DAY 8

VIII. DAMAGES

A. CONCEPT/KINDS OF DAMAGES (ARTICLES 2195, 2197-2198)

Spouses Ong v. CA

B. GENERAL PRINCIPLES OF RECOVERY

Air France v. CA
Dichoso v. CA
PAL v. Miano
DBP v. CA

C. ACTUAL DAMAGES (ARTICLES 2199-2203; 2207, 2209)

1. Damnum emergens / lucrum cessans
2. Disability
3. indemnity for death
4. Interest
5. Attorney’s Fees (ARTICLE 2208)
PNOC Shipping v. CA
Bangko Sentral ng Pilipinas Resolution No. 799
Francisco v. Co
Marikina Autoline v. People
Magbanua v. Junsay
NACAR v. Gallery Frames
People v. Jugueta
City Trust v. Villanueva
Spouses Ong v. CA
SEE:
Ramos v. CA
Industrial Insurance Co. v. Bondad
Pestano v. Spouses Sumayang
Lambert v. Heirs of Castillon

1
 DAMAGES RECOVERABLE CASED ON CAUSE OF ACTION

Actual Moral Nominal Temperate Liquidated Exemplary

YES
YES YES
GR: NO YES But breach must be
Breach of If the court awards it, and If damage is proven but
YES XPN: IF BREACH WAS DONE If there is a stipulation to providing wanton, fraudulent,
Contract BAD FAITH
also if a right was violated pecuniary loss cannot be
for penalty reckless, oppressive,
or invaded proven with certainty
malevolent

YES
Extent? All damages that
Quasi-Delicts could have been foreseen
or reasonably foreseen by
the defendant
YES
YES YES
Also in case of death family NO YES
If the court awards it, and If damage is proven but
members can claim Moral Liquidated damages arise only There must be gross
also if a right was violated pecuniary loss cannot be
damages for the anguish from stipulation negligence
or invaded proven with certainty
suffered

YES
Civil damages and
Crimes/Delicts Indemnity under the Penal
Code are two different
things
YES
YES YES YES
Also in case of death family NO
If the court awards it, and If damage is proven but When there is a presence
members can claim Moral Liquidated damages arise only
also if a right was violated pecuniary loss cannot be of one or more aggravating
damages for the anguish from stipulation.
or invaded proven with certainty circumstances
suffered

GR: X
XPNS: ✓
GR: X (1) If there is a stipulation to the before exemplary damages
BUT if the injury is chronic, contrary could be awarded it must
Actual ✓ ✓ X
recurring, or continuous, (2) If the damage pertains to a be proven that plaintiff is
then: ✔ breach not contemplated and not entitled to actual, moral,
under the penal clause of the and temperate
contract (Art. 2228)

GR: X
XPNS:
(1) Breach Contract of Carriage
Moral ✓ ✓ X (see note 1) ✓ ✓
results in death/injury
(2) Breach of Contract of Carriage
in Bad faith

Nominal X X ✓ X X X (see note 2)

GR: X
XPNS:
(1) If there is a stipulation to the
GR: X
contrary extent of pecuniary loss
BUT if the injury is chronic,
Temperate ✓ X ✓ cannot be proven with certainty ✓
recurring, or continuous,
(2) If the damage pertains to a
then: ✔
breach not contemplated and not
under the penal clause of the
contract (Art. 2228)

2
 GR: X
✓
GR: X XPNS:
Provided that under Art.
XPNS: (1) If there is a stipulation to
GR: X 2234, the plaintiff must
(1) If there is a stipulation to the contrary extent of
XPNS: show that he would be
the contrary pecuniary loss cannot be
(1) Breach Contract of Carriage entitled to moral,
Liquidated (2) If the damage pertains proven with certainty
results in death/injury temperate or
to a breach not (2) If the damage pertains to
(2) Breach of Contract of compensatory damages
contemplated and not a breach not contemplated
Carriage in Bad faith were it not for the
under the penal clause of X and not under the penal ✓
stipulation for liquidated
the contract (Art. 2228) clause of the contract (Art.
damages.
2228)

✓
before exemplary damages
could be awarded it must
Exemplary ✓ X (see note 2) ✓ ✓ ✓
be proven that plaintiff is
entitled to actual, moral,
and temperate

Note 1: Vda. De Medina vs. Cresencia, moral damages are compensatory damages. They seek to compensate for injury/ moral loss sustained by the plaintiff, so they are also compensatory
damages. Therefore, when they’re awarded that already amounts to or in recognition or vindication of the legal right that was violated.

Note 2: Under Art. 2234, nominal is conspicuously not included in the enumeration of damages the award of which must precede an award of exemplary damages.

3
 VIII. DAMAGES Q: What is the effect of an award of damages by the court that is not prayed for in the
complaint?
A. CONCEPT/KINDS OF DAMAGES (ARTICLES 2195, 2197-2198) ● A: The court might commit grave abuse of discretion amounting to lack or excess of
jurisdiction
ARTICLES 2195, 2197-2198
TYPES OF DAMAGES:
Article 2195. The provisions of this Title shall be respectively applicable to all obligations 1. Actual or Compensatory
mentioned in article 1157. ● It is to indemnify the person for what he has lost or what he can potentially
gain if the injury did not happen.
Article 2197. Damages may be:
(1) Actual or compensatory; 2. Moral
(2) Moral; ● When the person injured is paid for social humiliation, mental anguish, or
(3) Nominal; moral attack or effect as caused by the injury
(4) Temperate or moderate; 3. Nominal
(5) Liquidated; or ● It is imposed when a right of the person injured has been violated. This is
(6) Exemplary or corrective.
imposed as a recognition of that right that was violated.
Article 2198. The principles of the general law on damages are hereby adopted insofar as 4. Temperate or Moderate
they are not inconsistent with this Code. ● It is awarded when there is no specific pecuniary estimation. Meaning that
the amount of loss or damage was not proved so in that case, temperate
damages will be imposed. This is more than the value of nominal damages
The provisions on damages apply to all obligations in Article 1157. These are obligations
but less than compensatory damages.
arising from law, contract, quasi-delict, acts or omissions punished by law and quasi-contract.
● it means that you have established the fact of loss but you failed to
substantiate or to show with certainty the amount. Temperate really means
Damages → Adequate compensation for the value of loss suffered or profits which obligee
that it’s supposed to be actual but the amount can’t be proven with
failed to obtain.
certainty to the court will approximate the amount.
● Exceptions: (1) Law; or (2) Stipulation
5. Liquidated
● It is the damages agreed upon by the parties in case an injury occurs.
Indemnification is meant to compensate for the injury inflicted and not to impose a penalty. A
6. Exemplary or Corrective
party is entitled to adequate compensation only for such pecuniary loss actually suffered and
● This is awarded in relation to collective good or public good in addition to
duly proved.
the imposition of moral, temperate, liquidated, or actual damages.
● Exemplary damages is really meant to deter persons who are similarly
GR: Damages have to be proved, it cannot be awarded without any basis.
minded from doing the wrongful act. It is really by way of example, to set
● There are only certain exceptions to this rule. (Cf. Nominal, Moral, & Exemplary
an example so that others will not follow the wrong doing.
damages)

One common thread runs before an award monetary damages is made. That is the plaintiff
must have suffered some kind of damage.
Atty. Go: All damage except nominal, MUST be prayed for in order for the court to award
Spouses Ong v. CA
damages. The court can give relief but cannot award damages if it is not prayed for in the
complaint.
Sps. Ong boarded Inland’s bus, which was hit at the rear by
Philtranco’s bus. Due to this, Sps. Ong suffered physical injuries..
Hence, they filed an action for damages against both Philtranco and
Inland. The trial court absolved Inland and ruled that Philtranco was
liable due to quasi delict. It awarded damages in favor of Sps. Ong.
However, on appeal, the CA resolved that Philtrancos liability for
damages could not be predicated upon the Police Report which had

4
not been formally offered in evidence. It found that Sps. Ong was able
to establish that Inland committed a breach of contract of carriage.
The award for unearned income was disallowed and the amount of
moral damages was reduced to P30,000, since it found that Francia’s
testimony was self-serving.
Was the reduction of the damages proper? – YES. THE PLAINTIFF
FAILED TO PROVE THE UNREALIZED INCOME FROM THE LOSS OF
AN ARM.
[Damages required evidence] 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.
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.
[Moral Damages & Diminution of Use of Francia’s arm] A person is
entitled to the physical integrity of his or her body, and if that integrity
is violated, damages are due and assessable. However, physical
injury, like loss or diminution of use of an arm or a limb, is not a
pecuniary loss. Indeed, it is not susceptible of exact monetary
estimation. Thus, the usual practice is to award moral damages for
physical injuries sustained. Sps. Ong protested the deletion of moral
damages because of the diminution of the use of Francia’s right arm
based on direct examination. According to jurisprudence, the usual
practice is to award moral damages. Hence,
● Francia Ong = From P30k -> P50k (reasonable)
○ In some cases medical procedures to restore the
injured person to the former condition but this
requires expert testimony. As applied herein:
petitioner failed to present evidence regarding the
feasibility or practicability and the cost of a
restorative medical operation on her arm; thus no
basis to grant P48k for such expenses.
● Renato Ong = P30k for moral damages for the mental anxiety
and anguish from the accident.
[Unrealized Income/Actual Damages] Although actual damages
include indemnification for profits which the injured party failed to
obtain (lucro cesante or lucrum cesans), the rule requires that said
person produce the "best evidence of which his case is susceptible.
The bare and unsubstantiated assertion of Francia Ong that she
usually earned P200 a day from her market stall is not the best
evidence to prove her claim of unrealized income for the eight- month
period that her arm was in plaster cast. Her (oral) testimony that it was
their lessor who filed their income tax returns and obtained business
licenses for them does not justify her failure to present more credible
evidence of her income. Furthermore, after her 10-day confinement at
the San Pablo Hospital, she could have returned to her work at the
public market despite the plaster cast on her right arm, since she
claimed to have two nieces as helpers. The deletion of awards for
unrealized income was appropriate because of the failure to
substantiate the claim.
[Atty’s Fees] Counsel for petitioner deeply laments the reduction in
the award of attorney's fees. He alleges that he had to use his own
money for transportation, stenographic transcriptions and other court
expenses, and for such reason, avers that the award of 25% attorney's
fees made by the trial court was proper. Under the CC, an award of
attorney's fees is an indemnity for damages ordered by a court to be
paid by the losing party to the prevailing party, based on any of the
cases authorized by law. It is payable not to the lawyer but to the
client, unless the two have agreed that the award shall pertain to the
lawyer as additional compensation or as part thereof Counsel's
performance, however, does not justify the award of 25% attorney's
fees. It is well-settled that such award is addressed to sound judicial
discretion and subject to judicial control.
NOTES:
Fundamental principle of the law on damages – one injured by a
breach of contract 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 defendant’s acts. Hence, actual
pecuniary compensation is the general rule, except where the
circumstances warrant the allowance of others.
Attorney’s fees – An indemnity for damages ordered by a court to be
paid by the losing party to the prevailing party based on any of the
cases authorized by law. Payable to the client, unless he agreed with
the lawyer that the award shall pertain to the latter as additional
compensation or as part thereof. Standards in fixing the amount of
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 B. GENERAL PRINCIPLES OF RECOVERY
attorney’s fees
1. Amount and character of services rendered;
2. Labor, time and trouble involved;
3. Nature and importance of the litigation or business in which
the services were rendered;
4. Responsibility imposed;
5. Amount of money or value of the property affected by the
controversy or involved in the employment;
6. Skill and experience called for in the performance of
services;
7. Professional character and social standing of the lawyer;
8. Results secured; an attorney may properly charge a much
larger fee when it is contingent than when it is not.
When we’re talking about damages, who has the burden of proving
the amount being claimed? The one who is claiming.
● When you read cases on Torts and Damages especially with
respect to the damages part, the Rules on Evidence will be
very important, especially if you are talking about actual or
compensatory damages.
Based on the cases assigned, not only with respect to the case of
Spouses Ong, when you are talking about actual or compensatory
damages, what is the preponderance of evidence or burden of proof
that is required?
● Best evidence available.
In the case of Spouses Ong, did they meet that burden?
● They did not meet that burden because there was a lack of
basis with regard to their claim.
Discuss the concept of moral damages for the injured arm
● The Supreme Court, when they explained moral damages,
they said that a person is entitled to the physical integrity of
his body, and this is not susceptible of pecuniary estimation.
So, what the Supreme Court explained is that when they
award moral damages, they award it for physical injuries that
have been sustained by the claimant.
Atty Go: Always remember that for moral damages, you must still
prove the proximate relation between the injury sustained and the
act being complained of.
What about unrealized income, what did the court say with respect to
the contention on unrealized income?
● There is failure to prove or the evidence presented was not
the best evidence.
Morales purchased an airline ticket from Air France (AF) through
Aspac Management Corporation (AMC) and [NOTE] the itinerary
thereof clearly included several cities, with certain segments restricted
by markings of “non- endorsable” and “valid on AF only.” While he was
in NYC, Morales obtained medical certificates, attesting to an ear
infection that needed immediate treatment, as he intended to shorten
his trip. Morales requested twice from the AF offices in Copenhagen
and Hamburg to shorten his trip, but he was turned down both times
by AF-Manila, whose approval must be secured as a matter of
procedure. Aggrieved, Morales bought a new set of tickets and, upon
reaching Manila, filed a complaint for BREACH OF CONTRACT OF
CARRIAGE and DAMAGES against AF. Both the CFI and the CA ruled
in favor of Morales, finding that the breach was due to AF’s refusal to
re-route Morales.
[breakdown JIC] CFI found Air France in evident bad faith for breach
of contract of carriage aggravated by the threatening attitude of the
employees and awarded
● Actual Damages – 1,914 German Marks
● Moral Damages – 1M
● Exemplary damages – P800k
Air France v. CA ● Legal interest from date of filing of complaint until fully paid
[TRANSPO] ● Attorney’s fees – 20%
CA modified
● Moral Damages – P500k
● Exemplary damages – P150k - Attorney’s fees – 5%
Before the SC, AF assailed the award of damages and maintained that
the original ticket was discounted and specifically non-endorsable in
certain segments.
W/N there is a breach of contract of carriage on the part of AF, as to
justify the award to Morales of actual, moral, and exemplary damages?
NO
The SC held that before damages may be awarded, it is essential that
the claimant satisfactorily prove (a) the existence of the factual basis
of the damages and (b) its causal connection to defendant’s acts.
Here, considering the clear restrictions on the original ticket, it was not
unreasonable for AF to deny the request. Furthermore, there was no
bad faith on the part of AF, as it only followed the advice of AMC, who,
if anything, should be blamed for failing to explain the non-endorsable
character of the ticket. Nevertheless, considering that Morales is a
6
 lawyer, he cannot simply plead ignorance of such restrictions.
NOTES:
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.
What did the court say with respect to the comparison of the case of
KLM?
● In the case of KLM there was bad faith because of how the
airlines treated the passenger and the passenger was not
expressly informed of the conditions. In this case, the
petitioner was in good faith and was not discourteous.
● Court: “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 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 reroute.
There was 16.8 hectare land owned by spouses, Gaspar & Maria. Mom
died first giving Vivencia (Daughter) ½ portion and Dad 1⁄2. When Dad
died, his ½ portion was split into 3: ⅓ to Vivencia; ⅓ to Asuncion and
⅓ to Custodia.
● Vivencia Prila (4/6) = 11.2477has
● Asuncion Pacamara (1/6) = 2.8119has
● Custodia Parcia (1/6) = 2.8119has
Vivencia Prila sold her 4/6 portion to Dichoso, and Asuncion sold her
1/6 to Ramos. The deed (Asuncion -> Ramos) stated however that the
Dichoso v. CA land was 4.1250 hectares which was in excess of the 2.8119 hectares,
It is overlapping with the property of Dichoso, thus Dichoso is now
claiming the disputed land, alleging that Ramos with a soldier and two
policemen seized 50 cavans of palay from the tenant of Dichoso. In
retaliation, Dichoso brought a soldier and appropriated 6 cavans of
Ramos. Ramso filed a complaint for quieting of title.
CFI ruled in favor of Ramos. CA affirmed and ordered Dichoso to
deliver 40 cavans annually to Ramos due to Ramos’ dispossession of
his land.
W/N CA erred in finding that Ramos is the owner of the 4.1250 hectare
land in question? YES, the records show Asuncion only owns ⅙ of the
property based on the boundaries
This Court has held that in cases of conflict between areas and
boundaries, it is the latter that should prevail. What really defines a
piece of ground is not the area, calculated with more or less certainty,
mentioned in its description, but the boundaries therein laid down, as
enclosing the land and indicating its limits. In a contract of sale of land
in a mass, it is well established that the specific boundaries stated in
the contract must control over any statement with respect to the area
contained within its boundaries.
W/N CA erred in requiring the petitioner to deliver 40 cavans annually
to Ramos despite its finding that only 1/3 of the produce "went to" the
Ramos, 2/3 being for his tenant? NO, actual damages cannot be
presumed but must be proven.
Petitioner alleged that since respondent's share of the harvest is only
1/3, the remaining 2/3 representing his tenant's share, only the 1/3 of
the annual harvest must be awarded to Ramos. Ramos, on the other
hand, argues that his tenant will be deprived of his share if only 1/3 of
the harvest will be awarded to him.
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 been suffered and on evidence of the actual amount
thereof. It is undisputed that the land in question yields an average of
20 sacks of palay per planting and that it is planted to palay twice a
year. Ramos' share of the harvest is only 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
2/3 share.
The award of actual damages is hereby REDUCED in proportion to the
area that may be awarded to Ramos and to his one-third (1/3)
participation in the harvests, from 1964 up to the time the land
appurtenant thereto is returned to Ramos. (So...Ramos wanted the
higher award of damages awarded by the TC to be sustained, but the
SC decided against it as the facts were shown to prove that he would
have only received 1/3 of land’s output.)
NOTES:
Remember if the court will do so that will be tantamount to unjust
enrichment. The court can only grant what is being asked for, or what
7
 is being prayed for. That's basic in your civil procedure and other
procedural rules or Rules of Court.
Florante Miano took PAL’s flight bound for Frankfurt, Germany. He had
an immediate connecting flight via Lufthansa flight to Vienna, Austria.
At NAIA, he checked-in a brown suitcase containing money,
documents, a Nikon camera with zoom lens, suits, sweaters, shirts,
pants, shoes, and other accessories. When he arrived at Vienna, his
baggage was missing. He reported the matter to Lufthansa authorities.
After 3 hours of nothing, he went to Piestany, Czechoslovakia. 11 days
after, his suitcase was delivered to him in his hotel. He claimed that
because of the delay he was forced to borrow money to buy clothes,
pay $200 for the transportation of his baggage from Vienna to
Piestany, and he lost his Nikon Camera. Florante wrote PAL a letter
asking for compensation. It was left unheeded so he filed a case in the
RTC of Makati for damages. PAL said it shouldn’t be held liable
because: (1) there was no report of mishandled baggage on its plane
(2) nor was there any tracer telex received from its Vienna Station.
RTC: PAL’s action was not attended by bad faith but awarded
damages and attorney’s fees to Florante. Hence, this petition.
W/N the moral damages, exemplary damages, and attorney’s fees
should be awarded? – NO
PAL v. Miano In breach of contract of carriage by air, moral damages can only be
awarded if defendant acted fraudulently or in bad faith. RTC ruled that
there was no bad faith. Thus it erred in awarding moral damages.
[Moral Damages] Bad faith means a breach of a known duty through
some motive of interest or ill will. Facts show that the late delivery was
not motivated by ill will/bad faith. PAL coordinated with its Central
Baggage Services to trace the baggage and succeeded in finding it.
Also, PAL did not receive any tracer telex. Therefore, it was
reasonable to presume that the handling of baggage was normal and
regular. Bad faith must also be substantiated by clear and convincing
evidence. It cannot be presumed.
[Exemplary Damages] Exemplary damage cannot be awarded
DBP v. CA
because the prerequisite for its award in cases of
contract/quasi-contract is that the defendant acted in wanton,
fraudulent, reckless, oppressive, or malevolent manner. The facts do
not show such.
[Atty’s Fees] Attorney’s fees cannot be awarded. The fact that
respondent was compelled to litigate and incur expenses to protect
and enforce his claim did 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 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.
NOTES:
In this case, the Court did not award exemplary damages. The
prerequisite for the award of exemplary damages in cases of contract
or quasi-contract is that the defendant acted in wanton, fraudulent,
reckless, oppressive, or malevolent manner.
In breach of contract of carriage by air, moral damages are awarded
only if the defendant acted fraudulently or in bad faith—a breach of a
known duty through some motive of interest or ill will. Bad faith must
be substantiated by clear and convincing evidence. In breach of
contract cases where the defendant is not shown to have acted
fraudulently or in bad faith, liability for damages is limited to the
natural and probable consequences of the breach of the obligation
which the parties had foreseen or could reasonably have foreseen.
The damages, however, will not include liability for moral damages.
The prerequisite for the award of exemplary damages in cases of
contract or quasi-contract is that the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. The general
rule is that attorney’s fees cannot be recovered as part of damages
because 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.
Cuba was a grantee of a Fishpond Lease Agreement (i.e., Leasehold
Rights) from the Government. She obtained loans from DBP and
executed PNs using as security the Leasehold Rights. She defaulted in
her payments. DBP appropriated the Leasehold Rights over the
fishpond without a foreclosure proceeding. Then, DBP executed a
Deed of Conditional Sale of the Leasehold Rights back to Cuba. After
the execution of the said Deed, a new Fishpond Lease Agreement
was issued by the Ministry of Agriculture and Food in favor of Cuba.
However, again, Cuba failed to pay the amortizations due. DBP
rescinded the agreement, and took possession of the Leasehold
Rights. Subsequently, DBP disposed the property through a public
bidding.
W/N DBP was liable for actual damages? – NO
With regard to damages, Art. 2199 provides: Except as provided by
8
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. Actual or compensatory damages cannot be presumed, but
must be proved with reasonable degree of certainty. A court cannot
rely on speculations, conjectures, or guesswork as to the fact and
amount of damages, but must depend upon competent proof that
they have been suffered by the injured party and on the best
obtainable evidence of the actual amount thereof. It must point out
specific facts which could afford a basis for measuring whatever
compensatory or actual damages are borne. In the case at bar, plaintiff
Cuba claimed aggregate actual damages of more than 1M based on
the following: Equipment, tools, and other articles = 500k; 230k
pieces of bangus = 500k. SC held both losses were not proved by
clear evidence.
● Equipment etc.: only evidence is testimony of Cuba and her
caretaker; no inventory of alleged lost items presented; no
single receipt or record of acquisition presented.
● Bangus: loss not duly proved; claim was also unreasonably
delayed; loss allegedly happened in 1979 when DBP took
possession of property, yet from this time until 1985
complaint, Cuba did not bring the alleged loss to DBP’s
attention.
Thus, the award of actual damages should, therefore, be struck down
for lack of sufficient basis. Nonetheless, an award of MORAL
DAMAGES is in order conformably with Article 2219(10), in relation to
Article 21, of the Civil Code. EXEMPLARY DAMAGES should likewise
be awarded by way of example or correction for the public good.
There being an award of exemplary damages, attorney’s fees are also
recoverable because DBP’s act of appropriating CUBA’s 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.
which is normal in a project which sometimes, if most often,
is left to the care of other persons. Neither was a single
receipt or record of acquisition presented.
● The complaint was dated May 17 and included the losses of
property. However, here, the son and caretaker knew of the
alleged loss in September 1985. The claim for loss of
property having been made before knowledge of the alleged
actual loss was speculative.
Actual or compensatory damages cannot be presumed, but must be
proved with reasonable degree of certainty. A court cannot rely on
speculations, conjectures, or guesswork as to the fact and amount of
damages, but must depend upon competent proof that they have
been suffered by the injured party and on the best obtainable
evidence of the actual amount thereof. It must point out specific facts
which could afford a basis for measuring whatever compensatory or
actual damages are borne.
What did the court say with respect to the damages?
● There was no proof as to the existence of items claimed
before the loss. With regard to moral, exemplary damages,
and attorney’s fees, the defendant is entitled to it because
DBP acted contrary to law in foreclosing the mortgage
before the agreement of the parties.
● Because there are moral damages, exemplary damages. And
because there are exemplary damages, attorney’s fees are
also recoverable.

NOTES:

To recover actual damages, specific facts which could afford a basis

for measuring whatever compensatory or actual damages are borne
must be pointed out.
● In this case, the Court found that the alleged loss of personal
belongings and equipment was not proved by clear
evidence. Other than the testimony of Cuba and her
caretaker, there was no proof as to the existence of those
items before DBP took over the fishpond.
● There was no inventory of the alleged lost items before loss

9
C. ACTUAL DAMAGES (ARTICLES 2199-2203; 2207, 2209)
ARTICLES 2199-2203; 2207, 2209
CHAPTER 2
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. (1106)
Article 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.
(1107a)
Article 2202. 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. It
is not necessary that such damages have been foreseen or could have reasonably been
foreseen by the defendant.
Article 2203. The party suffering loss or injury must exercise the diligence of a good
father of a family to minimize the damages resulting from the act or omission in question.
Article 2207. If the plaintiff's 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 2209. If the obligation consists in the payment of a sum of money, and the debtor
incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall
be the payment of the interest agreed upon, and in the absence of stipulation, the legal
interest, which is six per cent per annum. (1108)
Atty. Go: I mentioned earlier that if we’re talking about actual or compensatory damages, it’s
really meant to keep whole, that’s why you approximate the loss that was suffered. If in the
event that the plaintiff or movant or complainant cannot prove with certainty the amount
being claimed, then the court will award temperate damages.
T/F: Good faith or bad faith is relevant when we are talking about entitlement to actual
damages? True.
T/F: The injured party claiming damages has the obligation to mitigate the damages he
sustained. True since that person must exercise due diligence in minimizing the damages.
Classes (I-LAV-IIT)
1. Indemnity for death
2. Lucrum Cessans (Benefits you would have obtained
3. Attorney’s fees
4. Value of loss actually sustained (damnum emergens)
5. Interest
6. Injury to business standing or commercial credit
7. Temporary or permanent loss of earning capacity
Kinds of Actual or Compensatory Damages
1. General Damage. Natural, necessary and logical consequences of a particular
wrongful act which result in injury; need not be specifically pleaded because the law
itself implies or presumes that they resulted from the wrongful act
2. Special Damages. Damages which are the natural, but not the necessary and
inevitable result of the wrongful act. (i.e., attorney’s fees)
Requisites:
1. Alleged and Proved with Certainty
● Must be pleaded and proved with certainty,
● Must pray for the relief that claim for loss be granted and
2. Not Speculative.
● Plaintiff must prove the loss. For damages to be recovered, the best
evidence obtainable by the injured party must be presented. Actual or
compensatory damages cannot be presumed but must be proved with
reasonable degree of certainty. The 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 been suffered and on
evidence of the actual amount. If the proof is flimsy and unsubstantial, no
damages will be awarded.
● The claimant has the burden of proof. He must establish his case by a
preponderance of evidence which means that evidence, as a whole,
adduced by one side is superior to that of the other. It is not enough that
10
 plaintiff present an estimated amount. But uncertainty as to the precise
amount is not necessarily fatal. Mere difficulty in the assessment of
damages is not sufficient reason for refusing to award damages where the
right to them has been established
Extent of Actual Damages
When loss need not be proved
● Liquidated damages previously agreed upon; liquidated damages take the place of
actual damages except when additional damages are incurred
● If damages other than actual are sought
● Loss is presumed (ex: loss if a child or spouse)
● Forfeiture of bonds in favor of the government for the purpose of promoting public
interest or policy (ex: bond for temporary stay of alien)
● Award of civil indemnity in tort cases or criminal cases where the victim died. This
civil indemnity is in addition to any actual or compensatory damages that may be
awarded in favor of the victim’s heirs. NOTE: Two Kinds of Foreseeability:
Formulas
Value of loss suffered → Destruction of things, fines or penalties, medical & hospital bills,
attorney's fees, interests, cost of litigation
rather than loss of actual earnings. The minimum wage can be used in computing the net
earnings.
1. In Contracts and Quasi-Contracts
a. Damages in case of Good Faith
● Natural and probable consequences of breach of obligations
● Parties have foreseen or could have reasonably foreseen at the
time the obligation was created
b. Damages in case of Bad Faith
● It is sufficient that damages may be reasonably attributed to the
non-performance of the obligation.
● Imputed Foreseeability. Those consequences which a reasonable person should
have foreseen; the test is whether a reasonable person would have foreseen the
damages that the purchaser encountered.
● Actual Foreseeability. Actual knowledge (not just imputed) of relevant facts is
necessary where the loss in question is of an unusual kind or of an unusually high
extent.

Loss of Earning Capacity

2. In Crimes and Quasi-Delicts
● Life expectancy → [2/3 x (80 - (age at the time of death))]
The resulting amount should be used as a multiplier even if the computed life a. Defendant is liable for all damages that are natural and probable
expectancy goes beyond the victim's retirement age. The presumption is that the consequences of the act complained of;
victim could have earned income even if he is beyond the retirement age. b. Not necessary that damages have been foreseen or could have been
● Net income/earnings → total of the earnings less expenses necessary for the reasonably foreseen.
creation of such earnings and less living or other incidental expenses
● Living expenses → In the absence of the specific amount to be deducted from
1. Damnum emergens / lucrum cessans [GOOGLE]
the gross income, the amount of living expenses shall be 50% of the gross
income. Examples of living expenses: transportation, clothing, toiletries ● Damnum Emergens – actual losses (e.g., amount for lands, buildings & equipment)
● Pension → Loss of earning capacity covers pension which the decedent would ○ Value of loss (Art. 2200)
have received ● Lucrum Cessans – loss of profits (e.g., loss profits from an ongoing business)
○ Profits failed to obtain (Art. 2200)
Formula for computation of loss of earning capacity
[2/3 x (80 - (age at the time of death))] x monthly earnings x 12 = GROSS EARNINGS (GE)
2. Disability
GE - Approximate Expenses (50% of GE) = Net Earnings
● Loss or impairment of earning capacity in cases of temporary or permanent
NOTE: In the absence of documentary evidence of expenses, it is reasonable to presume personal injury; e.g., Injury to the plaintiff’s business standing or commercial credit
that it is 50% of the gross income.
3. Indemnity for death
FOR NON-WORKING VICTIMS: Earning capacity may be impaired even if no actual earning ● Documentary evidence should be presented to substantiate the claim for damages
is lost in the meantime. The liability under Article 2206 is for loss -of earning capacity for loss of earning capacity

11
 ● XPNS to documentary proof in loss of earning capacity:
○ The deceased is self-employed earning less that the minimum wage under
current labor laws, and judicial notice may be taken of the fact that in the
deceased’s line of work no documentary evidence is available;
○ The deceased is employed as a daily wage worker earning less than the
minimum wage under current labor laws.
4. Interest
QUICK CREDTRANS REVIEW:
● Legal interest on damages for loans and forbearance of money is now 6% starting
July 1, 2013.
● Now if the claim for damage is other than loans and forbearance then what applies
is Art. 2209 of the Civil Code (which in hindsight does not matter anymore since it’s
the same: 6%)
Types
1. Monetary interest - compensation for the use of money.
● The legal rate at the time of perfection of the obligation will apply. It will not
be affected by a supervening change in the legal rate of interest.
● Requisites: The collection of interest in loans or forbearance of money is
allowed only when these two conditions concur:
i. There was an express stipulation for the payment of interest; and
ii. The agreement for the payment of the interest was reduced in
writing.
● Absent any of these two conditions, the money debtor cannot be made
liable for interest. Evidence must be presented to show that the parties
agreed on the payment of interest.
2. Compensatory interest - it is awarded in the concept of damages for delay in the
performance of an obligation. It is due and demandable from the time demand is
first made, whether judicial or extrajudicial.
● For compensatory interest, the legal rate of interest always applies. This
means that compensatory interest is affected by supervening changes in
legal rate of interest.
Rules in the computation of interest in the concept of actual or compensatory damage
(a) In case of loan or forbearance of money, goods, credits or judgments, the interest
due should be that which is stipulated by the parties in writing, provided that it is not
excessive and unconscionable. which may have been stipulated in writing.
● In the absence of a stipulated reckoning date, the interest shall be
computed from default, i.e., from extrajudicial or judicial demand in
accordance with Article 1169 of the Civil Code, UNTIL FULL PAYMENT,
without compounding any interest.
○ Unless compounded interest is expressly stipulated by the
parties, by law or regulation.
● Interest due on the principal amount accruing as of judicial demand shall
separately earn legal interest at the prevailing rate prescribed by the
Bangko Sentral ng Pilipinas, from the time of judicial demand until full
payment.
(b) Obligation other than a loan or forbearance of money, goods, credits or judgments
● The rate of interest on the principal amount shall be the prevailing legal
interest prescribed by the Bangko Sentral ng Pilipinas.
● It shall be computed from extrajudicial or judicial demand in accordance
with Article 1169 of the Civil Code, UNTIL FULL PAYMENT, without
compounding any interest.
○ Unless compounded interest is expressly stipulated by the
parties, by law or regulation.
● Interest due on the principal amount accruing as of judicial demand shall
separately earn legal interest at the prevailing rate prescribed by the
Bangko Sentral ng Pilipinas, from the time of judicial demand until full
payment.
(c) When the obligation, not constituting a loan or forbearance of money, goods, credits
or judgments, is breached, an interest on the amount of damages awarded may be
imposed in the discretion of the court at the prevailing legal interest prescribed by
the Bangko Sentral ng Pilipinas, pursuant to Articles 2210 and 2011 of the Civil
Code.
(d) No interest, however, shall be adjudged on unliquidated claims or damages until the
demand can be established with reasonable certainty. Accordingly, where the
amount of the claim or damages is established with reasonable certainty, the
prevailing legal interest shall begin to run from the time the claim is made
extrajudicially or judicially (Art. 1169) until full payment, 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 of the judgment of the trial court (at which time
the quantification of damages may be deemed to have been reasonably
ascertained) until full payment.
● The actual base for the computation of the interest shall, in any case, be
on the principal amount finally adjudged, without compounding any
interest unless compounded interest is expressly stipulated by law or
regulation.
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5. Attorney’s Fees (ARTICLE 2208)
ARTICLES 2208
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.
They are actual damages due to the plaintiff and not to counsel.
Plaintiff must allege the basis of his claim for attorney’s fees in the complaint. The basis
should be one of the cases under Art. 2208.
Attorney's fees are recoverable not as a matter of right. It is the import of Article 2208 that
the award of attorney's fees is an exception and that the decision must contain an express
finding of fact to bring the case within the exception and justify the grant of attorney's fees.
"Just and equitable" under paragraph 11, Article 2208, New Civil Code is not a matter of
feelings, but demonstration. The reason for the award of attorney's fees must be stated in the
text of the court's decision, otherwise, if it is stated only in the dispositive portion of the
decision, the same must be disallowed on appeal.
In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by
his client for the legal services he has rendered to the latter. The basis of this compensation
is the fact of his employment by and his agreement with the client.
In its extraordinary concept, an attorney’s fee is an indemnity for damages ordered by the
court to be paid by the losing party in litigation. The basis of this is any of the cases provided
by law where such award can be made, such as those authorized in Article 2208, Civil Code,
and is payable not to the lawyer but to the client, unless they have agreed that the award
shall pertain to the lawyer as additional compensation or as part thereof.
When attorney’s fees are recoverable
● GR: In the absence of stipulation, attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered
● XPNS:
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.
NOTES:
● An award of Attorney’s fees is correct when it falls under the grounds in Art. 2208
● However take special note of Art. 2208(2), jurisprudence has provided that there
must be bad faith in order to merit the award of attorney’s fees.
● The case of Francisco v. Co is instructive: “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.”
M/V Maria Efigenia XV, owned by Efigenia Fishing Corp, collided with
Petroparcel, owned by PNOC. Efigenia filed a case against PNOC and
Petroparcel’s Captain praying an award of:
● P692,680 for the fishing nets, equipment and cargo with
legal interest and 25% attorney’s fees
Efigenia later amended its complaint to include:
PNOC Shipping v. CA ● The boat
○ actual value of P800k, deducted by 200k due to
insurance payment, making it 600k
○ Take note of the devaluation of the Philippine peso
for actual damages
● Unrealized profits and lost business opportunity
Lower Court ruled in favor of Efigenia, awarding P6M as actual
13
damages. This was based on documentary evidence Efigenia
attached to its complaint, as well as the testimony of its general
manager and sole witness, who testified that M/V Maria Efigenia was
owned by Efigenia Fishing Corp as indicated by a certificate of
ownership. PNOC on the other hand, presented a sole witness without
documentary evidence.
W/N the award of actual damages is proven with evidentiary basis?
NO. Evidence failed to adduce the amount of damages was proper.
Actual or compensatory damages is awarded in satisfaction of or in
recompense for loss or injury sustained. There are two kinds of
actual or compensatory damages:
1. Dano Emergente - Loss of what a person already possess
2. Lucro cesante – the failure to receive as a benefit that which
would have pertained to him.
Where goods are destroyed by the wrongful act of the defendant, the
plaintiff is entitled to their value at the time of destruction. The actual
amount of loss must be proven with reasonable degree of certainty
based on competent proof and best evidence available. It must be
established with preponderance of evidence. To enable an injured
party to recover actual 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. 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, the actual damages were proven through sole testimony
of Efigenia’s general manager and certain pieces of documentary
evidence.
● The pieces of documentary evidence with respect to items
and equipment lost showed similar items and equipment
with corresponding prices 10 years after collision
○ These were not duly authenticated
○ Efigenia also did not present witnesses who
signature appear in the price quotation
● Del Rosario (general manager), even though a seasoned
owner of a fishing fleet, could not testify to this because he
was not the one who issued the price quotation – hearsay
evidence
Nominal damages are damages in name only but not in fact. The
damages recognize the existence of a technical injury. In this case,
PNOC’s vessel, Petroparcel was at fault and Efigenia definitely
sustained an injury. However, the injury was not adequately and
properly proven and the case has dragged for almost two decades.
The award of P2 million in favor of Maria Efigenia Corp is in order.
NOTES:
Atty. Go: What kind of evidence are you allowed to present in order
to merit award of actual damages?
● A: Best evidence. Which is determined by Rule 130 of the
Rules of Court which provides the Best Evidence Rule.
Series of 2013.
SEC. 1 - The rate of interest for the loan or forbearance of any money,
goods or credit and the rate allowed in judgments, in the absence of
Bangko Sentral ng an express contract as to such rate of interest, shall be 6% per annum.
Pilipinas Resolution
No. 799
Basically its the resolution which lowered the interest rate (in the
absence of stipulation) in loan contracts from 12 to 6%. DAZZIT!
Effectivity Date: July 1, 2013
[CASE 1] - Upon the death of Pastora Baetiong, Co filed a complaint for
accion publiciana against the heirs of Baetiong including Editha. This
case was settled through a Compromise Agreement wherein the
parties acknowledged that the heirs of Baetiong are the owners of the
property, however the property would be leased to the Cos. The
contract of lease would subsist for 15 years.
[CASE 2] - Five years later, heirs of Baetiong filed a motion, alleging
that Co occupied a larger portion than agreed upon. They prayed that
a commission be constituted for the proper enforcement of the
Agreement. RTC granted but CA reversed. It held that the constitution
of a commission for the purpose of delineating the bounds of the
Francisco v. Co
leased portion would serve no purpose because the compromise
rendered in the first case was finally terminated and executed. It also
held that the heirs were guilty of laches for remaining silent for 5
years.
[CASE 3] - Four years later, Editha, one of the heirs, filed a complaint
for forcible entry against the Co’s, alleging she owned the place and
Co’s, through their agent, started fencing it. Co answered that it was
covered by the compromise agreement and it was barred by res
judicata. MeTC ruled in favor of Editha; CA reversed stating it was
barred by res judicata and there was malicious prosecution
● Moral damages – P30k
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 ● Exemplary damages – P20k
● Attorney’s fees – P20k
Whether the case was barred by res judicata? Yes, because Editha
failed to show her property was not covered by the contract of lease.
Whether the award of moral damages, exemplary damages and
attorney’s fees were proper? NO.
Moral Damages – No
● In order to be entitled to moral damages, bad faith must be
established. Bad faith does not connote bad judgment or
negligence but it imports dishonest purpose or moral
obliquity and conscious doing of wrong. It is established by
clear and convincing evidence.
● In this case, CA did not conduct the mandate of careful
examination of evidence and nothing in the record
establishes this right.
Exemplary damages – No
● The plaintiff must show he is entitled to moral, temperate or
compensatory damages before the court may consider the
question of exemplary damages. It must be shown that the
party acted in a wanton, oppressive or malevolent manner. It
is allowed only in addition to moral damages. In this case,
there is no moral damages. The defendant was unable to
establish bad faith, or that the part acted in a wanton,
oppressive or malevolent manner.
Attorney’s Fees – No [I think most impt one in this topic]
● Attorney’s fees may be awarded if the defendant’s act or
omission compelled the plaintiff to litigate with third persons
or to incur expenses to protect interest. It is not enough the
party was compelled and that he incurred expenses.
● The mere fact the petitioners were constrained to litigate
does not ipso facto entitle them attorney’s fees.
● 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 award of attorney's fees must be deleted where the
award of moral and exemplary damages are eliminated.
○ Eh diba no moral/exemplary damages here so duh
no atty fees either
Marikina Autoline v. A bus driven by Suelto, owned by Marikina Auto, suddenly swerved to
People the right and struck the terrace of Valdellon’s apartment. Valdellon
requested the City Engineer to inspect the damage, who
recommended to demolish the terrace. Valdellon hired Engineer Regal
who estimated the cost of repairs at P171,088.46. Valdellon sent a
letter to Marikina Auto and Suelto demanding P148,440 for the repairs
but they offered P30k as settlement.
Valdellon refused and filed a criminal complaint for reckless
imprudence resulting in damage to property against Suleto and a
separate civil complaint against Suelto and Marikina Auto. The RTC
conducted a joint trial for these two cases.
During the examination, Valdellon offered testimonies of Pontiveros,
the engineer, and herself to prove the amount of actual damages. The
RTC ruled that Suelto was liable of reckless imprudence, and that
Marikina Auto and Suelto are solidarily liable to pay
● P150k – as actual damages / reasonable compensation for
damaged apartment
● P20k – compensatory and exemplary damages
● P20k – attorney’s fees
CA affirmed but reduced actual damages to P100k.
Whether prosecution failed to adduce evidence to prove Valdellon
suffered actual damages in the amount of P100k? Yes.
Whether the prosecution failed to prove the crime charged? No,
Suelto’s defense of the emergency doctrine was not proven.
Actual Damages – P50k
Actual damages include all the natural and probable consequences of
the act or omission, classified as:
1. Dano emergente – for loss of what person possess
2. Lucro cesante – failure to receive benefit
Actual damages are not presumed and the claimant must prove the
actual amount at the time of destruction with a reasonable degree of
certainty, proved by competent proof and best evidence obtainable.
Prosecution failed to prove damages.
The only evidence adduced Valdellon to prove actual damages were
the summary computation of damage made by the engineer
amounting to P171k and the receipt issued by the BB Construction and
Steel Fabricator for P35k representing cost for carpentry works,
masonry, welding, and electrical works. However, they failed to
present the engineer to testify on his estimation. Prosecution was also
15
not able to determine whether the necessary repairs were caused by
Valdellon’s negligence or wear and tear of the house. Furthermore,
Marikina Auto and Suelto showed evidence that the damage to the
terrace was only P55k .
Exemplary Damages – P20k
NOTES:
When a claimant is asserting damages, he must be able to prove the
actual amount of the loss with a reasonable certainty and this must be
premised upon a competent proof and the best evidence obtained.
There must be specific facts which must be deemed as the basis for
measuring how much actual/compensatory damages must be borne
upon the person who caused the damage. In this case, he failed to
produce adequate evidence and he also failed to ask the engineer
who made the quote to speak as a witness and validate the quote that
he made for him. Furthermore, he merely provided an estimated
amount and not the actual amount which he suffered as damages.
Thus, the SC ruled that he is entitled to damages less than what he is
claiming for.
It’s not clear and convincing evidence but merely a reasonable degree
of certainty and its premised on the best available evidence or best
evidence available. Same with the case of PNOC, when you are
claiming damages, it must be in the point of time of destruction. Not at
the time that you filed the case. When you’re asking for damages at
the point of destruction, at the time you incurred the loss or you
sustained the injuries, for example an item, it simply means that what
you have paid in the market for the same goods. That’s how you
measure the damages.
Proving entitlement is different because you have to prove all the
elements of quasi- delict. Meaning, that there is an injury that you
sustained by way of the act of the defendant and there is a causal
relation. That is the first step in determining BUT determining the
amount is the second step.
When you determine actual/compensatory damages, it is a two-step
process.
1. The fact of the loss or the injury sustained;
2. The actual amount.
If you failed to prove the amount but you were able to prove the first
step, the court will simply grant temperate damages.
Rosemarie was a housemaid in the residence of Pilar Junsay. There
was a robbery incident in the house, so Rosemarie was charged with
the crime of Robbery. She was however acquitted by the RTC due to
the maltreatment of the investigating officers for her to confess. RTC
held it was not only that it was insufficient to prove guilt but it was
insufficient to establish a case. Rosemarie filed a complaint for
damages against the members of the police force for malicious
prosecution, but RTC dismissed, saying that Pilar had no malice or bad
faith in instituting the criminal case. CA affirmed.
Whether the filing of the criminal case for Robbery against
Rosemarie constituted malicious prosecution? No, it was with
probable cause and not impelled by legal malice. Pilar had sufficient
ground to believe she had a cause of action against Rosemarie.
Whether Rosemarie entitled for damage? No, because there is no
malicious prosecution.
Recovery of damages based on malicious prosecution, it must be
established that the prosecution was impelled by legal malice. The
mere act of submitting a case to the authorities for prosecution does
not make one liable for malicious prosecution because the law did not
Magbanua v. Junsay mean to impose a penalty on the right to litigate. There was no proof
of a sinister design to vex or humiliate Rosemarie.
Requisites of malicious prosecution
1. Prosecution occurred and defendant was himself the
prosecutor or the one who institgage the commencement
2. Criminal action ended with acquittal
3. No probable cause – Rosemarie admitted to participation
4. Legal malice – no proof
NOTES:
● There is no malicious prosecution because she has probable
cause that a crime has been committed and that the maid is
probably guilty thereof due to her admission. Damages
because of that could not be recovered because there was
no bad faith/ill intent.
● This could be a case of damnum absque injuria. The
defendant in this case had a right, that was not exercised in
an unjust manner.
● Does this preclude all types of damage? No, the Court can
actually award damages in cases of damnum absque injuria.
However, nominal damages cannot be paid. (See discussions
on Nominal Damages for more explanations)
16
 Nacar filed a complaint for constructive dismissal with the Labor
Arbiter against Gallery Flames and Bordey. Labor Arbiter awarded
Nacar P158,919 for backwages and separation pay. NLRC, CA and SC
affirmed. Nacar filed a motion before labor arbiter for recomputation
alleging backwages should be computed from the time of illegal
dismissal (January 24, 1997) until the time the decision of the SC
became final (May 27, 2002, with interest. LA denied and said only up
to the decision of LA (Oct. 15, 1998) because no appeal was made;
hence, as to him, that decision became final and executory. CA
affirmed.
Is Nacar entitled legal interest? If so until when and what are the
rates? – YES. FROM THE TIME OF THE COMPLAINT TO THE FINAL
AWARD GIVEN BY THE COURT. HOWEVER THE RATES ARE SUBJECT
TO TWO DIFFERENT PERIODS. 6% STARTING FROM JULY 1, 2013,
12% FOR THE PERIOD BEFORE THE BSP MEMO.
Whether the guidelines laid down in the case of Easter apply to this
case? Yes, but modified by BSP-MB Circular No. 799
The ruling of the SC in Eastern Shipping Lines vs. CA was modified by
the promulgation of the BSP Monetary Board Resolution No. 796 on
NACAR v. Gallery July 1, 2013. It states that when an obligation, regardless of its source,
Frames i.e., law, contracts, quasi- contracts, delicts or quasi-delicts is
breached, the contravenor can be held liable for damages. "Damages"
of the Civil Code govern in determining the measure of recoverable
damages.
1. Breach of obligation – contravenor can be held liable for
actual and compensatory damages, rate of interest and
accrual thereof
2. Breach of obligation and it consists the payment of a sum of
money (loan or forbearance)
a. Compensatory Interest due is what is stipulated in
writing
b. Absence of stipulation – 6% per annum computed
from default
c. Monetary interest due shall earn legal interest from
judicial demand
3. Breach of obligation not constituting a loan or forbearance of
money – interest on amount of damages may be imposed at
the discretion of court at 6% per annum
a. No interest on unliquidated claims or damages
except when or until the demand can be
People v. Jugueta
established with reasonable certainty
b. Shall run from judicial or extrajudicial claim but
when it cannot be determined, run from the date of
judgment of the court is made
c. Actual base of computation of legal interest –
amount final adjudged
4. When judgment becomes final and executory – rate is 6%
per annum from finality until Satisfaction
Whether Nacar’s back wages should be computed from the time he
was illegally dismissed up to finality of SC’s decision? Yes
Whether Nacar is entitled to legal interest? Yes
The said resolution lowered the legal rate of interest from 12% to 6%.
As such, the interest of 12% per annum shall be applicable if Gallery
Frames fails to pay Nacar from May 27, 2002 to June 30, 2013, and
the interest rate of 6% per annum shall be applicable if Gallery Frames
fails to pay Nacar from July 1, 2013 onwards.
This guideline shall be applied prospectively
1. If Gallery fails to pay Nacar from May 27, 2002 to June 30,
2013 – 12% interest rate
2. If Gallery fails to pay Nacar from July 1, 2013 onwards – 6%
interest rate
NOTES:
Nacar was awarded backwages and separation pay but Gallery
Frames appealed.
The case of Nacar will show you how the BSP Resolution will be
applied by the SC. Prior to 2013, any judgment by the Court which
becomes final and executory is in the nature of forbearance of money.
Forbearance of money is you set aside, or earmark money already.
Since it partakes of the nature of forbearance of money, in the past, it
should earn 12% until you finally pay. With the BSP Resolution in July 1
2013, such date onwards, regardless of the nature of the obligation,
such as loan or forbearance of money or any other obligation, it will
simply earn 6%. No more confusion going forward.
Remember it only talks about legal interest. If the parties talk about a
stipulated interest rate, that will govern, UNLESS it will be struck down
or mitigated by the Courts for being unconscionable.
Jugueta was the brother- in-law of Norberto and Jugueta got mad at
Norberto because Norberto filed a case against 2 of Jugueta’s
17
brothers since they were molesting Norberto’s daughter. So Jugueta,
along with 2 other men, went to the hut of Norberto and fired shots,
resulting to the death of 2 of his daughters. Jugueta was convicted for
double murder and multiple attempted murder and was ordered an
indemnity of
- P50k for the death of Mary Grace
- P50k for the death of Claudine
- Actual damages – P16,150
CA affirmed
Whether Jugueta’s arguments have merit? No, he was proven guilty
beyond reasonable doubt. No double jeopardy with Estores and San
Miguel because their case was dismissed before they were arraigned.
Whether award of damages was correct? No
The SC modified the damages awarded by the lower courts. Generally
in criminal cases where the imposable penalty is reclusion perpetua to
death, there are three kinds of damages:
1. Civil indemnity
2. Moral damages
3. Exemplary damages
4. *Actual or Temperate damages may be awarded in some
instance
It is apparent in Art. 2206 that the law only imposes a minimum
amount for awards of civil indemnity, which is Php 3,000.00. The law
did not provide for a ceiling. Although the minimum amount can’t be
changed, increasing the amount awarded as civil indemnity can be
validly modified and increased when the present circumstance
warrants it. As a result of RA 9346 (Act Prohibiting Imposition of Death
Penalty), the death penalty can no longer be imposed. Instead, they
have to impose reclusion perpetua. Despite this, the principal
consideration for the award of damages is the penalty provided by law
or imposable for the offense because of its heinousness, not the
public penalty actually imposed on the offender.
Civil indemnity ex delicto – equivalent to actual or compensatory
damages in civil law, based on Art. 100 of the RPC. – P100k each 2
(CC1) and P50k each 4 (CC2)
● May be increased based on Art. 2206 (P3k is only a
minimum)
● In a crime, where a person dies, in addition to imprisonment,
accused is ordered to pay as restitution
Moral damages – P100k each 2 (CC1) and P50k each 4 (CC2)
● It is compensatory in nature. These damages must be
understood to be in the concept of grants, not punitive or
corrective. It is the restoration, within limits possible, the
spiritual status.
● Although incapable of exactness and no proof of pecuniary
loss, it is imperative that
1. Injury must have been suffered by claimant
2. Such injury sprung from any cases in Art. 2219 and
2220
● In this case, there were 2 counts of murder and 4 counts of
attempted murder.
Exemplary damages – P100k each 2 (CC1), P50k each 4 (CC2)
● Intended to serve as deterrent to serious wrong doings and
as vindication of undue suffering and wanton invasion of
rights or punishment
● Caused by highly reprehensible conduct of the defendant
associated with willfulness, wantoness, malice, gross
negligence, recklessness, oppression, insult or fraud or gross
fraud that intensifies injury
Whether due to presence of ordinary or qualifying aggravating
circumstances, a person can be awarded exemplary damages. -
Does not need to be mentioned in the complaint or information to be
awarded exemplary damages
In this case, there was an aggravating circumstance of dwelling.
Temperate Damages – P50k
● In homicide or murder cases, P25k is proper when no
evidence of burial and funeral expenses.
● Temperate damages may be awarded if there is pecuniary
loss but exact amount cannot be proved.
● The court awarded P50k.
○ The increase was done because the crime was
aggravated by dwelling, and the murders
committed were atrocious since it was done against
innocent, defenseless minors.
○ It is befitting to show not only the Court’s but all of
society’s outrage over such crimes and wastage of
lives.
NOTES:
This case guides judges as to the amounts to be imposed on certain
crimes. Explain how to characterize aggravating circumstances and
18
what are the civil indemnities that may be provided to the heir or
victim of a crime.
The discussion talked about the three (3) damages awarded in case
the imposable penalty is reclusion perpetua to death.
● Civil Indemnity
○ Indemnity from criminal laws based on Art. 100
which states that every person criminally liable is
civilly liable
○ Awarded as compensation to restore the victim
back to how he was before the injury
● Moral Damages
○ Compensatory in nature, not considered as
corrective or punitive in nature.
● Exemplary Damages
○ Granted as punitive or vindictive damages.
○ When there is a presence of an aggravating
circumstance, even if it was not alleged in the
Information but was proven during trial, it will entitle
the victim to exemplary damages. It can also be
awarded when there was outrageous conduct on
the part of the offender.
How many aggravating circumstances are there? 21. In those 21, are
they automatically aggravating or some can be considered mitigating
depending on the circumstances? Or are what the circumstances can
be considered mitigating, exempting or aggravating?
● Those are the alternative circumstances like intoxication or
education.
It can either be mitigating or aggravating?
Atty. Erds Go
In People v. Agueta, the Court wants to make a distinction. Don't be
confused. When you're reading that case in your criminal law aspect,
the fact or absence of aggravating circumstances being alleged in the
complaint-affidavit and eventually in the information, even if there are
aggravating circumstances proved during trial, it cannot be
considered in the context of criminal law in the imposition of the
penalty because of the constitutional provision which requires the
complainant or the State as a prosecutor to inform the accused the
nature and cause of accusation against him. Aggravating
circumstances will serve to increase the penalty so if that is not clearly
alleged in the information, that cannot be considered.
But for purposes of Civil Liability arising from the crime even if it's not
alleged in the information but if it's proven in the trial, it can be
considered in the imposition of damages. CIVIL LIABILITY. Do not
confuse the two concepts for purposes of torts and damages. The rule
is still all aggravating circumstances must be alleged for criminal law
because of the constitutional provision requiring the complainant or
the State to inform the accused the nature and cause of accusation
against him. But if you're only talking about ability or entitlement to
civil liability arising from the crime, if it's proved during trial even if it's
not alleged in the information, damages may still be awarded.
Isagani VILLANUEVA maintained accounts with Citytrust BANK. He
requisitioned a check book because it ran out. While filling up the
details, he left the account number blank because he can’t remember
the number, and a blank clerk volunteered to fill it for him.
The blank clerk filled it with the wrong number (but same name).
Isagani then issued a check to a creditor but it later bounced due to
insufficiency of funds – but this was later rectified by the bank by
issuing a manager’s check. Isagani is now claiming for damages.
He asked the bank for actual damages in the form of MISSED
TRADING PROFITS. He also asked for moral damages due to his
losing of face to his peers. Bank denied.
Whether Villanueva is entitled to compensatory damages, moral
damages and attorney’s fees? No.
City Trust v. No actual damages: ​cannot be presumed but must be duly proved
Villanueva with reasonable certainty. 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.
No moral damages: ​requisites for the award of moral damages, viz:
1. there must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant;
2. there must be a culpable act or omission factually
established;
3. the wrongful act or omission of the defendant is 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.
It may be true that Villanueva suffered some, but it could not have
been so great, considering that the Bank immediately rectified the
19
 situation and provided satisfactory explanation.
No Atty’s fee: ​The general rule is that attorney’s fees cannot be
recovered as part of damages because of the policy that no premium
should be placed on the right to litigate. Atty’s 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.
This is a case of damnum absque injuria.
NOTES:
There are requisites for the award of moral damages:
1. There must be an injury suffered by the person claiming it
2. There must be a culpable act or omission
3. The wrongful act or omission must be the proximate cause of
the injury
4. The amount of damages must be predicated on any of the
cases listed under Art. 2219
In this case, Villanueva suffered inconvenience as a result of the
dishonor. However, the inconvenience he suffered was not so grave
or intolerable as to warrant an award of moral damages. The bank was
also able to immediately remedy the situation by issuing a manager’s
check and by personally explaining the reason for the dishonor.
Spouses Ong (Francia and Renato) were passengers of Inland Bus. It
was bumped in the rear by a Philtranco bus. The spouses were
injured. Francia's arm was put in a cast for a period of 8 months.
Spouses filed an action for damages against the companies for
damages suffered due to their injuries on December 22, 1988.
Spouses allege that Francia could not operate the sari-sari store due
to her injuries, costing them a daily income of 200php. Also, Renato
could not work as an overseas contract worker as a pipe welder,
losing an income of 690USD.
Spouses Ong v. CA
[REPEAT}
They filed an action for damages against Inland and Philtranco. RTC
held Philtranco liable under quasi delict.
1. P10k – actual damages for medical and miscellaneous
expenses;
2. P50k – compensatory damages for the diminution of the use
of Francia’s right arm;
3. P48k – unrealized profit or income;
4. P50k – moral damages;
5. 25% - contingent attorney’s fees
However, on appeal, the CA resolved that Philtrancos liability for
damages could not be predicated upon the Police Report which had
not been formally offered in evidence. It found that Sps. Ong was able
to establish that Inland committed a breach of contract of carriage.
The award for unearned income was disallowed and the amount of
moral damages was reduced to P30,000, since it found that Francia’s
testimony was self-serving.
Whether the reduction in the amount of damages was proper? Yes.
[Actual damages] There was an agreement to submit the case for
decision based on the pleadings but it does not necessary imply that
Sps. Ong are entitled to award of damages. The fundamental principle
on damages is that one injured by breach or quasi-delict shall have a
fair and just compensation commensurate with the loss as proven,
except as provided by law or stipulation. Actual damages is one that
will put the injured party in the position in which he was before injury.
Damages cannot be presumed and must be proven. In this case, there
is lack of basis.
● From documentary evidence, Sps. Ong jointly spent P3,977
and did not present evidence that it paid further.
● Philtranco went to the hospital to get the receipts and paid
● The Court however made the actual damages P10k due to
miscellaneous expenses such as
● transport and food
[Moral Damages] Physical injury is not a pecuniary loss because it is
not susceptible to exact monetary examination. According to
jurisprudence, the usual practice is to award moral damages.
Francia - 30-50k reasonable.
Renatio - 30k as moral damages
[Unrealized Income] Although actual damages include
indemnification for profits the injured party failed to obtain (lucro
cesans or lucrum cesans), it requires the person to produce the best
evidence. In this case, the assertion of Francia that she earned
P200/day and claims it for the 8 months her arm in a plaster is not the
best evidence.
[Atty’s Fees] The award is based on judicial discretion. In this case,
there was no abuse and in fact, CA was generous because (1) The
case was not exceptionally difficult. (2) He was not required to exert
Herculean efforts. (3) His handling of the case was sorely inadequate
as shown by his failure to produce evidence.
20
 Culpable Act or Omission: Wrong intubation by Dr. Gutierrez
Damage: Comatose condition of Erlinda
Causal Relation: Doctor witness: endotracheal tube entered
esophagus causing delay in oxygen. Second intubation was not
successful because bluish discoloration was observed. Assuming
successful, Erlinda brain dead.
______________________________________________________
Because of occasional complaints of discomfort due to pains which
she thinks are being caused by gall bladder stones, Erlina Ramos, an
otherwise a robust woman, with her husband, met with Dr. Hosaka, for
a cholecystectomy. She was admitted into Delos Santos Medical
Center. On the day of the operation, Dr. Hosaka arrived 3-hours late.
When he arrived, they abruptly Started.
Dean Herminda, Erlina’s sister-in-law, was present in the operation
room for support. She observed that while Dr. Gutierrez, the
anesthesiologist, was intubating the patient, the patient’s nailbred
became bluish, signaling decrease of bloody supply in the brain. Dr.
Gutierrez remarked that something is wrong with the intubation and
that the patient’s stomach is growing. Dr. Hosaka had to call another
anesthesiologist. Still with bluish nail beds, the patient was placed in a
trendelenburg position. At 3PM that day, the patient was admitted to
Ramos v. CA
the ICU. She stayed there for a month, and then was discharged
from the hospital after 4 months. However, since that day, the
patient Erlinada, has been in comatose. She cannot move, see, hear
and is living on mechanical means. She was diagnosed to be suffering
from diffuse cerebral parenchymal damage.
The Ramos family filed a civil case for damages against the hospital,
Dr. Hosaka, and Dr. Gutierrez. As a defense, they presented the
testimony of Dr. Jamora who said the cause of brain damage was
Erlinda’s allergic reaction to the anesthetic agent. RTC held them all
liable, but the CA reversed.
ISSUE: Amount of damages to be awarded.
Actual Damages (1.3M): ​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.
Temperate Damages (1.5M): ​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. ​This is because the family is still
incurring expenses due to the home-based nursing care of the
patient. (XPN TO GR)
Other damages: ​2M Moral damages; 100k exemplary damages; 100k
atty’s fee.
Court allowed temperate damages because of its special
circumstances.
NOTES:
As a general rule, can you award temperate damages in addition to
actual damages? Why not?
● No. Because in terms of actual damages, this is awarded
when there the damages are capable of pecuniary
estimation, while in temperate damages, this is awarded
when there is damages but there is no pecuniary estimation.
What’s the more primordial reason?
● Its to compensate the pecuniary loss suffered by the plaintiff.
What about in temperate damages? Do they serve the same purpose?
● Since both actual damages and temperate damages serve
the same purpose, they cannot both be awarded if the cause
is based on one civil act.
But in the case of Ramos, by way of exception, how did the court
explain the awarding of both temperate and actual damage?
● The Court explained that the rules on actual and temperate
damages doesn’t consider this kind of case, in a sense that
the rules presumes that the injury suffered by the plaintiff has
already been completed, meaning it can already be
estimated or liquidated. But in this case, since the injury
suffered by the plaintiff has not yet lapsed, because she was
still under comatose, then temperate damages can be
awarded in order to prevent the plaintiffs or the family of
Ramos to keep adjusting the compensatory damages initially
21
 awarded by the Court. The Court also said that the
temperate damages was awarded for the future care and
optimal care of Erlinda Ramos, because when the case was
settled, she was still comatose.
Atty. Go: But in the resolution the, the Court did away with the
temperate damages, because of the supervening event of the death
of Erlinda Ramos, so its was just the actual damages that was
awarded.
Remember, when we are talking about respirative(?) care or a patient
who is comatose or in critical care, it’s not the amount that the family
can afford, but the amount that is actually needed by the patient.
2 buses are racing, then 1 bus hit the jeep that is parked due to flat
tire. Due to the impact, the bus ended up swerving and hitting the car
of Morales. Industrial then paid Morales due to the damage on the car.
Industrial then filed a case of damages against Bondad ( jeepney
driver) and the bus. Bondad filed a counterclaim for damages since
Industrial forced him to litigate. ​SC: Bondad is entitled to damages.
W/N entitled to damages?
Atty’s fee: Bondads were compelled to litigate an unfounded suit
because of Industrial’s negligence and lack of prudence in not
verifying the facts before filing this action. It 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 it is unjustified because Industrial knew that Bondad was not the
Industrial Insurance
Co. v. Bondad
proximate or even the remote cause of the accident)
Moral damages: ​It is not enough that the claimant alleges mental
Pestano v. Spouses
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 BF or ill motive. ​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.
Exemplary damages: ​Industrials conduct needlessly dragged
innocent bystanders into an unfounded litigation
ERDS; If there is no police report, will the decision be the same? ​No. If
the police report is still the only real hard evidence that the proximate
cause was the bus then if that was removed, there would be no bad
faith on the part of the insurance company since the ruling of the
Court pointed out that it was the police report which made the
insurance company in bad faith because they could have easily
referred to such police investigation report. If that was not the case,
then it would not be bad faith.
NOTES:
Remember the difference between appealing a criminal and civil
case?
● When appealing a civil case, its limited to the assignment of
errors or the issues you bring up on appeal
● As opposed to a criminal case, the entire case is opened
Thats also the reason why in civil procedure, when youre talking
about damages, except for liquidated damages, it cannot be the
subject of execution pending appeal because the amounts will still be
determined by the court, and only the amounts that are certain and
fixed can be subject of an execution
A bus driven by Pestano, owned by Metro Cebu tried to overtake but
ended up hitting the motorcycle rode by Sumayang and Romagos
causing their deaths. Heirs of Sumayang file criminal and civil charges
against Pestano, Metro Cebu and Perla Compania as insurer.
RTC ruled in favor of Heirs of Sumayang alleging Pestano was
negligent at driving for driving at dangerous speed coming upon a
junction and Metro Cebu directly and primarily liable as employer
because it did not observe the diligence of a good father to prevent
the damage, nor in the supervision of its employees and maintenance
of vehicles.
CA affirmed and raised the indemnity of death of the victim to P50k
Sumayang
from P30k.
W/N CA properly increased the award for life indemnity YES
W/N CA properly based the award of loss of earning capacity on the
life expectancy of deceased (Sumayang) instead of his heirs (as
beneficiary). YES
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.
The Court has consistently computed the loss of earning capacity
22
 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 victim’s work, lifestyle, age and state of
health prior to the accident. The second refers to the victim’s 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.
Computation: 2/3 (80-age of the deceased) (gross annual income –
necessary living expenses)
● If necessary living expenses is not mentioned: 2/3(80-age of
deceased) (50%)
● (80-age of deceased) – pertains to life expectancy
NOTES:
When you talk about loss of earning capacity, it is loss of earning
capacity of the victim and NOT of the heirs. Some cases they peg it at
the earning capacity of the heirs and it should not be that way.
Net earning capacity should be equal if you don’t know the life
expectancy. Life expectancy is (2⁄3 x 80 - age at the time of death) x
gross annual income. If you cannot find the gross annual income,
normally it’s just 50% or gross annual income - reasonable expenses.
Look at the case of Lambert v. Heirs of Castillon for the formula.
Is it still 100,000 for the civil indemnity?
● It depends. Sometimes the court increases it depending on
the aggravating circumstances but it depends on the factual
circumstances.
Ray drove a motorcycle with Sergio as the backrider. After eating
supper at Honas Restaurant and imbibing a bottle of beer, they
traversed the highway towards Tambo at a high speed. Upon reaching
Brgy. Sto. Rosario, they figured in an accident with a Tamaraw jeepney,
Lambert v. Heirs of owned by Nelen Lambert and driven by Reynaldo Gamot, which was
Castillon traveling on the same direction but made a sudden left turn. The
incident resulted in the instantaneous death of Ray and injuries to
Sergio. The heirs of Ray Castillon, thus filed an action for damages.
What is the proximate cause of the death of Castillon? - The
sudden left turn of the jeepney owned by the Lamberts.
The theory that drivers of vehicles who bump the rear of
another vehicle are presumed to be the cause of the accident
is, as in this case, sufficiently contradicted by evidence, which
is the sudden left turn made by Reynaldo which proximately
caused the collision. The abrupt and sudden left turn by
Reynaldo, without first establishing his right of way, was the
proximate cause of the mishap which claimed the life of Ray
and injured Sergio. While the SC agrees that Ray was likewise
guilty of contributory negligence as defined under Article
21799 of the Civil Code, we find it equitable to increase the
ratio of apportionment of damages on account of the victims
negligence.
In the case at bar, it was established that Ray, at the time of the
mishap:
a.) was driving the motorcycle at a high speed;
b.) was tailgating the Tamaraw jeepney;
c.) has imbibed one or two bottles of beer; and
d.) was not wearing a protective helmet.
Loss of earning capacity: There are a lot of cases which appear to be
flip flopping. In the past, there are cases decided by the Supreme
Court which limited loss of earning capacity to those who are actually
earning at that particular point in time when they got injured or when
they died. But in the recent years, the Court had actually granted loss
of earning capacity even for minors without work because of the
language of the Civil Code which pertains to capacity. It doesn’t mean
earning capability. Earning capacity simply means that that minor,
actually when the person graduates, will actually earn and find gainful
employment.
There are a lot of conflicting opinions on the matter because in some
cases, the dissenting would say that loss of earning capacity partake
the nature of actual compensatory damages. So it cannot be based on
speculation. And if it’s a minor without work, then you’re speculating.
But there are cases actually decided already by the Supreme Court
which state that even if you’re a minor, as long as a minor about to
graduate, or a graduating student, a student who has actually
graduated, and he/she does not have any disability and can actually
have that capacity to earn, sometime the Court will grant that loss of
earning capacity.
One more thing that I want to point out: Damages for death of
23
unborn child can sometimes be granted by your court when you ask
for damages based on crime. So, for let’s say, based on quasi-delict.
Let’s say you’re a pregnant bystander, got injured or was hit and run.
You survived but the unborn child passed away. Damages can be
awarded in such a situation.

Student: About the P100,000. So, if ever there are cases when
someone dies, P100,000 is the minimum?
● Yun yung ginagawa ng Court now. Because in the past, ang
gulo gulo di ba. They follow the Civil Code which is what?
P3,000. Yung iba P30,000. Yung iba P50,000. So People v.
Jugueta was an attempt actually on the then Chief Justice
Peralta to try to streamline as a guide for judges in awarding
civil indemnity. So parang nagiging minimum yung P100,000.

Student: With regard to attorney’s fees, I got confused with the

Supreme Court at times. Is the basic rule really to determine if there is
bad faith or good faith? Because sometimes they say that the person
was compelled to litigate. But sometimes they say that you cannot put
a premium on litigating.
● To be candid, flip flopping talaga yung Supreme Court. There
is no concrete guideline. So sometimes, they just say look at
the facts if there is bad faith or good faith. In the case of
Bondad. Clearly, they have no cause of action and they still
filed. So clearly, may bad faith dun. So attorney’s fees should
be awarded. In cases where... the case of the robbery with a
helper... di ba, walang bad faith dun eh. Because you
honestly believed in your cause. There was some sort of
confession. So in that case, nagiging parameter yung good
faith or bad faith. But it’s still very facts driven. But you’re
right. The Supreme Court can tend to be confusing. Kasi di
ba you don’t give a premium to litigate, but at the same time
they award attorney’s fees because you were actually
compelled to litigate to protect your interests. So in the
absence of any concrete guideline, sometimes they really
just use the facts and check if there’s good faith or bad faith.

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