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Chapter 6

ACTIONS AND DAMAGES IN CASE OF BREACH


ALTERNATIVE COMPENSATION SCHEME
Requirement of mandatory insurance for passengers to
DISTINCTIONS meet the financial responsibility of domestic ship
The source of obligation based on culpa contractual is operator for breach of contract of carriage
separate and distinct from quasi-delict.
ELEMENTS OF CAUSE OF ACTION AGAINTS CARRIER
Cause of action of a passenger and shipper: 1. a right in favor of the plaintiff by whatever
a) against common carrier based on culpa contractual means and whatever law it arises
or culpa aquiliana 2. the correlative obligation of the defendant to
b) on the part of the driver based on either culpa repect such right
delictual or culpa aquiliana 3. the act or omission of the defendant violates
the right of plaintiff.
DISTINCTIONS BETWEEN CULPA CONTRACTUAL AND If the cause of action invoked is culpa contractual, it is not
CULPA AQUILIANA necessary for the plaintiff passenger or shipper to allege
and prove the negligent act of the carrier. All that is
Point of CULPA CULPA necessary is to allege presence of contract and the
Distinction CONTRACTUAL AQUILIANA damage or injury to the plaintiff because breach through
Source of Contract Quasi-Delict negligence is already presumed.
Obligation
Liability of None, there being Solidarily liable RECOVERABLE DAMAGES
Employee no privity of with Employer Damages is the pecuniary compensation, recompense, or
contract satisfaction for an injury sustained or as otherwise
Availability of Due diligence in Due diligence in expressed, the pecuniary consequences that the law
Defense selection and selection and imposes for the breach of some duty or violation of some
supervision of the supervision of rights.
employees is NOT the employees
a defense EXTENT OF RECOVERY.
In what As a contracting As an employer
Capacity Liable party Article 2201. In contracts and quasi-contracts, the
damages for which the obligor who acted in good faith
is liable shall be those that are the natural and probable
CONCURRENT CAUSES OF ACTION consequences of the breach of the obligation, and
The same act breaches the contract may also be a tort, which the parties have foreseen or could have
hence, a negligent act that breaches the contract may give reasonably foreseen at the time the obligation was
rise to a liability base on contract as well as quasi-delict constituted.
under Article 2176.
In case of fraud, bad faith, malice or wanton attitude,
- There is one action but several causes of
the obligor shall be responsible for all damages which
action
- The same act that breaches the contract may be reasonably attributed to the non-performance of
may also be tort the obligation. (1107a)

Applied to CC.
CONCURRENCE WITH THIRD PERSONS The carrier in
If negligence of third persons concurs with the breach (as 1. GF is liable only to pay for the damages that are
in the case where the passenger was injured because the the natural and probable consequences of the
carrier collied with another vehicle), the liability of the breach of the obligation and which the parites
third person who was driving another vehicle and or his have forseen or could have reasonable forseen
employer may be based on quasi-delict. The driver alone at the time the obligation was constituted.
may be held criminally liable and civil liability may be 2. BF, or was guilty of gross negligence, CC is
imposed on him based on delict. The employer is liable for ALL damages, whether can be forseen
subsidiarily liable. or not.
-in case of injury to a passenger due to the negligence of Carriers right of Recourse
the driver of the vehicle on which he was riding and the CC has the right against the employee who committed the
driver of another vehicle, the drivers and the owners of negligent intentional or fraudulent act.
the two vehicles are JOINTLY and SEVERALLY liable for
damages KINDS OF DAMAGES

SLIDARY LIABILITY Article 2216 provides that no proof of pecuniary loss is


In case of negligence of the carriers driver and a third necessary in order that moral, nominal, temperate,
person concurs, the liability of the parites carrier and liquidated or exemplary damages may be adjudicated.
his driver, third person- IS JOINT ad SEVERAL. The assessment of such damages, except liquidated ones,
is left to the discretion of the court, according to the
Alternative cause of Action circumstances of each case. However, proof of pecuniary
The carrier may be sued on the alternative cause of action loss is necessary if actual or compensatory damages are
and quasi-delict. being claimed.
ACTUAL OR COMPENSATORY DAMAGES ATTORNEYS FEES
- only for the pecuniary loss suffered by him as - refer to Art. 2208 of the Civil Code
he has duly proved - attorneys fees may be awarded in an action
- not only the value of the loss suffered, but also for breach of contract of carriage under par.
that of the profits which the obligee failed to 1,2,4,5,10 and 11 of Art. 2208.
obtain - If awarded exemplary, one is entitled to
attorneys fees
- 2 Kinds: - 2 kinds: ordinary (compensation to the
1. the loss of what a person already possesses lawyer); extraordinary (indemnity as a form
(dao emergente); of damages suffered due to the breach of
2. the failure to receive as a benefit that would contract)
have pertained to him (lucro cesante). - You can be awarded if you show that you
- It should be proven: cannot be decided based were forced to litigate and when you are
on the consideration of the judge; not to be entitled to exemplary damage.
based on the perception, observation and - But this award is subject to the discretion of
consideration of the judge the court (you cannot dictate usually 10%-
- With respect to restorative medical procedure: 15%)
to be entitled to actual damage, you need to
have an EXPERT TESTIMONY. Without such,
you cannot recover.

Damages may be recovered: Art. 2205 (Civil Code) Article 2208. In the absence of stipulation, attorney's
1) For loss or impairment of earning capacity in cases of fees and expenses of litigation, other than judicial costs,
temporary or permanent personal injury; cannot be recovered, except:
2) For injury to the plaintiffs business standing or (1) When exemplary damages are awarded;
commercial credit. (2) When the defendant's act or omission has compelled
the plaintiff to litigate with third persons or to incur
Damages cannot be presumed. The burden of expenses to protect his interest;
proof rests on the plaintiff who is claiming actual (3) In criminal cases of malicious prosecution against the
damages against the carrier. plaintiff;(4) In case of a clearly unfounded civil action or
proceeding against the plaintiff;
In case of goods the plaintiff (5) Where the defendant acted in gross and evident bad
is entitled to their value at the faith in refusing to satisfy the plaintiff's plainly valid, just
time of destruction. The award and demandable claim;
is the sum of money which (6) In actions for legal support;
plaintiff would have to pay in (7) In actions for the recovery of wages of household
the market for identical or helpers, laborers and skilled workers;
essentially similar goods (8) In actions for indemnity under workmen's
For personal injury and even compensation and employer's liability laws;
death the claimant is entitled (9) In a separate civil action to recover civil liability
to all medical expenses as well arising from a crime;
as other reasonable expenses (10) When at least double judicial costs are awarded;
that he incurred to treat his or (11) In any other case where the court deems it just and
her relatives injuries. equitable that attorney's fees and expenses of litigation
In case of death the plaintiff is should be recovered.
entitled to the amount that he In all cases, the attorney's fees and expenses of litigation
spent during the wake and must be reasonable.
funeral of the deceased. But,
expenses after the burial are not
compensable. INTERESTS
12% per annum if it constitutes a loan or
LOSS OF EARNING CAPACITY forbearance of money
6% per annum if it does not constitute loan or
Net Earning Capacity = Life Expectancy x [Gross Annual forbearance of money
Income less Necessary Living Expenses] 12% - for final judgment
No interest, however, shall be adjudged on unliquidated
Life expectancy (2/3 x 80 age at death) claims for damages except when or until the demand can
Net earnings based on the gross income of the be established with reasonably certainty, the interest
victim minus the necessary incidental living shall begin to run form the time the claim is made
expenses which the victim would have incurred if judicially or extrajudicially.
he were alive.
Amount of living expenses must be established. In
the absence of proof, it is fixed at fifty (50%) of the MORAL DAMAGES
gross income. - Includes physical suffering, mental anguish,
Rules on loss of earning apply when the breach of fright, serious anxiety, besmirched reputation,
the carrier resulted in the plaintiffs permanent wounded feelings, moral shock, social
incapacity. humiliation and similar injury.
- Though incapable of pecuniary computation, not for the purpose of indemnifying the
moral damages may be recovered if they were plaintiff for any loss suffered by him.
the proximate result of the defendants - The assessment of nominal damages is left to
wrongful act or omission. the discretion of the court according to the
- Moral damages are not awarded to punish the circumstances of the case.
defendant but to compensate the victim - The award of nominal damages is also justified
- May be recovered when there is death or there in the absence of competent proof of the
is malice or bad faith. (in transportation of specific amounts of actual damages suffered.
passengers) - Cannot co-exist with actual damages.
- Refer to Art. 2219 and 2220 (enumerates cases - There is no loss in nominal damages, unlike in
when moral damages may be awarded) actual and temperate damages, loss is present
- Generally, no moral damages may be awarded which is proven and not proven but rather
where the breach of contract is not malicious. ascertained by the court, respectively.
- Moral damages may be awarded if the
contractual negligence is considered gross
negligence. SECTION 2 Nominal Damages
- Subject to three conditions in transportation
law:
o Death Article 2221. Nominal damages are adjudicated in
o Malice or bad faith (must be done in order that a right of the plaintiff, which has been
the performance of the contract of violated or invaded by the defendant, may be vindicated
carriage) or recognized, and not for the purpose of indemnifying
o Physical Injuries the plaintiff for any loss suffered by him.
- Requisites:
o There must be an injury, whether Article 2222. The court may award nominal damages
physical, mental or psychological, in every obligation arising from any source enumerated
clearly sustained by the claimant
in article 1157, or in every case where any property
o There must be a culpable act or
right has been invaded.
omission factually established
o The wrongful act or omission of the
defendant is the proximate cause of Article 2223. The adjudication of nominal damages
the injury sustained by the claimant shall preclude further contest upon the right involved
o The award of damages is predicated and all accessory questions, as between the parties to
on any of the cases stated in Art. the suit, or their respective heirs and assigns.
2219.
- IN BREACH OF CONTRACT OF AIR CARRIAGE,
may be recovered when
1. the misshap results in the death of a Case: Japan Airlines vs. CA
passenger - The award of moral damages was justified
2. where the carrier is guilty of fraud or bad because JAL failed to make necessary
faith arrangement to transport the plaintiffs on the
3. where the negligence of the carrier is so first available connecting flight to Manila.
gross and reckless as to virtually amount - Only Nominal damages were awarded in the
to bad faith absence of proof of actual damages

TEMPERATE OR MODERATE DAMAGES


- Factors to consider that could affect the - More than nominal but less than compensatory
amount to be recovered: damages.
o The extent of humiliation may also - Art. 2224 provides:
determine the amount of moral may be recovered when the court finds that some
damages that can be awarded pecuniary loss has been suffered but its amount
o The extent of pain and suffering cannot, from the nature of the case, be provided
likewise determines the award with certainty.
o Official, political, social and financial - cannot co-exist with actual damages
standing of the offended party and - Definite proof of pecuniary loss cannot be
the business and financial position offered, although the court is convinced that
of the offender affect the amount of there has been such loss.
damages
o The age of the claimant.

GROSS NEGLIGENCE Article 2225. Temperate damages must be reasonable


Implies a want or absence of or failure to exercise even under the circumstances.
slight care or diligence or the entire absence of care.

NOMINAL DAMAGES
LIQUIDATED DAMAGES
- Refer to Art. 2221-2223 (Civil Code) - Those agreed by the parties to a contract, to be
- It is adjudicated in order that the right of paid in case of breach thereof.
plaintiff may be vindicated or recognized, and
- Ordinarily, the court cannot change the amount Article 2234. While the amount of the exemplary
of liquidated damages agreed upon by the damages need not be proved, the plaintiff must show
parties. However, Art. 2227 of the Civil Code that he is entitled to moral, temperate or compensatory
provides that liquidated damages, whether damages before the court may consider the question of
intended as an indemnity or a penalty, shall be whether or not exemplary damages should be awarded.
equitably reduced if they were iniquitous or In case liquidated damages have been agreed upon,
unconscionable.
although no proof of loss is necessary in order that
such liquidated damages may be recovered,
nevertheless, before the court may consider the
Article 2226. Liquidated damages are those agreed question of granting exemplary in addition to the
upon by the parties to a contract, to be paid in case of liquidated damages, the plaintiff must show that he
breach thereof. would be entitled to moral, temperate or compensatory
damages were it not for the stipulation for liquidated
Article 2227. Liquidated damages, whether intended as damages.
an indemnity or a penalty, shall be equitably reduced if
they are iniquitous or unconscionable. Article 2235. A stipulation whereby exemplary
damages are renounced in advance shall be null and
Article 2228. When the breach of the contract void.
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.

EXEMPLARY OR CORRECTIVE DAMAGES


- Requisites for the award of exemplary damages:
1. They may be imposed by way of example in
addition to compensatory damages, and only
after the claimants right to them has been
established.
2. They cannot be recovered as a matter of right,
their determination depending upon the
amount of compensatory damages that may be
awarded to the claimant.
3. The act must be accompanied by bad faith or
done in wanton, fraudulent, oppressive or
malevolent manner.

Article 2229. 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.

Article 2230. 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.

Article 2231. In quasi-delicts, exemplary damages may


be granted if the defendant acted with gross
negligence. Article 2232. In contracts and quasi-
contracts, the court may award exemplary damages if
the defendant acted in a wanton,

fraudulent, reckless, oppressive, or malevolent manner.

Article 2233. Exemplary damages cannot be recovered


as a matter of right; the court will decide whether or not
they should be adjudicated.

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