through its then
Chairperson, Ms. Ma. Rocio de Vega, who was
theretofore authorized to deal with the clients
of Expertravel. The payment was evidenced by
a Monte de Piedad Check No. 291559, dated 06
October 1987, for P42,175.20 for which Ms. de
Vega, in turn, issued City Trust Check No.
417920 in favor of Expertravel for the amount
of P50,000.00, with the notation "placement
advance for Ricardo Lo, etc." Per its own
invoice, Expertravel received the sum on 10
October 1987.

The trial court dismissed the case and

ordered Expertravel to pay Lo moral damages
in the amount of P30,000 and attorneys fees in
the amount of P10,000.
Issue: Whether or not the award of moral
damages in favor of Lo is proper.
Held: No. Although the institution of a clearly
unfounded civil suit can at times be a legal
justification for an award of attorney's fees,
such filing, however, has almost invariably
been held not to be a ground for an award of
moral damages. The rationale for the rule is
that the law could not have meant to impose a
penalty on the right to litigate. The anguish
suffered by a person for having been made a
defendant in a civil suit would be no different
from the usual worry and anxiety suffered by
anyone who is haled to court, a situation that
cannot by itself be a cogent reason for the
award of moral damages. If the rule were
otherwise, then moral damages must every
time be awarded in favor of the prevailing
defendant against an unsuccessful plaintiff.
Francisco vs Ferrer (2001)
Done.
Francisco vs Ferrer (1999)
Done.
Industrial Insurance Company vs Bondad
(2000)
Done.
Calalas vs CA (2000)
Facts:
At 10 o'clock in the morning of August 23,
1989, private respondent Eliza Jujeurche G.
Sunga, then a college freshman majoring in
Physical Education at the Siliman University,
took a passenger jeepney owned and operated
by petitioner Vicente Calalas. As the jeepney
was filled to capacity of about 24 passengers,
Sunga was given by the conductor an
"extension seat," a wooden stool at the back of
the door at the rear end of the vehicle. On the
way to Poblacion Sibulan, Negros Occidental,
the jeepney stopped to let a passenger off. As
she was seated at the rear of the vehicle,
Sunga gave way to the outgoing passenger.
Just as she was doing so, an Isuzu truck driven
by Iglecerio Verena and owned by Francisco
Salva bumped the left rear portion of the
jeepney. As a result, Sunga was injured. On
October 9, 1989, Sunga filed a complaint for
damages against Calalas, alleging violation of
the contract of carriage by the former in failing
to exercise the diligence required of him as a

common carrier. Calalas, on the other hand,

filed a third-party complaint against Francisco
Salva, the owner of the Isuzu truck.
The trial court ruled in favor of Calalas and
held that Salva was liable, but the appellate
court reversed the same, on the ground that
Sungas cause of action was based on a
contract of carriage, not quasi-delict, and that
the common carrier failed to exercise the
diligence required under the Civil Code. (Note:
the trial court here also decided another case
for quasi-delict by Calalas against Salva and
Verena, and there it was held that Salva and
Verena are jointly and severally liable. Hence,
Calalas is using the ruling therein as a basis to
absolve him from liability)
Issue:
Whether or not the fact that Sunga agreed
to sit on an extension seat amounted to an
implied assumption of risk.
Ruling:
No. We find it hard to give serious thought
to petitioners contention that Sungas taking an
"extension seat" amounted to an implied
assumption of risk. It is akin to arguing that the
injuries to the many victims of the tragedies in
our seas should not be compensated merely
because those passengers assumed a greater
risk of drowning by boarding an overloaded
ferry. This is also true of petitioners contention
that the jeepney being bumped while it was
improperly parked constitutes caso fortuito. A
caso fortuito is an event which could not be
foreseen, or which, though foreseen, was
inevitable. This requires that the following
requirements be present: (a) the cause of the
breach is independent of the debtors will; (b)
the event is unforeseeable or unavoidable; (c)
the event is such as to render it impossible for
the debtor to fulfill his obligation in a normal
manner, and (d) the debtor did not take part in
causing the injury to the creditor. Petitioner
should have foreseen the danger of parking his
jeepney with its body protruding two meters
into the highway.
Also, the issue in Civil Case No. 3490 was
whether Salva and his driver Verena were liable
for quasi-delict for the damage caused to
petitioners jeepney. On the other hand, the
issue in this case is whether petitioner is liable
on his contract of carriage. The first, quasidelict, also known as culpa aquiliana or culpa
extra contractual, has as its source the
negligence of the tortfeasor. The second,
breach of contract or culpa contractual, is
premised upon the negligence in the
performance of a contractual obligation. There
is, thus, no basis for the contention that the
ruling in Civil Case No. 3490, finding Salva and
his driver Verena liable for the damage to
petitioners jeepney, should be binding on
Sunga. It is immaterial that the proximate
cause of the collision between the jeepney and
the truck was the negligence of the truck
driver. The doctrine of proximate cause is

applicable only in actions for quasi-delict, not in

actions involving breach of contract.
Issue on Damages:
The CA erred in awarding moral damages
in the amount of P50,000.
As a general rule, moral damages are not
recoverable in actions for damages predicated
on a breach of contract for it is not one of the
items enumerated under Art. 2219 of the Civil
Code.5 As an exception, such damages are
recoverable: (1) in cases in which the mishap
results in the death of a passenger, as provided
in Art. 1764, in relation to Art. 2206(3) of the
Civil Code; and (2) in the cases in which the
carrier is guilty of fraud or bad faith, as
provided in Art. 2220.
In this case, there is no legal basis for
awarding moral damages since there was no
factual finding by the appellate court that
petitioner acted in bad faith in the performance
of the contract of carriage. Sunga's contention
that petitioner's admission in open court that
the driver of the jeepney failed to assist her in
going to a nearby hospital cannot be construed
as an admission of bad faith. The fact that it
was the driver of the Isuzu truck who took her
to the hospital does not imply that petitioner
was utterly indifferent to the plight of his
injured passenger. If at all, it is merely implied
recognition by Verena that he was the one at
fault for the accident.
Cocoland Dev Corp vs NLRC (1996)
Facts:
Cocoland is a corporation engaged in the
production of coffee, coconut, cacao and black
pepper. It hired private respondent Jeremias
Mago as an agriculturist. Later on, Cocoland
found out that Mago was also engaged in
extending technical services and advice to
small farmers without its consent. According to
Cocoland, such act violated its policy against
unauthorized disclosure of trade secrets, which
was a ground for dismissal. Dialogue was
conducted, with Mago arguing that there was
no trade secret to be disclosed as Cocolands
technology and techniques were already known
by the public. Eventually, Mago was dismissed,
so he filed a complaint for illegal dismissal with
the Labor Arbiter, which ruled in his favor. The
Labor Arbiter also awarded moral damages.
Issue: Whether or not the award of moral
damages is proper.
Held: Yes. While the foregoing discussion
clearly shows that private respondent was

wrongfully dismissed by petitioner without valid

cause, this does not automatically mean that
petitioner is liable to private respondent for
moral or other damages.
An award (of moral damages) cannot be
justified solely upon the premise (otherwise
sufficient for redress under the Labor Code)
that the employer fired his employee without
just cause or due process. Additional facts must
be pleaded and proven to warrant the grant of
moral damages under the Civil Code, these
being, to repeat, that the act of dismissal was
attended by bad faith or fraud, or was
oppressive to labor, or done in a manner
contrary to morals, good customs, or public
policy; and of course, that social humiliation,
wounded feelings, grave anxiety, etc., resulted
therefrom." This was reiterated in Garcia vs.
NLRC, where the Court added that exemplary
damages may be awarded only if the dismissal
was shown to have been effected in a wanton,
oppressive or malevolent manner.
This the private respondent failed to do.
Because no evidence was adduced to show
that petitioner company acted in bad faith or in
a wanton or fraudulent manner in dismissing
the private respondent, the labor arbiter did
not award any moral and exemplary damages
in his decision.Respondent NLRC therefore had
no factual or legal basis to award such
damages in the exercise of its appellate
jurisdiction. However, the Court sustains the
award of attorney's fees equivalent to five
percent (5%) of the total monetary award as
authorized by the Labor Code.

Damages
A. Concept/Kinds of Damages (Article 2197)
Spouses Ong v. CA 301 SCRA 387
B. General Principles of Recovery
Air France v. CA 171 SCRA 399
Dichoso v. CA 192 SCRA 169
PAL v. Miano 242 SCRA 235
DBP v. CA 284 SCRA 14
C. Actual Damages (Articles 2199-2203; 2207; 2209)
1.
2.
3.
4.
5.

Damnum emergens/lucrum cessans

Disability
Indemnity for death
Interest
Attorney's fees (Article 2208)

PNOC Shipping vs. CA 358 Phil 38

Eastern Shipping v. CA 234 SCRA 78 (See BSP
Resolution No. 799 dated July 1, 2013
Francisco v. Co GR No 15133, January 31, 2006
Marikina Autoline v. People GR No 152040, March 31,
2006
Magbanua v. Junsay GR No 132659, February 12,
2007
Nacar v. Gallery Frames GR No. 189871, August 13,
2013
Citytrust v. Villanueva GR No. 141011, July 19, 2001
Spouses Ong v. CA GR No 117103, January 21, 1999

Ramos v. CA GR No. 124354, December 29, 1999

Industrial Insurance Co. v. Bondad, GR No. 136722,
April 12, 2000
Pestano v. Spouses Sumayang, GR No. 139875, Dec.
4, 2000
D. Moral Damages (Articles 2217,2220)
Villanueva v. Salvador GR No. 139436, January 25,
2006
Morris v. CA 352 SCRA 428
Francisco v. Ferrer 352 SCRA 261
Filipinas Broadcasting v. Ago Medical GR No. 141994,
January 17, 2005

Expertravel & Tours v. CA GR No. 130030, June 25,

2009
Francisco v. Ferrer GR No. 142029, February 28, 2001
Ramos v. CA GR No. 124354, December 29, 1999
Industrial Insurance Co. v. Bondad GR No. 136722,
April 12, 2000
Calalas v. CA GR No. 122039, May 31, 2000
Cocoland Development v. NLRC GR No. 98458, July
17, 1996.