PNB vs CA
damages on sufferance of bersmiched reputation,
HELD: A bank is under obligation to treat the accounts
of its depositors with meticulous care whether such
account consists only a few hundreds of pesos or of
millions of pesos. Responsibilty arising from negligence
in the performance of every kind of obligation is
demandable. While petitioners negligence in this case
may not have been attended with malice and bad faith,
nevertheless, it caused serious anxiety, embarrassment
and humiliation to private respondent which she is
entitled to recover moral damages.
MORAL DAMAGES NOT RECOVERABLE IN BREACH
OF CONTRACT OF TRANSPORTATION;
EXCEPTIONS
GR: In actions for damages on breach of contract of
transportation, moral damages are not recoverable
XPN:
1. Where the mishap results in the death of the
passenger; and
2. Where it is proved that the carrier was guilty of
fraud or bad faith, even if death does not result
-The fraud, malice or bad faith must be proved.
-Mere carelessness of the carriers driver does not per
se constitute or justify an inference of malice or bad
faith on said carriers part
AMOUNT OF MORAL DAMAGES MUST BE
REASONABLE
-should not be scandalously excessive as to indicate
that the amount fixed was the result of passion,
prejudice or corruption on the part of the trial court.
-should not be out of proportion to the injury
suffered.
-Judicial discretion in fixing the award should be
exercised with balanced restraint and measured
objectivity.
Ex: The court errs when it awards an exorbitant amount
of Php 50,000 as damages, without designating the
purpose and basis for such general award of damages
MAY A CORPORATION WHICH IS AN ARTIFICIAL
PERSON SUFFER FROM MORAL DAMAGES
-depends on the specific basis relied upon.
-If the corporation bases its claim for moral
damages on physical sufferings or mental
anguish, fright, serious anxiety, wounded
feelings, mental shock, social humiliation and
similar internal injury, the corporation cannot be
awarded with moral damages.
REASON: An artificial person cannot suffer such internal
feelings for lack of a nervous system.
-If a corporation is basing its claim for moral
then it is entitled to moral damages if warranted by
evidence.
-Essential that it enjoys a good reputation
-Artificial persons like corporations have also
reputations to protect.
-They do not need a nervous system to possess
reputation or goodwill to suffer the impairment.
Summing it up, an existing corporation with reputation
to protect is entitled to moral damages. If the basis of
the claim is either:
1. Its good reputation has been besmirched by the
defendant (Art 2217)
2. If its complaint is for libel or any other form of
defamation (Art 2219)
-resulting in its social humiliation
-This is an exception to the GR that juridical persons
like a corporation cannot suffer moral damages for lack
of a nervous system, thus, not susceptible to feelings or
senses.
-A juridical person is not entitled to moral damages
under Article 2217 but it may avail of moral damages
under the analogous cases listed in Article 2219, such
as for libel, slander or any other form of defamation.
-The plaintiff may be natural or juridical person
as there is no distinction made by law.
-The award of moral damages cannot be granted in
favor of a corporation because, being an artificial person
and having an existence only in legal contemplation, it
has no feelings, no emotions, no senses. It cannot,
experience physical sufferings and mental anguish,
which can be experienced only by one having a nervous
system. (ABS-CBN vs CA)
-The statement in People vs Manero and Mambulao
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.
CIVIL ACTION FOR LIBEL NEEDS ONLY
PREPONDERANCE OF EVIDENCE
-A civil action for libel under Article 33 of the Civil Code
shall be instituted and prosecuted for final judgment and
proved by preponderance of evidence separately and
entirely independent of the institution, pendency or
result of the criminal action.
A CORPORATION MAY BE GRANTED ACTUAL,
COMPENSATORY, TEMPERATE, LIQUIDATED OR
EXEMPLARY DAMAGES
-The same may be granted because a corporation,
although an artificial person may suffer such kind of
damages.
-These are not mental feelings and do not require a
central nervous system to suffer them.
ART. 2220 Willful injury to property may be a legal
ground for awarding moral damages if the court
should find that, under circumstances, such
damages are justly due. The same rule applies to
breaches of contract where the defendant acted
fraudulently or in bad faith.
WILLFUL INJURY TO PROPERTY
-entitles to an award of moral damages.
-Malicious mischiefs punishable under Artilces 320-321
of the RPC are instances of willful injury to property.
-The civil aspects of these crimes are deemed instituted
with the criminal actions unless reservation is made to
prosecute them independently of the criminal actions or
are filed ahead of the criminal actions.
-They are not independent civil actions exempt from the
requirement of reservation
BREACHES OF CONTRACTS; WHEN MORAL
DAMAGES RECOVERABLE
-do not justify moral damages unless it be proved that
the defendant has acted fraudulently or in bad faith.
-Moral damages may be awarded in culpa contractual or
breach of contract when the defendant acted
fraudulently or in and faith or is guilty of gross
negligence amounting to bad faith or in wanton
disregard of his contractual obligations.
MEANING OF MALICE OR BAD FAITH
-implies conscious or intentional design to do a wrongful
act for a dishonest purpose or moral obliquity
-Bad faith in the context of Article 2220, includes gross,
but not simple negligence
Ex:
In awarding moral damages for breach of contract of
carriage, the breach must be wanton and deliberately
injurious or for the one responsible acted fraudulently or
with malice or bad faith.
-Moral damages may be awarded in a breach of contract
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.
-In culpa contractual or breach of contract, moral
damages are recoverable only if the defendant has acted
fraudulently or in bad faith, or is found guilty of gross
negligence amounting to bad faith, or in wanton
disregard of its contractual obligations.
-The fundamental principle of law on damages is that
one injured by a breach of contract or by a wrongdoing
or negligent act or omission shall have a fair and just
compensation, commensurate with the loss sustained as
a consequence of the defendants acts.
MORAL DAMAGES IN BREACH OF CONTRACTS
INVOLVING TELEGRAPHIC MESSAGES
USE OF WRONG AND IMPROPER FORUMS
RCPI vs CA
HELD:
When plaintiffs placed an order for transmission of their
social condolence telegram, defendant did not inform
the plaintiff of the exhaustion of such social condolence
forms. Defendant-appellant accepted through its
authorized agent or agency the order and received the
corresponding compensation therefore. Defendant did
not comply with its contract as intended by the parties
and instead of transmitting the condolence message in
an ordinary form, in accordance with its guidelines,
placed the condolence message expressing sadness and
sorrow in forms conveying joy and happiness. Under the
circumstances, we cannot accept the defendants plea
of good faith predicated on such exhaustion of social
condolence forms. Gross negligence or carelessness can
be attributed to defendant-appellant in not supplying its
various stations with such sufficient and adequate social
condolence forms when it held out to the public
sometime in January 1983, the availability of such social
condolence forms accepted for fee the transmission of
messages on such forms. Knowing that there are no
such forms as testified to by its Material Control
Manager Meteo Atienza, and entering into a contract of
transmission of messages in such forms, defendant-
appellant committed acts of bad faith, fraud and malice.
OMISSION TO DELIVER MESSAGE
TELEFAST COM (Phil) WIRELESS INC vs CASTRO
HELD:
We find Article 227 of the Civil Code applicable in the
case at bar. It states, Moral damages include physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feeling, 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 or omission.
The petitioners act or omission, which amounted to
gross negligence, was precisely the cause of suffering
private respondents had to undergo.
The Court did not sustain the petitioners defense that
technical and atmospheric factors beyond its control,
prevented the sending of the message. Compensatory,
moral and exemplary damages were imposed upon
petitioner.
INTERCALATING LIBELOUS MATTERS INTO THE
MESSAGE
RCPI vs DIONELA
HELD:
A message from the Manila office of the petitioner was
sent to L. Dionela of Legaspi City, reading, Wire arrival
of check. Petitioners employees added: Sa iyo walang
pakinabang dumating ka diyan. Wala kang padala ditto
kahit bulbul mo. Dionela filed a libel suit. RCPI
committed breach of contract through its employees. It
was made liable for Php 15,000 as moral damages.
DAMAGES IN SEXUAL HARRASSMENT
-An employer is liable to pay moral damages to an
employee subjected to sexual harassment, for the
anxiety, the seen and unseen hurt that she suffered.
DAMAGES IN COMMON CRIMES
-The grant in common crimes like robbery, is not
automatic, unlike in rape cases
DISCONNECTION OF ELECTRICITY WITHOUT
PRIOR NOTICE CONSTITUTES BREACH OF
CONTRACT
-amounts to independent tort
-the prematurity of the action is indicative of an intent
to cause additional mental suffering to private
respondent.
-This is a violation of Article 21 of the Civil Code which
provides that any person who willfully causes loss or
injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
latter for damages.
-the award for moral damages is sanctioned by Article
2220 which provides that 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 breached of contract where
the defendant acted fraudulently or in bad faith.
DEFAULT IN THE PAYMENT OF BILLS CANNOT BE
UTILIZED BY PETITIONER TO DEFEAT OR NULLIFY
THE CLAIM FOR DAMAGES
-Default in the payment of his bills cannot be utilized by
petitioner to defeat or nullify the claim for damages. At
most, this circumstance can be considered as a
mitigating factor in ascertaining the amount of
damages. (Manila Gas Corporation case)
SECTION 2
NOMINAL DAMAGES
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.
HISTORICAL NOTE
-Before the NCC, nominal damages were not
recognized.
NOMINAL DAMAGES, CONCEPT
-Technical violation of plaintiffs rights resulting in no
substantial injury to him. (Algarra vs Sandejas)
-This branch of damages is also unknown under the Civil
Code. If no damages have actually occurred there can
be none to repair and the doctrine of nominal damages
is not applicable. Thus it has been often held by the
Supreme Court of Spain that a mere non-compliance
with the obligations of a contract is not sufficient to
sustain the judgment for damages. It must be shown
that the damages actually existed.
NATURE AND PURPOSE OF NOMINAL DAMAGES
-Not for indemnification of loss but for the vindication or
recognition of a right violated or invaded.
Ex:
1. Employees of the SSS attempted to foreclose
mistakenly the mortgage of the borrower who was
not delinquent at all. It was held that the SSS was
liable for nominal damages and attorneys fees. No
moral damages were awarded.
ASSESSMENT OF NOMINAL DAMAGES,
DISCRETIONARY TO THE COURT
-Assessment of nominal damages is left to the sound
discretion of the court in accordance with the
circumstances of each case.
-The court may award nominal damages in every case
where any property right has been invaded
NOMINAL AND EXEMPLARY DAMAGES CANNOT
CO-EXIST
-cannot be awarded together with compensatory
damages
-Where the court has already awarded compensatory
and exemplary damages that is already a juridical
recognition that plaintiffs right was violated. Hence,
the award of nominal damages is unnecessary
and improper.
-Award of actual, moral, temperate or moderate
damages precludes nominal damages.
-It is an established rule that nominal damages cannot
co-exist with compensatory damages.
NOMINAL DAMAGES AND ATTORNEYs FEES,
COMPATIBLE
-May be awarded together with attorneys fees.
Instances of Nominal Damages in Labor Case
1. Where the dismissal is for an authorized cause,
the lack of statutory due process should not
nullify the dismissal, or render it illegal, or
ineffectual-however, the employer should
indemnify the employee, in the form of nominal
damages, for the violation of his right to
statutory due process.
2. In the determination of the amount of nominal
damages which is addressed to the sound
discretion of the court, several factors are taken
into account:
a. The authorized cause invoked
b. The number of employees to be awarded
c. The capacity of the employers to satisfy
the awards taken into account their
prevailing financial status as borne by the
records
d. The employers grant of other
termination benefits in favor of the
employees
e. Whether there was a bona fide attempt to
comply with the notice requirements as
opposed to giving no notice at all
3. Where the dismissal of an employee from the
service is due to dishonesty or a just cause but
due process was not observed as no hearing was
conducted despite her request, the employer
should be held liable for indemnity in the form
of nominal damages.
4. A violation of an employees statutory right to
two notices prior to the termination of his
employment for a just cause entitles him to
nominal damages absent sufficient evidence to
support an award for actual or moral damages.
Art. 2222. 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.
ALL SOURCES OF OBLIGATION MAY GIVE RISE TO
NOMINAL DAMAGES
-The five sources of obligations enumerated in Art 1157
are:
1. Law
2. Contracts;
3. Quasi-Contracts
4. Acts or omissions punishable by law; and
5. Quasi-delicts
-The court may award nominal damages in any
obligation arising from any said sources.
-Nominal damages may be awarded where any property
right has been invaded such as in trespass upon property
-A violation on the plaintiffs right, even if only technical,
is sufficient to support an award of nominal damages
-The award of nominal damages does not run counter to
the maxim de minimio non curat lex (the law does not
cure or bother with trifles)
NOMINAL DAMAGES, ONLY IN NAME
Art 2223. The adjudication of nominal damages
shall preclude further contests upon the right involved
and all accessory questions, as between the parties to
the suit, or their respective heirs and assigns.
RES JUDICATA
-After the final adjudication of nominal damages by the
court, there shall be no further contests upon the right
involved as well as all accessory questions as between
the parties or their respective heirs or assigns.
SECTION 3
TEMPERATE OR MODERATE DAMAGES
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
cannot form the nature of the case, be proved with
certainty.
TEMPERATE OR MODERATE DAMAGES, CONCEPT
-These are the damages the amount of which is left to
the sound discretion of the court, but it is necessary
that there be some injury or pecuniary loss
established, the exact amount of which, could not
be determined by the plaintiff by reason of the
nature of the case.
RATIONALE BEHIND TEMPERATE OR MODERATE
DAMAGES
-Is precisely that from the nature of the case, definite
proof of pecuniary loss cannot be offered.
-When the court is convinced that there has been such
a loss, the judge is empowered to calculate moderate
damages, rather than let the complainant suffer without
redress from the defendants wrongful act.
-There are cases where from the nature of the case,
definite proof of pecuniary loss cannot be offered,
although that the court is convinced that there has been
such loss.
Ex:
-Injury to ones commercial credit or to the goodwill of
the business firm is often hard to show with certainty in
terms of money. Should the damages be denied for that
reason? The judge shall be empowered to calculate
moderate damages in such cases, rather than that the
plaintiff should suffer, without redress, from the
defendants wrongful act.
DAMAGES FOR LOSS OF GOODWILL OR
REPUTATION
-Falls under the actual or compensatory damages. Even
if it is not recoverable as compensatory damages, it may
still be awarded in the concept of temperate or
moderate damages
REQUISITES TO JUSTIFY AWARD OF TEMPERATE
OR MODERATE DAMAGES
-It is essential that some pecuniary loss had been
suffered but its exact amount cannot from the nature of
the case, be proved with certainty. The court is allowed
to calculate the amount.
PEOPLE vs PRINCIPE
HELD:
The list of expenses incurred for the wake,
funeral and burial of the victim amounting to Php 21,307
submitted by the victims father is self-serving and not
proved. Thus, the trial courts award of Php 21, 307 for
funeral expenses cannot be availed of.
However, under Art 2224, the temperate
damages may be recovered if it is shown that such party
suffered some pecuniary loss but the amount cannot,
from the nature of the case, be proved with certainty.
As there is no doubt that the heirs of the victim incurred
funeral expenses, although the amount thereof has not
been proved, it is appropriate to award Php 15,000 by
way of temperate damages to the heirs of the victim.
Art 2225. Temperate damages must be reasonable
under the circumstances.
REASONABLENESS OF TEMPERATE DAMAGES
-What is reasonable will depend upon circumstances of
each particular case.
GR: What is reasonable is one which is not excessive
nor very low in the estimation of men of ordinary
intelligence and discretion.
-Temperate damages should be one half of the
indemnity for death.
SECTION 4
LIQUIDATED DAMAGES
ART 2226. Liquidated damages are those agreed
upon by the parties to a contract, to be paid in case of
breach thereof.
NATURE OF LIQUIDATED DAMAGES
-Fixed damages previously agreed by the parties to the
contract and payable to the innocent party in case of
breach by the other.
-Where the principal obligation is void, there is no
contract that could be breached- the nullity of the
principal obligation carries with it the nullity of the
accessory obligation of the liquidated damages.
PENALTY DISTINGUISHED FROM LIQUIDATED
DAMAGES
Penalty- is the sum inserted in a contract, not a
measure of compensation for its breach, but rather as a
punishment for default, or by way of security for actual
damages which may be sustained by reason of non-
performance, and it involves the idea of punishment.
-is an agreement to pay a stipulated sum on
breach of contract, irrespective of damages sustained.
-Its essence is payment of money stipulated as
a terrorem of the offending party, while the essence of
liquidated damages is a genuine covenanted pre-
estimate of damages.
-The amount is fixed and is not subject to
change; however, if the stipulated sum is deemed to be
a penalty, it is not enforceable and the nondefaulting
party is left to recover such actual damages as he can
prove.
-A provision for payment of a special sum as
compensation for acts contemplated by the contract as
opposed to compensation for injury resulting from
breach of the contract, is neither a penalty nor
liquidated damages.
-Also to be distinguished from both a penalty
and liquidated damages is a contractual limitation of
liability
SIMILARITY WITH PENALTY IN A CONTRACT
WITH A PENALTY CLAUSE
-As far as the legal results are concerned, liquidated
damages are identical with penalty under Article 1226.
Art 1226. In obligation with a penal clause, the penalty
shall substitute the indemnity for damages and the
payment of interests in case of noncompliance, if there
is no stipulation to the contrary. Nevertheless, damages
shall be paid if the obligor refuses to pay the penalty or
is guilty of fraud in the fulfillment of the obligation.
 The penalty may be imposed only when it is
demandable in accordance with the provisions of this
Code.
-A stipulation on liquidated damages is a penalty clause
where the obligor assumes a greater liability in case of
breach of an obligation.
-Courts are empowered to reduce the penalty if it is
iniquitous or unconscionable.
-The injured party in either case, need not prove actual
damages. It is so because the parties had already
agreed on the amount of damages to be paid in case of
breach of the contract.
-Whether a penalty or indemnity, it is necessary that
there be a contract the violation of which gives rise to
the liquidated damages stipulated thereon.
-Liquidated damages cannot be awarded where
the parties did not agree on that kind.
Ex:
Attorneys fees expressly provided in contracts
recoverable as damages against the other party are in
the nature of liquidation damages and the stipulation
may be aptly called a Penal clause.
Art 2227. Liquidated damages, whether intended as
an indemnity or a penalty, shall be equitably reduced if
they are iniquitous or unconscionable.
HISTORICAL NOTES
-the reason for reduction liquidated damages, whether
intended as an indemnity or a penalty, is that the
stipulation is contra bonos mores under Art. 1306. It is
a mere technicality to refuse to lessen the damages to
their just amount simply because the stipulation is not
meant to be a penalty. An immoral stipulation is
nonetheless immoral because it is called indemnity.
EQUITABLE REDUCTION
-If the amount fixed as liquidated damages is iniquitous
or unconscionable, the court may reduce it to a
reasonable level.
-Liquidated damages should be reduced by the court to
the equities of the case.
EFFECT OF PARTIAL PERFORMANCE
-the total amount of the liquidated damages agreed
upon cannot be enforced.
-Liquidated damages are presumed to be only for a
total breach of the contract.
ART 2228. 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.
WHEN STIPULATION MAY BE DISREGARDED
-When the breach or violation of the contract is not the
one contemplated by the parties, the determination of
damages shall not be based on the stipulation but on
the law.
-Art 1229 may be applied by analogy in such case
Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or
irregularly complied with the debtor. Even if there has
been no performance, the penalty may also be reduced
by the courts if it is iniquitous or unconscionable.
SECTION 5
EXEMPLARY OF CORRECTIVE DAMAGES
Art. 2229. The exemplary or corrective damages are
imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated or compensatory damages.
PUNITIVE OR VINDICTIVE DAMAGES
-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
rights of an injured or a punishment for those guilty of
outrageous conduct.
RATIONALE BEHIND EXEMPLARY DAMAGES
-Required by public policy, for wanton acts must be
suppressed.
-To serve as deterrent to serious wrongdoings
-Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a deterrent
against or as a negative incentive to curb socially
deleterious actions.
NATURE OF EXEMPLARY DAMAGES
-Mere accessories to other forms of damages except
nominal damages.
-Mere additions to actual, moral, temperate and
liquidated damages which may or may not be granted
at all depending upon the necessity of setting an
example for the public good as a form of deterrent to
the repetition of the same act by any one.
-It is imposed as a corrective measure when the guilty
party has acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner.
-Before considering whether exemplary damages should
be awarded, it must first be shown that an award of
moral, temperate, or compensatory damages obtains.
Moral damages cannot be lumped with exemplary
damages because tehya re absed on different jural
foundations.
VEHICLE OWNER NOT LIABLE FOR EXEMPLARY
DAMAGES
-The actual driver of the vehicle who caused the injuries
to the victim is the one liable for exemplary damages
and not the owner of the said vehicle.
WHEN CAN AN EMPLOYER BE LIABLE FOR
EXEMPALRY DAMAGES FOR THE ACTS OF HIS
EMPLOYER?
MUNSAYAC vs DE LARA
HELD:
A principal or master can be held liable for
exemplary or punitive damages based upon the
wrongful act of his agent or servant only when he
participated in the doing of such wrongful act or has
previously authorized or subsequently ratified it,
with full knowledge of the facts. Exemplary
damages punish the intent- and this cannot be
presumed on the part of the employer merely because
of the wanton, oppressive, or malicious intent on the
part of the agent.
LIABILITY OF REGISTERED OWNER OF A VEHICLE
DRIVEN ON THE HIGHWAY
-even if not used for public service, would primarily be
responsible to the public or to third persons for injuries
caused the latter while the vehicle was being driven on
the highway or streets.
CAN THE AGENCY OF THE STATE BE SUBJECTED TO
TEMPERATE AND EXEMPLARY DAMAGES?
-The court finds it proper to award temperate and
exemplary damages in light of NIAss misuse of its
power of eminent domain- any arm of the State that
exercises the delegated power of eminent domain must
wield that power with circumspection and utmost regard
for procedural requirements.
UNJUSTIFIED REFUSAL TO GRANT ACADEMIC
HONORS JUSTIFIES GRANT OF EXEMPLARY
DAMAGES
-who through neglect of duty and moral callousness, did
not award the academic honors of magna cum laude
which the latter deserved.
GRANT OF ACADEMIC HONORS IS PART OF
ACADEMIC FREEDOM WHICH WILL NOT BE
DISTURBED UNLESS THERE IS A GRAVE ABUSE OF
DISCRETION IN ITS EXERCISE (University of San
Carlos vs CA)
CASES WHERE EXEMPLARY DAMAGES MAY BE
IMPOSED AS ACCESSORY DAMAGES
-Exemplary damages cannot be recovered as a matter
of right (Art 2233)
-They can be imposed in the following cases:
1. Criminal offense- when the crime
was committed with one or more
aggravating circumstances (Art
2230)
2. Quasi-delicts- when the defendant
acted with gross negligence
3. Contracts and Quasi-Contracts-
when the defendant acted in
wanton, fraudulent, reckless,
oppressive, or malevolent manner.
-While the exact amount of exemplary damages need
not be proved, there is a sine quo non for its grant.
Plaintiff must prove that he is entitled to:
a. Moral;
b. Temperate; or
c. Compensatory (actual) damages
FINANCIAL CREDIT WHEN ADVERSELY AFFECTED
-Moral and exemplary damages may be awarded
without proof of pecuniary loss.
-The financial credit of a businessman is a prized and
valuable asset, it being a significant part of his business,
and any adverse reflection thereon constitutes some
financial loss to him.
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.
EXEMPLARY DAMAGES, WHEN IMPOSABLE IN
CRIMINAL CASES; AGGRAVATING
CIRCUMSTANCES MUST BE PRESENT
-In criminal cases, exemplary damages cannot be
awarded if there is no aggravating circumstance.
-The aggravating circumstance whether ordinary or
qualifying, should entitle the offended party to an award
of exemplary damages after proof that the offended
party is entitled to moral, temperate and compensatory
damages.
AGGRAVATING CIRCUMSTANCE- is one which when
present would increase the period of the penalty within
the range imposable under the law.
THE EMPLOYER CANNOT BE LIABLE MORE THAN
THE EMPLOYEE
BANTOTO vs BOBIS
HELD:
Considering that no exemplary damages were
imposed on the driver, and the master, as person
subsidiarily liable, cannot incur greater civil liability than
his convicted employee, any more than a guarantor can
be held responsible for more than the principal debtor.
TERM AGGRAVATING CIRCUMSTANCES TO BE
UNDERSTOOD IN THE BROAD SENSE
-The ordinary or qualifying nature of an aggravating
circumstance is a distinction that should only be of
consequences to the criminal, rather than to the civil,
liability of the offender- relative to the civil aspect of the
case.
-Even if the aggravating circumstances which have not
been alleged in the information cannot be appreciated
for the purpose of fixing a heavier penalty, they can,
however, be considered as bases for an award of
exemplary damages.
-Evidence proving these circumstances forms part of the
actual commission of the crime and justifies an award of
exemplary damages even when said aggravating
circumstances were not alleged in the information.
GENERIC AGGRAVATING CIRCUMSTANCE MUST
BE ALLEGED
-although proven by the prosecution and admitted by
the accused, cannot justify the award of exemplary
damages if this fact was not alleged in the information.
EXEMPLARY DAMAGES, DISTINCT FROM FINES
-In criminal cases, fines may be imposed by the court.
These fines are separate and distinct from the
exemplary damages. The fines are payable to the State
but the exemplary damages to the injured party.
IS IT NECESSARY THAT THE AGGRAVATING
CIRCUMSTANCES BE ALLEGED IN THE
INFORMATION TO JUSTIFY A GRANT OF
EXEMPLARY DAMAGE?
Decisions are conflicting but the better rule is to follow:
Notwithstanding the failure to allege the aggravating
circumstances, the proven presence thereof is still
material in the determination of exemplary damages to
be awarded to the complainant (People vs Legaspi)
Art. 2231. In quasi-delicts, exemplary damages
may be granted if the defendant with gross
negligence.
EXEMPLARY DAMAGES, IN QUASI-DELICTS
-Gross negligence must be shown on the part of the
defendant
-In crimes and quasi-delicts, the defendant shall be
liable for all damages, which are the natural and
probable consequences of the act or omission
complained of.
-Article 2231 mandates that in cases of quasi-delicts,
exemplary damages may be recovered additionally, if
the defendant acted with gross negligence.
-The award of these damages is meant to be a
deterrent, to socially deleterious actions.
-Gross negligence is tantamount to bad faith.
-Even if there is gross negligence, the grant is not
automatic. It is still subject to the discretion of the court.
Art. 2232. In contracts and quasi-contracts, the
court may award exemplary damages if the defendant
acted in wanton, fraudulent, reckless, oppressive or
malevolent manner.
EXEMPLARY DAMAGES IN CONTRACTS AND
QUASI-CONTRACTS
-it is essential that the defendant must have acted in a
wanton, fraudulent, reckless, oppressive or malevolent
manner
WILLFUL, WANTON AND RECKLESS MANNER
-They have been grouped together as an aggravated
form of negligence, differing in quality rather than in
degree from ordinary lack of care.
-They apply to conduct which is merely negligent, rather
than actually intended to do harm, but which is so far
from a proper state of mind that is treated in many
respects as if it were intended.
-Thus, to be held to justify an award of punitive
damages, warrant a broader duty and more extended
liability for consequences.
-It will also avoid contributory negligence on the part of
the plaintiff.
-Moral damages are recoverable only if the defendant
has acted fraudulently or in bad faith, or is guilty of
gross negligence amounting to bad faith, or in wanton
disregard of his contractual obligations
-Moral damages may be awarded in culpa contractual or
breach of contract cases when 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 partakes the
nature of fraud.
FRAUDULENT, OPPRESSIVE AND MALEVOLENT
MANNER
-If the act is tainted with deception or injurious
misrepresentation of which the plaintiff is unaware, the
act is considered fraudulent.
-If it arbitrary or compulsive, it is oppressive
-If it is done in bad faith, it is considered malevolent
Art 2233. Exemplary damages cannot be
recovered as a matter of right; the court will decide
whether or not they should be adjudicated
GRANT OF EXEMPLARY DAMAGES IS
DISCRETIONARY
-Exemplary damage cannot be claimed as a matter of
right
-they are merely additional to other forms of damages
(except nominal damages) which the court may or may
not grant.
-If there is a need to set an example for the public good,
the court may grant exemplary damages.
-Although exemplary damages cannot be recovered as
a matter of right, they also need not be proved.
Art 2234. 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 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.
CONDITIONS FOR THE GRANT OF EXEMPLARY
DAMAGES:
-Exemplary damages are merely accessory damages
granted as addition:
1. Actual damages
2. Moral damages
3. Temperate damages
-The grant of exemplary damages is discretionary to the
court.
-It cannot be claimed as a matter of right
-While the court has the discretion to grant, it is,
however required of the aggrieved party to establish by
evidence that he is entitled to compensatory, moral or
temperate damages. However, even if it is not alleged,
as long as damages have been established, exemplary
damages may be granted.
-Where the moral and exemplary awards were
eliminated, so must the awards for the attorneys fees
REQUIREMENTS FOR AWARD OF EXEMPLARY DAMAGES
1. The may be imposed by way of example in
addition to compensatory damages, and only
after the claimants right to them has been
established
2. That they cannot be recovered as a matter of
right, their determination 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 a wanton, fraudulent, oppressive and
malevolent manner
-This rule applies to moral and temperate damages
AMOUNT OF EXEMPLARY DAMAGES NEED NOT BE
ALLEGED OR PROVED
-the amount depends upon the sound discretion of the
court when the other forms of damages have been
established except only nominal damages.
-The amount need not also be alleged because it is
merely incidental or dependent upon what the court
may award as compensatory damages.
-The amount need not be pleaded in the complaint
because the same cannot be predetermined
PUBLIC OFFICIALS
-ought to act with highest degree of excellence,
professionalism, intelligence and skill, and for failure to
act with such, a public official may thus be held liable,
in his personal capacity, for exemplary damages.
Art. 2235. A stipulation whereby exemplary
damages are renounced in advance shall be null
and void.
FUTURE RENUNCIATION OF EXEMPLARY
DAMAGES IS NULL AND VOID
-impliedly, exemplary damages already determined and
granted by the court in a final judgment may be
renounced by the winning party to a case.