Dec 7 Torts Digest

CONCEPT AND KIND OF DAMAGES (Art 2197)
Article 2197. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective
Filinvest Credit Corporation vs IAC and Nestor Sunga Jr.
Facts:
A case for damages was filed by Nestor Sunga Jr., a businessman and the owner of the
NBS Machineries and the NAP-NAP Transit. He purchased a minibus Mazda from Motorcester
with an agreement to pay the balance on a monthly basis. Subsequently, Nestor failed to pay his
obligations to the company which caused the confiscation of the minibus by the officers of Filinvest
Corp. The minibus was then mortgaged to Filinvest Corp. Sunga cleared his obligations to
Filinvest. The court granted Sunga moral, actual damages, litigation expenses and Attorney's
fees. Filinvest filed a motion to review the decision of the court.
Issue:
Whether or not the award of damages to Sunga is valid.
Held:
Yes. It is valid but it is unconscionable. There is no hard and fast rule in the determination
of what would be a fair amount of moral damages, since each case must be governed by its own
peculiar circumstances. Be that as it may and in amplification of this generalization, the Court set
the criterion that in the case of moral damages, the yardstick should be that the amount awarded
should not be palpably and scandalously excessive so as to indicate that it was the result of
passion, prejudice or corruption on the part of the trial court. Moreover, the actual losses sustained
by the aggrieved parties and the gravity of the injuries must be considered in arriving at
reasonable levels. In this case, the Supreme Court reduced the amount granted to Sunga since
the facts show that the latter had not suffered much and that it was his obligation to pay the
minibus as it was stipulated in the agreement between him and Filinvest Corp. Further, moral and
actual damages were granted but litigation expenses were eliminated for it has no price for
litigation.
Occena vs Icamina
GR No. 82146
January 22, 1990
Facts:
Petitioner was a barangay captain and private respondent allegedly openly, publicly and
maliciously said the words, translated in English, “You are a foolish Barangay Captain, ignoramus,
traitor, tyrant, Judas,” and other similar words. Petitioner instituted a criminal complaint for Grave
Oral Defamation against private respondent to which the Municipal Trial Court held her guilty of
Slight Oral Defamation but there was no award for damages. Petitioner sought relief from the
Regional Trial Court for the non-awarding of damages but the RTC denied the petition. Hence,
this petition.
Issue:
Whether or not petitioner is entitled to an award of damages arising from the remarks uttered by
private respondent and found by the trial court to be defamatory
Ruling:
Yes, petitioner is entitled to an award of damages.
The Supreme Court ruled that civil obligations arising from criminal offenses are governed by
Article 100 of the Revised Penal Code, it is provided that “Every person criminally liable for a
felony is also civilly liable,” in relation to the Civil Code provisions on quasi-delict under Article
2177, Human Relations and regarding regulation of damages.
A person who is criminally liable is also civilly liable because he offends two entities: first, is state
he lives in, and second, is the individual members who was injured or damaged by his act or
omission unless there was no offended party.
The SC also cited Article 2219, par. (7) of the Civil Code that provides for the recovery of moral
damages in cases of libel, slander or any other form of defamation., giving the offended party a
right to recover from the guilty party damages for the injury the former has suffered to his feelings
and reputation. In the case at bar, petitioner was embarrassed and humiliated and testified that
he felt shame and anguish due to the defamatory comments made by private respondent.
Therefore, petitioner is entitled to moral and exemplary damages.
SO PING BUN v. COURT OF APPEALS
G.R. NO. 120554
21 SEPTEMBER 1999
FACTS: Tek Hua Trading Co’s managing partner So Pek Giok entered into lease agreements
with lessee Dee C. Chuan & Sons Inc (DCCSI) over property located in Binondo, Manila to be
used as storage for textiles. The contracts provided that when the lessee should continue to
occupy the premises after the expiration of the one-year term, the lease will be on a month-to
month basis. The parties did not renew the contracts after their expiration but Tek hua continued
to occupy the property. Tek Hua Trading Co. was dissolved and its members formed Tek Hua
Enterprising Corp. So Pek Giok eventually died in 1986 and his grandson So Ping Bun occupied
the warehouse for his own textile business, Trendsetter Marketing. DCCSI sent letters to Tek Hua
Enterprises which informed it of the increase in rent. The letters included the new lease contracts
for signing and a warning from DCCSI that failure to sign such contracts would mean lack of
interest and agreement to have the lease terminated. Tek Hua Enterprising did not answer the
letters but the contracts were not rescinded. Finally on 1 March 1991, private respondent Tiong
sent a letter to Petitioner asking it to vacate the warehouse which petitioner refused. Petitioner
alleged that he had been paying rent on time. Lease contracts were then executed in favor of
Trendsetter Marketing. The private respondents filed a suit for injunction and prayed for the
nullification of the lease contracts between DCCSI and petitioner. The RTC rendered judgment
annulling the contracts of lease. The CA upheld the trial court and upon the MR, the CA reduced
the attorney’s fees to 200,000 pesos.
ISSUE: Whether or not the CA erred in affirming the RTC’s decision finding So Ping Bun guilty of
tortious interference of contract
RULING: NO
The Supreme Court defined Damage as the loss, hurt, or harm which results from injury, and
damages as the recompense or compensation awarded for the damage suffered. In the case at
bar, the records show that So Ping Bun’s interest in the property of the respondent corporation is
not motivated by malice. In the absence of malice, an award of damages is not warranted.
Similarly, in the case of Gilchrist v. Cuddy, the Supreme Court found it difficult to determine the
extent of damage thus it refrained from awarding damages. The same shall be applied in this
case. The CA did not err when it confirmed the permanent injunction and nullification of the lease
contracts without awarding damages for the injunction was able to hinder any further damage
caused by the petitioner’s interference.
GENERAL PRINCIPLES OF RECOVERY
Air France vs. Carrascoso
G.R. No. L-21438
September 28, 1966
Facts:
Rafael Carrascoso was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a "first
class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled
in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the
"first class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento,
there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked
to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's
Manager that his seat would be taken over his dead body; a commotion ensued, and, according
to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when
they found out that Mr. Carrascoso was having a hot discussion with the white man [manager],
they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white
man; and plaintiff reluctantly gave his "first class" seat in the plane.
The Court of First Instance of Manila sentenced Air France to pay damages. The Court of
Appeals slightly reduced the amount of refund on Carrascoso's plane ticket and voted to affirm
the appealed decision "in all other respects", with costs against petitioner. Hence, this petition.
Issue:
Whether or not there is a breach of contract of carriage between Air France and
Carrascoso that would hold Air France liable for damages.
Ruling:
Yes. For the willful malevolent act of petitioner's manager, petitioner, his employer, must
answer. Article 21 of the Civil Code provides that: Any person who willfully causes loss or injury
to another in a manner that is contrary to morals, good customs or public policy shall compensate
the latter for the damage. The Court also held that upon the provisions of Article 2219 (10), Civil
Code, moral damages are recoverable.
A contract to transport passengers is quite different in kind and degree from any other
contractual relation. And this, because of the relation which an air-carrier sustains with the public.
Its business is mainly with the travelling public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage, therefore, generates a relation attended with a
public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for
an action for damages. Passengers do not contract merely for transportation. They have a right
to be treated by the carrier's employees with kindness, respect, courtesy and due consideration.
They are entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is, that any rule or discourteous conduct on the part of
employees towards a passenger gives the latter an action for damages against the carrier.
Exemplary damages are well awarded. The Civil Code gives the court ample power to
grant exemplary damages — in contracts and quasi- contracts. The only condition is that
defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent
manner." The manner of ejectment of respondent Carrascoso from his first class seat fits into
this legal precept. And this, in addition to moral damages
The right to attorney's fees is fully established. The grant of exemplary damages justifies
a similar judgment for attorneys' fees. The least that can be said is that the courts below felt that
it is but just and equitable that attorneys' fees be given
The task of fixing the amount of damages is primarily with the trial court. The Court of
Appeals did not interfere with the same. The dictates of good sense suggest that we give our
imprimatur thereto. Because, the facts and circumstances point to the reasonableness thereof.
PAL v. Miano
G.R. No. 106664. March 8, 1995
FACTS
Florante Miano was traveling from the Philippines to Czechoslovakia via

connecting flights of PAL (Manila to Frankfurt) and Lufthansa (Frankfurt to Vienna). Miano
checked in NAIA to board his PAL flight with one brown suitcase weighing 20kgs allegedly
containing money, documents, and a Nikkon camera along with clothes and accessories.
However, upon arrival in Vienna, Miano reported of the loss of his checked-in baggage.
But despite waiting 3 hours, his baggage was not found; hence, Miano proceeded to
Piestany, Czechoslovakia without his baggage. Miano was only able to reobtain his
luggage 11 days after in his hotel in Piestany.
Miano claims that because of the delay in the return of his baggage, 1) he had to
borrow money and pay an additional USD200 for the transport of his baggage from
Vienna to Piestany, and 2) he lost his Nikkon camera. As such, Miano wrote to PAL
demanding 1) cost of lost Nikkon camera at Php10,000; 2) cost of transporting the
luggage of USD200; and 3) additional Php100,000 as damages. Thereafter, feeling lack
of action on PAL’s part, Miano filed an action for damages with the RTC. PAL contests
the complaint disclaiming liability on ground of absence of report of mishandled baggage
and tracer teletex. Alternatively, PAL argues that its liability should be limited by the
Warsaw Convention.
RTC ruled that PAL was not in bad faith; but nevertheless, awarded Miano
damages of: 1) cost of transport of USD200; 2) moral damages; 3) exemplary damages;
and 4) attorney’s fees.
ISSUE: WON the award of damages to Miano was proper?
RULING
Actual Damages – Proper
PAL is willing to pay the just claim of $200.00 as a result of the delay in the
transportation of the luggage in accord with the Warsaw Convention.
Moral Damages – Not proper

In breach of contract of carriage by air, moral damages are awarded only if the
defendant acted fraudulently or in bad faith. However, in the case at bar, It was
reasonable to presume that the handling of the baggage was normal and regular.
Exemplary Damages – Not proper

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. However, the facts of the case do not show such action on the part
of PAL to warrant exemplary damages.
Attorney’s Fees – Not proper
The award of attorney's fees must also be disallowed for lack of legal leg to stand
on. The fact that Miano 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.
DBP v. CA
FACTS:
• Lydia P. Cuba is a grantee of a Fishpond Lease the Government; She obtained several
loans from the Development Bank of the under the terms stated in the Promissory Notes; As
security for said loans, Cuba executed two Deeds of Assignment of her Leasehold Rights;
• Cuba failed to pay her loan on the scheduled dates thereof in accordance with the terms
of the Promissory Notes; Without foreclosure proceedings, whether judicial or extra-judicial, DBP
appropriated the Leasehold Rights of Cuba over the fishpond in question;
• After DBP has appropriated the Leasehold Rights of Cuba over the fishpond in question,
DBP, in turn, executed a Deed of Conditional Sale of the Leasehold Rights in favor of Cuba over
the same fishpond in question;
• In the negotiation for repurchase, Cuba addressed two letters to the Manager DBP,
Dagupan City. DBP thereafter accepted the offer to repurchase in a letter addressed to Cuba;
• After the Deed of Conditional Sale was executed in favor of Cuba , a new Fishpond
Lease Agreement was issued by the Ministry of Agriculture and Food in favor of Cuba only,
excluding her husband;
• Cuba failed to pay the amortizations stipulated in the Deed of Conditional Sale; After
Cuba failed to pay the amortization as stated in Deed of Conditional Sale, she entered with the
DBP a temporary arrangement whereby in consideration for the deferment of the Notarial
Rescission of Deed of Conditional Sale
• DBP thereafter sent a Notice of Rescission thru Notarial Act, and which was received by
Cuba ; After the Notice of Rescission, DBP took possession of the Leasehold Rights of the
fishpond in question;
• That after DBP took possession of the Leasehold Rights over the fishpond in question,
DBP thereafter executed a Deed of Conditional Sale in favor of defendant Agripina Caperal
through a public sale; Thereafter, Caperal was awarded Fishpond Lease Agreement.
ISSUE: W/N Cuba is entitled to recover damages
RULING: YES
Article 2199 provides: 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. Actual or compensatory
damages cannot be presumed, but must be proved with reasonable degree of certainty.It must
point out specific facts which could afford a basis for measuring whatever compensatory or actual
damages are borne. In the present case, the trial court awarded in favor of CUBA P1,067,500 as
actual damages consisting of P550,000 which represented the value of the alleged lost articles of
CUBA and P517,500 which represented the value of the 230,000 pieces of bangus allegedly
stocked in 1979 when DBP first ejected CUBA from the fishpond and the adjoining house. This
award was affirmed by the Court of Appeals. We find 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
in question. As pointed out by DBP, there was not "inventory of the alleged lost items before the
loss which is normal in a project which sometimes, if not most often, is left to the care of other
persons." Neither was a single receipt or record of acquisition presented.
Victory Liner vs. Heirs of Andres Malecdan
GR No. 154278 | December 27, 2002 | J. Mendoza
Facts:
• On July 15, 1994 at 7pm, Andres Malecdan, riding his carabao, crossed the National
Highway in Brgy. Nungnungan, Cauayan, Isabela.
• A Dalin Liner bus stopped to allow him to pass. However, a Victory Liner bus, driven by
Ricardo Joson, Jr., bypassed the former and hit Andres and his carabao.
• The carabao toppled over and Andres was thrown off. Both buses proceeded without
helping him.
• A witness and another person took him to the hospital where he died after arrival. His
carabao also died afterwards.
• A criminal complaint for reckless imprudence resulting to homicide and damage to
property was filed against Joson, Jr. A suit for damages was also filed.
• RTC: Joson, Jr. guilty of gross negligence in driving the bus while Victory Liner was found
guilty of gross negligence in the selection and supervision of Joson, Jr. Both were held
liable for damages.
• CA: Affirmed with modifications in the amount of attorney’s fees.
• Petitioner’s argument: The award of moral damages was double than what was prayed
for; the actual damages was not supported by official receipts; the moral damages, and
the exemplary damages and attorney’s fees were not proved.
Issue: Whether the award of damages and attorney’s fees is proper.
Ruling: Actual and moral damages should be reduced while exemplary damages and attorney’s
fees are proper.
Actual damages
• There should be proof to the actual amount of loss incurred in connection with the death,
wake or burial of the victim. Receipts for expenses incurred after the burial, however, shall
not be included.
• In the case, the award of P88,339 included a P5,900 worth of pig butchered on the 9 th day
of death, hence, it cannot be allowed to be recovered. The actual damages was reduced
to P82,439.
Moral damages
• The award of P200,000 should be reduced. Art. 2206 of the Civil Code, allows the heirs
of the deceased to demand moral damages for mental anguish for the latter’s death but
under the circumstances of this case, an award of P100,000 would be in keeping with the
purpose of the law.
Exemplary damages
• They are imposed not to enrich one party or impoverish another but to serve as a deterrent
against or as a negative incentive to curb socially deleterious actions.
• In this case, Joson, Jr. was grossly negligent in driving at such fast speed and in overtaking
another vehicle, allowing a pedestrian to pass, along the national highway. Worse, he did
not even help the victim. The award of P50,000 is proper.
Attorney’s fees
• Art. 2008 of the Civil Code, attorney’s fees may be recovered when exemplary damages
are awarded.
• In Metro Manila Transit Corp. v CA, an award of P50,000 as attorney’s fees was held to
be reasonable.
Wherefore, the decision of the CA is affirmed with modification.

ACTUAL DAMAGES (ART 2199-2203, 2205,2207,2209)
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 2205. Damages may be recovered:
(1) For loss or impairment of earning capacity in cases of temporary or permanent

personal injury;
(2) For injury to the plaintiff's business standing or commercial credit.
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.
REFRACTORIES CORPORATION OF THE PHILIPPINES, v. IAC and FIRESTONE CERAMIC,
INC.
G.R. No. 70839. August 17, 1989
FACTS:
In 1980, petitioner Refractories Corporation of the Phils imported from Japan around 250 metric
tons of magnesite and magnesia clinker. When the shipment arrived, they were discovered to be
water-damaged and unfit for consumption. As a consequence, RCP declared the whole cargo a
total loss and filed a claim with its insurer.
Alejandrino Sangalang, acting for and on behalf of private respondent Firestone Ceramic, Inc.
(FCI) bid and won. After full payment of the price of the goods, FCI attempted to withdraw the
goods from the warehouse of RCP but the latter refused to release the same.
On February 19, 1981, RCP and FCI entered into an agreement wherein the RCP withdrew its
objection/opposition to the award of the bidding to Sangalang and/or FCI. Thus, FCI paid the
customs duties and taxes on the goods but RCP again refused to release the goods when FCI
tried to take them the next day. RCP demanded payment of storage fees in the sum of P3,455.44
per month, and claimed that there was delay on the part of FCI in withdrawing the goods which
supposedly forced RCP to store the goods in Iligan City. Said controversy resulted in the filing by
FCI of a complaint for specific performance and damages against Filriters Guaranty Assurance
Corporation and petitioner RCP.
The trial court rendered judgment finding that it was RCP which prevented the immediate removal
of the cargo and if there was any delay on the part of FCI. It ordered RCP to (1) allow FCI to take
delivery of the ube green and magnesia clinker and in default thereof, to pay to plaintiff jointly and
severally the sum of P276,672.00, which is equivalent to the insurance payment on the shipment
plus the legal interest thereon at 18 per cent per annum from May 6, 1981 until the same is fully
paid; and (2) to jointly and severally to pay to plaintiff the sum of P234,000.00 as and for actual
and compensatory damages, and the further sum of P50,000.00 as and for attorney’s fees and
expenses of litigation.
ISSUE: Whether the IAC erred in affirming the judgment of the trial court with respect to the
awards for damages and attorney’s fees.
HELD:
Yes. Article 2219 of the Civil Code is explicit as to the requirements for entitlement to actual or
compensatory damages, that is, that except as provided by law or by stipulation, one is entitled
to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved."
Indeed, before the award of actual or compensatory damages can be made, adequate proof of
the pecuniary loss suffered is indispensable. These factual and legal bases must be clearly
established and reliance on mere speculation, conjecture or guess work on the part of the trial
court will demand the reversal of the award. The same is true if the proof is flimsy and
unsubstantiated.
The foregoing considerations appear to have been lost upon the trial court when it awarded two
components of actual and compensatory damages, one for P234,000.00 and another in the sum
of P276,672.00 in case of failure to deliver the remaining 96 tons of said water-damaged
magnesite and magnesia clinker.
1. The absence of actual proof thereon to justify the same is evident from the records and
transcripts of the proceedings in the case, other than the recitation of the reliefs prayed
for in the complaint, no evidence with respect to said damages was ever pleaded or
adduced in court. This may also be gleaned from FCI’s own submission. FCI erroneously
relied on the transcript of the notes wherein RCP allegedly "readily admitted that the reliefs
prayed for were those outlined in the complaint," obviously under the mistaken belief that
the bare statement of reliefs prayed for, and no more, is proof in itself of the supposed
injury resulting from the wrong allegedly committed against it;
2. The award of P276,672.00 is also not sustained by the evidence. Such amount was
claimed to be equivalent to the insurance payment, but no reason has been advanced,
nor is any apparent, as to why the measure of the amount to be paid by petitioner in case
of non-delivery of the aforesaid balance of the shipment should be the insurance amount
due from Filriters;
3. Lastly, for the lack of factual basis and legal justification, the award of attorney’s fees
should be eliminated.
Therefore, the Court resolved to modify the appealed decision by deleting the award of actual and
compensatory damages in the amount of P234,000.00 and attorney’s fees in the amount of
P50,000.00. The amount to be paid in case petitioner fails to deliver the water-damaged cargo or
a part thereof is P450. 00 per metric ton, with interest thereon at the legal rate of six percent (6%)
per annum until fully paid.
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 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.

personal injury;
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.
DAVID V. COURT OF APPEAL

G.R. Nos. 111168-69
June 17, 1998
FACTS: The case involves the accused, Joaquin David who was charged with homicide and
frustrated homicide for the fatal of Noel Nora and the serious wounding of the latter’s brother,
Narciso Nora, Jr. He was found guilty by the trial court and was ordered to pay as damages,
P30,000.00 for the death of Noel Nora, P37,000.00 for actual damages, P30,000.00 for moral
damages P20,000.00 for and as attorney’s fees or a total sum of P117,000.00. To indemnify
Narciso Nora, he was ordered to pay the sum of— P8,728.00 for actual damages P20,000.00 for
moral damages or a total sum of P28,000.00. The Supreme Court ruled out the possibility of self-
defense since there was no longer any unlawful aggression on the part of the victims when David
shot them. However, the Supreme Court applied the privileged mitigating circumstance of minority
and two ordinary mitigating circumstances – voluntary surrender and immediate vindication of a
grave offense. The petitioner’s sentence was thereafter reduced accordingly. The question now
arises with regard to the damages.
ISSUE: Whether or not the damages imposed upon the petitioner were proper.
RULING: No, the damages imposed were not proper. The Supreme Court increased the
indemnification damages for the death of Noel Nora to Php 50,000 in accordance with the current
rulings. In terms of actual damages, the Supreme Court applied the ruling in Fuentes Jr. v. Court
of Appeals, that only expenses supported by receipts and which appear to have been actually
expended in connection with the death of the victim should be allowed. The award of actual
damages cannot be based on the allegation of a witness without any tangible document to support
such a claim.
Therefore, the actual damages awarded to Noel Nora were reduced from P37,000.00 to
P22,000.00 since only P22,000.00 is supported by a receipt for funeral expenses as shown in
Exh. X. The actual damages awarded to Narciso Nora were also reduced from P8,728 to
P1,928.65 as the receipts (Exhs. Y and Z), show the payment of this amount only to the National
Orthopedic Hospital.
The Supreme Court, however, ruled that the moral damages and attorney’s fees were proper.
ACTUAL/COMPENSATORY DAMAGES
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.
PEOPLE OF THE PHILIPPINES vs. EFREN DEGOMA and MARINO TABORADA

FACTS:
Efren Degoma and Marino D. Taborada were charged with the crime of robbery with
homicide. They were arraigned and after trial, were found guilty beyond reasonable doubt. They
were sentenced to reclusion perpetua and to jointly and severally indemnify the owners of the
Tagbilaran friendly Bazaar the sum of P200.00 and the equivalent of $300.00, indemnify the heirs
of late Alexander Parilla in the sum of P36,000.00 for his death, P200,000.00 moral damages, P
87, 947.94 for actual expenses, and P,5,000 for atty’s fees. Only Marino Taborada appealed from
the judgment of conviction.
ISSUE:
Whether or not the award of damages is correct.
RULING:
No, it is incorrect. In delict, the defendant is liable for all damages which are the natural
and probable consequences of the act or omission complained of. To seek recovery for actual
damages, it is necessary to prove with a reasonable degree of certainty, premised upon
competent proof and on the best evidence obtainable by the injured party, the actual amount of
loss. Courts cannot simply assume that damages were sustained by the injured party, nor can it
rely on speculation or guesswork in determining the fact and amount of damages.
The court a quo's award of actual damages in the amount of P87,947.94 is not sustained
by a review of the evidence of record. Of the expenses allegedly incurred, the Court can only give
credence to those supported by receipt and which appear to have been genuinely incurred in
connection with the death, wake or burial of the victim. Thus, the Court cannot take account of
receipts showing expenses incurred before the date of the slaying of the victim; those incurred
after a considerable lapse of time from the burial of the victim and which do not have any relation
to the death, wake or burial of the victim; those incurred for purely aesthetic or social purposes,
such as the lining with marble of the tomb of the victim; those which appear to have been modified
to show an increase in the amount of expenditure, such as by adding a number to increase the
purchase value from tens to hundreds; those expenditures which could not be reasonably
itemized or determined to have been incurred in connection with the death, wake or burial of the
victim; those which would nonetheless have been incurred despite the death, wake or burial of
the victim, the death, wake or burial being merely incidental; and those which were not in fact
shouldered by the immediate heirs of the victim, such as plane trips by relatives or in-laws. Having
these as guidelines, the Court puts the gross expenses proved by the immediate heirs of the
victim at P10,175.85.
The Court off-sets the amount of P6,400.00, representing the alms received by the heirs
of the victim, 11 against the above amount of P10, 175.85, representing the expenses proved,
leaving the amount of P3,775.85 as the actual amount of loss sustained by immediate heirs of
the victim.
The moral damages in the amount of P200,000.00 awarded by the court a quo is
unexplained and unsupported in the court's decision. While moral damages are incapable of
pecuniary estimation, the Court, under the circumstances attending the loss, considers it proper
to reduce the amount of the award for moral damages to P10,000.00. The Court, however, hereby
increases the amount of indemnity for the death of Alexander Parilla to P50,000.00, in line with
present jurisprudence.
Teodoro Araos, Alejandro Langcauan, Eugennia Pitoy, Spouses Perfecto Reyes and
Rosario Reyes, Ruth Rayco, Prospero Peralta, Myrna Mendoza, and Spouses Redentor
Comintan and Lucy Comintan, Petitioners, vs. Hon. Court of Appeals and Jovan Land, Inc.,
Respondents.
Facts:
The petitioners are lessees of a ten-door apartment building which they have been
occupying for some 25 years. The building was owned by Vivien Bernardino with whom the
petitioners had a written contract of lease which expires on January 31, 1988. After that period,
the petitioners peacefully occupied their respective units and the lessor continued to collect
monthly rentals from the petitioners despite the absence of a written contract. The apartment was
sold to private respondent Jovan Land, Inc on July 11, 1991. Three days after, the respondent
and Bernardino demanded the petitioners to vacate the units they were occupying. Demands
were unheeded, ten separate cases for unlawful detainer were filed before the MeTC.
The MeTC rendered its decision in favor of the respondent. It held that the contracts
between the lessor and the lessees provided for a lease on a month-to-month basis and, in the
light of Art. 1687 in relation in Art. 1670 of the Civil Code that the lease period had expired. It also
ordered the petitioners to vacate the premises and to pay the rental arrearages and reasonable
compensation for the use and occupancy of the premises. The petitioners appealed the decision
to the RTC. The RTC reversed the decision of the MeTC on the ground that the cases are covered
by BP Blg. 25, as amended by BP Blg. 877, Section 6. It also ruled that the increase in the rental
was iniquitous and unconscionable. The increase should not exceed 20% per year. The
respondent appealed to the CA. The CA reversed the decision of the RTC and affirmed the
decision of the MeTC. Hence, this petition.
Issue:
Is the propriety and validity of the increase in the monthly rates of rentals as decreed by
the MeTC and sustained by the CA reasonable?
Ruling:
The SC ruled in favor of the petitioners. It held that there is no basis for the increase in the
rentals. In forcible entry or unlawful detainer cases, the only damage that can be recovered is the
fair rental value or the reasonable compensation for the use and occupation of the leased
property. The damages which could be recovered are those which the plaintiff could have
sustained as a mere possessor, or those caused by the loss of the use and occupation of the
property, and not the damages which he may have suffered but which have no direct relation to
his loss of material possession. The courts have no authority to fix the rental fee for the parties
where no valid demand for an increased rent has been made by the lessor. Hence, the MeTC did
not have the authority to decree the increase in rental rates. The petitioners were ordered to pay
the accumulated.
ALEXANDER G. ASUNCION, petitioner, vs. EDUARDO B. EVANGELISTA and COURT OF
APPEALS, respondents.
Facts:
• Private respondent has been operating a piggery on his landholdings in Bulacan
and he operated the piggery under the trade name Embassy Farms as a single
proprietorship. Private respondent was the majority stockholder of the corporation,
with 90% of the shares in his name. He also served as its president and chief
executive officer.
• Private respondent borrowed P500,000 from Paluwagan ng
Bayan Savings and Loan Association to use as working capital for Embas
sy Farms. He executed
a real estate mortgage on three of his properties as security for the loan.
• On November 4, 1981, private respondent mortgaged 10 titles more in favor of
PAIC Savings and Mortgage Bank. Private respondent obtained another
loan in the amount of P844,625.78 from Mercator Finance Corporation.
• The loan was secured by a real estate mortgage on five
5 other landholdings of private respondent. Private respondents aggregate
debt exposure totaled P3,056,625.78. However,
he defaulted in his loan payments.
• His aggregate debt had ballooned to almost 6M. Then, petitioner and
private respondent executed a Memorandum of Agreement. Upon the exec
ution of the
Memorandum, petitioner paid private respondent one million pesos, P500,0
00.00 within a ninety-day period in four disbursements.
• The second installment, in the like amount of 300,000, was supposed to be
remitted by petitioner to private respondent
for the purpose of financing the operations of the piggery pursuant to the
Memorandum.
• Instead, petitioner agreed to pay to PAIC Savings & Mortgage Bank. However,
more than a
year after the signing of the Memorandum of Agreement, the landholdings
of private
respondent which were mortgaged to Paluwagan ng Bayan Savings and L
oan Association,
PAIC Savings and Mortgage Bank and Mercator Finance Corporation still r
emained titled in his name. Neither did he inform said mortgagees of the transfer
of his lands.
• As to the shares of stock, it was
incumbent upon private respondent to endorse and deliver them to petitioner
so he could also have them transferred in his name, but private respondent never
did. He refused to honor his obligations under the Memorandum of Agree
ment and even countered with a demand letter of his own of stock until they
constitute 90% of the paid-in equity of said corporation.
• Petitioner filed in RTC a complaint for rescission of the MOA with a prayer for
damages, and the trial court rendered judgment in favor of private respondent. CA
affirmed.
Issue:
Whether or not the non-
compliance of one party in a reciprocal obligation amounts to rescission of the obligation
and therefore not entitled to damages.
Ruling:
Yes. Neither may this Court allow the grant of damages corresponding to the value of the
land foreclosed by private respondent's creditors upon the latter's failure to make his loan
payments. Private respondent, in his amended counterclaim, prayed for the rescission of the
Memorandum of Agreement. In case of rescission, while damages may be assessed in favor of
the prejudiced party, only those kinds of damages consistent with the remedy of rescission may
be granted, keeping in mind that had the parties opted for specific performance, other kinds of
damages would have been called for which are absolutely distinct from those kinds of damages
accruing in the case of rescission. The Memorandum of Agreement entered into by petitioner and
private respondent should indeed be rescinded. The respondent appellate court erred in
assessing damages against petitioner for his refusal to fully pay private respondent's overdue
loans. Such refusal was justified, considering that private respondent was the first to refuse to
deliver to petitioner the lands and certificates of stock that were the consideration for the almost
6M pesos in debt that petitioner was to assume and pay.
DISABILITY/COMMERICAL CREDIT

personal injury;
GSIS vs. CA
G.R. No. 117572
January 29, 1998
Ponente: Justice Romero
FACTS:
Rosa Balais worked for the NHA since 1952. On December 1989 she was diagnosed to
be suffering from Subarachnoid Hmorrhage Secondary to Ruptured Aneurysm. After undergoing
craniotomy, she was finally discharged from the hospital January 20, 1990. Despite her operation,
Rosa could not perform her duties as efficiently as she had done prior to her illness. This forced
her to retire early from the government service on March 1, 1990 at the age of sixty-two (62)
years. In the same month, she claimed from GSIS benefits. She was granted such under
Temporary Total Disability (TTD) and was subsequently converted to Permanent Partial Diability
(PPD). Rosa again applied for conversion of her classification to Permanent Total Disability
(PTD). She was denied of this because the results of her physical examination conducted on June
5, 1990 did not satisfy the criteria for permanent total disability.
ISSUE:
Whether or not Rosa is entitled to conversion of benefits.
RULING:
It is true that the degree of Rosa’s physical condition at the time of her retirement was not
considered as permanent total disability, yet, it cannot be denied that her condition subsequently
worsened after her head operation and consequent retirement. In fact, she suffered afterwards
from some ailments like headaches, dizziness, weakness, inability to properly sleep, inability to
walk without support and failure to regain her memory. All these circumstances ineluctably
demonstrate the seriousness of her condition, contrary to the claim of petitioner. More than that,
it was also undisputed that private respondent was made to take her medication for life.
A person's disability may not manifest fully at one precise moment in time but rather over
a period of time. It is possible that an injury which at first was considered to be temporary may
later on become permanent or one who suffers a partial disability becomes totally and
permanently disabled from the same cause. This Court has ruled that "disability should not be
understood more on its medical significance but on the loss of earning capacity." Rosa’s persistent
illness indeed forced her to retire early which, in turn, resulted in her unemployment, and loss of
earning capacity.
Jurisprudence shows that disability is intimately related to one's earning capacity.,
"permanent total disability means disablement of an employee to earn wages in the same kind of
work, or work of a similar nature that she was trained for or accustomed to perform, or any kind
of work which a person of her mentality attainment could do." "It does not mean state of absolute
helplessness, but inability to do substantially all material acts necessary to prosecution of an
occupation for remuneration or profit in substantially customary and usual manner."
PHILIPPINE NATIONAL BANK vs. COURT OF APPEALS
G.R. NO. 126152 SEPTEMBER 28, 1999
BELLOSILLO, J.
FACTS
Lily S. Pujol opened with petitioner Philippine National Bank an account denominated as
"Combo Account", a combination of Savings Account and Current Account in her business name
"Pujol Trading," under which checks drawn against her checking account could be charged
against her Savings Account should the funds in her Current Account be insufficient to cover the
value of her checks. Hence, private respondent was issued by petitioner a passbook on the front
cover of which was typewritten the words "Combo Deposit Plan." Lily S. Pujol issued a check in
the amount of P30,000.00 in favor of her daughter-in-law. When issued and presented for
payment, Lily S. Pujol had sufficient funds in her Savings Account. However, PNB dishonored her
check allegedly for insufficiency of funds and debited her account with P250.00 as penalty charge.
Lily S. Pujol issued another check in the amount of P30,000.00 in favor of her daughter. When
issued and presented for payment, Lily S. Pujol had sufficient funds in her Savings Account. But,
this notwithstanding, petitioner dishonored her check for insufficiency of funds and debited her
account with P250.00 as penalty charge. After realizing its mistake, PNB accepted and honored
the second check for P30,000.00 and re-credited to Lily S. Pujol’s account the P250.00 previously
debited as penalty. Lily S. Pujol filed with the Regional Trial Court of Pasig City a complaint for
moral and exemplary damages against petitioner for dishonoring her checks despite sufficiency
of her funds in the bank. The trial court rendered a decision ordering petitioner to pay private
respondent Pujol moral damages of P100,000.00 and attorney's fees of P20,000.00. It found that
private respondent Lily S. Pujol suffered mental anguish and besmirched reputation as a result of
the dishonor of her checks, and that being a former member of the judiciary who was expected to
be the embodiment of integrity and good behavior, she was subjected to embarrassment due to
the erroneous dishonor of her checks by petitioner. The Court of Appeals affirmed in toto the
decision of the trial court.
ISSUE
Whether PNB was liable for damages to Lily S. Pujol
HELD
Yes.
The Supreme Court has ruled that a bank is under obligation to treat the accounts of its
depositors with meticulous care whether such account consists only of a few hundred pesos or of
millions of pesos. Responsibility arising from negligence in the performance of every kind of
obligation is demandable. While petitioner’s negligence in this case may not have been attended
with malice and bad faith, nevertheless, it caused serious anxiety, embarrassment and humiliation
to private respondent Lily S. Pujol for which she is entitled to recover reasonable moral damages.
In the case of Leopoldo Araneta v. Bank of America, the Supreme Court held that it can hardly be
possible that a customer’s check can be wrongfully refused payment without some impeachment
of his credit which must in fact be an actual injury, although he cannot, from the nature of the
case, furnish independent and distinct proof thereof.
Damages are not intended to enrich the complainant at the expense of the defendant, and
there is no hard-and-fast rule in the determination of what would be a fair amount of moral
damages since each case must be governed by its own peculiar facts. The yardstick should be
that it is not palpably and scandalously excessive. In this case, the award of P100,000.00 is
reasonable considering the reputation and social standing of private respondent Pujol and
applying our rulings in similar cases involving banks negligence with regard to the accounts of
their depositors. The award of attorney's fees in the amount of P20,000.00 is proper for
respondent Pujol was compelled to litigate to protect her interest.
FIXED INDEMNITY (ART 1764 AND 2206)
Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with
Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a
passenger caused by the breach of contract by a common carrier.
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be
at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in
every case be assessed and awarded by the court, unless the deceased on account
of permanent physical disability not caused by the defendant, had no earning
capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article
291, the recipient who is not an heir called to the decedent's inheritance by the law
of testate or intestate succession, may demand support from the person causing
the death, for a period not exceeding five years, the exact duration to be fixed by
the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death
of the deceased.
People of the Philippines vs. Ireneo Jugueta
G.R. No. 202124

April 5, 2016
Facts:
On June 06, 2002, the family of Norberto Divina were all lying down side by side about to
sleep at around 9:00 o’clock in the evening when suddenly their wall made of sack was stripped
off by Jugueta, San Miguel and Alegre. They ordered him to go out of their house and when he
refused despite his plea for mercy, they fired at them having hit and killed his two daughters, Mary
Grace and Claudine, 13 years old and 3 1⁄2 years old, respectively. The family of Norberto Divina
were unarmed and his children were at very tender ages. The trial court finds the accused guilty
beyond reasonable doubt for 2 counts of murder and 4 counts of attempted murder and is hereby
sentenced to suffer reclusion perpetua and prision correccional as minimum to prision mayor as
maximum for each of the offended parties, respectively. They were also ordered to indemnify
Mary Grace’s heirs in the amount of P50,000 and another P50,000 to heirs of Claudine. In
addition, he is hereby ordered to pay the heirs of the victims actual damages in the amount of
P16,150 and to pay for the costs. This was affirmed by the Court of Appeals.
Issue:
Whether or not the lower court imposed proper award of damages on the accused.
Ruling:
No. In criminal cases where the imposable penalty is reclusion perpetua to death, there
are three kinds of damages awarded by the Court; namely: civil indemnity, moral, and exemplary
damages. Likewise, actual damages may be awarded or temperate damages in some instances.
Civil indemnity ex delicto is the indemnity authorized in our criminal law for the offended
party, in the amount authorized by the prevailing judicial policy and apart from other proven actual
damages, which itself is equivalent to actual or compensatory damages in civil law. This award
stems from Article 100 of the RPC which states, "Every person criminally liable for a felony is also
civilly liable." It is to be noted that civil indemnity is, technically, not a penalty or a fine; hence, it
can be increased by the Court when appropriate. Article 2206 of the Civil Code provides:
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and
the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be
assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of Article 291,
the recipient who is not an heir called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person causing the death, for a period not
exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased
may demand moral damages for mental anguish by reason of the death of the deceased.
In our jurisdiction, civil indemnity is awarded to the offended party as a kind of monetary
restitution or compensation to the victim for the damage or infraction that was done to the latter
by the accused, which in a sense only covers the civil aspect. Precisely, it is civil indemnity. Thus,
in a crime where a person dies, in addition to the penalty of imprisonment imposed to the offender,
the accused is also ordered to pay the victim a sum of money as restitution. Also, it is apparent
from Article 2206 that the law only imposes a minimum amount for awards of civil indemnity, which
is ₱3,000.00. The law did not provide for a ceiling. Thus, although the minimum amount for the
award cannot be changed, increasing the amount awarded as civil indemnity can be validly
modified and increased when the present circumstance warrants it.
In the case at bar, the crimes were aggravated by dwelling, and the murders committed
were further made atrocious by the fact that the victims are innocent, defenseless minors – one
is a mere 3½-year-old toddler, and the other a 13-year-old girl. The increase in the amount of
awards for damages is befitting to show not only the Court's, but all of society's outrage over such
crimes and wastage of lives. The Court, in summary, provides that the civil indemnity for the crime
of murder amounts to P100,000 and for attempted murder, it is P50,000.
Therefore, aside from moral, exemplary, and temperate damages, the accused is liable to the
heirs of the victims P100,000 as civil indemnity for each of the two children who died, and P
50,000.00 as civil indemnity for each of the four victims in the 4 counts of attempted murder.
FORTUNE EXPRESS, INC. vs. COURT OF APPEALS
Facts:
A bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norte, resulting
in the death of several passengers of the jeepney, including two Maranaos. Certain Maranaos
were planning to take revenge on the petitioner by burning some of its buses. Three armed
Maranaos who pretended to be passengers, seized a bus of petitioner. Among the passengers of
the bus was Atty. Caorong. The leader of the Maranaos ordered the driver to stop the bus on the
side of the highway. The one of the companions of Mananggolo started pouring gasoline inside
the bus, as the other held the passenger at bay with a handgun. Mananggolo then ordered the
passenger to get off the bus. The passengers, including Atty. Caorong, stepped out of the bus.
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. at that
time, one of the armed men was pouring gasoline on the head of the driver. Larry de la Cruz, one
of the passengers, saw that Atty. Caorong was hit. Then the bus was set on fire. Some of the
passengers were able to pull Atty. Caorong out of the burning bus and rush him to the Mercy
Community Hospital in Iligan City, but he died while undergoing operation.
Issue:
Whether or not heirs of Atty. Caorong are entitled to damages.
Ruling:
Yes, petitioner is liable to private respondents for damages. Indemnity for Death. Art. 1764 of the
Civil Code, in relation to Art. 2206 thereof, provides for the payment of indemnity for the death of
passengers caused by the breach of contract of carriage by a common carrier. Initially fixed in
Art. 2206 at P3,000.00, the amount of the said indemnity for death has through the years been
gradually increased in view of the declining value of the peso. It is presently fixed at P50,000.00.
Private respondents are entitled to this amount.
WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby AFFIRMED
with the MODIFICATION that petitioner Fortune Express, Inc. is ordered to pay the following
amounts to private respondents Paulie, Yasser King, Rose Heinni, and Prince Alexander
Caorong:
1. death indemnity in the amount of fifty thousand pesos (P50,000.00);

2. actual damages in the amount of thirty thousand pesos (P30,000.00);
3. moral damages in the amount of one hundred thousand pesos (P100,000.00);
4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);
5. attorney's fees in the amount of fifty thousand pesos (P50,000.00);
6. compensation for loss of earning capacity in the amount of two million one hundred twenty-one
thousand four hundred four pesos and ninety centavos (P2,121,404.90); and
7. cost of suits.
LOSS OF EARNING CAPACITY (ART 2206)
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be
at least three thousand pesos, even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in
every case be assessed and awarded by the court, unless the deceased on account
of permanent physical disability not caused by the defendant, had no earning
capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article
291, the recipient who is not an heir called to the decedent's inheritance by the law
of testate or intestate succession, may demand support from the person causing
the death, for a period not exceeding five years, the exact duration to be fixed by
the court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death
of the deceased.
Pedro Davila vs PAL

Facts:
Pedro Davila Jr. boarded Philippine Airlines flight from Manduriao, Iloilo to Manila. The
plane did not reach its destination because it crashed at Mt. Baco, Mindoro. The parents were
bothered by the conflicting news reports until a letter from PAL’s president informing them that
their son died in the crash was sent to them. It was only on December 29 that his body was
recovered and taken back to Iloilo. The findings of the investigation conducted by the Civil
Aeronautics Administration showed that the prescribed Iloilo-Romblon-Manila Route was not
followed as it being a straight line from Iloilo to Manila. The plane reported its position after take-
off and again when it was abeam the Roxas homer. However, the pilot did not intercept airway
Amber I as it was supposed to. This led to the conclusion that the plane deviated from the
prescribed route by 32 miles to the west when it crashed at Mt. Baco. Due to this accident the
Court of First Instance ruled in favor of Pedro Davila Jr. and ordered PAL to pay the plaintiffs
various sums of money: Php 6,000 for Jr’s death; Php 60,000 for loss of earning capacity (Php
12,000 per annum times 5 years), Moral damages, Exemplary damages, Actual Damages and
Attorney’s Fees.
Issue:
Whether or not the damages awarded to Davila was proper?
Ruling:
In relation to the loss of earning capacity, the Court ruled in affirmative.
Art 2206 provides that the defendant shall be liable for the loss of earning capacity of the
deceased and indemnity shall be paid to the heirs of the latter. This article is expressly made
applicable to Art 1764 to the death of the passenger caused by the breach of contract by a
common carrier, as in this case.
In computing a deceased’s life expectancy, the formula is: (2/3) x (80-age at the time of
death). In this case Jr was single at 30 years of age when he died. Using the formula, his normal
life expectancy is 33 and 1/3 years. However, his life expectancy must be reduced to 25 years
since his medical history shows that he had complained of and had been treated for backaches,
chest pains and occasional feeling of tiredness. In this case, taking into consideration JR’s income
from all 3 sources together with his living expenses, a yearly living income of Php 7,800 is left.
This amount multiplied by 25 years (Php 195,000) is the amount which should be awarded to Jr’s
parents.
People of the Philippines v. Quilaton

G.R. No. L-69666 - January 23, 1992
Facts:
On 16 August 1983, between the hours of 6:00 and 9:00 o'clock in the evening, victim
Rolando Manahan, then officer-in-charge of PROFEM, called for defendant-employee Quilaton
to see him in his office. Manahan instructed respondent Quilaton to stop sleeping inside the office
after working hours. Thereafter, and due to this, the two engaged in a heated exchange of words.
Moments later, appellant pulled a balisong from his right hip and told Rolando Manahan: "this
time I am going to kill you, I shall not forgive you." Rolando Manahan started to run away but
appellant chased him. A post mortem examination showed that Rolando Manahan sustained
seven (7) wounds, two (2) of which, located in the chest. Defendant was convicted of the crime
of murder with the following penalties: 100,000 for the death, 26,225 for actual damages, and
250,000 for moral damages.
Issue:
Whether the damages rendered by the trial court is correct.
Ruling:
Yes, but with modifications as to the amount.
The monetary liabilities of a person accused and convicted of a crime are specified in
Article 2206 of the Civil Code:
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate
succession, may demand support from the person causing the death, for a period not exceeding
five years, the exact duration to be fixed by the court;
(3) The spouses, legitimate and illegitimate descendants and ascendants may demand moral
damages for mental anguish by reason of the death of the deceased.
The Court also laid down the guideline to determine the compensable amount of loss earnings:
(1) the number of years for which the victim would otherwise have lived; and
(2) the rate of loss sustained by the heirs of the deceased.
The Court computed the first factor by applying the formula (2/3 x [80 age at death])
adopted in the American Expectancy Table of Mortality or the actuarial Combined Experience
Table of Mortality. Considering that Rolando Manahan was 26 years of age at the time of death,
he was expected to live for another 46 years. But a man does not normally continue working to
earn money up to the final month or year of his life; hence 46 years could be reasonably reduced
to 39 years. Besides, Rolando Manahan was a government employee who is expected to retire
at the age of 65. If there are 261 working days in a year and Rolando Manahan was receiving
P23.00 a day, Rolando Manahan’s gross earnings would be approximately P234,000.00. A
reasonable amount must be deducted therefrom that would represent Rolando Manahan’s
necessary expenses had he been living, in this case P120,000.00. The net or compensable
earnings lost by reason of Rolando Manahan’s death is, accordingly, P114,000.00.
Appellant is ordered to pay the heirs of Rolando Manahan the following amounts:
1. P50,000.00 as indemnity for death;
2. P26,445.00 as actual damages;
3. P114,000.00 by way of lost earnings;
4. P10,000.00 by way of educational assistance to Rolando Manahan’s two (2) sisters; and
5. P20,000.00 as moral damages.
PEOPLE OF THE PHILIPPINES vs. EFREN JEREZ
G.R. No. 114385
January 29, 1998
FACTS: On May 23, 1990, Gil Villafranca, a tricycle driver was approached by Efren Jerez,
informing him that he was looking for a carabao buyer. Subsequently, Villafranca accompanied
Efren to the house of one Reynaldo Ochoa. Efren, together with Reynaldo and another carabao
buyer, Joselito Balbastro, boarded a motorcycle and proceeded to Barangay Teddy to check the
condition of the carabaos. It was the last time that the two were seen alive. When Efren failed to
return the following day, a search, led by Julian, was conducted. In the course of their inquiry,
they found Reynaldo and Joselito lifeless, having sustained several mortally-inflicted stab wounds
in different parts of their bodies. The victims were divested of their watches, rayban glasses, and
a sum of money amounting to P37,000.00. The trial court convicted Efren Jerez, along with
Joselito Quijan, Zaldy Victa and Efren Bola guilty beyond reasonable doubt of the crime of robbery
with double homicide and were ordered to pay the heirs of the victims 100,000 as cost of loss of
earning capacity.
ISSUE: Whether or not the award of damages by the trial court for loss of earning capacity is
erroneous
RULING: YES. The computation of the damages awarded by the trial court for loss of earning
capacity fixing the same at P100,000.00 for each victim is erroneous. The formula consistently
used by the Supreme Court in determining life expectancy is (2/3 x [80 - age of the victim at the
time of death]). Thus, the award for loss of earning capacity for each victim shall be as follows:
Joselito Balbastro
P36,000.00 - gross annual income (P3,000.00 x 12 mos.)
Multiply: 30 - life expectancy (2/3 x 45 [80 - 35 age at time of death])
P 1,080,000.00 - total loss of earning capacity
Reynaldo Ochoa
P36,000.00 - gross annual income (P3,000.00 x 12 mos.)
Multiply: 21 - life expectancy (2/3 x 31 [80 - 49 age at time of death])
P756,000.00 - total loss of earning capacity
WHEREFORE, EFREN JEREZ guilty beyond reasonable doubt of the crime charged is hereby
AFFIRMED with the MODIFICATION that appellant shall indemnify Joselito Balbastro and
Reynaldo Ochoa in the amount of P1,080,000.00 and P756,000.00, respectively, for losses of
their respective earning capacity.
INTEREST (ART 2209-2213)
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)
Article 2210. Interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.
Article 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper
case, be adjudicated in the discretion of the court.
Article 2212. Interest due shall earn legal interest from the time it is judicially demanded,
although the obligation may be silent upon this point. (1109a)
Article 2213. Interest cannot be recovered upon unliquidated claims or damages, except
when the demand can be established with reasonable certainty.
Nacar vs. Gallery Frames
Facts:
Dario Nacar was dismissed by his employer, Gallery Frames which prompted him to file a
complaint. The Labor Arbiter ruled that the petitioner was dismissed without just cause. A
computation for the separation pay and back wages were made which amounted to Php
158,919.92. The respondent sought appeal to the NLRC, CA and Supreme Court, but they were
all dismissed. Thus, the judgment became final on April 17, 2002. During the execution of the
final judgment, the petitioner filed a motion for the re-computation of the damages. The amount
previously computed includes the separation pay and back wages up to the time of his dismissal.
The petitioner argued that the damages should cover the period until the date of final judgment.
A re-computation was made and the damages was increased to 471,320.31. Respondent prayed
for the quashal of such motion on the ground that the judgment made by the SC is already final
and the amount should not be further altered. Petitioner also filed another motion asking the court
to order the respondent to pay the appropriate legal interest of the damages from the date of final
judgment until full payment.
Issues:
Whether or not appropriate interests may be claimed by the petitioner.
Ruling:
The Supreme Court ruled that the petitioner shall be entitled to interest. In the case of
Eastern Shipping Lines, Inc. v. Court of Appeals, among the guidelines laid down by the Supreme
Court regarding the manner of computing legal interest is - when the judgment of the court
awarding a sum of money becomes final and executory, the rate of legal interest shall be 12%
per annum from such finality until its satisfaction. In addition to this, the Bangko Sentral ng
Pilipinas Monetary Board (BSP-MB), in its Resolution No. 796 dated May 16, 2013 declared that
the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed
in judgments, in the absence of an express contract as to such rate of interest, shall be six percent
(6%) per annum. Consequently, the twelve percent (12%) per annum legal interest shall apply
until June 30, 2013. Afterwards, the new rate of six percent (6%) per annum shall be the prevailing
rate of interest when applicable. The respondent was ordered to pay interest of twelve percent
(12%) per annum of the total monetary awards, computed from May 27, 2002 to June 30, 2013
and six percent (6%) per annum from July 1, 2013 until their full satisfaction.
AMOUNT OF AWARD (ART 2217-2220)
Article 2217. Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of the defendant's wrongful act for omission.
Article 2218. In the adjudication of moral damages, the sentimental value of property, real
or personal, may be considered.
Article 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this
article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.
Article 2220. Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the defendant acted fraudulently or in bad
faith.
FERNANDO LOPEZ, ET AL vs. PAN AMERICAN WORLD AIRWAYS

G.R. No. L-22415, G.R. No. L-22415
FACTS:
Petitioners in this case bought first class tickets with Pan American World Airways (PAN-
AN) from Tokyo to San Francisco. PAN-AM’s San Francisco head office confirmed the
reservations. On the day of their flight when they were already in Tokyo, the first-class tickets
were all booked up and PAN-AM could not accommodate petitioners even though they have
shown their first-class tickets. Since they had to attend to matters in the US, such as a conference
and a medical check-up, they took the flight as tourist passengers but made it clear that they were
doing so under protest. Petitioners filed a suit for damages against PAN-AM in the Court of First
Instance asking for actual and moral damages of 500,000 pesos. The CFI ruled for the petitioners
awarding them of 100,000 pesos as moral damages. Petitioners moved for reconsideration and
the CFI modified its decision making the award an amount of 150,000 pesos. Both partis then
appealed, the defendant arguing that it did not act in bad faith while the petitioners seek for an
increase of the damages.
ISSUE:
Whether or not PAN-AM acted in bad faith in the breach of contracts therefore making
them liable for moral damages
RULING:
Yes, PAN-AM acted in bad faith making them liable for moral damages.
The Supreme Court ruled that based on defendant’s evidence of facts, there is a clear
admission of its bad faith with regard to its breach of contract. Moral damages can be recovered
in breach of contracts where defendant acted fraudulently or in bad faith. In the case at bar, the
parties have suffered social humiliation, wounded feelings, serious anxiety and mental anguish
due to the airlines’ bad faith. They were expected to be flying from first class passengers by those
who will welcome them but were found to be among the tourist passengers. The SC made
emphasis that although it is not humiliating to fly as tourist passengers, it was humiliating to be
compelled to travel as one being that the parties’ were contracted to fly as first class passengers.
Senator Lopez was then Senate President Pro Tempore and international carriers know
the prestige of such position. He was also the former Vice President of the Philippines. He had a
private business conference to attend to and a second engagement which is a banquet by his
Filipino friends to honor his position. The SC ruled that the amount of 100,000 as damages is
appropriate. As for his wife, Mrs. Lopez was sick and was supposed to get a medical check-up in
the US but she experienced physical discomfort due to the 13-hour trip in the tourist class. Aside
from the better comfort in seating and in treatment when seated in the first class, she was deprive
of her right in first class as she has already paid for such seat. Due to such suffering and
humiliation, Mrs. Lopez is awarded 50,000 as moral damages. And for the immediate family
members of Lopez, they also suffered humiliation as they has already paid for such seat as well.
They were asking for 37,500 each but in their motion for reconsideration, they stated that they
were satisfied with 25,000 and the Court awarded such amount to them.
Therefore, the defendants are in bad faith and are liable for moral damages.
GERARDO SAMSON JR v. BANK OF THE PHILIPPINE ISLANDS
G.R. NO. 150487
10 JULY 2003
FACTS: Samson alleges that he was a client/depositor of BPI and on 20 August 1990 he
deposited to his account a Prudential Bank Check amounting to 3,500 pesos and on that same
day his balance was 367.38 pesos. Four days later, the petitioner asked his daughter to withdraw
2,000 pesos from his account but the transaction was declined twice due to insufficient funds.
The petitioner suffered embarrassment because he was unable to pay a creditor who was waiting
at his residence. On 12 September 1990, petitioner deposited 5,500 pesos and discovered that
his balance was only 342.38 pesos and that the 3,500 pesos was not credited to his account. An
investigation was conducted when the petitioner informed the respondent bank that it was a
security guard named Nonilon Rondina who encashed the check. It was also discovered that one
of the deposit envelopes was missing but the respondent bank did not inform the petitioner about
the check nor took any action to look for it. Petitioner alleges that the manager of respondent bank
Nerissa Cayanga was arrogant towards him. The trial court rendered a decision in favor of the
petitioner. The CA affirmed the ruling of the trial court but modified the amount of damages. The
CA held that the bank was grossly negligent and such amounted to bad faith that entitled the
petitioner to moral damages in the amount of 50,000 pesos instead of the 200,000 pesos awarded
by the trial court.
ISSUE: Whether or not the reduction of the award of moral damages was proper
RULING:
Moral damages are awarded to compensate the claimant for any physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation and similar injuries unjustly caused. The award must be proportional to the suffering
inflicted. The award of the moral damages should be increased to 100,000 pesos because
petitioner was a businessman and the highest lay person in the United Methodist Church.
Petitioner was also treated by the respondent in a condescending manner and he was not
compensated by the respondent bank for more than a decade.
Francisco vs. Ferrer
G.R. No. 142029
February 28, 2001
Facts:
Rebecca Lo and her daughter Annette Ferrer ordered a three-layered cake from
Fountainhead Bakeshop. It was then agreed that the wedding cake shall be delivered at 5:00
o'clock in the afternoon at the Cebu Country Club, Cebu City, stating clearly that the wedding is
scheduled on December 14, 1992. They made their first deposit in the amount of P1,000.00 on
November 19, 1992 and two weeks thereafter made a full payment on the remaining balance. On
the day of the wedding, after plaintiffs made a follow-up call to Fountainhead Bakeshop, at 8:00
o'clock they were informed that no wedding cake will be delivered because the order slip got lost.
Plaintiffs were then compelled to buy the only available cake at the Cebu Country Club which was
a sans rival. Even though they felt that it was a poor substitute to a wedding cake, the cutting of
the cake is always a part of the ceremony.
At 10:00 o'clock in the evening, the wedding cake arrived but plaintiffs declined to accept
it, besides their order was a three-layered cake and what was actually delivered was a two-layered
one. Subsequently, defendant Erlinda Francisco sent a letter of apology accompanied with a
P5,000.00 check, however, the same was declined by plaintiffs because they felt it was
inadequate.
Respondents filed with the Regional Trial Court, Cebu City an action for breach of contract
with damages against petitioners. The RTC ruled in favour of the respondents. The CA affirmed
the RTC’s decision but increased the award of moral damages from Php 30,000 to Php 250,000.
Hence, this appeal
Issue:
Whether the Court of Appeals erred in affirming the trial court's award of moral damages
and increasing the amount from thirty thousand (30,000.00) to two hundred fifty thousand pesos
(P250,000.00).
Ruling:
Yes. To recover moral damages in an action for breach of contract, the breach must be
palpably wanton, reckless, malicious, in bad faith, oppressive or abusive. Under the provisions of
this law, in culpa contractual or breach of contract, moral damages may be recovered when the
defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton
disregard of his contractual obligation and, exceptionally, when the act of breach of contract itself
is constitutive of tort resulting in physical injuries. In this case, no such fraud or bad faith. The
person claiming moral damages must prove the existence of bad faith by clear and convincing
evidence for the law always presumes good faith. It is not enough that one merely suffered
sleepless nights, mental anguish, serious anxiety as the result of the actuations of the other party.
Invariably such action must be shown to have been willfully done in bad faith or will ill motive. An
award of moral damages would require certain conditions to be met, to wit: (1) first, there must be
an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) second,
there must be culpable act or omission factually established; (3) third, the wrongful act or omission
of the defendant is the proximate cause of the injury sustained by the claimant; and (4) fourth, the
award of damages is predicated on any of the cases stated in Article 2219" of the Civil Code.
Nevertheless, the facts show that when confronted with their failure to deliver on the
wedding day the wedding cake ordered and paid for, petitioners gave the lame excuse that
delivery was probably delayed because of the traffic, when in truth, no cake could be delivered
because the order slip got lost. For such prevarication, petitioners must be held liable for nominal
damages for insensitivity, inadvertence or inattention to their customer's anxiety and need of the
hour.
BAD FAITH/MALICE/FRAUD
Zalamea v. CA
G.R. No. 104235. November 18, 1993
FACTS
Spouses Zalamea, together with their daughter, purchased 2 discounted airline tickets
and 1 full priced airline ticket all bound from New York to Los Angeles from Transworld Airlines
Manila agent. All three tickets represented confirmed reservations and were reconfirmed two days
prior the day of the flight.
However, at the day of the scheduled flight, the Zalamea family was placed on the wait-
list due to over-booking. Eventually, Mr. Zalamea was eventually allowed to board the flight using
the sole full-priced ticket among the three; however, his wife and daughter were denied boarding.
Mrs. Zalamea and her daughter were forced to purchase new airline tickets from American
Airlines costing USD918. Hence, Zalamea filed an action for damages based on breach of
contract of carriage against Transworld Airlines with the RTC.
RTC ruled in favor of Zalamea and ordered payment of 1) actual damages representing
USD918 for the American Airline tickets and the unused Transworld Airline tickets of Mrs.
Zalamea and her daughter; 2) moral damages; and 3) attorney’s fees. CA modified the ruling
finding there to be no fraud or bad faith on the part of Transworld Airlines considering that
overbooking is a common and acceptable practice of airlines in the US. CA removed the grant of
moral damages but retained the actual damages and attorney’s fees.
ISSUE: WON there was fraud or bad faith on the part of Transworld Airlines?
RULING
Yes, Transworld Airlines was in bad faith when it did not allow the Mrs. Zalamea and her
daughter to board their flight to LA in spite of confirmed tickets.
Where an airline had deliberately overbooked, it took the risk of having to deprive some
passengers of their seats in case all of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said passenger is entitled to
an award of moral damages.
Even on the assumption that overbooking is allowed, TWA is still guilty of bad faith in not
informing its passengers beforehand that it could breach the contract of carriage even if they have
confirmed tickets if there was overbooking. Also, TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to discounted tickets.
Further, the court granted exemplary damages in addition to moral and actual damages.
PAL vs. CA
FACTS
1. Dr. Josefino Miranda and his wife went to the United States of America on a regular flight
of PAL. After a stay of over a month there, they obtained confirmed bookings from San
Francisco to Manila via Honolulu; PAL flight PR 851 from Manila to Cebu; and PAL Flight
PR 905 from Cebu to Surigao.
2. Private respondents boarded PAL Flight PR 101 in San Francisco with five (5) pieces of
baggage. After a stopover at Honolulu, and upon arrival in Manila, they were told by the
PAL personnel that their baggage consisting of two balikbayan boxes, two pieces of
luggage and one fishing rod case were off-loaded at Honolulu, Hawaii due to weight
limitations.
3. Consequently, private respondents missed their connecting flight from Manila to Cebu
City, as originally scheduled, since they had to wait for their baggage which arrived the
following day after their pre-scheduled connecting flight had left. They consequently also
missed their other scheduled connecting flight from Cebu City to Surigao City.
4. They departed for Cebu City and therefrom private respondents had to transfer to PAL
Flight 471 for Surigao City. On the way to Surigao City, the pilot announced that they had
to return to Mactan Airport due to some mechanical problem. While at Mactan Airport, the
passengers were provided by PAL with lunch and were booked for the afternoon flight to
Surigao City. However, said flight was also canceled.
5. Since there were no more lights for Surigao City that day, private respondents asked to
be billeted at a Hotel where they usually stay whenever they happen to be in Cebu City.
6. Contrarily, when Dr. Miranda called the hotel, he was informed that he and his wife could
be accommodated there.
7. When private respondents tried to retrieve their baggage, they were told this time that the
same were loaded on another earlier PAL flight to Surigao City. Thus, private respondents
proceeded to the hotel sans their baggage and of which they were deprived for the
remainder of their trip.
8. Thereafter, they instituted an action for damages which, after trial as well as on appeal,
was decided in their favor.
ISSUE: Whether or not there was bad faith on the part of PAL so as to entitle the Sps. Miranda to
moral damages?
RULING: YES, bad faith is present in this case.
The Court has time and again ruled that a contract of air carriage generates a relation
attended with a public duty and any discourteous conduct on the part of a carrier's employee
toward a passenger gives the latter an action for damages and, more so, where there is bad faith.
It is settled that bad faith must be duly proved and not merely presumed.
It is now firmly settled that moral damages are recoverable in suits predicated on breach
of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith.
Inattention to and lack of care for the interests of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad faith which entitles the
passenger to an award of moral damages.
In this case, the SC affirmed the findings of the lower court when it found that the situation
was aggravated by the following incidents: the poor treatment of the Mirandas by the PAL
employees during the stopover at Mactan Airport in Cebu; the cavalier and dubious response of
petitioner's personnel to the Miranda spouses' request to be billeted at the Cebu Plaza Hotel by
denying the same allegedly because it was fully booked, which claim was belied by the fact that
Dr. Miranda was easily able to arrange for accommodations thereat; and, the PAL employees'
negligent, almost malicious, act of sending off the baggage of private respondents to Surigao City,
while they were still in Cebu, without any explanation for this gross oversight.
Prudential Bank vs. Court of Appeals and Leticia Tupasi-Valenzuela
GR No. 125536 | March 16, 2000 | J. Quisumbing
Facts:
• On June 1, 1988, private respondent Leticia deposited P35,271.60 in her savings account
with petitioner Prudential Bank, bringing her deposits to a total of P36,770.41.
• Leticia then issued a post-dated check for P11,500, dated June 20, 1988, in favor of Belen
Legaspi as payment for a purchased jewelry.
• Legaspi endorsed the check to Philip Lhuillier and upon presentment of the latter, the
check was dishonored for insufficient funds. Leticia cannot be contacted to redeposit the
check.
• On July 4, 1988 upon learning of the incident, Leticia went to Prudential Bank to inquire
about the same, claiming that her account has sufficient funds. The officier-in-charge
responded that there is no need to review because the passbook was the best proof.
• Later, Leticia found out that her deposit was only credited on June 24 and Lhuillier
redeposited on the same date, so that on June 27 it was properly cleared.
• Petitioner bank explained to Lhuillier and Legaspi that it was at fault, however, Leticia was
unmoved since this was not her first incident with petitioner bank and filed a suit for
damages.
• RTC: Dismissed the complaint.
• CA: Set aside RTC’s decision and ruled in favor of private respondent, awarding P100,000
moral damages, P50,000 exemplary damages, and P50,000 attorney’s fees.
• Petitioner’s argument: It averred that it acted in good faith and the misposting was an
honest mistake and that its employees had profusely apologized to Leticia.
Issue: Whether or not moral damages can be awarded even if bad faith was not proved.
Ruling: YES. A bank is under the obligation to treat the accounts of its depositors with meticulous
care whether such account consists only of a few hundred pesos or of millions of pesos. It has
been ruled in PNB v CA, that an offended party was entitled to recover moral damages for serious
anxiety, embarrassment and humiliation brought by a bank’s negligence even if not attended with
malice and bad faith.
In the case, although malice or bad faith was not sufficiently proved, the fact remains that
petitioner bank committed a serious mistake and its negligence was a result of lack of due care
and caution required of managers and employees of a firm engaged in banking.
As there is no hard-and-fast rule in the amount of moral damages, but a yardstick that it should
not be palpably and scandalously excessive, the award of P100,000 is reasonable considering
the reputation and social standing of private respondent Leticia Valenzuela.
MALICIOUS PROSECUTION
ROSARIO LAO and GEORGE FELIPE, JR., vs. CA, former Fifth Division, and FRANK
DEUNA,
G.R. No. 109205 April 18, 1997
FACTS:
In the evening of December 30, 1988, Eduardo Antonio, his wife and children together with Mrs.
Miranda and her daughter Maricel were having a conversation while on the sidewalk near the side
of Eduardo's house. Suddenly, a jeep driven by defendant-appellant George Felipe, Jr. came
rushing into the direction of Eduardo and the other.
Eduardo told his companions to go to the side of the sidewalk to avoid being hit or bumped by
said jeep but he was not able to get out of the way and was violently bumped or hit on both his
calves by the bumper of the jeep.
Eduardo, asked for the assistance of respondent herein, Frank Deuna, who was then a barangay
councilman of the place of the incident. Frank accompanied him to the Sangandaan Police Sub-
station No. 8 and also assisted the uniformed police officers to the scene of the incident in seizing
the vehicle in question.
On January 4, 1989, Sangandaan Police Sub-station Commanding Officer P/Capt. Enrique M.

Robles filed a complaint with the Quezon City Fiscal's Office, charging George with frustrated
homicide and subsequently, Assistant City Prosecutor Maynigo filed an information charging
George with the crime of attempted murder.
Rosario Lao, on her part, filed a complaint-affidavit with the Anti-Carnapping Task Force of the
Department of Justice, dated January 10, 1989, impleading Frank and Eduardo as respondents
for carnapping. In the complaint-affidavit, Rosario alleged, among others, that Frank and Eduardo
together with their companions forcibly took the subject vehicle from George's house. The Anti-
Carnapping Task Force issued an alarm sheet as well as subpoenas addressed to Frank and
Eduardo who both subsequently filed their counter-affidavits stating that the vehicle was brought
to the Sangandaan Police Sub-station for safekeeping. After investigation, the Department of
Justice issued a resolution ordering the dismissal of the case "for lack of evidence sufficient to
establish a probable cause" against Frank and Eduardo.
On June 27, 1989, Frank, impleading Rosario and George as defendants, filed an instant civil
case for damages, alleging, among others, that he "suffered mental anguish, serious anxiety,
besmirched reputation, wounded feelings, moral shock and social humiliation" due to the
"fabricated, malicious and baseless charges" of carnapping filed against him by said defendants.
The RTC rendered its decision in favor of Frank.
Aggrieved, Rosario appealed to the CA who therein dismissed the appeal and rationated that
there was malicious intent in her filing of the complaint for carnapping.
ISSUE: Whether the conclusion of respondent appellate court that there was malicious intent in
the filing of the complaint for carnapping was incorrect.
HELD:
No. The elements of malice and absence of probable cause were present in the instant case.
1. Petitioner Rosario Lao knew that Frank, with policemen, had taken the vehicle to the
Sangandaan police station after the traffic incident. As pointed out by the CA, Rosario
cannot validly claim that, prior to the filing of the complaint-affidavit for carnapping, she
did not know the whereabouts of the vehicle.
2. That there was no probable cause for the filing of the carnapping charge against Frank as
resolved by the DOJ.
To quote the CA, “such actuations of Rosario lend credence to the conclusion arrived at by the
trial court that the filing of the carnapping case against the plaintiff (Frank) was nothing more than
a malicious, fabricated and baseless charge concocted to harass plaintiff and to scare and deter
Eduardo Antonio from pushing through with his complaint for Attempted Murder against George
Felipe, Jr.,” who is her cousin and co-petitioner herein.
Thus, the judgment rendered sentencing Rosario and George to pay Frank jointly and severally:
1. P50,000.00 as moral damages; 2. P25,000.00 as exemplary damages; 3. P25,000.00 as
attorney's fees; and 4. Costs of the suit was affirmed.
LABOR CASES
Audion Electric Co., Inc. vs. NLRC
G.R. No. 106648
June 17, 1999.
FACTS: The case involves a claim of moral and exemplary damages on the ground of illegal
dismissal. Nicolas Madolid was employed as a fabricator by petitioner Audion Electric Co.,
Inc. Madolid alleged that he was dismissed without just and legal cause and with bad faith, after
receiving a letter stating that he will be terminated after the turnover of materials, tools, and
equipment. The Labor Arbiter and the NLRC ruled in favor of Madolid and awarded him moral
and exemplary damages in the amount of P20,000.00. The petitioner then raised the case to the
Supreme Court questioning the decision of the NLRC in ruling that the petitioner was a regular
employee instead of a project employee. The Supreme Court ruled that Madolid was indeed a
regular employee as evidenced by the certificate of employment. This court has consistently held
that the failure of the employer to file termination reports after every project completion with the
nearest public employment office is an indication that the private respondent was not and is not
a project employee. Petitioner also raises the issue with regard to the imposition of damages.
ISSUE: Whether or not the award of moral and exemplary damages was proper considering that
the same are without factual and legal basis
RULING: No, the award of moral and exemplary damages was not proper. The award of moral
and exemplary damages must be deleted for being devoid of legal basis. Moral and exemplary
damages are recoverable only where the dismissal of an employee was attended by bad faith or
fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good
customs, or public policy. The person claiming moral damages must prove the existence of bad
faith by clear and convincing evidence for the law always presumes good faith. It is not enough
that one merely suffered sleepless nights, mental anguish, serious anxiety as the result of the
actuations of the other party. Invariably, such action must be shown to have been willfully done
in bad faith or with ill motive, and bad faith or ill motive under the law cannot be presumed but
must be established with clear and convincing evidence. Private respondent predicated his claim
for such damages on his own allegations of sleepless nights and mental anguish, without
establishing bad faith, fraud, or ill motive as legal basis therefor. Private respondent not being
entitled to award of moral damages, an award of exemplary damages is likewise baseless. Where
the award of moral and exemplary damages is eliminated, so must the award for attorney’s fees
be deleted. Private respondent has not shown that he is entitled thereto pursuant to Art. 2208 of
the Civil Code.
JOSE H. RUTAQUIO and ERLINDA F. VILLAREAL vs. NLRC
FACTS:
Jose Rutaquio and Erlinda Villareal were Savings Bookkeeper and Cashier of Rural Bank
of Baler, respectively. Upon auditing and inspection of MY Mateo and Co. (CPA of the bank) of
the records, it found out that certain accounts exceeded the entries of journals and ledgers of the
bank and that some transactions were not timely recorded. This prompted them to recommend
disciplinary action against the two which the bank heeded through its President (Flordeliza Carpio)
by approving a Resolution pursuant thereto. They then sought formal resignation of the two, which
the latter questioned through a letter expressing that they would only accede to the discipline if it
will be dispensed with in the proper venue. The bank then ratiocinated that the employees’ acts
were prejudicial to the bank which subjected it to penalties from the Central Bank. The refusal of
the two subsequently led to their dismissal. They then sued the bank for illegal dismissal and
prayed for reinstatement and certain back pays. NLRC ruled in their favor but instead did not
compel reinstatement due to strained relations and awarded moral damages and attorney’s fees.
CA deleted the latter awards upon appeal of the bank.
ISSUE:
Whether or not the Court of Appeals is correct in deleting the award for moral damages
and attorney’s fees.
RULING:
Yes, the deletion of the moral damages is correct but not the deletion of attorney’s fees.
As regards the award of moral damages, employer contends that mere allegation of
entitlement to moral damages would not suffice to justify the award, absent any concrete proof.
The Court is of the sense that moral damages must have a factual basis. In the case under
consideration, petitioners were unable to substantiate their claim for moral damages. In the
absence of fraud or bad faith on the part of the employer in dismissing petitioners, an award of
moral damages is not proper. Citing the case of Lopez v. Javier Moral damages in labor cases
are recoverable only when the dismissal is attended by bad faith or fraud, or constituted an act
oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.
As to the attorney’s fees: it is settled that in actions for recovery of wages or where an
employee was forced and constrained to litigate and incur expenses in order to protect his rights
or interests, the award of attorney’s fees is morally and legally justified.
CORPORATION
Development Bank of the Philippines, Petitioner, vs. Court of Appeals and Emerald Resort
Hotel Corporation, Respondents.
Facts:
Private respondent Emerald Resort Hotel Corporation (ERHC) obtained a loan from
petitioner Development Bank of the Philippines (DBP). DBP released the loan in three
installments. To secure the loan, ERHC mortgaged its personal and real properties. DBP
approved a restructuring of ERHC’s loan subject to certain conditions but it was then canceled for
ERHC’s failure to comply with some of the material conditions of the said agreement. ERHC
delivered to DBP three stocks certificates of ERHC. DBP filed with the Office of the Sheriff, RTC
an application for extra-judicial foreclosure of real estate and chattel mortgages alleging that
ERHC failed to pay its loan. The Deputy Provincial Sheriffs issued the required notice of public
auction sale of the personal and real properties. However, the sheriffs failed to execute the
corresponding certificates of posting of the notices. The notice of auction sale was published by
Bicol Tribune but at the request of ERHC the auction sale was postponed. ERHC filed with the
RTC a complaint for annulment of the foreclosure sale of the personal and real properties. It
alleged that the foreclosure was void because DBP failed to comply with the procedural
requirements prescribed by law. The RTC ruled in favor of the ERHC. It ordered DBP to pay the
corporation moral damages in the amount of 500,000 for initiating what a clearly illegal foreclosure
and causing the said plaintiff corporation to suffer needlessly anguish, opprobrium and disrepute
as a consequence thereto. The respondent appealed to the CA the insufficiency of the moral
damages awarded by the trial court and the absence of any award of temperate, nominal and
exemplary damages. The CA affirmed the decision of the trial court’s award of moral damages
but denied ERHC’s claim for temperate and exemplary damages. The CA found that DBP’s
intrusion assisted by sheriffs and several armed men into Hotel Ibaon and the sheriff’s inventory
of the hotel’s furniture and fixtures caused fear and anxiety to the hotel owner, staff and guests.
According to CA, these acts debased the hotel’s goodwill and undermined its viability warranting
the award of moral damages. Hence, this petition.
Issue:
Whether the award of moral damages to ERHC, a juridical person, is proper.
Ruling:
No. The SC held that as a general rule, moral damages are not awarded to a corporation.
The award of moral damages cannot be granted in favor of a corporation because being an
artificial person and having existence only in legal contemplation, it has no feelings, no emotions,
no sense. It cannot, therefore, experience physical suffering and mental anguish, which can be
experienced only be one having a nervous system. The statement in People vs. Manero and
Mambulao Lumber Co. vs PNB, that a corporation may recover moral damages if it “has a good
reputation that is debased, resulting in social humiliation” is an obiter dictum. The Court has set
aside the award of damages to ERHC.
FILIPINAS BROADCASTING NETWORK, INC., petitioner, vs. AGO MEDICAL AND
EDUCATIONAL CENTER-BICOL CHRISTIAN COLLEGE OF MEDICINE, (AMEC-BCCM) and
ANGELITA F. AGO, respondents.
Facts:
• Expose is a radio documentary program hosted by Carmelo Mel Rima and
Hermogenes Jun Alegre. Expose is aired every morning over DZRC-AM which is
owned by Filipinas Broadcasting Network, Inc. (FBNI). Expose is heard over
Legazpi City, the Albay municipalities and other Bicol areas.
• Rima and Alegre exposed various alleged complaints from students, teachers and
parents against Ago Medical and Educational Center-
Bicol Christian College of Medicine (AMEC) and its administrators. Claiming
that the broadcasts were defamatory, AMEC and Angelita Ago, as Dean of AMECs
College of Medicine, filed a complaint for damages against FBNI, Rima and Alegre
on 27 February 1990.
• The complaint further alleged that AMEC is a reputable learning institution.
With the supposed expose, FBNI, Rima and Alegre transmitted malicious
imputations, and as such, destroyed plaintiffs reputation. AMEC and Ago included
FBNI as defendant for allegedly failing to exercise due diligence in the selection
and supervision of its employees, particularly Rima and Alegre.
• The trial court rendered a Decision finding FBNI and Alegre liable for libel except
Rima. In holding FBNI liable for libel, the trial court found that FBNI failed to
exercise diligence in the selection and supervision of its employees. The CA
affirmed the trial courts judgment with modification. The appellate court made Rima
solidarily liable with FBNI and Alegre.
Issue:
Whether or not AMEC is entitled to moral damages.
Ruling:
FBNI contends that AMEC is not entitled to moral damages because it is a corporation. A
juridical person is generally not entitled to moral damages because, unlike a natural person, it
cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety,
mental anguish or moral shock. The Court of Appeals cites Mambulao Lumber Co. v. PNB, et
al.to justify the award of moral damages. However, the Courts statement in Mambulao that a
corporation may have a good reputation which, if besmirched, may also be a ground for the award
of moral damages is an obiter dictum. Nevertheless, AMECs claim for moral damages falls under
item 7 of Article 2219of the Civil Code. This provision expressly authorizes the recovery of moral
damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify
whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a
corporation can validly complain for libel or any other form of defamation and claim for moral
damages. Moreover, where the broadcast is libelous per se, the law implies damages. In such a
case, evidence of an honest mistake or the want of character or reputation of the party libeled
goes only in mitigation of damages. Neither in such a case is the plaintiff required to introduce
evidence of actual damages as a condition precedent to the recovery of some damages. In this
case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral damages. However,
the award of P300,000 moral damages are unreasonable. The record shows that even though
the broadcasts were libelous per se, AMEC has not suffered any substantial or material damage
to its reputation. Therefore, the award of moral damages was reduced from P300,000 toP150,000.
CRYSTAL vs. BANK OF THE PHILIPPINE ISLANDS
G.R. No. 172428

November 28, 2008
FACTS:
On 28 March 1978, spouses Crystal obtained a P300, 000.00 loan in behalf of the Cebu
Contractors Consortium Co. (CCCC) from the BPI-Butuan. The loan was secured by a chattel
mortgage on heavy equipment and machinery of CCCC. On the same date, the spouses executed
in favor of BPI-Butuan a Continuing Suretyship where they bound themselves as surety of CCCC
in the aggregate principal sum of not exceeding P300, 000.00. Thereafter, or on 29 March 1979,
Raymundo Crystal executed a promissory note for the amount of P300, 000.00, also in favor of
BPI- Butuan. Sometime in August 1979, CCCC renewed a previous loan, this time from BPI, Cebu
City branch (BPI-Cebu City). However, CCCC had no real property to offer as security for the
loan; hence, the spouses executed a real estate mortgage over their own real property. They
executed another real estate mortgage over the same lot in favor of BPI-Cebu City, to secure an
additional loan of P20,000.00 of CCCC. CCCC failed to pay its loans to both BPI-Butuan and BPI-
Cebu City when they became due. CCCC, as well as the spouses, failed to pay their obligations
despite demands. Thus, BPI resorted to the foreclosure of the chattel mortgage and the real estate
mortgage. The foreclosure sale on the chattel mortgage was initially stalled and done. BPI filed a
complaint for sum of money against CCCC and the spouses before the RTC, seeking to recover
the deficiency of the loan of CCCC and the spouses with BPI-Butuan Before the Court, petitioners
who are the heirs of the spouses argue that the failure of the spouses to pay the BPI-Cebu City
loan of P120,000.00 was due to BPI’s illegal refusal to accept payment for the loan unless the
P300,000.00 loan from BPI-Butuan would also be paid. Consequently, in view of BPI’s unjust
refusal to accept payment of the BPI-Cebu City loan, the loan obligation of the spouses was
extinguished, petitioners contend.
ISSUE:
Whether or not BPI is entitled to moral damages
RULING:
No, they are not entitled to moral damages. BPI is not entitled to moral damages. A
juridical person is generally not entitled to moral damages because, unlike a natural person, it
cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety,
mental anguish or moral shock. The Court of Appeals found BPI as "being famous and having
gained its familiarity and respect not only in the Philippines but also in the whole world because
of its good will and good reputation must protect and defend the same against any unwarranted
suit such as the case at bench. Obviously, an artificial person like herein appellant corporation
cannot experience physical sufferings, mental anguish, fright, serious anxiety, wounded feelings,
moral shock or social humiliation which are basis of moral damages. A corporation may have
good reputation which, if besmirched may also be a ground for the award of moral damages.
Indeed, while the Court may allow the grant of moral damages to corporations, it is not
automatically granted; there must still be proof of the existence of the factual basis of the damage
and its causal relation to the defendant’s acts. This is so because moral damages, though
incapable of pecuniary estimation, are in the category of an award designed to compensate the
claimant for actual injury suffered and not to impose a penalty on the wrongdoer.

Dec 7 Torts Digest

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CONCEPT AND KIND OF DAMAGES (Art 2197)

Article 2197. Damages may be:

(1) Actual or compensatory;

(4) Temperate or moderate;

(6) Exemplary or corrective

Filinvest Credit Corporation vs IAC and Nestor Sunga Jr.

Florante Miano was traveling from the Philippines to Czechoslovakia via

ISSUE: WON the award of damages to Miano was proper?

Moral Damages – Not proper

Exemplary Damages – Not proper

Issue: Whether the award of damages and attorney’s fees is proper.

Wherefore, the decision of the CA is affirmed with modification.

Article 2199. Except as provided by law or by stipulation, one is entitled to an adequate

Article 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent

(2) For injury to the plaintiff's business standing or commercial credit.

Article 2199. Except as provided by law or by stipulation, one is entitled to an adequate

Article 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent

(2) For injury to the plaintiff's business standing or commercial credit.

DAVID V. COURT OF APPEAL

PEOPLE OF THE PHILIPPINES vs. EFREN DEGOMA and MARINO TABORADA

Article 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent

(2) For injury to the plaintiff's business standing or commercial credit.

People of the Philippines vs. Ireneo Jugueta

G.R. No. 202124

1. death indemnity in the amount of fifty thousand pesos (P50,000.00);

Pedro Davila vs PAL

People of the Philippines v. Quilaton

Nacar vs. Gallery Frames

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in article 309;

FERNANDO LOPEZ, ET AL vs. PAN AMERICAN WORLD AIRWAYS

On January 4, 1989, Sangandaan Police Sub-station Commanding Officer P/Capt. Enrique M.

CRYSTAL vs. BANK OF THE PHILIPPINE ISLANDS

G.R. No. 172428

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