Damages. Actual Damages

VIII. DAMAGES

A. Concept / Kinds of Damages

Art. 2197. Damages may be:

1. Actual or compensatory;
2. Moral;
3. Nominal;
4. Temperate or moderate;
5. Liquidated; or
6. Exemplary or corrective

What are the kinds of damages and give a brief
explanation. Damages may be:

1. Actual – This is compensation for the pecuniary loss
actually suffered and proved by the plaintiff.

Examples:

A robber steals a ring. Actual damages = value of the ring
Someone beats you up. Actual damages = expenses for
going to the hospital, doctor, medicine

Contract with supplier of raw materials. Supplier fails to
comply and because of that, the buyer fails to
manufacture his products.

Actual damages = unrealized profit.

2. Moral – Moral damages include:

a. physical suffering
b. mental anguish
c. fright
d. serious anxiety
e. besmirched reputation
f. wounded feelings
g. moral shock
h. social humiliation
i. similar injury

Examples:

Someone beats you up.

Moral damages = pain, physical suffering Someone kills
your wife.

Moral damages = moral suffering, which is presumed by
law once a family member dies.

3. Nominal – 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.

Example:

Police officers barge into your home without a warrant.

4. Temperate – More than nominal but less than
actual/compensatory. May be recovered when the court
finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved
with certainty.

Example:

Evidence presented at the trial to show the value of the
damage was wrong, but the damage itself was proven.

5. Liquidated - agreed upon by the parties to a contract, to
be paid in case of breach thereof.



Example:

Contract for construction which states that in case of delay
in completion, the contractor must pay 1/10 of 1% of the
project cost for every day of delay.

6. Exemplary or corrective - imposed, by way of example
or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.

Example:

When offender acted with evident bad faith and malice,
such as in crimes attended by aggravating circumstances.

General Principles of Damages:

1. The amount should be fair and just and commensurate
to the damage.

2. Damage and the amount must be proven by
competent evidence. “Competent” means that it is
admissible.

How to prove:

Example: You lost jewelry to robbers. To prove the amount
of damages, you must present documentary evidence,
such as receipts. But you probably don’t keep the receipts
of your jewelry around, so you can also present
testimonial evidence of an expert witness, such as a
jewelry appraiser.

3. Only proximate damages, not remote or speculative,
can be recovered.

Examples:

If you run over a chicken, you only pay the value of the
chicken, not the eggs that it would have produced.

Client appealed a case that he lost. His lawyer failed to file
appellant’s brief, so his appeal was dismissed.

Client filed for damages against the lawyer, claiming that
he would have been awarded P1M by the appellate court
had the brief been filed. SC held that this was too
speculative.

Client was proceeding from the assumption that he would
win the case on appeal, when the probability of this
happening was not very high since he already lost in the
lower court.

But the SC ordered the lawyer to pay damages for his
gross negligence in failing
to file the brief.

WHAT DAMAGES MAY BE RECOVERED IN CASE OF DEATH OF A
PASSENGER?

When death occurs, the following items of damages may
be recovered:

1. An indemnity for the death of the victim;
2. An indemnity for loss of earning capacity of the
deceased;
3. Moral damages;
4. Attorney’s fee and expenses of litigation;
5. Interest in proper cases (Brinas vs. People, 125
SCRA 687).




IN FIXING A GREATER AMOUNT OF DAMAGES FOR DEATH OF A
PASSENGER THAN THAT PROVIDED BY LAW WHAT MAY THE COURTS
CONSIDER?

Article 2206 applies in case of death caused by
breach of contract by the common carrier (Article 1764). It
fixes the minimum indemnity for death at P_______ which
the courts may increase according to circumstances. It is in
fixing a greater amount of indemnity that courts may
consider the financial capacity of the common carrier,
along with such other factors as:

1. Life expectancy of the deceased or of the
beneficiary, whichever is shorter;
2. Pecuniary loss to the plaintiff or beneficiary;
3. Loss of support;
4. Loss of service;
5. Loss of society;
6. Mental suffering of beneficiaries; and
7. Medical and funeral expenses (Pangasinan
Transportation Co., Inc. vs. Legaspi, 12 SCRA
592).

In awarding compensatory damages, the age of the
plaintiff, his expected life span, and his earning capacity
within that life span must be taken into consideration.

Thus, the fact that the plaintiff was only in his twenties,
when through the negligence of the defendant, he lost the
use of his limbs, being condemned for the remainder of his
life to be a paralytic, in effect leading a maimed, well-nigh
useless existence, were taken into account in fixing
compensatory damages (Marchan vs. Mendoza, 24 SCRA
889).

HOW MAY LIFE EXPECTANCY OF A PERSON BE DETERMINED FOR
PUPROSES OF FIXING THE AMOUNT OF DAMAGES THAT MAY BE
RECOVERED?

In determining the number of years on the basis
of which the damages shall be computed and the rate
which the losses sustained by said heirs should be fixed,
the following formula was adopted in the American
Expectancy Table of Mortality or the actual Combined
Experience Table of Mortality:

2/3 x (80 – age of the decedent) = life expectancy.

Thus, the life expectancy of the passenger who died when
he was over 29 years of age (or around 30 for purposes of
computation) was placed at 33 1/3 years, following the
foregoing formula (Villa Rey Transit, Inc. vs. Court of
Appeals, 31 SCRA 514). And where the passenger was 37
years old when he died, he had a life expectancy of 28 2/3
more years (Fortune Express, Inc. vs. Court of Appeals, G.R.
No. 119756, March 18, 1999).

In the computation of the damages to be awarded, it
should be life expectancy of the passenger who died and
not the life expectancy of the beneficiary which should be
considered (Philippine Airlines vs. Court of Appeals, 185
SCRA 110).

JURISPRUDENCE:

So Ping Bun v. CA

ISSUE: Whether Tek Hua is entitled to the attorney’s fees
of P200,000.

HELD: Tek Hua is entitled to an award of attorney’s fees
BUT only in the amount of P100,000. The trial court and
the Court of Appeals were both correct in not awarding
actual, moral, and exemplary damages.

This is because So Ping Bun was not motivated by any
malicious intent in prevailing upon DCCSI to lease the
warehouse to his enterprise at the expense of Tek Hua.
Hence, he cannot be deemed a malicious interferor.

However, this does not mean that So Ping Bun is totally
exempt from liability. He is still liable for attorney’s fees.

The recovery of attorney’s fees in the concept of actual or
compensatory damages, is allowed under the
circumstances provided for in Art. 2208 of the Civil Code.

One such occasion is when the defendant’s act or omission
has compelled the plaintiff to litigate with third persons or
to incur expenses to protect his interest.

But it has been consistently held that the award of
considerable damages should have clear factual and legal
bases.

In connection with attorney’s fees, the award should be
commensurate to the benefits that would have been
derived from a favorable judgment.

Settled is the rule that fairness of the award of damages by
the trial court calls for appellate review such that the
award, if far too excessive, can be reduced. This ruling
applies with equal force on the award of attorney’s fees. In
a long line of cases, it has been said that it is not sound
policy to place a penalty on the right to litigate.

In this case, considering that the lease contract of Tek Hua
ran only on a month-to-month basis, the SC finds the
award of P200,000 still exorbitant in the light of prevailing
jurisprudence. Consequently, the award is reduced to
P100,000.

B. General Principles of Recovery

JURISPRUDENCE:

PAL v. Miano

Miano took a PAL flight to Germany. When he arrived in
Austria, his checked-in luggage was missing.

He reported the matter to Lufthansa authorities. It was
only 11 days later that his baggage was delivered to him.
He claimed that due to the delay, he was forced to borrow
money for clothes, pay $200 for the transportation of his
baggage from Austria to Czechoslovakia, and he lost a
camera.

Miano later instituted an action for damages before the
RTC of Makati. PAL disclaimed any liability on the ground
that there was no report of mishandled baggage on flight
PR 722, and no tracer telex from its Viena Station. It also
claimed that if it is at all liable, its obligation was limited by
the Warsaw Convention rate.

ISSUE: Whether Miano is entitled to damages and
attorney’s fees.

HELD: No. But he is entitled to actual damages of $200 for
expense incurred for the transportation of
his baggage.

In breach of contract of carriage by air, moral damages are
awarded only if the defendant acted fraudulently or in bad
faith.

There was no bad faith on the part of PAL. In fact, upon
complaint, it immediately coordinated with its central
baggage services to trace the bag and found it.

Exemplary damages cannot be awarded either. In case of
contracts and quasi contracts, the defendant must have
acted in a fraudulent, oppressive, reckless, or malevolent
manner for exemplary damages to be given.

These do not characterize PAL’s actions.

When moral and exemplary damages are eliminated,
attorney’s fees must be deleted as well.

People v. Paraiso

Paraiso and an unknown companion, John Doe, willfully
and unlawfully entered into the house of a neighbor, Lolita
Tigley, and robbed certain articles such as jewelry, a rolex
watch, P200 cash, and a telescope, all valued at P180 K.

They then hogtied Paraiso’s 4 children, afterwhich they
took Tigley to another room and stabbed her to death.

The lower court then held that Paraiso was guilty beyond
reasonable doubt of the special complex crime of robbery
with homicide attended by 3 aggravating circumstances:
disregard of the respect due the victim on account of her
sex, that the act was committed in the victim’s dwelling
without provocation on the victim’s part, and that the
accused took advantage of their superior strength.

Paraiso was then sentenced to death and ordered to pay
actual damages (P180K) as well as moral damages (P200K)
and exemplary damages ( P100K).

ISSUE: Did the court a quo err in finding Paraiso guilty
beyond reasonable doubt?

HELD: No. But the award of damages is modified.

Judgment with regard to damages was modified by the SC
in the following manner:

1. As regards the civil liability, following current
jurisprudence, the amount of P50K is
awarded for the death of the victim Tagley. No other proof
is necessary other than the fact
of the death of the victim and the accused’s responsibility
therefor.

2. As regards moral damages, such is in order because of
the obvious pain, anguish, and
grief suffered by the victim’s children. However, since the
purpose of such an award is not
to enrich the victim’s children but to compensate them for
the injuries to their feelings,
the amount of P200K is reduced to P100 K.

3. As regards exemplary damages, the presence of one or
more aggravating circumstances
justifies such after proof that the offended party is entitled
to moral, temperate, or
compensatory damages. However, in this case the amount
of P100 K is reduced to P50 K
as such is already reasonable.

4. As regards actual damages, such can only be premised
upon competent proof and on the
best evidence obtainable. In this case, except for the
amount of P200 cash, the value of the rest of the stolen
articles (jewelry, rolex, etc) are not matters of public
knowledge and in the absence of receipts or any other
competent evidence besides the self-serving valuation of
the prosecution, the award of actual damages should be
reduced from P200K to P200 as this was the only amount
which was sufficiently proven by the prosecution
witnesses.

Victory Liner v. Malecdan

ISSUE: Whether the award of damages by the RTC and its
affirmation by the CA was proper.

HELD: Yes, but the amounts are modified/reduced.

Actual Damages: To justify an award of actual damages,
there should be proof of the actual amount of loss
incurred in connection with the death, wake or burial of
the victim. Receipts showing expenses incurred some time
after the burial of the victim, such as expenses relating to
the 9th day, 40th day and 1st year death anniversaries,
should not be taken into account. In this case, the trial
court awarded P88,339.00 as actual damages. While these
were duly supported by receipts, these included the
amount of P5,900.00, the cost of one pig which had been
butchered for the 9th day death anniversary of the
deceased.

This item cannot be allowed. Therefore, the amount of
actual damages is reduced to P82,439.00.00.

Moral Damages: The award of P200,000.00 for moral
damages should likewise be reduced. The trial court found
that the wife and children of the deceased underwent
“intense moral suffering” as a result of the latter’s death.

Under Art. 2206 of the Civil Code, the spouse, legitimate
children and illegitimate descendants and ascendants of
the deceased may demand moral damages for mental
anguish by reason of the death of the deceased. Under the
circumstances of this case, an award of P100,000.00 would
be in keeping with the purpose of the law in allowing
moral damages.

Idemnity: The award of P50,000.00 for indemnity is in
accordance with current rulings of the Court.

Exemplary Damages: Art. 2231 provides that exemplary
damages may be recovered in cases involving quasi-delicts
if the defendant acted with gross negligence. Exemplary
damages are imposed not to enrich one party or
impoverish another but to serve as a deterrent against or
as a negative incentive to curb socially deleterious actions.

In this case, petitioner’s driver Joson, Jr. was grossly
negligent in driving at such a high speed along the national
highway and overtaking another vehicle which had
stopped to allow a pedestrian to cross. Worse, after the
accident, Joson, Jr. did not stop the bus to help the victim.
Under the circumstances, the trial court’s award of
P50,000.00 as exemplary damages is proper.

Attorney’s Fees: Private respondents are entitled to
attorney’s fees. Under Art. 2008 of the Civil Code,
attorney’s fees may be recovered when, as in the instant
case, exemplary damages are awarded.

In the recent case of Metro Manila Transit Corporation v.
Court of Appeals, an award of P50,000.00 as attorney’s
fees was held to be reasonable.

Hence, private respondents are entitled to attorney’s fees
in that amount.


















C. ACTUAL DAMAGES

Art. 2199. Except as provided by law or by stipulation, one
is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory
damages.

Art. 2200. Indemnification for damages shall comprehend
not only the value of the loss suffered, but also that of the
profits which the obligee failed to obtain.

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

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

Art. 2202. In crimes and quasi-delicts, the defendant shall
be liable for all damages which are the natural and
probable consequences of the act or omission complained
of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the
defendant.

Art. 2203. The party suffering loss or injury must exercise
the diligence of a good father of a family to minimize the
damages resulting from the act or omission in question.

Art. 2205. Damages may be recovered:

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

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

Art. 2207. If the plaintiff's property has been insured, and
he has received indemnity from the insurance company
for the injury or loss arising out of the wrong or breach of
contract complained of, the insurance company shall be
subrogated to the rights of the insured against the
wrongdoer or the person who has violated the contract. If
the amount paid by the insurance company does not fully
cover the injury or loss, the aggrieved party shall be
entitled to recover the deficiency from the person causing
the loss or injury.

Art. 2209. If the obligation consists in the payment of a
sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to the
contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest,
which is six per cent per annum.

NOTES:

Article 2199 provides the general rule that one is entitled
to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved.

The exceptions are:

1. provided by law: example is the fixed indemnity. If
someone is killed, automatically, an indemnity of 50K is
awarded. There is only a need to prove the fact of death.

2. stipulation: if the parties stipulate the amount of
damages in case of breach of contract, it becomes
liquidated damages.


Actual damages may be:

1. Under Article 2200

a. value of the loss suffered
b. profits which the obligee failed to obtain (unrealized
profit)

>how to prove this: documentary evidence

Example:

X and Y killed A and threw his body into a river, not
knowing that he had P100K in his pocket.

X and Y are liable for 100K in actual damages because they
are liable for all the damages attributed to their criminal
act, even if they did not know of or contemplate the loss
of the 100K.

2. Under Article 2205

a. loss or impairment of earning capacity due to temporary
or permanent injury

> “permanent injury” does not mean that you’re a
vegetable but that you cannot do the same job as before
because of the injury
>how to prove this: present documentary evidence, such
as the ITR, payroll

b. injury to the plaintiff’s business standing or commercial
credit

>how to prove this: present documentary evidence, such
as contracts for future business or comparison or earnings
before and after the injury.

3. Fixed indemnity – The law provides a fixed indemnity in
certain cases, such as death, rape, seduction, etc. For
death: 50K.

4. Loss of earning capacity – This presupposes that the
person concerned is dead. How to
compute:

First step: Determine the life expectancy using the
following formula:

Life expectancy = 2/3 x (80 - age of the deceased at the
time of death)

Second step: Compute for earning capacity using the
following formula:

Earning capacity = net earnings per year/2 x life
expectancy

How do you prove the net earnings per year:

a. documentary evidence: ITR, payroll

b. Oral testimony on minimum wage (but this is not always
admitted)

The net earnings of the deceased is divided by two since
the law presumes that half of it goes to his living expenses.
But if other evidence is presented to establish the actual
personal expenses of the deceased, then this figure may
be used instead.








Attorney’s Fee

(1) as FEES: lawyer-client relationship; belongs to lawyer
(2) as DAMAGES: belongs to client

General Rule: Atty’s fees cannot be recovered.

Exception: Granted in instances under 2208. There must
be a legal basis for the award of atty’s fees.

Court must state basis for award. Otherwise, its null &
void.

Example:

Case of A v. B who are fighting over ownership of land. A’s
counsel agrees to represent A for 25% of the value of the
land.

If A wins, can A’s counsel file for an attorney’s lien on the
property?

No. Atty’s lien on real property subject of litigation is not
allowed. But if the action was principally for damages and
A wins, the atty’s fees can constitute a lien on the money
awarded. The lien is allowed only if the subject matter is
money, not real property.

What if your agreement with your client is that you’ll be
paid 100K but client is awarded only 50K.

Are you entitled to just 50K?

No. The contract between you and the client is a separate
agreement.

Art. 2208. In the absence of stipulation, attorney's fees
and expenses of litigation, other than judicial costs,
cannot be recovered, except:

(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled
the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the
plaintiff;
(4) In case of a clearly unfounded civil action or
proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiff's plainly valid, just
and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's
compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability
arising from a crime;
(10) When at least double judicial costs are awarded;
(e.g. docket fees, TSN expenses; can be sizeable)
(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
(e.g. case lasted for several years & handled by same
lawyer)

In all cases, the attorney's fees and expenses of litigation
must be reasonable.

Algoon v. CA: There can be no atty’s lien on real property
subject of litigation.

However, if case was for damages, atty can claim a lien
over the award.