ACTUAL DAMAGES

I.

Definition

Actual and compensatory damages are those recoverable because of pecuniary loss in
business, trade, property, profession, job or occupation.
II.

Requirements

To seek recovery for actual damages, it is necessary to prove with a reasonable degree
of certainty, premised upon competent proof and on the best evidence obtainable by the
injured party, the actual amount of loss. Courts cannot simply assume that damages
were sustained by the injured party, nor can it rely on speculation or guesswork in
determining the fact and amount of damages
III.

Burden of proof

The burden of proof of the damages suffered is on the party claiming the same. It is the
duty of petitioner to present evidence to support his claim for actual damage
IV.

Components of

Chapter 2, Title XVIII, Book IV of the Civil Code governs the award of actual or
compensatory damages. The indemnification shall comprehend not only the value of the
loss suffered, but also that of the profits that the obligee failed to obtain.
V.
VI.

Kinds
In contracts and quasi-contracts

In contracts and quasi-contracts, the damages which may be awarded are dependent on
whether the obligor acted with good faith or otherwise.
In case of good faith, the damages recoverable are those which are the natural and
probable consequences of the breach of the obligation and which the parties have
foreseen or could have reasonably foreseen at the time of the constitution of the
obligation. If the obligor acted with fraud, bad faith, malice, or wanton attitude, he shall
be responsible for all damages which may be reasonably attributed to the nonperformance of the obligation (Art. 2201, NCC).
It is true that under Article 2206 of the Civil Code of the Philippines, only deaths caused
by a crime as quasi delict are entitled to actual and compensatory damages without the
need of proof of the said damages.
However, the Civil Code, in Article 1764 thereof, expressly makes Article 2206 applicable
to the death of a passenger caused by the breach of contract by a common carrier.
Accordingly, a common carrier is liable for actual or compensatory damages under
Article 2206 in relation to Article 1764 of the Civil for deaths of its passengers caused by
the breach of the contract of transportation.
In quasi-delict
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)

VII.

In crimes

The civil liability ex delicto provided by the Revised Penal Code, that is, restitution,
reparation and indemnification, all correspond to actual or compensatory damages in the
Civil Code
The indemnity authorized by our criminal law as civil indemnity ex delicto for the
offended party, in the amount authorized by the prevailing judicial policy and aside from
other proven actual damages, is itself equivalent to actual or compensatory damages in
civil law. Said civil indemnity is mandatory upon finding of the fact of rape; it is distinct
from and should not be denominated as moral damages which are based on different
jural foundations and assessed by the court in the exercise of sound judicial discretion
VIII. Interest
Controlling guideline on interests as an aspect or component of actual damages, in this
wise:
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.
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:
o When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.
o 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 at the rate of 6% per annum. No interest,
however, shall be adjudged on unliquidated claims or damages except when
or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall
begin to run only from the date the 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.
o 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.
The rates under the Usury Law (amended by P.D. 116) are applicable only to interest by
way of compensation for the use or forbearance of money, interest by way of damages is
governed by Article 2209 of the Civil Code.
Interest due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point (Article 2212, NCC).

IX.

Attorneys fees

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
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.
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
Where recoverable, attorneys fees are also in the nature of actual damages, which must
be duly proved. They are also subject to certain standards, to wit:
They must be reasonable, that is to say, they must have a bearing on the
importance of the subject matter in controversy;
The extent of the services rendered; and
The professional standing of the lawyer. In all cases, they must be addressed in a
full-blown trial and not on the bare word of the parties. And always, they are
subject to the moderating hand of the courts.
Attorneys fees as an item of damages provided for under Article 2208 of the Civil Code
is an award made in favor of the litigant, not of his counsel, and the litigant, not his
counsel, is the judgment creditor who may enforce the judgment for attorneys fees by
execution.
X.

Subrogatory right of the insurer

If the plaintiffs property has been insured, and he has received indemnity from the
insurance company for the injury or loss arising out of the wrong or breach of contract
complained of, the insurance company shall be subrogated to the rights of the insured
against the wrongdoer or the person who has violated the contract. If the amount paid
by the insurance company does not fully cover the injury or loss, the aggrieved party
shall be entitled to recover the deficiency from the person causing the loss or injury
(Article 2207, NCC).

MORAL DAMAGES
I.

Nature and concept

Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral damages may be recovered if
they are the proximate result of the defendants wrongful act or omission (Art. 2217,
NCC).
In the case of moral damages, recovery is more an exception rather than the rule.
Moral damages are not punitive in nature but are designed to compensate and
alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar harm
unjustly caused to a person.
In order that an award of moral damages can be aptly justified, the claimant must
be able to satisfactorily prove that he has suffered such damages and that the
injury causing it has sprung from any of the cases listed in Articles 2219 and 2220
of the Civil Code. Then, too, the damages must be shown to be the proximate
result of a wrongful act or omission.
The claimant must establish the factual basis of the damages and its causal tie
with the acts of the defendant. In fine, an award of moral damages would require,
o Firstly, evidence of besmirched reputation or physical, mental or
psychological suffering sustained by the claimant;
o Secondly, a culpable act or omission factually established;
o Thirdly, proof that the wrongful act or omission of the defendant is the
proximate cause of the damages sustained by the claimant; and
o Fourthly, that the case is predicated on any of the instances expressed or
envisioned by Article 2219 and Article 2220 of the Civil Code
II.

Requirements for the grant of moral damages

In order that moral damages may be awarded, there must be pleading and proof of
moral suffering, mental anguish, fright and the like.
The rule is settled that moral damages cannot be awarded in the absence of a
wrongful act or omission or fraud or bad faith.
The exception is in the case of rape. Moral damages may be awarded to the rape
victim, in such amount as the Court deems just, without the need for pleading or
proof of the basis thereof. The conventional requirement of allegata et probata in
civil procedure and for essentially civil cases was dispensed with in criminal
prosecutions for rape with the civil aspect included therein since no appropriate
pleadings are filed wherein such allegations can be made.
In the adjudication of moral damages, the sentimental value of property, real or
personal, may be considered (Art. 2218, NCC).

III.

Instances where moral damages may be recovered

Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of
this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.

IV.

In seduction

The seduction contemplated in Article 2219 of the New Civil Code as one of the cases
where moral damages may be recovered, is the crime punished as such in Articles 337
and 338 of the Revised Penal Code.
V.

In quasi-delict

Article 2219(2) specifically allows moral damages to be recovered for quasi-delicts,

provided that the act or omission caused physical injuries. There can be no recovery of
moral damages unless the quasi-delict resulted in physical injury.
VI.

In rape

Recent case law fixes the amount of moral damages in crime of rape to P75,000.00, in
addition to civil indemnity in like amount (People vs. Gregorio Corpuz Y Espiritu, G.R. No.
168101, February 13, 2006, En Banc).
The parents of the female seduced, abducted, raped, or abused may also recover moral
damages.
VII.

In defamation

Defamation, which includes libel and slander, means the offense of injuring a persons
character, fame or reputation through false and malicious statements. It is that which
tends to injure reputation or to diminish the esteem, respect, good will or confidence in
the plaintiff or to excite derogatory feelings or opinions about the plaintiff.
Any of the imputations covered by Article 353 is defamatory and, under the
general rule laid down in Article 354, every defamatory imputation is presumed to

be malicious, even if it be true, if no good intention and justifiable motive for

making it is shown.
There is malice when the author of the imputation is prompted by personal ill-will
or spite and speaks not in response to duty but merely to injure the reputation of
the person who claims to have been defamed.
Truth then is not a defense, unless it is shown that the matter charged as libelous
was made with good motives and for justifiable ends.

VIII. Doctrine of fair comment

The doctrine of fair comment means that while in general every discreditable imputation
publicly made is deemed false, because every man is presumed innocent until his guilt is
judicially proved, and every false imputation is deemed malicious, nevertheless, when
the discreditable imputation is directed against a public person in his public capacity, it is
not necessarily actionable. In order that such discreditable imputation to a public official
may be actionable, it must either be a false allegation of fact or a comment based on a
false supposition.
The doctrine of fair comment presupposes that the publication is based on established
facts. If the comments were an expression of opinion based on established facts, it is
immaterial that the opinion happens to be mistaken, as long as it might reasonably be
inferred from the facts. However, where the comments were not backed up by facts, the
broadcasts are not privileged and remain libelous per se
IX.

Public Figure

Men in public life may suffer under a hostile and unjust accusation; the wound may be
assuaged by the balm of a clear conscience. A public official must not be too thinskinned with reference to comments upon his official acts.
X.

Group libel

One guiding principle of group libel is that defamation of a large group does not give rise
to a cause of action on the part of an individual unless it can be shown that he is the
target of the defamatory matter.
XI.

Malicious prosecution

It is a settled principle that [w]hen the action is filed in good faith there should be no
penalty on the right to litigate.
To support, thus, an action for malicious prosecution, the plaintiff must prove the fact of
prosecution, that the defendant was himself the prosecutor or that he instigated its
commencement; that it finally terminated in his acquittal; that in bringing it the
prosecutor acted without probable cause, and that he was actuated by legal malice, that
is, by improper and sinister motives
The statutory recognition of an action for damages based on malicious prosecution (false
accusation or denuncia falsa) is found in Article 2219(8) of the Civil Code which allows
recovery of moral damages for malicious prosecution. Article 21 and 2176 of the same
Code may also be invoked to justify the action (supra).
To constitute malicious prosecution, there must be proof that the prosecution was
prompted by a design to vex and humiliate a person and that it was initiated deliberately
by the defendant knowing that the charges were false and groundless

XII.

Art. 19, 20, 21 of NCC

As for the award of damages under Articles 19, 20 and 21 of the Civil Code, it was held
that
The elements of abuse of right under Article 191 are the following: (1) the existence of a
legal right or duty, (2) which is exercised in bad faith, and (3) for the sole intent of
prejudicing or injuring another.
Article 20 speaks of the general sanction for all other provisions of law which do not
especially provide for their own sanction; while
Article 21 deals with acts contra bonus mores, and has the following elements: (1) there
is an act which is legal, (2) but which is contrary to morals, good custom, public order, or
public policy, and (3) and it is done with intent to injure.
Verily then, malice or bad faith is at the core of Articles 19, 20, and 21.
Indeed, bigamy is not one of those specifically mentioned in Article 2219 of the Civil
Code in which the offender may be ordered to pay moral damages to the private
complainant/offended party. Nevertheless, the petitioner is liable to the private
complainant for moral damages under Article 2219 in relation to Articles 19, 20 and 21 of
the Civil Code
XIII. Breach of promise to marry

XIV. Culpa contractual cases

With respect to the award of moral damages, the general rule is that said damages are
not recoverable in culpa contractual except when the presence of bad faith was proven
However, in breach of contract of carriage, moral damages may be recovered when it
results in the death of a passenger
In culpa contractual or breach of contract, moral damages may be recovered when the
defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith)
or in wanton disregard of contractual obligations and, as in this case, when the act of
breach of contract itself constitutes the tort that results in physical injuries.
So in breach of contract, the damages recoverable maybe
Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof,
provides for the payment of indemnity for the death of passengers caused by the
breach of contract of carriage by a common carrier.
Actual Damages. Art. 2199 provides that except as provided by law or by
stipulation, one is entitled to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved.;
Moral Damages. Under Art. 2206, the spouse, legitimate and illegitimate
descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased.;

 Exemplary Damages. Art. 2232 provides that in contracts and quasicontracts,

the court may award exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.;
Attorneys Fees. Pursuant to Art. 2208, attorneys fees may be recovered when,
as in the instant case, exemplary damages are awarded;
Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in
relation to Art. 2206 thereof, provides that in addition to the indemnity for death
arising from the breach of contract of carriage by a common carrier, the
defendant shall be liable for the loss of the earning capacity of the deceased, and
the indemnity shall be paid to the heirs of the latter.

XV.

Analogous cases

XVI. General rule on moral damages in favor of corporation

A juridical person is generally 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
XVII. Exception
However, where the claim for moral damages falls under item 7 of Article 2219 of the
Civil Code, moral damages may be recovered. 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.