C.

INTENTIONAL TORTS
Elements of intentional torts damages where there is an abuse of rights, even when the act is
A tort is intentional when the tortfeasor: not illicit.
1. Desires the consequence of his act; or
2. He believes that the consequences are When is there an abuse of right?
substantially certain to result from his act. Every abnormal exercise of a right, contrary to its
socio-economic purpose, is an abuse that will give
Originally, in Philippine law, quasi-delicts did not govern right to liability. The exercise of a right must be in
intentional torts. Intentional torts only became punishable if they accordance with the purpose for which it was
constituted a crime (thus, the governing law was the Revised established, and must not be excessive or unduly
Penal Code). harsh. There must be no intention to injure another.
However, the power to determine whether the
But with these provisions, intentional torts became incorporated exercise of a right has been unjust, considering all the
in Philippine law. facts and circumstances, is left to the court’s sound
discretion.
How is intent proved? via Tolentino
The defendant’s intent is usually proved
circumstantially, or is inferred from his conduct. If the When is there no abuse of right?
defendant’s conduct causes injury, he is presumed to Though injury may be caused by the following acts
intend the natural consequences of his act. exercising rights, there is no liability:
1. Where a person merely uses a right pertaining to
Intentional vs. negligent torts him, without bad faith or intent to injure, the fact
Intentional torts Negligent torts that damages are thereby suffered by another will
Harmful consequences are The act or omission merely not make the former liable.
substantially certain to occur creates a foreseeable risk or 2. Absolute rights are certain rights whose exercise
or are intended harm, which may or may not can never be the basis of liability, such as the
actually be realized following:
a. The right of parents to refuse or deny their
The difference lies in the certainty of the harmful consequences. consent to the marriage of a minor child;
Where in intentional torts there is substantial certainty of b. The right to deprive one’s legal heirs of an
harmful consequences, in negligence, the conduct of the inheritance by giving all the property of the
defendant creates a risk or harm which may or may not result. testator to others, so long as the legitime is not
This comparison is consistent with the definition of negligence, impaired;
which consists in a failure to observe the requisite due care in a c. The right to set up the nullity of contracts, legal
given circumstance. presumptions, and prescription of obligations;
d. Ordinarily, the refusal to enter into a contract is
Intent vs. motive an absolute right, and the motive for such
Intent Motive refusal cannot be inquired into.
Desire to cause the harmful Impelling reason for that via Tolentino
consequences particular desire
Definition of good faith
Will motive be material? Good faith is the honest intention to abstain from
Generally, motive is immaterial. But it may be used to taking any unconscientious advantage of another,
aggravate or mitigate the harmful consequences together with an absence of all information or belief of
resulting from an intentional tort. facts which would render the transaction
unconscientious.
1. ABUSE OF RIGHT via Tolentino

A R T . 1 9, C C A R T . 2 0, C C
Every person must, in the exercise of his rights and in Every person who, contrary to law, willfully or
the performance of his duties, act with justice, give negligently causes damage to another, shall
everyone his due, and observe honesty and good faith. indemnify the latter for the same.

Elements of abuse of right under Art. 19
1. There is a legal right or duty;
2. Such right or duty was exercised in bad faith;
3. Such exercise was for the sole intent of prejudicing
or injuring another.
via Albenson Enterprises Corp. v. CA
The old rule was that no person could beheld liable for damages
caused to another by the exercise of a right. But with the
introduction of this provision, the law now grants indemnity for
This article gives a general sanction for all other provisions which
do not especially provide their own sanction. It is broad enough
to cover all legal wrongs that do not constitute violations of
contract.
A R T . 2 1, C C
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.
 TORTS & DAMAGES
Elements of abuse of right under Art. 21
1. There is an act, which is legal;
2. It is, however, contrary to morals, good custom,
public order, or public policy;
3. It is done with intent to injure.
via Albenson Enterprises Corp. v. CA
Under this article, liability may arise from acts which are in
themselves legal or not prohibited, if such acts are contrary to
morals or good customs, public order, or public policy. This
provision is very intimately related to the principle embodied by
Art. 19.
This article fills the gaps in statutes that leave victims of moral
wrongs helpless, even though they may have actually suffered
material and moral damages.
The injury suffered by the plaintiff may refer to any determinate
right or property, whether material or not.
The doctrine of proximate cause must apply, because the
defendant must have caused the injury through his act or
omission. If through the plaintiff’s own fault or negligence, he
sustained injury, he cannot recover.
Acts punished by the provisions
Art. 19 Art. 20 Art. 21
Willful act causing loss
Willful or negligent or injury, in a manner
acts that are contrary contrary to morals,
An exercise of
to law (so long as it is good customs, or
a right
a violation of law, public policy (acts
there will be liability) contra bonos mores or
against good morals)
A R T . 2 3, C C
Even when an act or event causing damage to
another’s property was not due to the fault or
negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
benefited.
This provision imposes liability even without fault, as long as the
injurious act or event benefited the defendant.
Breach of promise to marry
The promise to marry has no obligatory force, so as a
rule, its breach cannot give rise to liability for
damages. But a prospective bride or groom who
capriciously breaks an engagement without reason,
and thereby causes moral and material injury to the
other party, is liable for the damages caused,
especially if the break occurs just before the wedding,
and after a long engagement.
via Tolentino
Mere breach of promise to marry is not actionable, unless there
are certain circumstances present, e.g.:
1. There are preparations for which expenses have been
incurred; or
2. There has been seduction or consummation.
41
Consummation
If a woman parted with her virtue merely based on the
promise of the man to marry, then the consummation
is actionable. If she would have had sex with him out
of love and regardless of the promise, then it is not
actionable.
Seduction
If the woman who is already of age knowingly gives
herself to a man, there is no injury for which she can
recover indemnity.
But if there is fraud, characterized by willfulness,
the action lies.
via Tolentino
If the breach of promise to marry was attended with seduction,
even if the girl was no longer a virgin prior to the seduction, it is
actionable.
WASSMER v. VELEZ
Breach of promise to marry not an actionable
wrong, but to walk away from it after completing
preparations and publicity is contrary to good
customs.
Though the court will not award damages to
soothe the hurt of a breach of promise to marry, it
will award actual damages indemnifying the
bride- or groom-to-be for actual expenses during
the wedding preparations.
Facts: Beatrice Wassmer and Paquing Velez were engaged to be
married, but 2 days before the wedding, Paquing wrote to Bet
that the wedding had to be postponed since his mother opposed
it. The next day, he sent a telegram saying that the situation had
changed, and that he was returning soon. Paquing was then
never heard from again. Bet then sued him for damages, and he
was held liable to the tune of around P30,000 total. He
appealed, arguing that the judgment was null and void, because
the breach of promise to marry as an actionable wrong was
eliminated by the Code Commission.
Issue: Whether Paquing should be liable for abandoning his
bride. YES.
Ratio: The couple applied for a marriage license and made
preparations by distributing wedding invitations, purchasing the
bride’s gown and her bridesmaids’ dresses, procuring a
matrimonial bed with accessories (ooh), and holding a bridal
shower. Before the wedding, however, Paquing simply did not
show. Though a breach of promise to marry is not an actionable
wrong, this is not merely a breach of promise to marry. To
formally set a wedding and go through the preparation and
publicity only to walk out of it is palpably and unjustifiably
contrary to good customs. Paquing must be held answerable for
damages under Art. 21.
BAKSH v. CA
Inducement through fraud makes “breach of
promise to marry” actionable.
Facts: Baksh, an Iranian studying medicine in Dagupan, promised
to marry Marilou, a waitress at a luncheonette. He met her
parents, and lived in with her in his own apartment after asking
for her hand. He then began maltreating her, and later
repudiated his promise to marry her, revealing that he had
already married someone in Bacolod. Though this was later
proven false, Marilou and her family filed this action for damages
against Baksh.
Issue: Whether Art. 21 applies to a breach of promise to marry.
YES.
Ratio: Intentional and malicious acts are governed by the RPC.
Art. 2176 meanwhile covers negligent acts or omissions. Injurious
acts not falling within those two provisions, and thus potentially
being beyond redress, are covered by Art. 21, which fills the
vacuum between the first two. Without Art. 21, Baksh could go
scot free: he could not be charged for seduction under the RPC,
since Marilou is over 18. An award of damages to Marilou under
Art. 21 is thus permissible, not because of the breach of promise
to marry, but because of the fraud behind the promise that
injured Marilou’s honor and reputation.
VELAYO v. SHELL
Facts: Commercial Air Lines, Inc. had a debt with Shell PH, and
offered its plane, located in California, to settle this debt. Shell
PH refused. Afterwards, CALI declared insolvency and held a
meeting to discuss how it would pay all its creditors pro-rata. A
liquidation committee was formed, and a Shell PH representative
was chosen as its head, to determine how CALI’s assets would be
distributed. However, because of its previous knowledge of CALI’s
plane located in California, Shell PH disregarded this agreement
and proceeded to assign its credit to Shell US, which then file a
case to recover CALI’s debt before a court in California. A writ of
attachment was issued against the plane, to the prejudice of
CALI’s other creditors. Velayo, CALI’s assignee, now asks for
damages.
Issue: Whether Shell may be liable for damages, though no law
prohibits the assignment of its credit. YES.
Ratio: The fact that Shell PH assigned its credit to Shell US and
Shell US was able to attach the plane is, strictly speaking, legal.
But there was already an agreement as to the payment of debts.
When the Shell PH representative went behind the other
creditors’ backs, it acted in bad faith in attaching the plane in the
California for the satisfaction of CALI’s debt to Shell.
Jurisdiction of labor arbiters vs. regular courts
Labor arbiters Regular courts
Art. 223, Labor Code Relevant CC provisions
Governed by
(formerly Art. 217)
Based on reasonable Based on quasi-delict
causal connection under Arts. 19, 20, and
Cause of between the act 21, regardless of the
action complained of and the existence of the
employer-employee employer-employee
relationship relationship
Mere illegal dismissal in a humiliating manner does not remove
the case from the LA’s jurisdiction, unless it is based on quasi-
delict under the Civil Code.
GLOBE MACKAY v. CA
Facts: Globe Mackay employee Tobias discovered anomalous
transactions and reported these to his superior, Hendry, who
confronted him as the main suspect. Tobias was ordered to take
a leave of absence, but when he returned for work, Hendry called
him a crook and a swindler, ordering him to take a lie detector
test and submit handwriting specimens. All analyses showed
that Tobias was not the culprit, but Globe and Hendry still filed 5
cases for estafa through falsification of commercial documents
and one case for discovering secrets through seizure of
correspondence under the RPC. The fiscal dismissed all the
cases, but Globe also dismissed Tobias. When he tried to apply
with another company, Hendry wrote the latter and stated that
Tobias was dismissed due to dishonesty, leading to Tobias not
getting the job. Tobias then filed suit to recover damages for
Globe and Hendry’s unlawful, malicious, oppressive, and abusive
acts.
Issue: Whether Globe and Hendry had acted in abuse of their
rights. YES.
Ratio: They did not violate any provision of law, since they were
merely exercising their legal right as management, but they are
liable under Art. 21. They were guilty of baselessly imputing guilt
to Tobias and harassing him during investigation, dismissing him
in an abusive manner, maliciously filing criminal complaints
against him, heaping defamatory remarks on him, and poisoning
his application for a new job. The manner by which they exercised
their right is the basis for awarding damages.
ALBENSON v. CA
Facts: Albenson charged Baltao with a violation of BP 22,
because Baltao allegedly issued a bouncing check to Albenson
as payment for a delivery of steel plates. Later, it was discovered
that the account the check was drawn against was in the name of
the company owned by Baltao’s son. Baltao filed a case for
malicious prosecution against Albenson.
Issue: Whether Albenson could be liable for malicious
prosecution. NO.
Ratio: Albenson didn't violate the principle of abuse of right.
What prompted the company to file a criminal complaint against
Baltao was the failure to collect the amount owed, plus the fact
that Albenson conducted inquiries regarding the origin of the
check. There was probable cause for the filing of the complaint,
and no malice attended it, either.
UNIVERSITY of the EAST v. JADER
Facts: Jader, a 4th year law student, was given an INC for a final
exam that he was unable to take during the first semester. The
next sem, he took the removals and got a 5.0, but he was not
informed of his grade. Jader’s name appeared in the tentative list
of graduates for that year, though, and his name was in the
invitations for the graduation ceremony. When he attended the
ceremony, he was called onstage and handed a symbolic
diploma. However, when he was already preparing for the bar
exams, he learned of his deficiency and was not able to take the
bar. He then sued UE for damages.
Issue: Whether UE is liable for misleading Jader thathe had
satisfied all the requirements for graduation. YES.
 TORTS & DAMAGES
Ratio: The school has the contractual obligation to timely inform
and furnish sufficient notice and information its students whether
he or she had already complied with all the requirements for the
conferment of a degree or whether they would be included
among those who will graduate. In belatedly informing Jader of
the result of his removals, UE acted in bad faith and should be
liable under Art. 19.
SAUDI ARABIAN AIRLINES v. CA
The situs of the tort is where the overall injury was
sustained by the plaintiff. The place with the most
significant contact is the PH.
Considerations in determining the situs of the tort
1. The place where the injury occurred;
2. The place where the conduct causing the injury
occurred;
3. The domicile, residence, nationality, place of
incorporation and place of business of the parties,
and
4. The place where the relationship, if any, between
the parties is centered.
Facts: Milagros was a flight attendant for Saudi Air, and on a lay-
over in Indonesia, a fellow crew member attempted to rape her.
Instead of assisting her with her case, Saudi Air coerced her into
dropping the charges. A year and a half later, she discovered that
a Saudi court had tried her case, with Saudi Air’s assistance, and
found her guilty of adultery. The Prince dismissed her case after
being denied Saudi Air’s aid, and upon her return to Manila,
Saudi Air dismissed her.
Issue: Whether the RTC has jurisdiction over the case. YES.
Ratio: Because Milagros predicated her case on Arts. 19 and 21,
the RTC has jurisdiction. The Philippines was the situs of the tort,
and the place with the most significant contact with the parties.
Milagros was a citizen and resident of the Philippines, recruited
in the Philippines, and Saudi Air’s deceit, leading her to believe
that the airline would offer her assistance, was employed in the
Philippines.
PETROPHIL v. CA
Facts: Petrophil and Dr. Cruz entered into a hauling contract,
where it was provided that Petrophil could terminate the contract
for any breach, negligence, improper authority, discourtesy,
inadequate performance or abandonment. Petrophil’s
employees then went on strike, supported by Cruz and her
husband. The spouses instructed their truck drivers not to load
any petrol. When operations resumed, Cruz’s contract was
suspended, and then later terminated. Cruz then filed an action
to seek the nullity of the termination.
Issue: Whether Petrophil was guilty of arbitrarily terminating the
contract. YES.
Ratio: It appears that the termination of the contract was in
retaliation for the support the spouses gave to the striking
employees. Cruz was not asked to explain her actions; her
contract was simply terminated. Petrophil thus had acted in bad
faith. Indeed, Petrophil had the right to terminate the contract,
but it could not act purposely to injure respondents.
43
AVON COSMETICS v. LUNA
Facts: Luna started worked for Beautifont, which was later
acquired by Avon. Luna and Avon had a Supervisor’s Agreement,
which prohibited her from selling products other than that of
Avon. While working for Avon, Luna then entered into the sales
force of Sandre Philippines, which sold health supplements.
Avon terminated her because of the alleged breach of contract,
and Luna filed for damages.
Issue: Whether damages could be awarded to Luna. NO.
Ratio: Aside from providing an exclusivity clause, which Luna
violated, the Supervisors’ Agreement gave Avon the unilateral
right to terminate the contract with or without cause, provided
there is notice. There is thus no abuse of right in terminating
Luna.
2. VIOLATION OF PERSONAL SECURITY,
PHYSICAL INJURIES
A R T . 3 2, C C
Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs any of
the following rights and liberties of another person
shall be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a
periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without
due process of law;
(7) The right to a just compensation when private
property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house,
papers, and effects against unreasonable
searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and
correspondence;
(12) The right to become a member of associations or
societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly to
petition the government for redress of grievances;
(14) The right to be free from involuntary servitude in
any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself
and counsel, to be informed of the nature and
cause of the accusation against him, to have a
speedy and public trial, to meet the witnesses
face to face, and to have compulsory process to
secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness
against one's self, or from being forced to confess
guilt, or from being induced by a promise of
immunity or reward to make such confession,
except when the person confessing becomes a
State witness;
(18) Freedom from excessive fines, or cruel and
unusual punishment, unless the same is imposed
or inflicted in accordance with a statute which has
 not been judicially declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article,
whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party has
a right to commence an entirely separate and distinct
civil action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
prosecution (if the latter be instituted), and mat be
proved by a preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or omission
constitutes a violation of the Penal Code or other
penal statute.
Rationale for Art. 32
This article further implements the civil liberties
guaranteed by the Constitution, and creates an
absolutely separate and independent civil action for the
violation of these civil liberties.
via Tolentino
Malice not required
To require that a person act with malice before he is
held liable under this article would defeat the purpose
to protect individual rights. The object of the article is
to put an end to official abuse under the guise of
being done in good faith.
via Tolentino
Who is held liable
1. Private persons;
2. Public officials, whether the acts/omissions of #1
and #2 constitute a criminal offense;
3. Judges, only when their act or omission constitutes
a criminal act
via Tolentino
A R T . 3 3, C C
In cases of defamation, fraud, and physical injuries, a
civil action for damages, entirely separate and distinct
from the criminal action, may be brought by the
injured party. Such civil action shall proceed
independently of the criminal prosecution, and shall
require only a preponderance of evidence.
Rationale for independent civil action
This provision creates an independent civil action for
the offenses provided, which may be filed even if no
reservation was made when the criminal action was
filed. This allows the injured individual to enforce his
rights and recover the damages due him, regardless
of the fiscal’s acts.
via Tolentino
Effect of failure of civil action
Though the criminal action will not be prejudiced and
will continue, the issue of civil liability has ceased to
be involved in the trial of the criminal action. Thus,
civil recovery can no longer be allowed.
Definition of “physical injuries”
The phrase must be understood in its general sense,
and not in its RPC sense. It therefore includes all
bodily injuries: slight/less serious/serious physical
injuries, attempted/frustrated homicide, etc.
via Tolentino
MADEJA v. CARO
Civil actions based on the causes in Art. 33 will
proceed independently of the criminal action, and
no longer need reservation. Art. 33 by itself
already reserves the right to instate the civil
action.
Facts: Respondent was accused of homicide through reckless
imprudence for the death of Cleto Madeja after an
appendectomy. The petitioner reserved her right to file a
separate civil action for damages. While the criminal case was
still pending, Petitioner sued Dr. Japzon for damages, alleging
that her husband died because of the latter’s gross negligence.
Dr. Japzon moved to dismiss this civil action, invoking Sec. 3(a),
Rule 111 of the Rules of Court, which barred damage suits arising
from the crime from being filed during the pendency of the
criminal case.
Issue: Whether the civil case should be dismissed. NO.
Ratio: The relevant provision here is Sec. 2 not Sec. 3a. The civil
action referred to here in Art. 33 is ex delicto, manifest from the
use of the phrases “criminal action” and “criminal prosecution.”
In this case, since “homicide” falls under Art. 33, the separate
civil suitshall proceed independently of the criminal case.
PONCE v. LEGASPI
Damages claimed from libelous statements under
Art. 33 cannot cover statements made in the
courtroom. The statements made therein are
privileged in character.
The test to breakthrough the protective barrier of
an absolutely privileged communication is not
“bona fides” but relevance.
Facts: A disbarment case was filed by the directors of L’NOR
against Atty. Legaspi, alleging several acts of conflict of interest
because of the creation of an alleged competitor company. The
disbarment complaint was dismissed. Subsequently Legaspi
filed an action for damages, stating that the allegations in the
disbarment complaint are libelous in nature.
Issue: Whether the case is indeed an action for damages arising
from libel. NO.
Ratio: The CA was wrong in treating the complaint as one arising
from libel and applied the test of bona fides. The allegations and
averments in the pleadings are absolutely privileged as long as
they are relevant or pertinent to the issues. The allegations that
Ponce made in the disbarment proceedings were not irrelevant,
and therefore not libelous. Also, Atty. Legaspi may have suffered
injury as a consequence of the disbarment proceedings but the
adverse result of an action does not per se make the action
wrongful. If the damage results from a person’s exercise of his
legal rights, it is damnum absque injuria.
 TORTS & DAMAGES
3. VIOLATION OF PERSONAL DIGNITY
A R T . 2 6, C C
Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other
persons. The following and similar acts, though they
may not constitute a criminal offense, shall produce a
cause of action for damages, prevention and other
relief:
(1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or
family relations of another;
(3) Intriguing to cause another to be alienated from
his friends;
(4) Vexing or humiliating another on account of his
religious beliefs, lowly station in life, place of
birth, physical defect, or other personal condition.
The Civil Code, through this provision, follows the exceptional
American cases allowing actions for damages based on profane,
insulting, humiliating, scandalous, or abusive language. The law
imposes respect for the dignity of others, and a person who
violates this duty becomes liable for damages. (via Tolentino)
A R T . 2 5, C C
Thoughtless extravagance in expenses for pleasure or
display during a period of acute public want or
emergency may be stopped by order of the courts at
the instance of any government or private charitable
institution.
This article may be read in conjunction with Art. 26(4).
Indulgence in thoughtless extravagance may demoralize and
kindle unrest in the hearts of the poor, who may become more
keenly conscious of their poverty. This provision reaffirms the
police power of the State in preserving social stability. (via
Tolentino)
YUTUK v. MERALCO
The law does not mean to impose a penalty on the
right to litigate. That right is so precious that
moral damages may not be charged on those who
exercise it erroneously, except if the exercise was
done wrongfully and recklessly.
Facts: Petitioner, a lawyer, was charged with theft of electricity,
when Meralco failed to collect the petitioner’s overdue
obligations. The petitioner contends that she is not liable for the
increased electricity because it was the meter inspector’s
tampering of the electric meter that caused the increase.
Petitioner now files a case for recovery of damages (moral)
because of Meralco’s bad faith in filing the criminal case.
Issue: Whether Meralco is liable for damages. YES.
Ratio: To protect its rights, appellant could have filed but did not
file any civil suit to recover the value of the electric current
allegedly consumed by appellee but not registered in the electric
meter installed in her premises; instead it resorted to a criminal
charge, which can only mean that it chose to force an alleged
debtor to pay — a clear perversion of the function of criminal
processes and of courts of justice. Also, Meralco should have
inquired carefully into the matter. The notation made by the
plaintiff coupled with the administrative charge based on the
45
incident should have been sufficient to give defendant
reasonable ground to delve further into the case before taking
such action.
MEDINA v. CASTRO-BARTOLOME
Facts: Petitioners were the former General Manager and
Comptroller, respectively, of the Pepsi-Cola plant in Muntinlupa.
They were dismissed and maliciously humiliated by Cosme de
Aboitiz after they were in delay in the use of promotional crowns.
The petitioners subsequently filed a case for illegal dismissal that
was dismissed because the petitioners signed a resignation
letter. After the dismissal, they filed an action for damages in the
CFI by reason of the humiliating manner of which they were
dismissed. The defendants filed a motion to dismiss, stating that
the LA should have jurisdiction because the cause of action
stems from an alleged illegal dismissal.
Issue: Whether the LA has jurisdiction. NO.
Ratio: The action is for damages from the tortious act allegedly
committed by the respondents. The governing statute is the Civil
Code and not the Labor Code. There is no need to discuss PD
1691 and its retroactive effects because the cause of action is
based on the humiliating manner to which the petitioners were
dismissed, and not the dismissal itself.
TENCHAVEZ v. ESCAÑ O
An action for alienation of affections against the
parents of one spouse cannot prosper without
proof of malice or unworthy motives on their part.
Facts: Vicenta and Pastor got married secretly and wanted to
elope but got caught by V’s parents. They’re supposed to have
their marriage re-celebrated but V didn’t want to push through
with it because of an anonymous letter saying that P has an
amorous relationship w/ V’s bff. They lived separately and
eventually V got a foreign divorce then remarried. Now P faults
V’s parents for their estranged relationship claiming that the
latter alienated their daughter’s affections.
Issue: Whether Vicenta’s parents are liable for damages for
discouraging and alienating Vicenta’s affections towards Pastor.
NO.
Ratio: There is no alienation of affection in this case. The charge
was neither supported by credible evidence nor were the acts
tainted with malice or unworthy motives.
4 . M ALI CIO US PRO S ECUT IO N
A R T . 2 2 1 9, C C
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,
 TORTS & DAMAGES
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.
Definitions of malicious prosecution
Latin: Denuncia falsia
Malicious prosecution is an action for damages
brought by one against whom a criminal prosecution,
civil suit or other legal proceeding has been instituted
maliciously and without probable cause, after the
termination of such prosecution, suit or other
1 contract, quasi-contract, crime, or quasi-delict.
proceeding in favor of the defendant therein.
To constitute malicious prosecution, there must be
proof that the prosecution was prompted by a sinister
design to vex and humiliate a person, and that it was
initiated deliberately by the defendant knowing that
2
his charges were false and groundless
1
via Lao v. Associated Anglo-American Tobacco Corp.
2
via Albenson Enterprises Corp. v. CA
Elements of malicious prosecution
What must be proven:
1. The following facts:
a. The prosecution exists;
b. The defendant had himself prosecuted the
case; and
c. The action was finally terminated with an
acquittal.
2. The prosecutor acted without probable cause in
bringing the action;
3. The prosecutor was actuated or impelled by legal
malice.
via Albenson Enterprises Corp. v. CA. See also Lao.
LAO v. ASSOCIATED ANGLO AMERICAN
Facts: By virtue of an agreement, Lao became the seller of
cigarettes manufactured by Associated Anglo- American
Tobacco Corporation for which he received commission, fixed
monthly salary and operational allowance. When Lao
experienced some difficulties in complying with his obligations in
the agreement, the Corporation caused the transfer of some of
the shipments of cigarettes to another agent. This cased Lao to
file an accounting case against the Corporation. While this was
pending, the corporation filed an estafa case against Lao. This
caused Lao to file a case for malicious prosecution (during the
pendency of the estafa case too).
Issue: Whether the case for malicious prosecution should
prosper. NO.
Ratio: Lao prematurely filed a case for malicious prosecution
when he did so during the pendency of the estafa case. Even the
fact that he was acquitted subsequent to the filing of the case for
malicious prosecution does not vest a cause of action.
As defined in the elements, the fact of termination of the criminal
prosecution, civil suit or legal proceeding maliciously filed and
without probable cause, should precede the complaint for
malicious prosecution. Otherwise, there would be no cause of
action.
46
A R T . 2 2 , C C
Every person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the latter
without just or legal ground, shall return the same to
him.
Elements of unjust enrichment
1. The defendant has been enriched;
2. The plaintiff suffered a loss;
3. There is a causal relation between the two;
4. The defendant’s enrichment was without just or
legal ground; and
5. The second party has no other action based on
This action to recover what has been paid without just cause is
the accion in rem verso.
What is enrichment?
1. Enjoyment of a thing belonging to the plaintiff;
2. The benefits from service rendered by the plaintiff
to the defendant;
3. The acquisition of a right, whether real or personal;
4. The increase of value of property of the defendant;
5. The improvement of a right of the defendant, such
as the acquisition of a right or preference;
6. The recognition of the existence of a right in the
defendant; or
7. The improvement of the conditions of life of the
defendant.
Unjust enrichment vs. solution indebitii
Unjust enrichment Solutio indebitii
Provided by Art. 22 Art. 2154
Source of
obligation Quasi-delict Quasi-contract
Mistake necessary:
Mistake as delivering something
Mistake not necessary
an element not meant to be
received
BAYANI v. PANAY ELECTRIC CO.
Facts: PECO discontinued supplying electrical services to Bayani
Drive Inn and William Bayani Hotel after it discovered that
electricity theft was ongoing in the pension houses. PECO then
filed two complaints for violation of RA 7832 against Bayani but
were dismissed by the City Prosecutor. PECO appealed at the
DOJ. Bayani then filed a civil case for injunction and damages
arising from malicious prosecution and subsequently added a
prayer for writ of preliminary prohibitory injunction to make
PECO desist from making “false imputations that plaintiff
allegedly continued to commit violations.”
Issue: Whether the malicious prosecution case should prosper.
NO.
Ratio: The element of final termination of action resulting in
acquittal was absent at the time Bayani filed the case in 1996
because the final termination from the DOJ only came in 1998.
Hence, his case was prematurely filed.
CHUA v. CA
Generally, a complaint for malicious prosecution
refers to unfounded criminal prosecutions, but the
term has been expanded to include baseless civil
suits filed without a cause of action or probable
cause, and which are meant to harass or humiliate
a defendant.
Facts: Co-lessee filed a complaint against co-lessee spouses
becaused the latter’s facilities caused some inconveniences to
the former’s premises plus there was no permit given to install
AC units therein. The spouses’ business was temporarily closed,
but the said order was eventually lifted after compliance.
Respondents were aggrieved by the order, so they filed a
complaint. Sps. Chua filed a counterclaim for damages based on
co-lessee’s malicious prosecution.
Issue: Whether the malicious prosecution case will prosper. NO.
Ratio: Malice and lack of probable cause must both be clearly
shown to justify an award of damages based on malicious
prosecution. SC ruled that there was no malicious prosecution:
there’s probable cause but no malice/bad faith. The finding that
he no longer conducted his business on the second floor of the
building cannot be a basis for inferring the presence of bad faith.
Findings of bad faith cannot be based on mere inferences
unsubstantiated by evidence.
5. DEFAMATION
Art. 33, CC
GUITA v. CA
Facts: Haguisan was found to be unfit to work as security guard
because of some difficulty in concentrating. He asked Guita for a
certification because he was looking for another job. Guita stated
in the certification that Haguisan was mentally unfit for work.
Haguisan says that this is defamation because he is only unfit to
work as security guard.
Issue: Whether the certification was made with malice. NO.
Ratio: The Court opines that the work referred to in the
certification is that of a security guard and nothing else. Also, no
malice can be imputed to Guita, as it is clear that the statement
can refer only to his unfitness to work. Furthermore, the
certification was made by Guita upon the request of Haguisan
himself and was given to no one but the latter.
NAVARRETE v. GENEROSO
Facts: Navarrete is a lawyer who notarized the Deed of Sale being
challenged as null and void by Private Respondent. Petitioner
was included as one of the respondents in that case. Petitioner
subsequently filed for a counterclaim for moral damages
because of statements made by private respondent in her
Amended Complaint and her testimonies in the course of the
trial that falsely and maliciously slandered him, alluded him
when she said the words "stupid", "bastards", "swindlers", and
"plunderers" while testifying on the Deed of Sale with Right of
Repurchase.
Issue: Whether statements in the judicial proceedings are
absolutely privileged. YES.
Ratio: It is a settled principle in this jurisdiction that statements
made in the course of judicial proceedings are absolutely
privileged. This absolute privilege remains regardless of the
defamatory tenor and the presence of malice if the same are
relevant, pertinent or material to the cause in hand or subject of
the inquiry. Thus, the person making these statements such as a
judge, lawyer or witness does not thereby incur the risk of being
found liable thereon in a criminal prosecution or an action for the
recovery of damages. In this case, the allegations made by
private respondent in her Amended Complaint stand the test of
relevancy. The words "forging", "malicious and fraudulent" and
"falsified" are clearly pertinent to the cause of action of private
respondent, which is to annul the Deed of Sale with Right of
Repurchase wherein private respondent’s signature was forged
by an impostor, and to recover damages resulting from such
forgery.
6 . S E DU CT I ON
Art. 21, CC
To recover damages for seduction, there need not
have been sexual intercourse.
The “seduction” that would make one liable for a
breach of promise to marry is not the same as that
punished under the Revised Penal Code, but the
latter may serve as guidance.
PE v. PE
Facts: Lolita Pe is a 24-year old unmarried teacher in a barrio
school. Alfonso Pe is a married man. Sometime in 1952, Alfonso
frequented the house of Lolita on the pretext that he wanted her
to teach him how to pray the rosary. They eventually fell in love
and conducted clandestine trysts not only in their hometown
Gasac but also in Boac. Lolita’s parents forbade him from going
to their house. On 1957, Lolita left her home, taking her clothes
with her. The disappearance of Lolita was reported to the police
but up to the present there was no news or trace of her
whereabouts. The family then instituted the present case,
claiming damages under Art. 21.
Issue: Whether Alfonso is liable for damages. YES.
Ratio: The circumstances under which Alfonso tried to win
Lolita’s affection cannot lead, to any other conclusion than that it
was he who, thru an ingenious scheme or trickery, seduced the
latter to the extent of making her fallin love with him. he wrong
he has caused her and her family is indeed immeasurable
considering the fact that he is a married man. Verily, he has
committed an injury to Lolita’s family in a manner contrary to
morals, good customs and public policy as contemplated in
Article 21 of the new Civil Code.
HERMOSISIMA v. CA
The seduction contemplated in Art. 2219 (moral
damages) is the crime punished by Arts. 337 and
338 of the RPC.
Facts: Petitioner and his girlfriend, Soledad — older than him by
around 10 years — had sex on a boat. When Sol became pregnant,
Frank promised that he would marry her, but a month after their
daughter was born, he married someone else. The lower courts
 TORTS & DAMAGES
awarded moral damages, on the basis that seduction had
occurred.
Issue: Whether there was indeed seduction in this case. NO
Ratio: Petitioner Frank is not morally guilty of seduction in this
case. He is approximately 10 years younger than complainant
Sol. The Court also considered that Sol was supposed to be
highly enlightened, as a former high schoolteacher and a life
insurance agent, whereas Frank was a “mere” apprentice pilot
when the two became intimate. Furthermore, it was found that
Sol “surrendered herself” to Frank because she had been
“overwhelmed by her love for him” and “wanted to bind him by
having a fruit of their engagement even before they had the benefit
of clergy.” Also, based on the clear and manifest intent of
lawmakers not to sanction actions for the breach of promise to
marry, the award of moral damages was improper.
Comparing “seduction” under Pe and Hermosisima
Pe v. Pe Hermosisima v. CA
The seduction referred to in The seduction referred to in
this case is the one that would this case is the one that would
make a person liable for make a person liable for moral
breach of promise to marry. It damages as specifically
is guided by, but does not enumerated under Art. 2219.
strictly adhere to, the RPC
It follows the RPC definition.
definition.
TANJANCO v. CA
The tortfeasor should have utilized seduction for
breach of promise to marry be actionable.
To constitute seduction, there must be in all cases
be some sufficient promise or inducement, and
the woman must yield because of the promise or
inducement.
Facts: Tanjanco started visiting and courting Santos, which
eventually led to Santos reciprocating his feelings. In due time,
Santos gave in to the pleas of Tanjanco to have sex with him.
Since then, they regularly had sex, which bore them a baby! She
had to quit from her job as an IBM secretary, which caused her to
be unable to support the baby. She subsequently informed
Tanjanco and pleaded with him to make good of his promise of
marriage, but Tanjanco stopped and refrained from seeing her,
and since then, he was never seen again. Santos filed a
complaint with a prayer for a decree compelling Tanjanco to
recognize the unborn child; to pay her not less than P430 per
month for support, plus moral and exemplary damages, plus
attorney’s fees
Issue: Whether Santos has a cause of action. NO.
Ratio: It is not seduction where the willingness arises out of
sexual desire or curiosity of the female, and the defendant merely
affords here the needed opportunity for the commission of the
act. In this case, it is apparent that for one whole year, Santos
maintained intimate sexual relations with Tanjanco, with
repeated acts of intercourse. Such conduct is incompatible with
the idea of seduction. Therefore, no case is made under Art. 21 of
the CC.
48
7. DERELICTION OF DUTY
A R T . 2 7, C C
Any person suffering material or moral loss because a
public servant or employee refuses or neglects,
without just cause, to perform his official duty may file
an action for damages and other relief against the
latter, without prejudice to any disciplinary
administrative action that may be taken.
Requisites of action under Art. 27
1. That the defendant be a public official charged
with the performance of official duties;
2. That there be a violation of an official duty in favor
of an individual;
3. That there be willfulness or negligence in the
violation of such official duty; and
4. That there be an injury to the individual.
via Tolentino
This article limits liability to refusal or neglect to perform official
duties —that is, inaction — and not wrongful official action. (via
Tolentino)
A R T . 3 4, C C
When a member of a city or municipal police force
refuses or fails to render aid or protection to any
person in case of danger to life or property, such
peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein
recognized shall be independent of any criminal
proceedings, and a preponderance of evidence shall
suffice to support such action.
This article creates a separate civil action to enforce the liability
of the officer, independent of any criminal proceeding.
It also makes the city or municipality subsidiarily liable for the
omission of its police officers to render air or protection to
anyone, meaning that liability can be enforced only when the
guilty police officer is insolvent. (via Tolentino)
AMARO v. SAMANGUIT
Art. 27 clearly provides that filing (or not filing) an
administrative charge does not preclude an action
for damages.
Facts: Man was assaulted and shot. When he tried to get help
from the police, the latter just harassed him and he was forced to
renounce their interest in said case. After the mayor ordered
Sumanguit to do an investigation, the latter harassed plaintiffs to
force them not to make him and the police liable.
Issue: Whether the Chief of Police is liable under Art. 27. YES.
Although the complaint is imperfectly drafted, all the Rules
require in order for the complaint to succeed is that there is a
showing by a statement of ultimate facts that the plaintiff has a
right and that the defendant violated such right. In this case,
there was a repeated dereliction of their duties, a grave violation
of their right, when the police harassed and terrorized them and
also when they were arrested just to sign affidavits.
 TORTS & DAMAGES
ZULUETA v. NICOLAS
If the complaint before the fiscal is dismissed, the
remedy is not an action for damages against the
fiscal. It is a motion for reconsideration before the
fiscal, and if it is denied, a petition for review with
the Secretary of Justice.
Facts: Zulueta filed a libel complaint against the provincial
governor of Rizal and the staff of Philippine Free Press. Nicolas
the provincial Fiscal of Rizal, after conducting an investigation,
absolved the provincial governor and the staff of Philippine Free
Press; finding that the libelous statements had been made in
good faith and for the sole purpose of public interest. Zulueta
filed a case to recover moral and pecuniary damages from
Nicolas.
Issue: Whether there was a dereliction of duty on the part of
Nicolas. NO.
Ratio: Nicolas, in the exercise of discretion in determining the
sufficiency of evidence to justify the filing of an information,
cannot be charged with dereliction of duty because he has legal
cause not to charge the provincial governor and the staff of
Philippine Free Press with libel. He found insufficient evidence to
prosecute after conducting an investigation. Government agents
or officers cannot be held liable for the consequences of their
official acts, unless shown that it was willful and malicious and
with the express purpose of inflicting injury.
A R T . 3 5, C C
When a person, claiming to be be injured by a criminal
offense, charges another with the same, for which no
independent civil action is granted in this Code or any
special law, but the justice of the peace finds no
reasonable grounds to believe that a crime has been
committed, or the prosecuting attorney refuses or fails
to institute criminal proceedings, the complainant
may bring a civil action for damage against the
alleged offender. Such civil action may be supported
by a preponderance of evidence. Upon the
defendant’s motion, the court may require the plaintiff
to file a bond to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the prosecuting
attorney, the civil action shall be suspended until the
termination of the criminal proceedings.
Prejudicial questions determine guilt or innocence of the accused
and suspends the criminal action.
Just because the civil action ex delictu was filed before the
criminal charge does not mean the latter will be suspended on
the ground of a prejudicial question. The civil action must raise
the prejudicial question, and not merely seek recovery. Only
then will the criminal action be suspended.
A R T . 3 1, C C
When the civil action is based on an obligation not
arising from the act or omission complained of as a
felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result
of the latter.
49
VITAL-GOZON v. CA
Under Arts. 19 and 27 of the Civil Code, a public
official may be made to pay damages for
performing a perfectly legal act, albeit with bad
faith or in violation of the “abuse of right” doctrine
embodied in the preliminary articles of the Civil
Code concerning Human Relations.
Facts: Because of the reorganization of the DOH based on an EO
passed by Pres. Aquino, Respondent was demoted. She
subsequently filed for reinstatement to her previous position,
alleging that such demotion should be null and void. The CSC
ruled in her favor, so she asked the hospital to reinstate her
immediately. Petitioner failed to act on several requests. The
court later on granted a suit for mandamus + damages, which
forced petitioners to question the award of damages.
Issue: Whether there was ground for the damages. YES.
Ratio: The Court found that the award of each was proper in the
case at bar considering the ordeal that de la Fuente had to
endure before he could avail of what judicial authorities declared
he was entitled to. Under Arts. 19 and 27, public officers may be
liable for moral damages for as long as the same suffered by the
private respondent were the proximate result of the public
officer’s wrongful act or omission. In any case, she was sued in
both her official and personal capacities.
8 . VIOLATION OF RIGHT S
Art. 32, CC
ABERCA v. VER
Public officers, whether direct or indirectly
involved in the transgression of Constitutional
rights, are liable under Art. 32.
Facts: Under the pretense of preempting terrorist activities
planned by the CPP-NPA, the military authorities raided various
suspected communist safe houses in the metro. After their arrest
they were denied visits from their counsels and relatives, they
were interrogated in violation of their rights to silence and
counsel, and that they were tortured in order to extract from
them incriminatory information and statements. These were
deliberate and concerted actions and said plans were known to
and sanctioned by the defendants. The petitioners filed a case for
damages against the military authorities and their superiors.
Issue: Whether the officials impleaded are liable for damages.
YES.
Ratio: The contention that the military officers involved were
immune from suit because they were acting in performance of
their official duties is misplaced. It may be that, as members of
the AFP, they were merely responding to their duty, but this
cannot be construed as blanket license or roving commission
untrammelled by constitutional restraint, to disregard or
transgress upon the rights and liberties of the individual citizen
enshrined and protected by the Constitution. Article 32 does not
exempt respondents from responsibility. Only judges are
excluded under the said article, provided their acts or omissions
do not constitute a violation of the Penal Code or any other
statute.
 TORTS & DAMAGES 50

The principle of accountability of public officers means that he

can no longer abdicate his duty to supervise his subordinates,
secure in the thought that he does not have to answer for the
transgressions against the constitutional rights of the citizen.

MHP GARMENTS v. CA

Facts: MHP granted exclusive franchise to sell BSP

uniforms/paraphernalia. They found out that private
respondents were selling without any authority so they initiated a
raid with the help of the PHL Constabulary. They seized the
goods, but after the prelim investigation, fiscal dismissed
complaint and ordered return of goods. Private respondents filed
for damages.

Issue: Whether MHP and De Guzman liable for damages even if

they did not effect the seizure. YES.

Ratio: Evidence did not justify warrantless search and seizure of

private respondents ‘ goods The time between the receipt of
information by MHP that private respondents were selling BSP
goods without any authority and the raid/seizure was sufficient
enough for MHP to have applied for a search warrant. The law
speaks of an officer or employee or person directly or indirectly
responsible for violation of constitutional rights and liberties of
another. Thus it is not actor alone who must answer but also the
person directly and indirectly responsible. In this case, MHP can
beheld liable as well because they assented to the illegal search.
 D. STRICT LIABILITY
1. SPECIFIC PERSONS
Specific persons held liable
1. Owners of animals (Art. 2184)
2. Manufacturers and processors of foodstuffs,
drinks, toilet articles, and similar goods (Art. 2187
and provisions of the Consumer Act)
3. Provinces, cities, and municipalities (Art. 2189)
4. Heads of families living in a building from where
things are thrown or fallen (Art. 2193)
5. Employers, in the even of death or injury to their
employees (Art. 1711 and 1712)
2. ABNORMALLY DANGEROUS
A CT I V IT I ES
A R T . 2 1 8 8, C C
There is prima facie presumption of negligence on the
part of the defendant if the death or injury results
from his possession of dangerous weapons or
substances, such as firearms and poison, except when
the possession or use thereof is indispensable in his
occupation or business. (n)
3. NUISANCE

Liability for things falling from buildings i . Definition

vs. collapsing buildings
A R T . 6 9 4, C C
Things falling Collapsing buildings
A nuisance is any act, omission, establishment,
Provided by Art. 2193 Art. 2190, 2191 condition of property, or anything else which:
Building or structure (1) Injures or endangers the health or safety of others;
Event that collapses totally or
Things are thrown or
causes or
damage fall from a building partially due to lack of (2) Annoys or offends the senses; or
necessary repairs (3) Shocks, defies or disregards decency or morality; or
Person held Proprietor of the (4) Obstructs or interferes with the free passage of any
Head of family
liable building or structure public highway or street, or any body of water; or
Strict liability— (5) Hinders or impairs the use of property.
whether negligently Negligence is
Extent of
or intentionally presumed from the ii . Kinds
liability
thrown, the head of lack of repairs
family is liable A R T . 6 9 5, C C
Nuisance is either public or private. A public nuisance
A R T . 1 7 1 1, C C affects a community or neighborhood or any
Owners of enterprises and other employers are considerable number of persons, although the extent
obliged to pay compensation for the death of or of the annoyance, danger or damage upon individuals
injuries to their laborers, workmen, mechanics or other may be unequal. A private nuisance is one that is not
employees even though the event may have been included in the foregoing definition.
purely accidental or entirely due to a fortuitous cause,
if the death or personal injury arose out of and in the Public vs. private nuisance
course of the employment. The employer is also liable Public nuisance Private nuisance
for compensation if the employee contracts any illness Affects a community or
or disease caused by such employment or as the neighborhood or any
result of the nature of the employment. If the mishap considerable number of
was due to the employee’s own notorious negligence, Anything not covered by
persons, although the
or voluntary act, or drunkenness, the employer shall Definition the definition of a public
extent of the annoyance,
not be liable for compensation. When the employee’s danger, or damage nuisance
lack of due care contributed to his death or injury, the upon individuals may be
compensation shall be equitably reduced. unequal
Criminal prosecution
A R T 1 7 1 2, C C Civil action (abatement,
Civil action (abatement,
If the death or injury is due to the negligence of a Remedies damages, injunction)
damages, injunction)
fellow-worker, the latter and the employer shall be
solidarily liable for compensation. If a fellow worker’s Extrajudicial abatement Extrajudicial abatement
intentional or malicious act is the only cause of the City or municipal mayor
death or injury, the employer shall not be answerable, Who may Private person ONLY IF
Any private person
unless it should be shown that the latter did not institute the nuisance is
injured by the nuisance
exercise due diligence in the selection or supervision complaint especially injurious to
of the plaintiff’s fellow-worker. him

Liability of employers under Arts 1711 and 1712 Nuisance per accidens vs. nuisance per se
Liability exists even if the death or injury is purely Per accidens Per se
accidental or due to fortuitous cause, as long as the Nuisance by reason of the Nuisance at all times, under
death or injury arose out of employment circumstances all circumstances
 TORTS & DAMAGES 52

ILOILO ICE & COLD v. MUNICIPAL COUNCIL repairing and building bodies of motor vehicles, and
involves the use of tools and machinery that give rise to
A municipal body has the power to declare and much noise and
abate nuisances but it has no power to find as fact annoyance during all hours of the day up to nighttime.
that a particular thing is a nuisance. The
determination of whether or not a nuisance exists
is a judicial function, because to declare
something a nuisance is to deprive its use.

Facts: ICS’s cold storage plant emitted an obscene amount of

smoke so the municipal council issued a resolution requiring it to
elevate its smokestacks or face closure. This is a suit to enjoin the
Municipal Council. ICS claims that the intervention of the courts
is necessary to find property a nuisance.

Issue: Whether a municipal council may declare and abate

nuisances. Qualified YES.

Ratio: Even if the ICS business is lawful, it can still be a nuisance

insofar as it substantially affects the comfort and enjoyment of
others. This question cannot be determined by the resolution of
council, but rather by a fair, impartial hearing which Iloilo Ice is
entitled to.

TAN CHAT v. MUNICIPALITY OF ILOILO

It is within the power of the municipal authorities

to determine and declare what shall constitute a
nuisance. But such power must be exercised
reasonably and not arbitrarily and that
declaration is subject to review by the courts.

Facts: Petitioners are lumber merchants along Iznart St., Iloilo

City. Sawed lumber and the petroleum run-sawmill are stored
inside the building. The loading of sawed lumber are done within
the premises without annoyance to the neighbors or to passers-
by. An ordinance was passed which prohibited lumber stores on
several streets on the ground that these establishments are a
public nuisance. Aggrieved by the ordinance, they filed an action
to annul the same alleging that it is illegal and in violation of
their rights.

Issue: Whether such ordinance is valid. YES.

Ratio: The Municipality has the authority to enact the questioned

Ordinance pursuant to the Revised Administrative Code. The
municipality has the authority to abate public nuisance pursuant
to the municipal police power and Sec 2242 (h) RAC. Abatement
of nuisances by municipal corporations is a governmental
function. The power may arise by express grant or by necessary
implication. It usually is enjoyed as part of the police power,
especially as it deals with the protection of the health and of the
inhabitants of the municipal corporation. The lumber stores
located at the specified streets are both nuisance per se and per
accidens. Because of the nature of the business itself (pile of
lumber as stock/inventory, noise and saw dust from the sawmill)
it is considered as nuisance per se. In addition, they are also
considered as nuisance per accidens.

RAMCAR v. MILLAR

Facts: Ramcar operates and maintains an auto repair and body

building shop at Gen. Luna St, Ermita, Its business consists in
Respondents, who reside near and around the shop, repeatedly
petitioned the city authorities for the closure of the shop to no
avail. They later brought an action before CFI Manila to abate the said
establishment as a nuisance.

Issue: Whether the said business is a nuisance. YES.

Ratio: The zoning ordinance prohibited Ramcar’s body building

operations. It is only on account of its location that it is a public
nuisance. To abate it, it’s not necessary to remove all buildings and
structures built in the place where it’s presently located as these, or
parts thereof, may be utilized for pursuits that aren’t forbidden by law
or ordinances.

VELASCO v. MERALCO

For sound to be a nuisance, it does not take into

account the oversensitive, the intensity or volume, but
whether it causes discomfort to the man of ordinary
sensibilities.

Facts: Velasco bought 3 lots and sold 2 to Meralco. He lived on the lot
he didn’t sell, while Meralco built a substation which
produced a lot of noise. Velasco sued for damages, arguing that it
disturbed his concentration, sleep, impaired his health and it also
diminished the value of his house.

Issue: Whether the noise coming from the substation constitutes an

actionable nuisance. YES.

Ratio: The general rule is that everyone is bound to bear the

habitual or customary inconveniences that result from the
proximity of others, and so long as this level is not surpassed, he may
not complain against them. But if the prejudice exceeds the
inconveniences that such proximity habitually brings, the
neighbor who causes such disturbance is held responsible for the
resulting damage, being guilty of causing nuisance. After taking
objective measurements, the court found that the sound was of a much
higher level than the ambient sound of the community.
Velasco is entitled to damages but the same is mitigated since he
waited for the debilitating effects on his body to happen
before taking action. As a physician he should have known the risks.

iii. A ba t e me nt
A R T . 6 9 6, C C
Every successive owner or possessor of property who
fails or refuses to abate a nuisance in that property
started by a former owner or possessor is liable

A R T . 6 9 7, C C
The abatement of a nuisance does not preclude the
right of any person injured to recover damages for its
past existence.

A R T . 6 9 8, C C
Lapse of time cannot legalize any nuisance, whether
public or private.

A R T . 6 9 9, C C
The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local
ordinance; or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
 TORTS & DAMAGES
A R T . 7 0 0, C C
The district health officer shall take care that one or
all of the remedies against a public nuisance are
availed of.
A R T . 7 0 1, C C
If a civil action is brought by reason of the
maintenance of a public nuisance, such action shall
be commenced by the city or municipal mayor.
A R T . 7 0 2, C C
The district health officer shall determine whether or
not abatement, without judicial proceedings, is the
best remedy against a public nuisance.
A R T . 7 0 3, C C
A private person may file an action on account of
public nuisance, if it is specially injurious to himself.
A R T . 7 0 4, C C
Any private person may abate a public nuisance which
is specially injurious to him by removing, or if
necessary, by destroying the thing which constitutes
the same, without committing a breach of the peace,
or doing unnecessary injury. But it is necessary:
(1) That demand be first made upon the owner or
possessor of the property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district
health officer and executed with the assistance of
the local police; and
(4) That the value of the destruction does not exceed
three thousand pesos.
A R T . 7 0 5, C C
The remedies against a private nuisance are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.
A R T . 7 0 6, C C
Any person injured by a private nuisance may abate it
by removing, or if necessary, by destroying the thing
which constitutes the nuisance, without committing a
breach of the peace or doing unnecessary injury.
However, it is indispensable that the procedure for
extrajudicial abatement of a public nuisance by a
private person be followed.
A R T . 7 0 7, C C
A private person or a public official extrajudicially
abating a nuisance shall be liable for damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the
courts to be not a real nuisance.
Functions of mayor vs. district health officer
Mayor District health officer
Brings action for a Takes care that one or all of the
public nuisance remedies against public nuisances are
availed of
Determines whether abatement of the
public nuisance is the best remedy
53
TIMONER v. PEOPLE
Facts: Upon orders of petitioner, the laborers brought by the City
Mayor proceeded to nail together rough lumber slabs to fence off
the stalls, which protruded into the sidewalk of the highway. The
Municipal Health Officer, Dra. Alegre, had recommended these
establishments for closure for non-compliance with certain
health and sanitation requirements. Petitioner filed a complaint
for judicial abatement of their stalls alleging these stalls
constituted public nuisances as well as nuisances per se.
Subsequently, petitioner and the two policemen, Morena and
Quibral, were charged with the offense of grave coercion.
Issue: Whether the closure of the barbershop was done in
abatement of a public nuisance, and therefore is lawful. YES.
Ratio: Unquestionably, the barbershop in question did constitute
a public nuisance as defined under Article Nos. 694 and 695 of
the Civil Code. The barbershop occupied a portion of the
sidewalk of the poblacion's main thoroughfare and had been
recommended for closure by the Municipal Health Officer. In fact,
the Court of First Instance of Camarines Norte, in a prior civil
case, declared said barbershop as a nuisance per se.
But even without this judicial pronouncement, petitioner could
not have been faulted for having fenced off said barbershop. Par
3, Article 699 of the Civil Code authorizes the abatement of a
public nuisance without judicial proceedings. Petitioner, as
mayor of the town, merely implemented the aforesaid
recommendation of the Municipal Health Officer. Having then
acted in good faith in the performance of his duty, petitioner
incurred no criminal liability.
Extrajudicial abatement
The remedy of extrajudicial abatement is available:
1. When there is a public nuisance; or
2. When there is a private nuisance, but the
destruction of the thing must not exceed P3,000.
In both cases, the requisites below must be followed.
Requisites of the right to
extrajudicially abate nuisances
1. The right must be exercised only in cases of urgent
or extreme necessity, and if such nuisance is
especially injurious to him. The summary
abatement should be resorted to within a
reasonable time after knowledge of the nuisance.
2. Demand to abate the nuisance must be made on
the owner of the property originating the nuisance,
and such demand must have been rejected.
3. Notice of the intention to abate must be given to
the one causing the nuisance, within a reasonable
time.
4. The abatement must be approved by the District
Health Officer.
5. The local police must assist in the exercise of the
right to abate extrajudicially.
6. The means employed must be reasonable,
without causing any breach of peace or
unnecessary injury. The property must not be
destroyed, unless it is absolutely necessary to do
so.
TORTS & DAMAGES 54

Liability for extrajudicially abating a nuisance

1. Done with unnecessary injury
2. Thing abated is later declared by the courts to not
be a nuisance

i v . Ease ment against nuisance

A R T . 6 8 2, C C
Every building or piece of land is subject to the
easement which prohibits the proprietor or possessor
from committing nuisance through noise, jarring,
offensive odor, smoke, heat, dust, water, glare and
other causes.

A R T . 6 8 2, C C
Subject to zoning, health, police and other laws and
regulations, factories and shops may be maintained
provided the least possible annoyance is caused to the
neighborhood.
 D A M A G E S
A. CONCEPT PEOPLE v. DIANOS

“Damage” vs. “damages” An award of actual or compensatory damages

Damage Damages requires actual proof of pecuniary loss. An
Actionable loss, hurt, or harm Sum of money that the law exception to the rule, pursuant to Art. 2206, are
that results from the unlawful awards or imposes as "damages for death caused by a crime or quasi-
act, omission, or negligence of pecuniary compensation, delict," which can be awarded to the heirs of the
another recompense, or satisfaction victim by proof alone of such fact of death.
for an injury done or a wrong
sustained as a consequence of Facts: Murder of 2 people (Teresita and Ricardo); attempted and
either a breach of a frustrated Murder on 3 others (Virgilio, Zaldy and Lizette). Virgilio
contractual obligation or a prayed for the ff. actual damages:
tortuous or illegal act - P1k for medications for his thigh injury
via People v. Dianos - P14K total loss of monthly income
- P110k for funeral services for his wife (Teresita).
Governing laws on damages
1. Civil Code provisions on damages Nenita prayed also for actual damages:
2. Contracts between the parties, e.g. penal clauses - P15k for the autopsy and coffin of Ricardo
(which take the place of damages) - P3k, by way of doctor's fee and P8k for the wake
3. Special laws, e.g. compensation for employees in
case of death, injury, or illness Likewise, Zaldy prayed for P500 for the treatment of his injury.

Kinds of damages (MENTAL) The SC awarded:

1. Moral - Nominal damages: 15K for 2 murder cases, 10K for the
2. Exemplary frustrated, 5K for the 2 attempted; specific amounts of
3. Nominal alleged actual damages were not sufficiently proven by
4. Temperate or moderate competent evidence
5. Actual or compensatory - Actual damages: indemnity for death, 50K each for
6. Liquidated Teresita and Ricardo
- Moral damages — 30K for each of the 2 deceased,
Damages cannot be awarded for potential - payable to their respective heirs
damage. Being incapable of exact pecuniary estimation, the assessment of
such damages, except for liquidated damages which the parties
LAZATIN v. TWANO themselves fix, is left to the sound discretion of the court. Akin to,
but not exactly in the same category as actual or compensatory
Defendants are not entitled to moral damages, damages, is the civil indemnity ex delicto (indemnification for
unless there is a showing of malice. Absent consequential damages) can be awarded without need of further
malice, the damages to be awarded must be proof than the fact of commission of the felony itself (similar to
compensatory merely, confined to actual loss. that needed in an award of moral damages).

HEIRS of JUSTIVA v. CA
Twano sued Atty. Lazatin. The case was dismissed by the CFI but
31 January 1963
reversed by CA. Lazatin’s property was levied and auctioned, but
he deposited a sum as redemption price. Then he secured a writ
of attachment on the redemption price. Twano prayed for the To be recoverable, actual damages must be
following: pleaded or prayed for. It is not enough that they
(a) Attorney’s fees — Not granted; no showing that Lazatin’s be proven, but they must be in the pleading or
action was clearly unfounded. prayer. When there is a prayer for “moral
(b) Moral damages for false statements — Not granted; no damages, attorney’s fees, and such other reliefs
malice on the part of Lazatin when he filed his actions. Also, that the court may find just and equitable under
TC decision did not state any suffering of mental anguish or the premises,” there may be an award for actual
injury to their credit or reputation. damages.

HEIRS of BORLADO v. VDA. DE BULAN

B. ACTUAL or COMPENSATORY
Damages should be paid in legal tender. DAMAGES
A trial court judge awarded payment in the form of 100 cavans of A R T . 2 1 9 9, C C
palay from 1972 until plaintiffs vacate the property in question. Except as provided by law or by stipulation, one is
The 100 cavans of palay was awarded as a form of damages. entitled to an adequate compensation only for such
Damages should be paid in legal tender, palay is NOT legal pecuniary loss suffered by him as he has duly proved.
tender, so the TC ruling cannot be sustained. Such compensation is referred to as actual or
compensatory damages.
 TORTS & DAMAGES 56

dead freight) for which it would beheld liable under its

Definition of actual or compensatory damages contract with a Japanese buyer even if such damages
Those awarded in order to compensate a party for an have not yet been
injury or loss he suffered. They cannot be presumed,
but must be proven with a reasonable degree of
certainty.
via MCC Industrial v. Ssangyong

Exception to the rule of proving actual damages

Civil indemnity for death caused by crime or quasi-
delict, as provided by Art. 2206, is the exception to the
rule that an award of actual damages presupposes
that the pecuniary loss must be proven.

1. REQUISITES
Requisites of actual or compensatory damages
1. They must be alleged and proven with certainty;
2. They must have proximately resulted from the
injury; and
3. They must not be speculative.

i. Alle ge d a n d pr ov e d wit h c e r t ai nt y
SCOTT CONSULTANTS v. CA

One is entitled to adequate compensation only for

such pecuniary loss suffered by him, as is duly
proved.

Facts: Philrock (which had an old operating agreement)

prevented Scott Consultants (which had the a new operating
agreement) from exploring and developing the existing mining
claims, despite a cease and desist order from the Bureau of
Mines to Philrock. Because of this, Scott Consultants alleges that
it has lost P300K a day. Philrock filed a counterclaim for
damages. TC awarded P800K compensatory damages to
Philrock.

Held: There was no credible proof of actual damages. The TC

made no specific finding on the extent of the damages. All the
TC held was that “the Court finds that there is ample proof to
grant defendant’s claim for moral damages. The only question that
confronts this Court is the amount to be awarded.” The TC did not
answer this question but nonetheless awarded P800K in actual
damages. CA justified this award by giving credence to
testimonies of Philrock’s EEs. San Juan speaks of “attention,
diverted to the entering of Scott Consultants to our area” and lack
of sleep and anxiety because of public ridicule. How the award of
P800K was arrived at was never shown.

BASILAN LUMBER v. CAGAYAN TIMBER

Damages must be duly proved. Speculative

damages, or damages not actually proved to have
existed and to have been caused to the party
claiming them, cannot be awarded. Only when
one actually suffers the injury can damages be
claimed.

In an action for damages resulting from a breach of contract to

supply, the exporter (Basilan) sought to recover from a supplier
(Cagayan) the amount of damages (damages for demurrage and
demanded from and paid by it, and before said exporter actually paid
the same? NO.

Held: The evidence shows that actual damage was caused to the agent
(East Asiatic Company). However, there is no proof that
respondent had already paid the agent said damages, or that it had
already been required to pay the agent. The damage to the petitioner
may not be deemed to have actually happened
already. Even if there is an express stipulation between the
parties holding the seller liable for damages it may cause the
buyer, it is merely declaratory of the obligation assumed. It is
only when the obligee actually suffers the damage can it demand the
obligation.

MCC INDUSTRIAL v. SSANGYONG CORP.

The claimant bears the onus of presenting before the

court the actual proof of damages alleged to have
been suffered. He need not prove these beyond
reasonable doubt, but may do so with his best evidence.

It is not merely the loss that should be proved with

certainty, but also the amount of the loss.

Facts: Contract of sale for stainless steel was perfected upon a series
of fax transmissions (Phil-Korea). However only partial payment was
made through opening of letter of credit, which resulted to the delay
of delivery and storage expenses for
Ssangyong.

Held: The pieces of evidence presented were the statement of

account, contract of alleged resale of goods to another Korean
company, and the authentication of the resale contract. The
court said that these are not sufficient as they are self-serving
and not substantiated by other corroborative evidence (i.e.
official receipts). These documents were prepared by Ssangyong itself.
To award actual damages, the court cannot simply rely on speculation,
conjecture or guesswork as to the fact and amount of damages. It
must depend on competent proof that the
claimant has suffered, and on evidence of, actual amount thereof.
However, since there was a breach of contract,
respondent is entitled to nominal damages.

ii . Proximate
SONGCO v. SELLNER

Actual damages cannot be remote or speculative.

Facts: Songco misrepresented the amount of sugar cane his

farm will produce. Sellner refused to pay the third installment,
because of such misrepresentation. Songco filed attachment against
Sellner, allegedly because the latter was disposing his property in
fraud of creditors. The TC awarded damages
equivalent to actual expenses of Sellner for dissolution of the
wrongful attachment. Sellner claimed further the following:
1) Damages for injury done to his credit (allegedly, his creditors
withheld further credit due to the attachment); and
2) Punitive damages for wrongful attachment.

Held: The first is too remote and speculative, and for the second, the trial
court’s findings were respected. It could hardly be
foreseen as a probable consequence of the suing out of this
attachment that the hands of the creditors would come down
 TORTS & DAMAGES
upon their unfortunate client with such disastrous results; and
the Songco certainly cannot be held accountable for the
complications of the Sellner's affairs, which made possible the
damage.
ABESAMIS v. WOODCRAFT
The mere fact that demands were made upon a
debtor does not necessarily prove loss of credit,
which must be proven through clear evidence.
Facts: Breach of contract. Woodcraft failed to supply necessary
vessels to pick up the logs it ordered from Abesamis. CFI ruled
that Woodcraft to pay P145,623.03 as actual damages; P50K as
actual loss of credit in Abesamis’ business; P5,000 as attorney’s
fees; and costs of litigation.
Held: The SC deleted the award of actual loss of credit. The TC
decision does not say upon what evidence the award is based.
Nor is there any attempt in Abesamis’ brief to justify the amount
awarded. In this case, other than a few letters of demand for
payment of money accounts received by Abesamis from its
creditors and presented as exhibits, there is nothing to go upon,
and the mere fact that such demands were made does not
necessarily prove loss of credit.
iii . Not speculative
SEAVAN CARRIER v. GTI SPORTSWEAR
The injured party must present the best evidence
obtainable to prove the actual damages.
Facts: Seavan Carrier lost 100 cartons of denim jeans in transit.
GTI Sportswear demands P2.4M damages for losses in the
goodwill of the company, based on possible gross earnings, had
its foreign customers not learned about the loss.
Ratio: The amount of P2.4M is speculative. No evidence was
presented to show the average actual profits realized to enable
the court to reasonably ascertain the amount of actual damages
GTI suffered.
SIGUENZA v. CA
An alleged loss of income is not recoverable if no
receipt or any kind of evidence on the matter was
presented to prove it.
Facts: Double sale. Sps. Quimbo claimed that deceit and
misrepresentation prevented them from constructing their house
worth P100k on the lots, which if constructed at present (filing of
complaint) would cost them 300% more than the original
amount.
Ratio: P100K compensatory damages is patently erroneous
because no proof whatsoever was or could be presented by the
spouses to show that they had actually suffered pecuniary loss in
that amount. In fact, they have not even started the construction
of their house on the disputed lots. Any alleged pecuniary loss
that they claim to have suffered because of the delay in the
construction is purely speculative.
57
2. COMPONENT ELEMENT S
i. Value of loss; unrealized pr ofits
A R T . 2 2 0 0, C C
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)
A R T . 2 2 0 5, C C
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.
Damnum emergens v. lucrum cessans
Damnum emergens Lucrum cessans
Actual loss suffered Literally, “cessation of gains,”
meaning unrealized profits
via Magat v. Guerrero
GENERAL ENTERPRISES v. LIANGA BAY
Indemnification for damages comprehends not
only the value of the loss suffered, but also that of
the profits which the creditor fails to obtain.
Facts: Breach of contract: LB did not continue sending logs in
violation of their contract with GE. GE is the distributor of those
logs and earns commission out of it.
Held: Had LB continued to deliver the logs as it was bound
pursuant to the agreement, it is reasonable to expect that GE
would have continued to earn its commission in much the same
manner as it used to in connection with the previous shipment of
logs, which clearly indicated that it failed to earn its commissions
it should during this period of time, which is approximately
P400k (17 months remaining in contract x 2M board ft per month
x P0.01commission per board ft).
MAGAT v. GUERRERO
Facts: Guerrero entered into a contract w/ Magat for the latter to
provide him with radio transceivers for his radio-controlled taxis.
Guerrero applied for letter of credit but was refused by Central
Bank because gov’t refuses to issue permit to import
transceivers. Guerrero and Magat’s agreement then didn’t come
into fruition. Magat cancelled his order from his supplier so asks
now for actual damages.
Held: Actual damages for unrealized profit - NOT AWARDED.
Victorino had to suspend transactions with his Japanese supplier
for 6 months. The volume of Victorino's business also diminished
significantly.
In order to recover, the amount of loss must not only be capable
of proof, but must be proven with reasonable degree of certainty.
Receipts or other documentary proof would have been the best
evidence.
TORTS & DAMAGES
ii. Att orne y’ s fees and expenses of
lit iga t io n
A R T . 2 2 0 8, C C
In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot
be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
interest;
(3) In criminal cases of malicious prosecution against
the plaintiff;
(4) In case of a clearly unfounded civil action or
proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's
compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability
arising from a crime;
(10) When atleast double judicial costs are awarded;
(11) In any other case where the court deems it just
and equitable that attorney's fees and expenses
of litigation should be recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
General rule for attorney’s fees
Attorney’s fees are generally not recoverable, except
in the cases stated in Art. 2208. Attorney’s fees go to
the litigant, and not the lawyer. They are a form of
compensatory damages, awarded to the litigant who
incurred expenses in order to protect his interests.
They cannot be awarded without being claimed and
without their basis being stated in the decision.
In all cases, attorney’s fees must be reasonable.
Considerations in awarding attorney’s fees
1. Amount and character of services rendered
2. Labor, time, and trouble involved
3. Nature and importance of litigation and business
in which the services were rendered
4. Responsibility imposed
5. Amount of money and value of property affected
by controversy
6. Skill and experience called for
7. Professional character and social standing of
attorney
8. Results secured
From the Code of Professional Responsibility,
via PCI Bank v. Alejandro
Why use these standards?
Standards under the CPR are equally applicable,
because these are essentially the same standards to
judge the litigant’s expenses. The CPR governs the
contract between the lawyer and litigant anyway.
58
SOLID HOMES v. CA
Attorney’s fees are awarded by court when its
claimant is compelled to litigate with third
persons or compelled to incur expenses to protect
his interest, by reason of an unjustified act or
omission of the party from whom the fees are
sought.
Facts: Respondents entered into a contract to sell containing an
acceleration clause with Solid Homes. Respondents alleged that
Solid Homes violated their contract as it refused to pay the
balance and failed to negotiate a settlement with squatters on
the property. Thus the latter is liable for attorney’s fees.
Held: Attorney’s fees were not awarded. The record was bereft of
basis to sustain attorney’s fees. Solid Home’s act of withholding
payment was justified.
FIRST METRO INVESTMENT v. ESTE DEL SOL
Attorney’s fees as provided in penal clauses are in
the nature of liquidated damages and binding as
long as not contrary to law, morals, public order,
etc.
Facts: FMIC granted EDSMR 7.3m loan secured by a real estate
mortgage executed by the latter. Contract contains an
acceleration clause in case of default + penalty + liquidated
damages + attorney’s fees (25% of sum sought to be recovered).
EDSMR failed to meet schedule of payment so FMIC
extrajudicially foreclosed mortgaged property.
Held: Attorney’s fees were AWARDED but REDUCED. 25% or
3.2M is manifestly exorbitant, considering that there’s no clear
showing that FMIC engaged services of counsel to effect the
foreclosure.
PCI BANK v. ALEJANDRO
Facts: Alejandro, a lawyer working at Romulo Mabanta’s HK
office temporarily as managing partner, had an account with
PCIB where he took out loans and deposited certain amounts of
US dollar as security. Because of fluctuations in foreign exchange
rates, his deposit became insufficient. The bank thus garnished
his assets. TC granted, because of bank’s allegation that he’s not
a resident of the Philippines. He filed a complaint for damages
because of PCIB’s wrongful attachment of his assets.
Held: Attorney’s fees were AWARDED but REDUCED from P1M -
200k. There was bad faith in the misrepresentation of PCIB
about Alejandro’s residence (basis for TC granting the writ of
attachment under ROC Rule 57 Sec 1). Wrongful attachment
forced Alejandro to litigate. However, attorney’s fees were
reduced, because the writ was quickly lifted. Alejandro also
obtained a favorable judgment from TC and did not present
evidence as to the professional char and social standing of his
lawyer.
PRUDENTIAL BANK v. TUPASI-VALENZUELA
Facts: Letty opened a savings and current account (with
autotransfer of funds from savings to current) in Prudential. She
deposited a check in her savings account. Thinking she had
sufficient funds, she issued a check as payment for jewelry, but
 TORTS & DAMAGES 59

the check bounced. It was later found out that the bank The right to interest arises only by virtue of a
deposited the check 23 days after she gave it to them. This contract or by virtue of damages for delay or
wasn’t the first time this had happened. failure to pay the principal loan on which interest
is demanded.
Ratio: Attorney’s fees were AWARDED but REDUCED from P50k
to P30k. The award of attorney’s fees is proper when exemplary Applicability of 12% vs. 6% interest rates
damages are awarded and plaintiff was compelled to engage 12% interest per annum 6% interest per annum
services of a lawyer. Applicable interest for loans Applies for any other breach
or forbearance of money, that is not a loan or
iii . Interest where there is no stipulation forbearance of money)
fixing another rate (penalty
A R T . 2 2 0 9, C C
clause); counted from the
If the obligation consists in the payment of a sum of
date of demand
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 Definition of "forbearance of money”
upon, and in the absence of stipulation, the legal Contractual obligation of lender or creditor to refrain,
interest, which is six per cent per annum. (1108) during a given period of time, from requiring the
borrower or debtor to repay loan or debt that is due
A R T . 2 2 1 0, C C and payable.
Interest may, in the discretion of the court, be allowed via ICTSI v. FGU
upon damages awarded for breach of contract.
REFORMINA v. TOMOL
A R T . 2 2 1 1, C C
In crimes and quasi-delicts, interest as a part of the The legal interest to be imposed is 6% per annum,
damages may, in a proper case, be adjudicated in the except for judgments involving loans or
discretion of the court. forbearances of money, goods, or credit, to which
12% per annum will apply, by virtue of Central
A R T . 2 2 1 2, C C
Bank Circular 416.
Interest due shall earn legal interest from the time it is
judicially demanded, although the obligation may be
Facts: In an action for recovery of damages for injury to person
silent upon this point. (1109a)
and loss of property instituted by Reformina, Shell and Michael
A R T . 2 2 1 3, C C Inc. was ordered to pay the former for the loss of her boat with
legal interest from the filing of complaint until paid. Judge Tomol
Interest due shall earn legal interest from the time it is
used 6% p.a interest in computing the legal interest. Reformina
judicially demanded, although the obligation may be
contends that it should be 12% as per CB Circular 416.
silent upon this point. (1109a)
Held: The action was for recovery of damages — not a loan or
Monetary vs. compensatory interest
forbearance. Thus, Art. 2209 should apply for delay in payment
Monetary interest Compensatory interest
of obligation.
Stipulated by the parties fir Compensatory interest kicks in
the use or forbearance of when there is a breach, as CASTELO v. CA
money in writing (not compensation for the default
considered monetary interest by the party; it may be Facts: Castelo executed a Deed of Conditional Sale for a parcel of
if not in writing) imposed by law or by courts as land in favour of Dela Rosa. The contract stipulated that in case
penalty or indemnity for of failure to pay on date prescribed, a grace period of 6 months
damages would be given. During grace period, interest rate would be 12%
Not considered monetary p.a. along with 1% monthly penalty charged on remaining
interest if not in writing diminishing balance. Dela Rosa failed to pay 163k balance. CA
ordered Dela Rosa to pay. Writ of execution required payment of
Monetary vs. compensatory interest 198k (163k + 12% interest). Castelo wants recomputation using
Compensatory 24% (12% + 1% penalty) yearly interest on unpaid amt from
Monetary interest
interest institution of action onwards.
Who may The parties, through
impose it their stipulation Law or the courts
Held: Interest rates to be applied: 12% during grace period, 24%
When When there is a use or Kicks in when there is from institution of action onwards.
applicable forbearance of money a breach
Not considered The case interprets Art. 2209’s rules for damages in cases of
May either be oral or
Form monetary interest if delay as such:
not in writing written
1. Payment of the penalty interest stipulated
Compensation for the 2. Payment of additional interest at rate equal to the regular or
Compensation fixed
Purpose default by the party in monetary interest
by the parties
breach 3. Payment of legal interest
 TORTS & DAMAGES 60

The Court found no need to go to 2nd and 3rd levels because the payment of a sum of the payment of a sum of
there’s a valid stipulation in the contract regarding payment in money, i.e., a loan or money, i.e., a loan or
case of delay. forbearance of money, the forbearance of money, the
interest due should be that interest due should be that
SIR’S NOTE: This case suggests that in the absence of which may have been which may have been
stipulation between parties of an actual compensatory interest, stipulated in writing. stipulated in writing.
the rate of monetary interest applies. However, it is merely obiter. Furthermore, the interest due Furthermore, the interest due
☺ shall itself earn legal interest shall itself earn legal interest
from the time it is judicially from the time it is judicially
EASTERN ASSURANCE v. CALUMPANG demanded. In the absence of demanded. In the absence of
stipulation, the rate of stipulation, the rate of
a
[Principal – payments made] interest shall be 12% per interest shall be 6% per
+ [(remaining balance x 12% p.a. x number of annum to be computed from annum to be computed from
years after demand)b default, i.e., from judicial or default, i.e., from judicial or
+ (interest on principal computed from the time of extrajudicial demand under extrajudicial demand under
judicial demand x 12% p.a. x number of years and subject to the provisions and subject to the provisions
c of Art 1169 of the Civil Code of Art 1169 of the Civil Code
from due date)]
TOTAL AMOUNT DUEd 2. When an obligation, not 2. When an obligation, not
a constituting a loan or constituting a loan or
Remaining balance from the amount originally due
b forbearance of money, is forbearance of money, is
Legal interest on the remaining balance
c
breached, an interest on the breached, an interest on the
Legal interest on the monetary interest due amount of damages awarded amount of damages awarded
This computation contemplates a situation after may be imposed at the may be imposed at the
judicial demand, so the interest rate applied is 12% discretion of the court at the discretion of the court at the
per annum. rate of 6% per annum. No rate of 6% per annum. No
After final judgment: Total amount due (d) + [d x interest, however, shall be interest, however, shall be
12% p.a. x number of years from finality to adjudged on unliquidated adjudged on unliquidated
satisfaction]. claims or damages except claims or damages, except
when or until the demand can when or until the demand can
Facts: Vicente took out fire insurance for his building with EASCO be established with be established with
(250k). Building burned down, EASCO refused to pay, Vicente reasonable certainty. reasonable certainty.
sued for breach of contract w/ damages. CA ordered payment Accordingly, where the Accordingly, where the
with 6% p.a legal interest from June 26, 1981 (date of fire) to July demand is established with demand is established with
30, 1993 (promulgation of CA’s decision). No appeal so decision reasonable certainty, the reasonable certainty, the
became final and executor on Aug. 25, 1993. Tan wants interest interest shall begin to run interest shall begin to run
to be 12% p.a. so went to Insurance Commission. Parties agreed from the time the claim is from the time the claim is
to fix legal interest rate @ 6% p.a from June 26,’93 to Sept. 30, made judicially or made judicially or
’94 (agreed cut-off date). EASCO then filed petition to TC extrajudicially (Art. 1169) but extrajudicially (Art. 1169), but
regarding their agreement in IC. TC said it should be 12%. CA when such certainty cannot be when such certainty cannot be
said 6% p.a from June 26 – Aug. 24 and 12% from Aug. 25 until so reasonably established at so reasonably established at
paid. the time the demand is made, the time the demand is made,
the interest shall begin to run the interest shall begin to run
Held: The applicable interest is 6% p.a from June 26 – Aug. 24 only from the date the only from the date the
and 12% from Aug. 25 until Sept. 30, ’94 (which was the agreed judgment of the court is made judgment of the court is made
cut-off date). (at which time the (at which time the
quantification of damages quantification of damages
IMPORTANT NOTE REGARDING may be deemed to have been may be deemed to have been
APPLICABLE INTEREST reasonably ascertained). The reasonably ascertained). The
actual base for the actual base for the
Central Bank Circular 416 imposing a 12% per annum
computation of legal interest computation of legal interest
interest rate on all loans or forbearances of money,
shall, in any case, be on the shall, in any case, be on the
goods, or credit, and 6% per annum interest rate on
amount finally adjudged amount finally adjudged
all other obligations applies in the cases below.
3. When the judgment of the 3. When the judgment of the
However, effective 1 July 2013, BSP Monetary Bank
court awarding a sum of court awarding a sum of
Circular No. 799-2013 was issued, providing that the
legal interest for loans or forbearances of money shall money becomes final and money becomes final and
be 6%, thereby creating the 6-6-6 rule. executory, the rate of legal executory, the rate of legal
interest, whether the case falls interest, whether the case falls
This was applied in Nacar v. Gallery Frames (G.R.
under paragraph 1 or under paragraph 1 or
No. 189871; 13 August 2013). (See Eastern Assurance v.
paragraph 2, above, shall be paragraph 2, above, shall be
Calumpang for further discussion.)
12% per annum from such 6% per annum from such
finality until its satisfaction, finality until its satisfaction,
6-12-6 rule vs. 6-6-6 rule this interim period being this interim period being
6-12-6 (Eastern Assurance 6-6-6 (Nacar rules, applying
deemed to be by then an deemed to be by then an
three-step rule) new Circular 799-2013)
equivalent to a forbearance of equivalent to a forbearance of
1. When the obligation is 1. When the obligation is credit credit
breached, and it consists in breached, and it consists in
 TORTS & DAMAGES 61

INTERNATIONAL CONTAINER TRANSPORT 3. EXTENT OR SCOPE OF ACTUAL

SERVICES, INC. v. FGU INSURANCE CORP.
Facts: ICTSI lost a shipment of 400kg of silver nitrate due to
consignee Republic Asahi Glass Corp. FGU, as RAGC’s insurer,
paid 1.8M on Jan. 3, ’95. FGU claimed reimbursement from ICTSI
but latter refused so filed a complaint for sum of money. TC and
CA ruled in favour of FGU, ordered ICTSI to pay 1.8M + 12%
interest from Jan. 3 till fully paid. ICTSI now contends that legal
interest should be 6% since action was not for loan or
forbearance but one for breach of contract/damages. Also,
reckoning date should be April 10, 95 (filing of complaint) not
from Jan. 3 (date of payment to RAGC by FGU).
Held: The applicable interest rates are 6% from time of filing of
complaint until finality of judgment, and 12% p.a from after
finality till paid.
DAMAGES
i. Cont r ac ts a nd Qua s i - Contrac ts
A R T . 2 2 0 1, C C
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.

MACALINAO v. BPI Effect of good and bad faith under Art. 2201
Good faith Bad faith
The Court has the power to reduce the penalty Applicable
charge or interest if it deems this rate Paragraph 1 Paragraph 2
paragraph
unconscionable, excessive, or exorbitant. Attended with fraud,
Obligor’s Attended with good
bad faith, malice, or
Facts: Macalinao was a credit card holder of BPI Mastercard. She conduct faith wanton attitude
failed to pay her bill so BPI demanded payment of P141, 518. She Natural and probable
didn’t settle her obligation, so BPI filed a complaint for sum of consequences of the
money to the amount of P154, 608, 3.25% finance charges and breach of the
late payment charges equivalent to 6%, and 25% of total All damages which
obligation, and which
amount due as atty’s fees. MeTC ordered payment of P141k + 2% may be reasonably
Extent of the parties have
monthly interest from Jan. 5 til fully paid. CA modified: attributed to the non-
liability foreseen or could
decreased to P126, 706 (P141k was a result of compounding of performance of the
have reasonably
interest by BPI)+ penalty charge of 3%/month (based on Terms obligation
foreseen at the time
and Conditions Governing issuance & Use of BPI CC). the obligation was
constituted
Held: The interest was reduced from 3% monthly (or 36% p.a
because) to 2% monthly (or 24% p.a,). Such is iniquitous an Ordinary vs. special damages
unconscionable. Ordinary damages Special damages
Necessary consequences of Are imposed on top of
SIGA-AN v. VILLANUEVA
wrongful act or omission, such ordinary damages
as a breach of contract which
Facts: Villanueva accepted a 540k loan from Siga-an to finance
would lead to loss of profits
her business of supplying office supplies and materials to the
and an award of actual
Philippine Navy Office (PNO) which the latter is an officer of.
damages
Loan was not written and no agreed interest rate. Villanueva paid
a total of 1.2M as Siga-an continuously pestered her to pay
A R T . 2 2 1 5, C C
interest or else her business w/ PNO would be blocked. TC and
In contracts, quasi-contracts, and quasi-delicts, the
CA ruled that Villanueva overpaid because she was not obliged
court may equitably mitigate the damages under
to pay interest as there was no written agreement to the same.
circumstances other than the case referred to in the
Sigaan was ordered to pay 660k as overpayment, 300k moral preceding article, as in the following instances:
damages, 50k exemplary damages, and 25% of 660k as atty (1) That the plaintiff himself has contravened the
fees. terms of the contract;
(2) That the plaintiff has derived some benefit as a
Held: Payment of interest was improper in this case. The
result of the contract;
monetary interest was not in writing, so it is not collectible.
(3) In cases where exemplary damages are to be
Neither was evidence adduced to prove Villanueva’s default,
awarded, that the defendant acted upon the
making her liable for compensatory interest.
advice of counsel;
(4) That the loss would have resulted in any event;
Thus the applicable legal interest is 6% p.a from extrajudicial
(5) That since the filing of the action, the defendant
demand, because the obligation arises from a quasi-contract
has done his best to lessen the plaintiff's loss or
(solution indebitii) + 12% p.a after finality of judgment until paid.
injury.
 TORTS & DAMAGES
MENDOZA v. PAL
In order to impose on the defaulting party further
liability than for damages naturally and directly
arising from a breach of contract, such unusual or
extraordinary damages must have been brought
within the contemplation of the parties as the
probable result of a breach at the time of or prior
to contracting.
Facts: Delay in the delivery of the canister of the film “Himala ng
Birhen” to be shown during the fiesta of Pena Francia. It was
delivered only after the fiesta, hence, Mendoza (cinema owner)
sued PAL for special damages (unrealized profits).
Held: Mendoza was NOT entitled to special damages
representing her unrealized profits. A debtor in good faith like
PAL may be held liable only for damages that were foreseen or
might have been foreseen at the time of the contract of transpo
was entered into. PAL could not have foreseen the damages that
Mendoza would suffer, because it was not aware of his plans to
exhibit that film during the fiesta (and his preparations) nor were
the circumstances brought to its attention.
CARIAGA v. LTB
Facts: Collision of a bus and a train – a 4th yr med student of
UST was severely injured. The right frontal lobe of his brain was
removed thus reducing is intelligence by 50% and due to the
replacement of the right frontal bone of his head with a tantalum
plate Edgardo has to lead a quite and retired life because "if the
tantalum plate is pressed in or dented it would cause his death."
Hence, they filed action for damages.
Held: TC only awarded P10,490 as compensatory damages. *SC
increased this to P25k after considering the income he could
have earned in the medical profession.
Actual damages for his parents not awarded – they were not a
party in the contract of carriage and they themselves were not
injured in the collision.
Moral damages were also not awarded: the action was not based
on quasi-delict, so Art. 2219 is inapplicable. LTB also cannot be
held liable to pay moral damages under Art. 2220 on account
of breach of its contract of carriage, because it did not act
fraudulently or in bad faith. It exercised due diligence in the
selection and supervision of its employees so it must be
considered an obligor in good faith.
The income which Edgardo could earn if he should finish the
medical course and pass the corresponding board examinations
must be deemed to be within the same category because they
could have reasonably been foreseen by the parties at the time
he boarded the bus No. 133 owned and operated by the LTB. At
that time he was already a fourth-year student in medicine in a
reputable university. While his scholastic record may not be first
rate, it is, nevertheless, sufficient to justify the assumption that he
could have passed the board test in due time. As regards the
income that he could possibly earn as a medical practitioner,
according to Dr. Amado Doria, a witness for the LTB, the amount
of P300 could easily be expected as the minimum monthly
income of Edgardo had he finished his studies.
62
VILLA REY TRANSIT v. CA
The determination of damages depends, mainly
upon two (2) factors, namely: (1) the number of
years on the basis of which the damages shall be
computed and (2) the rate at which the losses
sustained by said respondents should be fixed.
Life expectancy = 2/3 x (80 – a), where a = the age
at death.
Adopted from the American
Expectancy Table of Mortality
Facts: Collision of an Isuzu first class passenger bus and bullcart
filled with hay. As a result the protruding end of the bamboo
pole, about 8 ft long from the rear of the bullcart, penetrated
through the glass windshield and landed on the face of
Policro nio – he died on the same day despite being rushed to the
hospital due to cerebral injuries.
His heirs (sisters) sued Villa Rey for breach of contract of
carriage. TC and CA computed the damages to be awarded by
adopting the American Expectancy Table of Mortality.
Held: DAMAGES AWARDED FOR BREACH OF CONTRACT OF
CARRIAGE SHOULD BE REDUCED to P49,561.28, with legal
rate of interest, from the date of the promulgation of TC decision.
*SC affirmed TC & CA computation of life expectancy. The life
expectancy of Poli (formula adopted from the American
Expectancy Table of Mortality or the actuarial of Combined
Experience Table of Mortality) = (2/3 x [80-x]) *x=age of
Policronio athis death
Computation:
(2/3 x [80-30]) = 33 1/3 years
Annual salary of Poli as “training asst” at the time of his death:
P2,184/yr
Court fixed the deductible living and other expenses of Poli:
P1,184/year
Annual salary – living expenses = P1,000/ yr or P33,333.33 for
the 33 1/3 years of his life expectancy (loss sustained by his
sisters).
The court added: (a) P12k, pursuant to Arts. 104 and 107 of RPC
(consequential damages), in relation to Art 2206 CC; (b)
P1,727.95, actually spent by respondents for medical and burial
expenses; and (c) attorney's fee, which was fixed by TC, at
P500.00, but which, in view of the appeal taken by petitioner
herein (to CA & SC, should be increased to P2,500.
PAL v. CA
Indemnity for death should be computed based on
the life expectancy of the deceased and not of his
heirs.
Facts: A plane crash killed Atty. Nic Padilla who was only 29 y.o.
and in good health with multiple jobs as sources of income
(president & general manager of Padilla Shipping Co, legal
assistant of Padilla Law Office, etc). As a result of his death,
Natividad (his mother and his only legal heir, because she’s
already a widow) filed a complaint for damages against PAL
demanding actual and compensatory damages plus exemplary
damages and attorney’s fees.
 TORTS & DAMAGES 63

Held: The Court only corrected the computations of the TC, since
the indemnity for death should be computed based on the life
expectancy of the deceased, and not of his heirs.
ii. Crimes and Quasi -delict s
A R T . 2 2 0 2, C C
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.
A R T . 2 2 0 3, C C
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.
Doctrine of avoidable consequences
A party cannot recover damages for consequences
that it may have avoided. This is embodied in Art.
2203.
- Lazam 45 Phil (1954) = fracture of a bone in
the wrist, but plaintiff refused to undergo
operation to remove a decaying splinter of
bone → a series of infections w/c required
constant expensive treatment
- Vs. contributory negligence = comes
before/during wrongful act or omission
death penalty.
Held: The civil indemnity to be awarded to the offended party in
the case at bar should be P75k. Moral damages of P50kis also
awarded since the Ct deems it just under the circumstances.
The recent judicial prescription (People v. Victor) is that the
indemnification of the victim shall be in the increased amount of
P75k if the crime of rape is committed or effectively qualified by
any of the circumstances under which the death penalty is
authorized by the applicable amendatory laws.
Civil indemnity is mandatory upon the finding of the fact of rape;
it is distinct from and should not be denominated as moral
damages, which are based on different foundations and assessed
by the court in the exercise of sound discretion.
PEOPLE v. CEPEDA
An award of P50k as civil indemnity is mandatory
upon the finding of the fact of rape. (This is
exclusive of the award of moral damages.)
Facts: Rape of a massage therapist – he pretended to ask her to
massage his wife’s abdomen. TC did not give credence to his
defense that they are in fact in an illicit relationship.
Held: The Court affirmed the award of moral damages in the
lower court, but added P50k as mandatory civil indemnity for
rape.
PEOPLE v. BALGOS

Avoidable consequences vs. contributory negligence If the commission of rape is effectively qualified by
Avoidable consequences Contributory negligence any of the circumstances under which the death
A wrongful act or omission The negligence comes before penalty may be imposed, the civil indemnity for
causing injury has already or during the wrongful act or the victim shall not be less than P75k.
taken place, but the avoidable omission that causes injury
consequences come after Facts: Balgos was convicted of qualified rape for raping a child
such act or omission below 7 years old and sentenced to suffer the death penalty.

A R T . 2 2 0 4, C C Held: TC’s award of civil indemnity is increased from P50k to

In crimes, the damages to be adjudicated may be P75k.
respectively increased or lessened according to the
aggravating or mitigating circumstances. PEOPLE v. DELOS SANTOS

Art. 2215, CC The award of P75k for qualified rape is a reaction

to the apathetic societal perception of the penal
Actual/compensatory damages vs. civil indemnity ex delictu law and the financial fluctuations over time, and
Actual or compensatory Civil indemnity ex an expression of the displeasure of the Court over
damages delictu the incidence of heinous crimes against chastity.
Basis Civil Code Revised Penal Code
Actual pecuniary Damage or injury (proof Facts: Delos Santos was found guilty of rape of his own daughter
Proof
damages, except if of commission of felony and is sentenced to suffer death penalty. TC held him liable for
required
resulting in death itself) P50k as moral damages

PEOPLE v. PRADES Held: Based on People v. Prades, the Court added an award of
P75k as civil indemnity, separate and distinct from the moral
The civil liability ex delicto provided by the damages already awarded.
Revised Penal Code (restitution, reparation and
indemnification) all correspond to actual or
compensatory damages in the Civil Code.

Facts: Rape committed in the dwelling of a 17 y.o. girl. Accused

absconded while the case was being tried – trial was then
continued in absentia. TC found him guilty, sentencing him to the
 TORTS & DAMAGES
iii. Crimes and Quas i -de lict s
r es ult ing in dea t h
A R T . 2 2 0 6, C C
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.
HEIRS of RAYMUNDO CASTRO v. BUSTOS
Indemnity may be recovered for loss of the
earning capacity of the deceased, considering the
circumstances related to his income at the time of
death and his probable life expectancy. This is
awarded as a matter of duty, unless it is proven
that the deceased did not have earning capacity.
Compensatory damages for loss or earning
capacity and moral damages may be recovered
separately from the fixed amount awarded on the
mere fact of death.
Facts: Bustos was convicted of the crime of murder for the killing
of Castro with 2 mitigating circumstances. TC awarded Castro’s
heirs indemnity for his death in the sum of P6k, without prejudice
to whatever Bustos is entitled from GSIS for his services of
around 26 years as a public schoolteacher.
Ratio: When death occurs, the heirs of the deceased are entitled
to the following damages:
1. A fixed amount awarded by the court without the need to
provide proof of pecuniary loss. (This is in the nature of
actual damages.) Mitigating circumstances do not affect this
award.
2. Indemnity for loss of earning capacity of the deceased (also
in the nature of actual damages).
3. Moral damages for mental anguish suffered by the heirs,
dependent on the discretion of the court. Both his legitimate
and illegitimate heirs may recover.
4. Exemplary damages may also be imposed as part of civil
liability when the crime has been committed with one or more
aggravating circumstances, depending on the discretion of
the court.
5. Attorney’s fees and expenses of litigation, to be awarded
64
only when exemplary damages are awarded or when a
separate civil action to recover civil liability has been filed).
6. Interests in proper cases.
PEOPLE v. QUILATON
Variables for loss of earnings
1. Life expectancy (number of years which victim
would otherwise have lived)
2. Rate of loss sustained by the heirs of the victim
Facts: Gumercindo Quilaton was found guilty of murder for
killing Rolando Manahan (26). TC awarded Manahan’s heirs the
sum of 100k for death of Manahan, P26,445 for actual damages
incurred for burial and other expenses of the deceased and
P250k for moral damages.
Ratio: The Court modified the amounts awarded. It changed the
civil indemnity to P50k, based on jurisprudence, added around
P125k for loss of earnings and support, and reduced the moral
damages to P20k.
SPOUSES PERENA v. SPOUSES ZARATE (supra)
Loss of earning capacity may be awarded even if
victim has no history of earnings, in which case,
the basis will be the minimum wage.
C . MORAL DAMAGES
A R T . 2 2 1 6, C C
No proof of pecuniary loss is necessary in order that
moral, nominal, temperate, liquidated or exemplary
damages, may be adjudicated. The assessment of
such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances
of each case.
A R T . 2 2 1 7, C C
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.
A R T . 2 2 1 8, C C
In the adjudication of moral damages, the
sentimental value of property, real or personal, may
be considered.
WHEN RECOVERABLE
A R T . 2 2 1 9, C C
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;
 TORTS & DAMAGES
(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.
Moral damages in criminal offenses under Art.
2219 may be recovered even without prior
judgment.
A R T . 2 2 2 0, C C
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.
LOPEZ v. PAN AM
Moral damages are recoverable in breach of
contracts where the defendant acted fraudulently
or in bad faith.
Considerations in determining
amount of moral damages
1. Official, political, social, and financial standing of
offended parties
2. Business and financial position of offender
Facts: “Your Travel Guide” agency booked first class
accommodations in Pan-AM [Tokyo- San Francisco flight]
Senator Fernando Lopez, his wife, daughter and son-in-law. In
Tokyo, Lopez found out that their ticket for first class
accommodation was cancelled so they had to take tourist class.
They were busy so they took it under protest. Lopez sued Pan-
Am for damages for the latter’s breach of contract in bad faith.
CFI awarded P150k moral damages, P25k exemplary damages,
legal interest, P25k atty’s fees. PanAm contends breach was not
in BF but honest mistake of employee. Lopez was asking for
increase of moral damages to P650k.
Held: Pan Am’s acts amount to bad faith, because after its
employee’s mistake, it deliberately and intentionally withheld
information from Lopez and his travel agent. This act in bad faith
was the proximate cause of plaintiff’s injury. The moral damages
were thus increased to P200k (P100k for Sen. Lopez, P50kfor his
wife, and P25k each to his daughter and son-in-law); the
exemplary damages were increased to P75k; and the attorney’s
fees were increased to P50k.
ZULUETA v, PAN AM
Discretion to fix moral damages lies with the
courts.
Facts: Sps. Zulueta and their daughter were on board a PanAm
plane from Honolulu to Manila. At a stopover, Mr. Zulueta
disembarked to go to the men’s room. This caused a delay in
flight and as a result was insulted by the staff of PanAm. Mr.
65
Zulueta was left in the stop over and was forced to spend money
to return home. Sps. Zulueta demanded reimbursement from
PanAm, but PanAm refused. TC awarded P5502.85 actual
damages, P1M moral damages, P400k exemplary damages,
P100k attorney’s fees.
Ratio: Moral damages were reduced in this case, because
Zulueta added to the gravity of the situation by being extremely
belligerent.
MAMBULAO LUMBER v. PNB
The general rule is that an artificial person cannot
recover moral damages, because it cannot
experience physical sufferings, mental anguish,
fright, serious anxiety, wounded feelings, moral
shock, or social humiliation.
An exception is a corporation, which may have
a good reputation whose besmirching may also be
a ground for the award of moral damages
A juridical person generally cannot recover moral
damages, because it does not have the feelings
that natural persons have.
via First Lepanto Insurance Corp. v. Chevron Philippines
Facts: MLC obtained loans from PNB but failed to pay so the
mortgaged properties (land + chattels/equipment) were
extrajudicially foreclosed and sold via public auction. PNB later
sold it to a third person who, together with PNB, took possession
of the properties by force, intimidation and coercion. MLC
contended that PNB has illegally sold chattels despite debt
settlement and for non-compliance with auction rules and asked
for damages.
Ratio: Moral damages were not awarded, because MLC had
already ceased operations at the time of the foreclosure. The
adverse effect would have been the same whether the sale was
conducted in Camarines Norte or in Manila.
SWEET LINES, INC. v. CA
Bad faith is defined as that breach of a known
duty through some motive or interest or ill will.
Facts: Private respondents purchased first class tickets to
Catbalogan from Sweet Lines’ office in Cebu. Departure of vessel
was delayed due to engine trouble. Vessel didn’t stop at
Catbalogan, first port of call, and instead proceeded to Tacloban.
As a result, private respondents were forced to find a way to go to
Catbalogan at their own expense. Suit for breach of contract was
filed. TC awarded P175k as moral damages divided among 4
private respondents here.
Held: The bad faith consisted in the fact that no notice as to
change in schedule of vessel was given by the ship: despite
knowing that vessel would be fixed for a long time, the ship
made the passengers wait. Moral damages were thus awarded
because of Sweet Lines’ bad faith.
VASQUEZ VDA. DE ARROYO v. CA
Facts: Two Special Powers of Attorney were issued by Vasquez to
respondent de la Viña, in order for the latter to redeem the
former’s property and use it as a collateral for a loan. But before
 TORTS & DAMAGES
the loan was issued, Vasquez caused the revocation of the 2nd
SPA. He also filed a complaint for estafa that was subsequently
dismissed.
TC: Petitioner acted in BF, as proven by the (1) revocation of the
SPA, without just cause, after allowing the property’s
redemption, (2) publication of the revocation in the Iloilo Times
and (3) filing of the criminal complaint.
Ratio: Moral damages were reduced to 15k from 30k. The source
of damage was Vasquez’s bad faith, as found by both TC and CA.
MAGBANUA v. IAC
Facts: Plaintiffs alleged that they are share tenants of the
defendants; that the defendants diverted the free flow of water
from their farm lots which caused portions of their landholdings
to dry up to their great damage and prejudice, and
that they were told by the defendants' overseer to vacate their
respective areas for they could not plant palay any longer due to
lack of water. The TC awarded 5k moral damages; the CA
deleted the moral damages.
Held: Petitioners were denied irrigation water for their farm lots in
order to make them vacate their landholdings. The defendants
violated the plaintiffs' rights and caused prejudice to the latter by
the unjustified diversion of the water. The Court used Art. 21 as
basis to award the petitioners moral damages.
MAYO v. PEOPLE
Facts: Mayo was found guilty of the crime reckless imprudence
resulting in damage to property with multiple serious, less
serious and slight physical injuries after collision between the
Phil. Rabbit bus he drives and a Mitsubishi Lancer. One of the
Lancer passengers was Linda Navarete, who was badly injured.
She demanded P500K moral damages for her physical injuries
and P1M moral damages for the loss of her boyfriend.
Ratio: The P500k moral damages for her injuries were reduced to
P200k, and her prayer for moral damages for the loss of her
boyfriend was denied. There is no doubt that Navarrete sustained
mental and emotional sufferings, but loss of a boyfriend as a
result of physical injuries suffered after an accident is not
recoverable under Art. 2219. Neither is it an analogous case.
DOMINGDING v. NG
Social and financial standings of the offender and
offended party should also be taken into account
in the determination of the amount of moral
damages.
Facts: Trinidad purchased 150 baskets of mangoes from Aranas.
When Trinidad went to the bodega of Aranas, the latter offered
to accompany Trinidad home. While inside a taxi, Aranas
committed acts of lasciviousness against Trinidad. Criminal case
was dropped. But a civil case was instituted for the payment of
the 150 baskets of mangoes. Trinidad counterclaimed for P50K
moral damages.
Ratio: The moral damages were reduced from P50k to P2k, for
abusing a customer belonging to the weaker sex. The following
were the bases of the award:
1. Offense
2. Fraud committed by Arañas
66
3. Trinidad suffered mental anguish, besmirched reputation,
wounded feelings, moral shock and social humiliation
4. Both Trinidad and Arañas were married
5. Nighttime (so not many witnesses)
6. Assault did not last very long because Trinidad was able to
escape
7. Only 4 people knew of the assault (2 taxi drivers, Trinidad’s
husband and Aranas)
SAN ANDRES v. CA
Facts: San Andres filed a complaint for estafa against Aguila for
non-payment of the balance of P3K+ from the sale of 38 hogs, 2
goats and 10 chicken with a total price of P5K+. Aguila only
made initial payment of P2K+.
In said complaint, San Andres made the misrepresentation that
the sale was just for 29 hogs, 2 goats and 10 chickens valued at
P3K. Also, that Aguila had 3 other unpaid credit transactions
with San Andres.
Held: The Court reduced the award to P10kfrom P30k, which
they deemed excessive, especially in view of San Andres’ bad
faith and malice in not disclosing all matters within his
knowledge that were relevant to the criminal case.
TAN KAPOE v. MASA
Facts: Masa and other respondents in this case were tenants of
Tan Kapoe. Masa et al. filed before the Court of Agrarian
Relations a petition for conversion of the tenancy to leasehold.
Tan Kapoe opposed, instead filed for ejectment and instituted 6
suits against Masa et.al. All of these suits were dismissed:
- Grave threats
- Oral defamation
- Violation of Sec.39 RA 1199
- Usurpation of real rights
- 2 suits of malicious mischief (the last suit led to the
incarceration of Masa et.al, though eventually released)
Masa et.al then filed for moral damages for malicious
prosecution.
Held: The SC ruled that the filing of unfounded successive
complaints satisfactorily prove the existence of the factual basis
for moral damages. Beyond doubt, Tan Kapoe’s motive was
obviously for harassment and embarrassment of Masa et.al. and
as a retaliatory measure for the agrarian case for conversion.
WHEN NOT RECOVERABLE
MERCADO v. LIM
Decided prior to Air France v. Carrascoso
Breach of contract cannot be considered included
in the phrase 'analogous cases’ used in Art. 2219.
Art. 2220 already provides for the damages
caused by contractual breach
Facts: Mercado et.al were the owners of the bus that met an
accident. Some passengers died while some sustained physical
injuries. Passengers and heirs are now claiming for moral
damages. Mercado’s defense: Art.2206 fixes actual damages at
P3K, and though the award for moral damages was also stated
in Art.2206, such is NOT obligatory. And since it is only “in
addition,” the amount should only be nominal if the heirs have
already been compensated for the death.
 TORTS & DAMAGES
Ratio: One of the passengers, Nita Lira, sustained physical
injuries, but the Court refused to award her moral damages. Her
case is predicated on breach of contract, and such is NOT
analogous to quasi-delicts causing physical injuries under
Art.2219. Her case, being based on contract, should be governed
by Art. 2220, where malice must be shown before moral
damages can be awarded.
BAGUMBAYAN v. IAC
Facts: Lelisa Seña went to the Tropical Palace Hotel to see the
Reycard Duet Show. They occupied a table and ordered drinks.
When the drinks arrived, the tray of the waiter overturned,
drenching Lelisa. The broken glasses also allegedly destroyed
her dress amounting to about P1K. She had to go to the ladies’
room and when she returned, the show has already started.
She claims for P100K moral damages for embarrassment and for
the fact that management did not even apologize for the alleged
negligence of the waiter.
Ratio: The "embarrassment" to which Mrs. Seña was exposed as
a result of the incident is not the mental anguish contemplated
in Art. 2217, for which moral damages can be recovered.
EQUITABLE BANKING CORP. v. IAC
Malicious prosecution refers to unfounded
criminal actions. The term has been expanded to
include unfounded civil suits instituted just to vex
and humiliate the defendant despite the absence
of a cause of action or probable cause.
Facts: Sps. Villariza and Atty. Contreras loaned to Equitable P1K,
P250 of which was unpaid. Atty. Tirol of Equitable then
demanded payment from Atty. Contreras but when this was
unheeded, he instituted a suit to claim the amount of P250 +
interest and damages. The following day, Atty. Contreras paid
the balance to the bank, so the complaint was dismissed by TC.
Atty. Contreras and Sps. Villariza now assert there was malicious
prosecution so they should be entitled to moral damages of
P80K.
Equitable, for its part, says that it was Atty. Contreras who was
guilty of malicious prosecution, so demanded moral damages as
well for P25K.
Held: There was no malice. The action to collect the P250 was
filed with utmost good faith (uberrima fides). It was not an act of
malevolence designed to harass or embarrass Atty. Contreras.
The amount was overdue. The complaint was dismissed before
summons was served on Atty. Contreras.
The Court also denied Equitable’s counterclaim. As a rule, there
should be no penalty on the right to litigate.
LBC EXPRESS, INC. v. CA
Corporations may not be awarded with moral
damages. A corporation, being an artificial person
and having existence only in legal contemplation,
has no feelings, no emotions, no senses;
therefore, it cannot experience physical suffering
and mental anguish.
67
Facts: Carloto was the President-Manager of the Rural Bank of
Labason. He was set to go to the Central Bank’s main office in
Manila to follow-up the Bank’s plan of payment of rediscounting
obligations. He then phoned his sister to ask for P1K pocket
money and some documents. His sister sent via LBC, but the
package arrived without the P1K. Carloto only received the P1K
after a month.
Carloto claimed that because of the delay, he failed to submit the
documents to CB, thus the Bank was penalized for P32K. He
asserts that LBC wantonly and recklessly disregarded its
obligation and claims for moral damages.
Ratio: The Court refused to award moral damages for three
reasons:
1. The Rural Bank of Labason, Inc. as a corporation, is not
entitled to moral damages.
2. Carloto was also at fault. The P1K pocket money was not
indispensable for him to proceed with his trip to CB main
office in Manila. In actuality, the money was supposed to be
used as a bribe, and thus could not be a basis for awarding
damages.
3. No showing of malice or bad faith on the part of LBC. Bad
faith is NOT presumed, it must be established by clear and
convincing evidence.
LUFTHANSA v. CA
Facts: Don Ferry purchased from Lufthansa German Airline a San
Francisco/ NY/ Paris/ Frankfurt/ Mla first class open dated
ticket. He alleged that 2 personnel of Lufthansa refused to give
him the required ticket endorsement causing delay in his travels.
He filed a complaint against Lufthansa for recovery of damages
of (moral damages = $75K) arising from breach of contract.
Ratio: Endorsement to Trans World Airlines (TWA): it was
proven that Don Ferry did NOT request for an endorsement, but
for a change in routing. There was no breach.
Endorsement to Cathay Pacific Airlines (CPA): there was breach
when Lufthansa did not give the necessary endorsement, but the
said breach was not attended by fraud or bad faith.
D . NOMINAL DAMAGES
Art. 2216, CC
A R T . 2 2 2 1, C C
Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.
A R T . 2 2 2 2, C C
The court may award nominal damages in every
obligation arising from any source enumerated in
Article 1157, or in every case where any property right
has been invaded.
There can be a grant of nominal damages for
every breach, irrespective of the source of
obligation.
A R T . 2 2 2 3, C C
The adjudication of nominal damages shall preclude
 TORTS & DAMAGES
further contest upon the right involved and all
accessory questions, as between the parties to the
suit, or their respective heirs and assigns.
Nominal damages are standalone damages,
which cannot be awarded when any other kind of
damages have been granted.
VDA. DE MEDINA v. CRESCENCIA
The award of nominal damages cannot co-exist
with compensatory damages. If the court below
has already awarded compensatory and
exemplary damages that are in themselves a
judicial recognition that the plaintiff’s right was
violated, the award of nominal damages is
unnecessary and improper.
Facts: Passenger jeepney owned by defendant smashed into a
Meralco post resulting in the death of Vicente Medina. A criminal
case for reckless imprudence resulting in homicide was filed
against Avorque, the driver of the jeepney, while separate civil
cases were filed for damages against driver and Cresencia,
registered owner. But the jeepney had already been sold
repeatedly, ultimately to Rosario Avorque, who was never the
public utility operator. The trial court held Cresencia and Avorque
liable; Rosario Avorque was absolved.
Issue: The sale of jeepney was without the approval of the Public
Service Commission; therefore, the owner still registered is liable
for compensatory and exemplary damages. As for nominal
damages, these cannot be awarded and must thus be eliminated
because:
1. Compensatory damages and exemplary damages cannot
coexist with nominal damages
2. P10k is anyway not nominal.
NORTHWEST AIRLINES v. CUENCA
Facts: Cuenca was Commissioner of Public Highways, traveling
on defendant airline’s plane from Manila to Tokyo. Upon arrival
in Okinawa, he was transferred to tourist class over his objection:
the crew member threatened to leave him in Okinawa. Because
he wanted to make his conference in Tokyo on time, Cuenca
desisted and transferred.
His ticket had been marked “W/L” or waitlisted, but his attention
was not called to this marking. He had paid the first class fare in
full, and having been given first class accommodation in Manila,
he was entitled to believe that he would keep the same
accommodation until arriving in Tokyo
Held: Since the offense was committed with full knowledge of
fact of respondent being an official representative of the country,
the sum of P20k could be considered nominal; said award may
also be considered exemplary, since Northwest had acted
wantonly, recklessly, and oppressively. (The Court made a mistake
here in deeming the nominal damages simultaneously exemplary.)
No compensatory, moral, or exemplary damages were awarded
in the lower court, justifying the award of nominal damages.
68
COGEO-CUBAO OPERATORS & DRIVERS ASSOC. v.
CA, LUNGSOD SILANGAN
Nominal damages are awarded where there has
been a violation of a property right.
Facts: A certificate of public convenience to operate a jeepney
service was issued in favor of Lungsod. Petitioner cooperative
was composed of Lungsod bus operators.
Lungsod then issued a board resolution charging P20 so that the
jeepney operators may queue for passengers at the Cogeo-
Cubao route. The cooperative then formed a human barricade to
protest this, and they assumed the dispatch of passenger
jeepneys. The trial court awarded actual damages in favor of
Lungsod. The CA added nominal damages worth P10k.
Held: The certificate of public convenience was issued in order to
operate public services. It constitutes “property” that can be sold
by its holder, since it is a valuable asset with considerable
material value. The right granted by such certificate thus cannot
be interfered with by third persons without due process.
In this case, petitioner association forcibly took over Lungsod
Silangan’s jeepney service operations without any authorization
from the Public Service Commission, in violation of the right of
respondent corporation to operate its services in the Cogeo-
Cubao route under the certificate.
E . TEMPERATE OR MODERATE
DAMAGES
A R T . 2 2 2 4, C C
Temperate or moderate damages, which are more
than nominal but less than compensatory damages,
may be recovered when the court finds that some
pecuniary loss has been suffered but its amount can
not, from the nature of the case, be provided with
certainty.
A R T . 2 2 2 5, C C
Temperate damages must be reasonable under the
circumstances.
ARANETA v, BANK of AMERICA
If the nature of the loss is such that definite proof
cannot be offered, yet the court is convinced that
there has been loss, the court may award
temperate damages.
Facts: Businessman Leopoldo Araneta issued a check to Harry
Gregory, drawn against the Bank of America. The check was
dishonored and stamped “Account Closed” in spite of the
sufficiency of Araneta’s funds. The bank acknowledged its
mistake (the check was encoded with wrong account number),
and it sent apology to Gregory that the incident should not
reflect adversely on Araneta. However, it happened two more
times: once, Bank of America claimed that payment had been
inadvertently made; another time, a check was stamped again
with “Account Closed” in spite of sufficiency of Araneta’s funds.
The trial court awarded damages totaling P120k:
1. Actual or compensatory — P30k
2. Moral — P20k
 TORTS & DAMAGES
3. Temperate — P50k
4. Exemplary — P10k
5. Attorney’s fees — P10k
The CA eliminated compensatory and temperate damages,
reduced moral damages to P8k, exemplary damages to P1k, and
attorney’s fees to P1k.
Held: The financial credit of a businessman is a prized and
valuable asset. An adverse reflection thereon constitutes a
material loss to him, amounting to an actual injury. But the
nature of the loss is that definite proof cannot be offered,
although the court is convinced that there has been such a loss.
The judge is thus empowered to calculate moderate or
temperate damages in such cases, instead of letting the plaintiff
suffer without redress. In the end, only temperate, moral, and
exemplary damages were awarded.
MANILA BANKING CORP. v. IAC
Temperate or moderate damages are proper not
for indemnification of loss suffered but for the
vindication or recognition of a right violated or
invaded.
Facts: Respondent Wilfredo Rivera received a correspondence
from a business partner, indicating that a check paid to his
partner was dishonored. Rivera then complained to the bank’s
PR Office, and the bank’s investigation revealed that money
deposited to fund the check was credited into another account
The trial court awarded damages:
1. P75,000 – actual damages
2. P25,000 – moral damages
3. P10,000 – exemplary damages
4. P25,000 – attorney’s fees
IAC eliminated award of actual damages, and P10k awarded as
temperate damages, since there was no proof of actual
damages, though damage was evidently sustained.
Held: No entitlement to moral damages → in a matter of 4 hours
the mistake was rectified and Rivera’s business partner was paid
the full value of the check. In this case, temperate damages are
not for the indemnification of the loss suffered, but for the
vindication or recognition of a right violated or invaded.
Ultimately, temperate damages and attorney’s fees were
awarded.
PEOPLE v. TORRES
Temperate damages are awarded where no
documentary evidence of actual damages was
presented in trial because it is reasonable to
presume that, when death occurs, the family of
the victim incurred expenses for the wake and
funeral.
Facts: The two accused were found guilty of murder (qualified by
treachery).
Held: The Court awarded civil indemnity (P50k, in accordance
with prevailing jurisprudence), moral damages (P50k), exemplary
damages (P25k), and temperate damages (P25k).
69
F . LIQUIDATED DAMAGES
A R T . 2 2 2 6, C C
Liquidated damages are those agreed upon by the
parties to a contract, to be paid in case of breach
thereof.
A R T . 2 2 2 7, C C
Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if
they are iniquitous or unconscionable.
A R T . 2 2 2 8, C C
When the breach of the contract committed by the
defendant is not the one contemplated by the parties
in agreeing upon the liquidated damages, the law
shall determine the measure of damages, and not the
stipulation.
Do liquidated damages need to be written?
No. If the contract is oral, yet outside the Statute of
Frauds and can be duly proven, then even an oral
agreement as to liquidated damages will suffice.
NAPOCOR v. NATIONAL MERCHANDISING CO.
A stipulation for liquidated damages is intended
to avoid controversy on the amount of damages,
especially when it is difficult to ascertain its exact
amount.
If iniquitous or unconscionable, the court may
equitably reduce liquidated damages.
Facts: International Commodities Corp. (whose local agent is
Namerco) failed to deliver 4,000 tons of crude sulfur to Napocor
due to its inability to secure shipping space. NPC then rescinded
its contract of sale due to this incident. It also sued for the
recovery of the stipulated liquidated damages to NAMERCO & its
surety. The case against International Commodities was
dismissed (lack of jurisdiction).
Held: It was found out that the agent acted beyond the scope of
its authority; hence, the agent and its surety should be held liable
for damages. The trial court reduced the award from
P360,572.80 to P45,100, relying on Art. 2227 CC, which provides
that “liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or
unconscionable.” The basis for the reduction was that NAMERCO
and ICC exerted efforts to charter a steamer to secure shipping
space.
TITAN v. UNI-FIELD
To be liable for liquidated damages, which are in
the nature of a penal clause, no proof of the actual
measure of damages is needed. The fact that the
existence of the breach can be proven is enough.
Facts: Uni-field filed a complaint for the collection of sum of
money with damages for Titan’s unpaid balance on its purchased
construction supplies and materials.
Titan had not only bound itself to pay the principal amount, but it
also promised to pay (1) interest of 24% p.a. on overdue
 TORTS & DAMAGES
accounts, compounded with the principal obligations as they
accrue; (2) 25% liquidated damages based on the outstanding
total obligation; and (3) 25% attorney’s fees based on the total
claim including liquidated damages.
Held: On the other hand, the law also allows parties to a contract
to stipulate on liquidated damages to be paid in case of breach.
A stipulation on liquidated damages is a penalty clause, where
the obligor assumes a greater liability in case of breach of an
obligation. The obligor is bound to pay the stipulated amount
without need for proof on the existence and on the measure of
damages caused by the breach.
Amount of damages claimed determines jurisdiction → no
counterclaim can be claimed above jurisdiction (ask Roby)
G . EXEMPLARY OR CORRECTIVE
DAMAGES
A R T . 2 2 2 9, C C
Exemplary or corrective damages are imposed, by way
of example or correction for the public good, in
addition to the moral, temperate, liquidated or
compensatory damages.
A R T . 2 2 30, C C
In criminal offenses, exemplary damages as a part of
the civil liability may be imposed when the crime was
committed with one or more aggravating
circumstances. Such damages are separate and
distinct from fines and shall be paid to the offended
party.
A R T . 2 2 3 1, C C
In quasi-delicts, exemplary damages may be granted
if the defendant acted with gross negligence.
A R T . 2 2 3 2, C C
In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or
malevolent manner.
A R T . 2 2 3 3, C C
Exemplary damages cannot be recovered as a matter
of right; the court will decide whether or not they
should be adjudicated.
A R T . 2 2 3 4, C C
While the amount of the exemplary damages need
not be proved, the plaintiff must show that he is
entitled to moral, temperate or compensatory
damages before the court may consider the question
of whether or not exemplary damages should be
awarded. In case liquidated damages have been
agreed upon, although no proof of loss is necessary in
order that such liquidated damages may be
recovered, nevertheless, before the court may
consider the question of granting exemplary in
addition to the liquidated damages, the plaintiff must
show that he would be entitled to moral, temperate or
compensatory damages were it not for the stipulation
for liquidated damages.
A R T . 2 2 3 5, C C
A stipulation whereby exemplary damages are
70
renounced in advance shall be null and void.
Rationale of exemplary damages
This kind of damage is intended to serve as deterrent
to serious wrongdoings, and as a vindication for
undue sufferings and wanton invasion of the rights of
an injured or as punishment for those guilty of
outrageous conduct.
via People v. Torres
Exemplary damages cannot be awarded if no
other kind of damages have been awarded. (It
cannot stand alone.) </3
When a crime is committed with an aggravating
circumstance, either qualifying or generic, an
award of P25,000 as exemplary damages is
1
justified under Art. 2230. If the circumstance is an
alternative one (Art. 14, RPC), exemplary damages
may be awarded if it is found to be aggravating.
1
via People v. Torres
Conditions for award of exemplary damages
1. Imposed by way of example or correction only in
addition, among others, to compensatory
damages;
2. Cannot be recovered as a matter of right;
3. Wrongful act accompanied by bad faith, i.e. award
would be allowed only if the guilty party acted in a
wanton, fraudulent, reckless, oppressive, or
malevolent manner.
via Octot v. Ybañez
SINGSON v. ARAGON
Exemplary damages may be imposed by way of
example or correction, and are not a matter of
right. The amount need not be proven (since it is
up to the Court’s discretion) nor alleged (since it is
incidental to the award of other damages).
The amount of damages claimed determines the
jurisdiction of the court over the case.
Facts: Lorza filed a complaint in the Municipal Court of Manila
against Singson to recover P1321.80 as actual damages, P500 as
atty’s fees, and exemplary damages as the court may deem
necessary. No specification with regards to the exemplary
damages prayed for so Singson moved moved for specification.
Such motion was denied. Singson filed a motion to dismiss on the
ground of lack ofjurisdiction of Municipal Court because case
involves prayer for an unspecified amount of exemplary damages
which is beyond courts limited jurisdiction.
Held: Exemplary damages were not yet awarded; if they had been
given, the award will only be up to the amount which, when
added to the actual damages will not exceed P2k, since this is
the ceiling of the jurisdiction of the municipal court.
Though non-specification of the amount is not tantamount to a
lack of the court’s jurisdiction, it is presumed that Lorza filed the
claim with full knowledge that the totality of her claim should
not exceed P2k [limit of Municipal Ct’s jurisdiction]. Lorza is thus
deemed to have waived his claim for exemplary damages.
TORTS & DAMAGES 71
MUNSAYAC v. LARA

Since exemplary damages are awarded not by way of compensation, but as

a warning to others, it can only be awarded against he who has
participated in the offense.

Facts: Munsayac owned and operated a jeepney which got

involved in an accident causing injuries to passenger De Lara. CFI found the driver recklessly
negligent [excessive speed despite the
bad condition of road] and ordered Munsayac to pay
compensatory damages, 1k exemplary damages and P500 attorney’s fees.

Munsayac questioned the award of exemplary and atty’s fees. CA affirmed CFI’s ruling saying that
exemplary damages was justly awarded because of Munsayac’s failure or refusal to placate
the sufferings of De Lara necessitating the filing of action.

Held: Failure to placate sufferings is an omission after the breach [basis of action: breach of
contract of carriage]. Such is not proof
that Munsayac as ER approved or ratified his driver’s act of
negligence in wanton, fraudulent, reckless, oppressive or
malevolent manner.

OCTOT v. YBANEZ

Exemplary damages are generally not recoverable

in a special civil action for mandamus, unless the
defendant patently acted with vindictiveness or
wantonness and not in the exercise of honest
judgment.

Facts: Octot was a Security Guard in government health office. He was summarily dismissed
pursuant to PD 6 which directed
department heads to weed out undesirable gov’t officials and
ees, specifically those who were facing charges or were
notoriously undesirable. Octot was dismissed on the ground that he was notoriously undesirable
because of his conviction in a
libel case. He was later acquitted by CA of such offense. Region Health office sent notice to
Octot about his reinstatement but he didn’t show up until after Court decision [upon Octot’s
petition that he be reinstated] that he be reinstated w/c the RHO acted on promptly.

Ratio: The record shows that there was no ill will or

personal malice in the dismissal of Octot, when he was dismissed in compliance with PD 6.
Respondents also showed willingness to reinstate him.
SARKIES TOURS v. IAC

in accidents involving public carriers, the causative negligence is personal to

the employees actually in charge of the vehicles, and it is they who should be made to
pay this kind of damages, unless by the demonstrative tolerance or approval of the
owners, they themselves can be held at fault.

Facts: Dizon family bought tickets from Sarkies for a tour to

Corrigedor. From Sarkies’ office, they boarded Sarkies bus to
Pasig River where they boarded M/V Edisco [owned and
operated by Mendoza] which is an oversized motorized banca not registered to ferry passengers. On the
trip back to Manila, vessel capsized which resulted to the death of Dizon’s daughter.

Held: Exemplary damages were not awarded, since there was no showing that Sarkies that he acted in
abd faith of his obligation.

SAN MIGUEL BREWERY v. MAGNO

Since exemplary damages are awarded not by

way of compensation, but as a warning to others,
it can only be awarded against he who has
participated in the offense.

Facts: An ordinance was passed which imposed tax on sales of

beer and sodas San Miguel paid initially but stopped payment
subsequently. City Treasurer Magno sent notice of warning that a warrant of distraint and levy will be
issued on SMB’s properties if it fails to pay [authority under O26]. SMB failed to pay so Magno levied
the former’s properties and seized 2 delivery trucks. SMB instituted action to release delivery truck and
order Magno to pay damages. Magno filed counterclaim for moral and exemplary
damages. TC awarded 2k as damages to Magno.

Held: Mere findings that certain allegations in the complaint are not true, and the plaintiff committed a
mistake in instituting the action against the wrong party, do not justify the award of this kind of
damages. It infringes upon the right of a citizen to have access to the courts.

SC found that City treasurer had authority to levy and that SMB knew about this, SMB shouldn’t have
sued Magno in his personal capacity. Though this is the case, exemplary damages should not be
awarded.