ACTIONS AND DAMAGES IN CASE OF BREACH

Cangco v. Manila Railroad Company. –"It is important to note that the foundation of the legal liability of the defendant
is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all,
from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to
say, its liability is direct and immediate, differing essentially, in the legal viewpoint from that presumptive responsibility
for the negligence of its servants, imposed by Article 1903 of the Civil Code, which can be rebutted by proof of the
exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations
arising ex contractu, but only to extra-contractual obligations - or to use the technical form of expression, that article
relates only to culpa aquiliana and not to culpa contractual.
CULPA CONTRACTUAL (Breach of contract) – Only the carrier is primarily liable and not the driver, because there
is no privity of contract between the driver and the passenger. No defense of due diligence in the selection and supervision
of employees.
Quasi-delicts (Culpa aquiliana) is an act or omission which causes damages to another, there being fault or negligence
and there being no pre-existing contractual relationship between the parties.
DISTINCTIONS BETWEEN CULPA CONTRAC TUAL AND CULPA AQUILIANA.

Point of Distinction Culpa Contractual Culpa Aquiliana

source of obligation Contract Quasi-delict
Liability of Employee No liability there being no Solidarity liable with the
privity of contract employer
Availability of Defense Due Diligence in the Due Diligence in the selection
selection and supervision of and supervision of employees
employees not a defense is a defense under Art. 2180
Capacity Liable as a contracting party Liable as an employer

CONCURRENT CAUSES OF ACTION. – The same act that breaches the contract may also be tort. Hence, a negligent
act that breaches the contract may give rise to a liability based on contract as well as quasi-delict under Article 2176 of the
Civil Code.
In fact, with respect to the employee of the carrier, civil liability may he based on quasi-delict as well as on criminal
liability under Article 100 of the Revised Penal Code.
People v. Got –the Shipowner's liability based on the contract of carriage is separate and distinct from the criminal
liability of those who may be found negligent: Thus, the obligation of the common carrier to indemnify its passenger or his
heirs for injury or death arises from the contract of carriage entered into by the common carrier and the passenger. On the
other hand, 'the essence of the quasi offense of criminal negligence under Article 365 of the RPC lies in the execution of
an imprudent or negligent act that, if intentionally done, would be punishable as a felony. The law penalizes, thus, the
negligent or careless act, not the result thereof.
BASIS FOR CAUSE OF ACTION OF PASSENGER:
1. Culpa contractual
2. Culpa aquiliana
BASIS OF LIABILITY OF DRIVER
1. Culpa delictual
2. Culpa aquiliana
CULPA CONTRACTUAL (Breach of contract) – Only the carrier is primarily liable and not the driver, because there is
no privity of contract between the driver and the passenger . No defense of due diligence in the selection and supervision
of employees
Basis: Art. 1759, New Civil Code. Common carriers are liable for the death of or injures to passengers through the
negligence or willful acts of the former's employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carrier.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good
father of a family in the selection and supervision of their employees.
CULPA AQUILIANA (quasi_delict) – The carrier and driver are solidarily liable as joint tortfeasors. Defense of due
diligence in the selection and supervision of employees is available. ( direct and primary liability of driver applicable to
captain, officers, and crews of the vessel or the caption and other personnel of the air carrier in applicable cases where
they committed a negligent act or omission ) Exception: Marine tort resulting in collision.
Basis: Art. 2180, New Civil Code. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.

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The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees
in the service of the branches in which the latter are employed or on the occasion of their functions. Employers shall be liable
for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.

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The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the
diligence of a good father of a family to prevent damage.

CULPA CRIMINAL (criminal negligence) – The driver is primarily liable. The carrier is subsidiarily liable only if the
driver is convicted and declared insolvent.
Basis: Art. 100, RPC In case of injury to a passenger due to the negligence of the driver of the bus which he is riding and
of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for
damages. t makes no difference that the liability of the bus driver and owner springs from contract while that of the owner
and driver of the other vehicle arises from quasi-delict. (Fabre vs. CA)
CONCURRENCE WITH THIRD PERSONS. –If the negligence of third persons concurs with the breach , the liability
of the third person who was driving another vehicle and/or his employer may be based on quasi-delict.
The DOCTRINE OF LAST CLEAR CHANCE provides that where both parties are negligent but the negligent act of
one is appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the
impending harm but failed to do so, is chargeable with the consequences arising therefrom
ELEMENTS OF CAUSE OF ACTION AGAINST THE CARRIER. "cause of action" is alleged and proved.
CAUSE OF ACTION – is the act or omission in violation of the right of the other party. The complaint states a cause of
action if it contains three essential elements:
(1) a right in favor of the plaintiff by whatever means and whatever law it arises;
(2) the correlative obligation of the defendant to respect such right; and
(3) the act or omission of the defendant violates the right of the plaintiff.
VIOLATION OF THE RIGHT IN CONTRACTS generally involves allegation of a breach of such contract through
negligence, fraud, delay, or any other acts or omissions that contravenes the tenor of the obligation.
If the cause of action invoked is culpa contractual, it is not necessary for the plaintiff passenger or shipper to allege and
prove the negligent act of the carrier. All that is necessary is to allege the presence of the contract and the damage or
injury to the plaintiff because breach through negligence is already presumed in such cases." Sufficient cause of
action is alleged even if the circumstances that constitute the negligent act of the carrier are not alleged because the law
already supplies the element for breach or violation of the right of the plaintiff through the presumption of negligence.
DAMAGES – it is the pecuniary compensation, recompense, or satisfaction for an injury sustained, or as otherwise
expressed, the pecuniary consequences that the law imposes for the breach of some duty or violation of some rights.
EXTENT OF DAMAGES - Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in
good faith is liable shall be those that 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 the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation
KINDS OF DAMAGES. Article 2197 of the New Civil Code provides that damages may be: (1) Actual or
Compensatory; (2) Moral; (3) Nominal; (4) Temperate or moderate; (5) Liquidated, and (6) Exemplary or Corrective.
Article 2216 provides that no proof of pecuniary loss is necessary in order that moral, nominal. temperate, liquidated, or
exemplary damages may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion
of the court, according to the circumstances of each case. However, proof of pecuniary loss is necessary if actual of
compensatory damages are being claimed.
PRESCRIPTIVE PERIOD AND CONDITIONS PRECEDENT
ARTICLE 366. Within the twenty-four hours following the receipt of the merchandise a claim may be brought against
the carrier on account of damage or average found therein on opening the packages, provided that the indications of the
damage or average giving rise to the claim can not be ascertained from the exterior of said packages, in which case said
claim would only be admitted on the receipt of the packages.
After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall
be admitted against the carrier with regard to the condition in which the goods transported were delivered.
INTERNATIONAL CARRIAGE OF GOODS BY SEA
SEC 3 (6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the
carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the
person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the
delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice
must be given within three days of the delivery.
Said notice of loss or damage maybe endorsed upon the receipt for the goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint
survey or inspection.
In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided,
That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall
not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date
when the goods should have been delivered
In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to
each other for inspecting and tallying the goods.
ACTUAL OR COMPENSATORY DAMAGES.
Article 2199. 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. Such compensation is referred to as actual or compensatory
damages.
Article 2200. Indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the
profits which the obligee failed to obtain.
KINDS OF ACTUAL DAMAGE.
(1) the loss of what a person already possesses (daño emergente);
(2) the failure to receive as a benefit that would have pertained to him (lucro cesante)
Article 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases of temporary or permanent personal injury;
(2) For injury to the plaintiff's business standing or commercial credit.
DETERMINATION OF AMOUNT OF LIABILITY IN CARRIAGE BY SEA:
Article 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall be determined in
accordance with that declared in the bill of lading, the shipper not being allowed to present proof that among the goods
declared therein there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall be
especially bound in favor of the shipper, although with respect to railroads said liability shall be subordinated to the
provisions of the laws of concession with respect to the property, and to what this Code established as to the manner and
form of effecting seizures and attachments against said companies.
ARTICLE 365. If, on account of the damage, the goods are rendered useless for purposes of sale or consumption in the
use for which they are properly destined the consignee shall not be bound to receive them, and may leave them on the
hands of the carrier, demanding payment therefor at current market prices.
If among the goods damaged there should be some in good condition and without any defect whatsoever, the foregoing
provision shall be applicable with regard to the damaged ones, and the consignee shall receive those which are sound, this
separation being made by distinct and separate articles, no object being divided for the purpose, unless the consignee
proves the impossibility of conveniently making use thereof in this form.
The same provision shall be applied to merchandise in bales or packages, with distinction of the packages which appear
sound.
ARTICLE 364. If the effect of the damage referred to in Article 361 should be only a reduction in the value of the goods,
the obligation of the carrier shall be reduced to the payment of the amount of said reduction in value, after appraisal by
experts.
Section 4(5) Of The COGSA Provides:
(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with
the transportation of goods in an amount exceeding $500 per package of lawful money of the United States, or in case of
goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the
nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.
By agreement between the carrier, master or agent of the carrier, and the shipper another maximum amount. than that
mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named.
In no event shall the carrier be liable for more than the amount of damage actually sustained. Neither the carrier nor the
ship shall be responsible in any event for loss damage to or in connection with the transportation of the goods if the
nature or value thereof has been knowingly and fraudulently misstated by the shipper in the bill of lading.
DAMAGES IN CASE OF DEATH
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos,
even though there may have been mitigating circumstances. In addition:
1. The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the
deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the
time of his death;
2. If the deceased was obliged to give support according to the provisions of article 291, the recipient who is not an
heir called to the decedent's inheritance by the law of testate or intestate succession, may demand support from the
person causing the death, for a period not exceeding five years, the exact duration to be fixed by the court;
3. The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages
for mental anguish by reason of the death of the deceased.
Net Earning Capacity = = Life Expectancy × (Gross Annual Income - Necessary Expenses)
(1) The first factor, i.e., life expectancy is computed by applying the formula (2/3 × 80 - age at death)
adopted in the American Expectancy Table of Mortality or the Actuarial Combined Experience Table of
Mortality.
(2) With respect to net earnings, the proper computation should be based on the gross income of the victim
minus the necessary and incidental living expenses that the vietim would have incurred if he were alive.
(3) The amount of the living expenses must also be established to determine the net earnings. However, the
Supreme Court has consistently ruled that, the amount thereof is fixed at 50% of the gross income in the
absence of proof of the amount of living expenses to be deducted from the gross income.
(4) It should be noted that the above-stated rules on loss of earning capacity applies when the breach of the
carrier resulted in the plaintiff's permanent incapacity.
(5) Loss of earning capacity must be established through documentary proof. By way of exception,
documentary evidence is not necessary in the following cases:
i. Self-employed victim and earning less than minimum wage;
ii. daily wage earner earning less than minimum,
(6) Upon presentation of special circumstances, the indemnification for loss of earning capacity may be
sustained although the victim is unemployed, because compensation of this nature is awarded not for loss
of time or earnings but for loss of the deceased’s power or ability to earn money
ATTORNEY’S FEES

Article 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.
MORAL DAMAGES
Article 2217. 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 defendant's wrongful act for omission.
Article 2218. In the adjudication of moral damages, the sentimental value of property, real or personal, may be
considered.
Article 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.
Article 2220. 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 breaches of contract where the
defendant acted fraudulently or in bad faith.
BREACH OF CONTRACT OF AIR CARRIAGE, MORAL DAMAGES MAY BE RECOVERED WHERE:
(1) the mishap results in physical injury or death of a passenger; or
(2) where the carrier is guilty of fraud or bad faith; or
(3) where the negligence of the carrier is so gross and reckless as to virtually amount to bad faith.
REQUISITES:
(1) First, there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant;
(2) second, there must be a culpable act or omission factually established;
(3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant;
and
(4) fourth, the award of damages is predicated on any of the cases stated in Article 2219.
Under the provisions of this law, 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 his
contractual obligation, and exceptionally, when the act of breach of contract itself is constitutive of tort resulting in
physical injuries.
WHEN MORAL DAMAGES AWARDED IN AIR TRANSPORTATION CASES.
In Air France v. Gillego – "Inattention to and lack of care for the interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to an award of moral
damages. What the law considers as bad faith which may furnish the ground for an award of moral damages would be bad
faith in securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any other kind of
deceit.
FACTORS TO CONSIDER.
1) the extent of humiliation may also determine the amount of moral damages that can be awarded;"
2) the extent of pain and suffering likewise determines the award;
3) official, political, social, and financial standing of the offended party and the business and financial
position of the offender affect the amount of damages;
4) the age of the claimant

NOMINAL DAMAGES

De minimis non curat lex. –  the law is not concerned with insignificant or minor matters.

Article 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.

Article 2222. The court may award nominal damages in every obligation arising from any source enumerated in article 1157, or
in every case where any property right has been invaded.

Article 2223. The adjudication of nominal damages shall preclude further contest upon the right involved and all accessory
questions, as between the parties to the suit, or their respective heirs and assigns.

TEMPERATE OR MODERATE DAMAGES

Article 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 can not, from the nature of the
case, be provided with certainty.

Article 2225. Temperate damages must be reasonable under the circumstances.

LIQUIDATED DAMAGES

Article 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.

Article 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable.

Article 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.

EXEMPLARY OR CORRECTIVE DAMAGES

The requisites for the award of exemplary damages are as follows:

(1) They may be imposed by way of example in addition to compensatory damages, and only after the claimant's
right to them has been established;
(2) 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 wanton, fraudulent, oppressive or malevolent manner.
Article 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner.
Article 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they
should be adjudicated.
Article 2234. While the amount of the 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.
Article 2235. A stipulation whereby exemplary damages are renounced in advance shall be null and void.