ERLINDA FRANCISCO as Cebu Fountainhead Bakeshop and JULIANA  Bad faith does not simply connote bad judgment
simply connote bad judgment or negligence, it
PAMAONG vs RICARDO FERRER , ANJETTE FERRER, ERNESTO LO
AND REBECCA LO
Moral of the Story
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
Exemplary damages may be awarded to set an example
Nominal damages are awarded where a right has been violated
Facts
 Mrs Lo and Annete order a 3 tier wedding cake from the bakeshop to
be delivered 5 oclock at the Cebu Country club on Dec 14 1992
o Respondent deposited 1k on nov 19 and made full payment
after 2 weeks
 The cake did not arrive on the designated time. After calling the first
time they were told it was late because of traffic. But on a follow up
call they were told no cake would be delivered as the order slip got
lost
 They were forced to buy the available sans rival in the Country Club
 The cake arrived at 10PM that evening but it was not accepted for
being late and for only being a 2 layered cake
 Later Francisco sent an apology letter with a 5k refund but was also
not accepted for being inadequate
 Respondents file for breach of contact and damages at the RTC.
Which they won:
 3175 for the cake
 30K moral damages
 10k atty fees
 Peitioners appealed to CA
o CA increases moral damages to 250K
 Which leads us to this case
Issues
 WON CA erred in awarding moral damages in the case at hand
Ruling
 I Yes. To recover moral damages in an action for breach of contract,
the breach must be palpably wanton, reckless, malicious, in bad
faith, oppressive or abusive
o Acted in bad faith
o Gross negligence amounting to bad faith
o Wanton disregard of his contractual obligation
o When act of breach is constitutive of tort resulting in physical
injuries
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.
 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
 n award of moral damages would require certain conditions to be
met, to wit:
o (1) first, there must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant;
o (2) second, there must be culpable act or omission factually
established;
o (3) third, the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and
(
o 4) fourth, the award of damages is predicated on any of the
cases stated in Article 2219 of the Civil Code
 In the same fashion, to warrant the award of exemplary damages,
[t]he wrongful act must be accompanied by bad faith, and an award
of damages would be allowed only if the guilty party acted in a
wanton, fraudulent, reckless or malevolent manner.
 The requirements of an award of exemplary damages are: (
o 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;
o (2) that they can not be recovered as a matter of right, their
determination depending upon the amount of compensatory
damages that may be awarded to the claimant;
o (3) the act must be accompanied by bad faith or done in a
wanton, fraudulent, oppressive or malevolent manner.
 Nominal damages are recoverable where a legal right is technically
violated and must be vindicated against an invasion that has
produced no actual present loss of any kind or where there has been
a breach of contract and no substantial injury or actual damages
whatsoever have been or can be shown.
 Nominal damages may be awarded to a plaintiff whose right has
been violated or invaded by the defendant, for the purpose of
vindicating or recognizing that right, not for indemnifying the plaintiff
for any loss suffered.
Dispositive
 Court grants the petition
 Reverses CA decision
 And reduces the costs to
o 3175 for the cake
o 10K as nominal damages
o 10 as attys fees
o Costs of litigation