Torts Notes6 on Damages

7/30/2019 Torts Notes6 on Damages

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NOTES FOR DAMAGES

1. CONCEPT OF DAMAGES

Whenever a right is transgressed, every manner of loss or injury iscompensated for in one way or another.

Damage has been defined as “the detriment, injury or loss which areoccasioned by reason of fault of another in the property or person.” (Escriche,Diccionario Razonado, cited in Aquino). It is also “the pecuniarycompensation, recompense or satisfaction for the injury sustained, or asotherwise expressed, the pecuniary consequence for which the law imposes

due to the breach by the defendant of some duty or violation of some right.”(Pp vs. Ballesteros).

Basis:

Damages as and by way of compensation is based, not only on what theplaintiff claims to be just, but also on what may be deemed as conscionable,considering the situation of the defendant and the evidence on hand. In theultimate analysis, it is the sound discretion of the court that will decide what ismutually fair.

In the practical application, a claim for damages will not arise until such timeas the plaintiff files a case in court (whether as a main case or ancilliary issuethereof). Hence, in order that he may recover damages, the plaintiff mustallege and prove that he suffered injury or loss on account of the wrongful or negligent act or omission of the defendant.

2. PURPOSE

Damages are awarded to compensate the plaintiff for the loss or injury that hesuffered, not to enrich him, and not to impose a penalty on the wrongdoer.

Hence, there can be no liability if there is no injury or loss. (Damnum absqueinjuria)

3. DAMAGE DISTINGUISHED FROM INJURY

• Damage refers to the amount of money awarded by the court tocompensate for the loss or injury suffered.

• Injury refers to the legal wrong to be redressed. It does not mean that aperson is always liable in each and every case where there existsdamage. In some cases, there is no liability even if there is damage,because there was no injury (damnum absque injuria).

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4. KINDS OF DAMAGES

Memory aid : MANTLE + Others under Special Laws

M-oral damages (Art. 2217)

A-ctual or compensatory damages (Art. 2199)

N-ominal damages (Art. 2221)

T-emperate or moderate damages (Art. 2224)

L-iquidated damages (Art. 2226)

E-xemplary or corrective damages (Art. 2229)+ Others under Special Law (Art. 2196)

B. ACTUAL OR COMPENSATORY DAMAGES

1. WHAT ARE ACTUAL OR COMPENSATORY DAMAGES?

They are those which can be recovered because of losses suffered (dañoemergente) or of profits which were not realized (lucro cesante).

2. WHAT IS NECESSARY IN ORDER TO RECOVER ACTUAL DAMAGES

2.1A complaint should be filed and actual damages should be pleadedtherein.

2.2As a rule, actual damages must be proved except as provided in Article2216 which provides as follows:

“ART. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplarydamages may be adjudicated. The assessment of suchdamages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case.”

3. ACTUAL DAMAGES ARE NOT SUBJECT TO SPECULATION

The damages claimed must not be speculative and should be based onevidence given and not on the personal knowledge of the judge. In other words, there should be actual proof that damages had been suffered.

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4. AWARD OF ACTUAL OR COMPENSATORY DAMAGES BARS AWARDOF NOMINAL DAMAGES AND EXEMPLARY DAMAGES

The reason for this is because the award of actual and exemplary damagesis by itself a judicial recognition that the plaintiffs right has been violated. Assuch, further award of nominal damages is unnecessary and improper.

Award of nominal damages is merely for the vindication of right that hasbeen violated, not indemnification of the loss suffered.

5. SIMPLIFICATION OF THE PERTINENT ARTICLES OF THE CIVIL CODEON ACTUAL OR COMPENSATORY DAMAGES

5.1 As to proof required:

“ART. 2199. Except as provided by law or by stipulation, one is entitled

to an adequate compensation only for such pecuniary losssuffered by him as he has duly proved. Such compensation isreferred to as actual or compensatory damages.”

Burden of proof is on the party who claims the damages. Note that thismust be proved with a reasonable degree of certainty, premised uponcompetent proof of best evidence obtainable of the actual amountsthereof.

The Court cannot rely on mere speculations, conjectures, surmises or guesswork as to the fact or amount of damages. It cannot also rely onhearsay or uncorroborated testimonies.

5.2 What comprises actual losses:

“ART. 2200. Indemnification for damages shall comprehend not only thevalue of the loss suffered (damnum emergente), but also of the

profits which the obligee failed to obtain. (lucro cesante)” (1160)

ART. 2205. Damages may be recovered: (a) for LOSS or IMPAIRMENT OF EARNING CAPACITY in cases of temporary or personal injury; and (b) for INJURY to the plaintiff’s business standingor commercial credit.

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LOSS OF EARNING CAPACITY, FORMULA INCOMPUTING:(precedent case: Villa Rey Transit vs. Court of Appeals, 31 SCRA 511)

Important factors which may be taken into account by the Court indetermining compensable amount of lost earnings are:

(a) LIFE EXPECTANCY or the number of years for which the victimwould have otherwise lived (using American Expectancy Table of

Mortality or Actuarial Combined Expenrience Table of Mortality);

(2/3 x 80 - age at death) = life expectancy

Note: other factors that may reduce life expectancy are thefollowing: (a) the fact that an average man is not expected to workup to the final month or year of his life; medical history; nature of the work where the deceased was engaged in a risky activity

(b) NET INCOME of the deceased, or the rate of loss sustained bythe heirs of the deceased

Note: sufficient evidence must be presented to establish net

earnings of the deceased, such as company payroll, certificate of employment and BIR Income Tax declarations, as well astestimonies of the officers of the corporation.

5.3 Application in cases of breach of contract or quasi-contract,distinction as to whether the obligor/defendant had acted in goodfaith or bad faith is important.

• If obligor acted in good faith, liable only to the natural and probableconsequences of the breach, as well as to those which can be

reasonably foreseen

• If obligor acted in fraud, bad faith, malice or wanton attitude, heshall be liable for ALL damages that can arise due to non-performance of the obligation

“ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that arethe natural and probable consequences of the breach of the obligation,and which the parties have foreseen or could have reasonably foreseenat the time obligation was constituted.”

In case of fraud, bad faith, malice or wanton attitude, the obligor shallbe responsible for all damages which may be reasonably attributed tothe non-performance of obligation.

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5.4 Application in crimes or quasi-delicts (torts).

“ART. 2202. In crimes and quasi-delicts, the defendant shall be

liable for all damages which are the natural and probableconsequences of the act or omis sion complained of . It is notnecessary that such damages have been foreseen or could have notreasonably been foreseen by the defendant.”

C. MORAL DAMAGES

1. Concept:

Award of moral damages is intended or designed to compensate theclaimant-plaintiff for actual injury, and is not meant to enrich thecomplainant at the expense of the defendant.

They are awarded only to enable the injured party to obtain means,diversions or amusement that will serve to alleviate the moral suffering hehas undergone or experienced by reason of the defendant’s culpableviolation. (Keirulf vs. CA, 269 SCRA 433 [1997]) Its aim is the restorationwithin the limits of the possible, e.g., the spiritual staus quo ante.(Visayan Sawmill vs. CA, 219 SCRA 378).

Though incapable of pecuniary estimation, this is recoverable if they are the proximate result of the defendant’s wrongful act or omission. (Art. 2217, Civil Code).

2. Pertinent provisions:

“ART. 2217. Moral damages include physical suffering, mentalanguish, fright, serious anxiety, besmirched reputation, woundedfeelings, moral shock, of social humiliation, and similar injury.Though incapable pecuniary computation, moral damages may berecovered if they are the proximate result of the defendant’swrongful act or omission.” (memory aid: PMF-SAB-MWSS)

“ART. 2218. In the adjudication of moral damages, the sentimentalvalue of property, real or personal, may be considered.”

“ART. 2219. Moral damages may be recovered in the followingand analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;(3) Seduction, abduction, rape, or other lascivious

acts;(4) Adultery or concubinage;(5) Illegal or arbitrary detention or arrest;

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(6) Illegal search;(7) Libel, slander or any other form of defamation;(8) Malicious prosecution;

(9) Acts mentioned in Article 309 (disrespect to thedead or wrongfully interferes with the funeral);

(10) Acts and actions referred to in Articles 21 (loss or injury caused to another in a manner contrary tomorals, good customs, public policy), 26 (respectof the dignity, personality and peace of mind of neighbor), 27 (refusal or neglect of public servantin performance of official duty), 28 (unfair competition), 29 and 30 (civil aspect of criminalprosecution), 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused,

referred to in No. 3 of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters maybring the action mentioned in No. 9 of this article, in the order named.”

“ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under thecircumstances, such damages are justly due. The same rule applies tobreaches of contract where the defendant acted fraudulently or in badfaith.”

2. REQUISITES TO RECOVER MORAL DAMAGES:(Expert Travel and Tours vs. CA, GR No. 120030, 25 June 1999).

2.1 Plaintiff must prove, by his clear testimony, that there was INJURY –

whether physical mental or psychological. Hence, he must testify thathe suffered physical suffering, mental anguish, fright, serious anxiety,besmirched reputation, moral shock, wounded feelings, socialhumilation, and similar injury.

2.2 There must be a culpable act or omission which is factuallyestablished;

2.3 Said wrongful act of the defendant is the proximate cause of theinjury suffered. Otherwise stated, the PMF-SAB-MWSS must be theproximate result of the wrongful act or omission.

2.4 Award of damages is predicated on any of the cases stated in Article2219.

NOTES:

(a) What controls is the dignity of man and his human value. However,the social and financial standing of the offender is also usually

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considered. Hence, no hard and fast rule in the determination of thefair amount of moral damages.

Thus the Supreme Court has held that “those affecting moral feelingsand personal pride of the person seeking recovery should beweighed in determining the indemnity to be awarded, and if the courthas no proof or evidence upon which the claim for moral damagescould be based, such indemnity could not be outrightly awarded.”

(b) Grant of moral damages is subject to court’s discretion but saiddiscretion must be founded on what is just and reasonable, not onthe whims and caprices of the judge.

D. NOMINAL DAMAGES

“ART. 2221. Nominal damages are adjudicated in order that a rightof the plaintiff, which has been violated or invaded by thedefendant, may be vindicated or recognized and not for thepurpose of indemnifying the plaintiff for any loss suffered by him.”

1. Concept of nominal damages

Nominal damages are those which are awarded to vindicate plaintiffs rightwhich is violated by the defendant. Nominal damages are awarded only for this purpose, not for the purpose of indemnifying the plaintiff for any loss suf-fered by him.

The allowance of nominal damages is generally based on the ground thatevery injury from its very nature legally imports damage, or that the injurycomplained of would in the future be evidence in favor or the wrongdoer. Thisis especially so where, if continued for a sufficient length of time, the invasionof the plaintiff’s rights would ripen into a prescriptive right in favor of thedefendant.

2. CAN NOMINAL DAMAGES BE AWARDED IN EVERY OBLIGATION?

“ART. 2222. The court may award nominal damages in everyobligation arising from any source enumerated in Article 1157, or inevery case where any property right has been invaded.”

3. GRANT OF NOMINAL DAMAGES IS A BAR TO RECOVERY OF ACTUAL,MORAL TEMPERATE OR MODERATE DAMAGES

When nominal damages are already awarded, it is no longer proper to awardfurther in terms of actual, moral, or temperate damages. Art. 2223 provides asfollows:

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“ART. 2223. The adjudication of nominal damages shall precludefurther contest upon the right involved and all accessory questions,as between the parties to the suit, or their respective heirs and

assigns.”

4. Award of nominal damages is justified in the absence of competentproof of specific amounts of actual damages suffered. (People vs.Dianos, 297 SCRA 191).

D. TEMPERATE OR MODERATE DAMAGES

1. TEMPERATE DAMAGES, Defined

Temperate damages are those which the court grant when the court findsthat some pecuniary loss has been suffered but its amount cannot, from thenature of the case be proved, with certainty. Hence, Art. 2224 provides:

“ART. 2224. Temperate or moderate damages, which are morethan nominal but less than compensatory damages, may berecovered when the court finds that some pecuniary loss has beensuffered but its amount cannot from the nature of the case, beproved with certainty.”

2. IMPORTANT REQUISITE UNDER ARTICLE 2224

The court is convinced that “some pecuniary loss has been suffered but itsamount can not, from the nature of the case, be proved with certainty.”

This happens when it is difficult to show with certainty in terms of money, aninjury to one’s business or goodwill, but the court is convinced that there hasbeen a pecuniary loss that has been suffered. In such a case, the court isempowered to calculate moderate damages. In doing this, however, thecourt is not without limit. It is guided by Article 2225 which reads:

ART. 2225. Temperate damages must be reasonable under thecircumstances.”

E. LIQUIDATED DAMAGES

1. DEFINITION OF LIQUIDATED DAMAGES

“ART. 2226. Liquidated damages are those agreed upon by theparties to a contract, to be paid in case of breach thereof.”

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“ART. 2227. Liquidated damages, whether intended as anindemnity or penalty, shall be equitably reduced if they areinequitous or unconscionable.”

“ART. 2228. When the breach of the contract committed by thedefendant is not the one contemplated by the parties in agreeingupon the liquidated damages, the law shall determine the measureof damages, and not the stipulation.”

2. REASON:

Being already agreed upon and defined by the contracting parties, proof of actual damages is no longer required. However, if what was previously

agreed upon is inequitous or unconscionable, as stated in Article 2227, thecourt can equitably reduce the liquidated damages, even if the same hasbeen previously agreed.

3. What if the breach of the contract committed by the defendant is notone contemplated by the parties in their agreement, what shall the courtdo?

The court shall determine the measure of damages, and not the stipulation.(Article 2228)

F. EXEMPLARY DAMAGES

1. DEFINITION OF EXEMPLARY DAMAGES

“ART. 2229. Exemplary or corrective damages are imposed, byway of example or correction for the public good, in addition to themoral, temperate, liquidated or compensatory damages.”

2. REASON WHY EXEMPLARY DAMAGES ARE AWARDED

Exemplary damages are awarded not only “by way of example or correctionfor the public good,” but also for reasons which, in the mind of the court, willserve as a reminder and a stern warning to those who abuse.

It serves to remind that their wrongful acts and their reckless disregard for therights of others can be penalized not only as a crime but as a civil guilt, todeter them from committing the same act in the future.

In the case of crimes, however, exemplary damages may be imposed onlywhen the crime is committed with one or more aggravating circumstances.

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3. EXEMPLARY DAMAGES IN CRIMES, IN QUASI-DELICTS, IN CONTRACTSAND QUASI-CONTRACTS

IN CRIME

Imposed only when thecrime was committedwith one or moreaggravatingcircumstances (Art.2230)

IN QUASIDELICTS

May be granted if thedefendant acted withgross negligence (Art.2231)

IN CONTRACTS ANDQUASI-CONTRACTS

May be awarded if thedefendant, acted in awanton, fraudulent,reckless, oppressive or malevolent manner (Art.2232)

4. OTHER RULES ON EXEMPLARY DAMAGES

“ART. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should beadjudicated.”

“ART. 2234. While the amount of the exemplary damages need

not be proved, the plaintiff must show that he is entitled tomoral, temperate or compensatory damages before the courtmay consider the question of whether or not exemplarydamages should be awarded. In case liquidated damages havebeen agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless,before the court may consider the question of granting exemplary inaddition to the liquidated damages, the plaintiff must show that hewould be entitled to moral, temperate or compensatory damageswere it not for the stipulation for liquidated damages.”

OTHER DAMAGES

The basis for this is found in Article 2196 and 2216 of the New Civil Code whichprovide as follows:

“ART. 2296. The rules under this title are without prejudice to special provisionson damages formulated elsewhere in this code. Compensation for workmen andother employees in case of death, injury or illness is regulated by special law.Rules governing damages laid down in other laws shall be observed insofar asthey are not in conflict with this code.”

“ART. 2216. No proof of pecuniary loss is necessary in order that moral, nominal,temperate, liquidated or exemplary damages may be adjudicated. Theassessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case.”

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ART. 2196

This covers damages for workmen andother employees in case of death,injury or illness under special law. (i.e.— indemnity for worker)

ART. 2216

This covers damages awarded whenthere is no proof of pecuniary loss. Thisis left to the discretion of the court,according to the circumstances of eachcase.

(i.e. Damages arising from tort or crime)

ATTORNEY’S FEES AND EXPENSES OF LIQUIDATION MAY BERECOVERED IN CASES ENUMERATED IN ARTICLE 2208

GENERAL RULE:

Attorney’s fees and expenses of litigation, other than judicial costs, CANNOT BERECOVERED.

EXCEPTIONS:

• Except when stipulated;

• Except when exemplary damages are awarded;

• Except when the defendant’s act or omission has compelled theplaintiff to litigate with third persons or incur expenses to protect hisinterest;

• Except in criminal cases of malicious prosecution again the plaintiff;

• Except in case of a clearly unfounded civil action proceeding againstthe plaintiff;

• Except where the defendant acted in gross and evident bad faithrefusing to satisfy the plaintiffs plainly valid, just and demandableclaim;

•

Except in actions for legal support;• Except in actions for the recovery of wages of household helpers,

laborers and skilled workers;

• Except in actions for indemnity under workmen’s compensation andemployer’s liability laws;

• Except in separate civil action to recover civil liability arising from acrime;

• Except when at least double judicial costs are awarded;

• Except where the courts deem it just and equitable that attorney’sfees and expenses of litigation should be recovered.

NOTE:

1. Attorney’s fees and expenses of litigation must be reasonable;

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2. Generally, attorney’s fees are not part of damages. Hence, even if a partyloses his case in court, this does not mean that attorney’s fees will be awardedby the court to the winning party as part of damages.

3. The court’s award of attorney’s fees is an indemnity to the party and not tohis lawyer.

THE MATTER OR AWARD OF ATTORNEY’S FEES MUST BE STATED INTHE TEXT OF THE DECISION

If it is stated only in the dispositive portion of the decision, it must be disallowedon appeal. On this point, the Supreme Court said:

“xxx The award of attorney’s fees must be disallowed where the reason for theaward of exemplary damages was eliminated by the court. The reason for theaward 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 samemust be disallowed on appeal. The award of attorney’s fees being an exceptionrather than the general rule, it is necessary for the court to make findings of factsand law that would bring the case within the exception and justify the grant of such award.”

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Torts Notes6 on Damages