TORTS – OTHER TORTS – DERELICTION OF DUTY

Article 27. 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.

Amaro vs. Sumanguit Gr No. L-14986 (July 31, 1962)

Facts: On October 5, 1958 Jose amaro was assaulted and shot near the city government building of
Silay, Negros Occidental by a police officer. He, together with his father and witnesses went to the office
of Ambrosio Sumanguit, the chief of police of the city to complain. However instead of gaining
assistance they were harassed terrorized and were forced to give up prosecuting the crime. Amaro still
persisted and obtained the aid of the city attorney who was about to file an information for the illegal
discharge of firearm against one of the police officers. Because of this, the harassment by the chief of
police continued, trying to force the Amaros to give up and sign prepared affidavits exculpating the
police from dereliction of duty with regard to the above said crime.

The complaint was dismissed upon Sumanguit’s motion, on the ground that it does not it does not state
facts sufficient to constitute a cause of action.

Issue: Whether such dismissal is valid on such ground?

Held: No, such dismissal was invalid. Although the complaint did not specifically allege so, it was an
action predicated on articles 21 and 27 of the Civil Code. The facts presented although vague do
constitute an actionable dereliction of duty as enunciated in article 27 as the chief of police refused to
give them assistance without just cause, when it was said officer’s duty to perform such.

Although the complaint was imperfectly drafted, ambiguous, indefinite and uncertain, such are not
grounds for dismissal of the case under Rule 8. The proper procedure would be to ask for a bill of
particulars under Rule 16 to fix said curable defects.

The Amaros have recourse to file their complaint for illegal discharge of firearm directly with the city
attorney and/or file an administrative complaint against the chief of police. Both of which do not
preclude an action for damages under article 27 of the Civil Code. Thus, the dismissal is set aside and
the case remanded to the appropriate court for further proceedings.
TORTS – OTHER TORTS – UNFAIR COMPETITION

Article 28. Unfair competition in agricultural, commercial or industrial enterprises or in labor through

the use of force, intimidation, deceit, machination or any other unjust, oppressive or highhanded
method shall give rise to a right of action by the person who thereby suffers damage.

TORTS – OTHER TORTS – VIOLATION OF HUMAN DIGNITY AND PRIVACY

Article 26. 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.

St. Louis Realty Corporation vs. C.A. GR No L-46061 (November 14, 1984)

Facts: St. Louis Reality Corp. caused to be published on the December 15, 1968 Sunday Times an
advertisement featuring the house of Dr. Conrado J. Aramil. Said advertisement was entitled “Where
the Heart is”, showed a picture of Dr. Aramil’s house but with the family of Arcadio S. Acradio depicted
as the owners. It also had written text stating that the Arcadios had purchased such house in Brookside
Hills village at an affordable rate. Such was done without the permission of Dr. Aramil.

Upon seeing a reprint of the advertisement on the same paper on January 5, 1969, Dr. Aramil
immediately wrote said reality corporation stating that the latter did not obtain permission to post his
house in the advertisement and depict it as being owned by another family. Dr. Aramil explained that it
has caused him humiliation as his colleagues and friends who recognize his house or have been to such
have uttered remarks questioning the ownership of his house, his integrity, if he rented the house from
the Arcadios and even that his wife was that of another husband. He then warned the corporation that
he would pursue legal action if such acts were not explained satisfactorily to him within one week of
receipt of the letter.

Said letter was received and answered by Ernesto Magtoto, an officer of said corporation who was in
charge of advertising. He immediately stopped its publication and contacted Dr. Aramil to apologise.
However no rectification or apology was ever published. Dr. Aramil’s counsel demanded actual, moral
and exemplary damages of P 110,000 from the corporation on February 20, 1969. The corporation
answered by claiming that it was an honest mistake and that a rectification will be made.

The corporation published a new advertisement on March 18, 1969 which again portrayed the Arcadio
family, but this time with their real house. However no apology or rectification was included. This led to
the filing of a complaint for damages against the said corporation on March 29, 1969. The lower court
and appellate court ruled in favor of Dr. Aramil; awarding him P 8,000 as actual damages, P 20,000 as
moral damages and P 2,000 for attorney’s fees.

Issue: Whether the case is covered by article 26 of the Civil Code?

Held: Yes, the case falls under said article which warrants the award of damages to Dr. Aramil. Said
article provides that "every person shall respect the dignity, personality, privacy and peace of mind of
his neighbors and other persons". "Prying into the privacy of another's residence" and "meddling with or
disturbing the private life or family relations of another" and "similar acts", "though they may not
constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief".
Such article was violated when the corporation released an advertisement depicting Dr. Armil’s home to
be that of another, without Dr. Aramil’s permission. Further, bad faith and negligence was evident as
the corporation refused to publish a rectification or apology despite demands.

The damages awarded are proper being enunciated by Articles 2200, 2208 and 2219 of the Civil Code.
Article 2219 allows moral damages for acts mentioned in Article 26.

Concepcion v. CA Gr No 120706 (January 31, 2000)

Facts: Nestor Nicolas and family were leases of an apartment owned by Florence Conception located at
San Joaquin, Pasig City. Nestor was engaged in the business of supplying office equipment, appliances
and other fixtures to government agencies. He had convinced Florence to join in by inputting capital in
exchange for an equal division of profits earned.

The problem started when Florence’s deceased husband’s brother, Rodrigo Conception, suddenly
confronted Nestor at his apartment on the second week of July 1985. He accused Nestor of being an
adulterer, receiving P 100,000 from Florence to go to Baguio with his family, but secretly returning to
Manila to have a tryst with Florence. Nestor even accompanied Rodrigo to ask the relatives whom the
rumor allegedly came from, they however denied any knowledge. Rodrigo again accused Nestor of
being an adulterer when they met Florence at the terrace of her residence when the two confronted her
about the rumor. Both Nestor and Florence denied such. Rodrigo continued to harass Florence via
phone, even saying that he would kill her if anything should happen to his mother.

As a result Nestor felt ashamed and embarrassed to face his neighbors as they had heard or had been
present during Rodrigo’s confrontation. His business was also in decline as Florence discontinued her
capital input. Moreover, his wife, Allem started to distrust him and constant fighting ensued due to the
rumor spread by Rodrigo. Nestor then demanded that Rodrigo make a public apology and pay damages.
Rodrigo refused to do so and reasoned that he was only protecting his family’s reputation. The RTC and
Court of Appeals ruled in favor of Nestor, awarding him P 50,000 for moral damages, P25,000 for
exemplary damages, P 10,000 for attorney’s fees and the cost of suit.

Issue: Whether the awarding is with basis or not?

Held: Yes, such decision is with legal and factual basis. First, Rodrigo’s claim that the awarding was
without legal basis is bereft of merit. His actions of confronting Nestor in the latter’s apartment and
hurling accusations that Nestor was an adulterer within view and hearing range of the public is indeed a
violation of articles 26 and 2219 of the Civil Code as such an act is indeed a form of defamation and
intrudes into the privacy of Nestor’s home and family life. Further, under article 2217 of the Civil Code,
moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury, although incapable of
pecuniary computation, may be recovered if they are the proximate result of the defendant's wrongful
act or omission. Such was manifest when Nestor was so humiliated that he could not face his
neighbours, his constant quarrels with his wife and the decline of his business.

Rodrigo’s second contention that the facts and circumstances of the case were manifestly overlooked
misunderstood or glossed over by respondent court which, if considered, would change the verdict. The
court sees no such error. The totality of the evidence and facts presented truly show that Rodrigo had
defamed Nestor. The minor inconsistencies of the testimonies and affidavits of witnesses do not
debunk Nestor’s case; in fact they are a badge of its authenticity as experience would dictate that minor
inconsistencies are to be expected.

Rodrigo’s final contention is that the appellate court did not take into account the fact that the lower
court’s judge who penned the decision was not the original judge who heard his case; and is thus not in
a position to properly weigh the facts and circumstances of the case leading to a flawed decision. The
court finds this untenable. First off the Supreme Court as a rule respects the finds of the lower court
and shall not disturb such unless it finds good reason to do so. No such reason in this case exists or has
been proven. The mere fact that the lower court judge who penned the decision was not the one who
heard the case does not destroy the presumption of regularity of the judge’s performance. The judge is
presumed and held to have made his decision after reviewing the facts and circumstances which are
kept in the records of the case.

Thus the totality of the facts and circumstances lead the court to believe that indeed Rodrigo had
defamed Nestor and is thus liable for damages. The damages previously awarded are affirmed.
TORTS – DAMAGES – CONCEPT OF DAMAGES

Aquino pp 842 – 843

People vs. Ballesteros 285 SCRA 438 (January 29, 1998)

Facts: Carmelo Agliam, his half-brother Eduardo and Ronnel Tolentino along with Vidal Agliam, his
brother Jerry Agliam, Robert Cacal, Raymundo Bangi and Marcial Barid went to the barangay hall to
attend a dance. The group did not stay long because they sensed some hostility from Cesar Galo and his
companions who were giving them dagger looks. The group had barely left when, within fifty meters
from the dance hall, their owner jeep was fired upon from the rear. The precipitate attack upon the jeep
left two people dead (Eduardo and Jerry) and four others injured.

Based upon the affidavits of Carmelo and Vidal Agliam, warrants for the arrest of Ballesteros, Galo and
Bulusan were issued for the crime of double murder with multiple frustrated murder. The trial court
found the three accused guilty beyond reasonable doubt of murder, qualified by treachery awarding the
heirs of Eduardo and Jerry:

1. Compensatory damages in the amount of PhP50,000.00

2. Moral damages in the amount of PhP20,0000

3. Actual damages in the amount of 61,785.00 (Jerry) & P35,755.00 (Eduardo)

Issue: Whether or not the trial court is correct in the award of damages?

Held: As to moral and to actual damages, yes. As to compensatory damages, no. Damages may be
defined as the pecuniary compensation, recompense, or satisfaction for an injury sustained, or as
otherwise expressed, the pecuniary consequences, which the law imposes for the breach of some duty
or the violation of some right.

Actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or
injury sustained, whereas moral damages may be invoked when the complainant has experienced
mental anguish, serious anxiety, physical suffering, moral shock and so forth, and had furthermore
shown that these were the proximate result of the offender's wrongful act or omission.

Before actual or compensatory damages could be granted, the party making a claim for such must
present the best evidence available, viz., receipts, vouchers, and the like, as corroborated by his
testimony. Here, the claim for actual damages by the heirs of the victims is not controverted, the same
having been fully substantiated by receipts accumulated by them and presented to the court. Therefore,
the award of actual damages is proper.

However, the order granting compensatory damages to the heirs of Jerry Agliam and Eduardo Tolentino
Sr. must be amended. Consistent with the policy of this Court, the amount of fifty thousand pesos
(P50,000.00) is given to the heirs of the victims by way of indemnity, and not as compensatory damages.
As regards moral damages, the trial court in its discretion may determine the amount of psychological
pain, damage and injury caused to the heirs of the victims, although inestimable. Hence, we see no
reason to disturb its findings as to this matter.
Custodio vs. Court of Appeals 253 SCRA 483 (February 9, 1996)

Facts: Mabasa bought a parcel of land with an apartment in Interior P. Burgos St., Taguig, Metro Manila.
There were tenants occupying the apartment at the time of purchase. Taking P. Burgos St. as the point
of reference, on the left side going to Mabasa’s apartment, the row of houses are as follows: That of
Custodio, then of Santos, then that of Mabasa. On the right side is that of Morato and a septic tank. The
first passageway from the apartment to P. Burgos St. is through these houses. The second passageway
goes through the septic tank, with a width of less than 1 meter.

Sometime later, one of the apartment’s tenants vacated it. Mabasa checked the premises and saw that
the Santoses built an adobe fence, making the first passageway narrower. Morato also built an adobe
fence in such a way that the entire passageway was enclosed. Then the remaining tenants vacated the
area. Santos claimed that she built the fence because of an incident involving her daughter and a passing
bicycle. She also mentioned that some drunk tenants would bang their doors and windows. The RTC
granted a right of way and damages in favor of Custodio and the Santoses. The CA modified it, ordering
an award of damages to Mabasa. Custodio questioned the right of way and award of damages in the SC.

Issue: Whether or Not the award of damages is proper.

Held: Firstly, the Custodios are barred from questioning the grant of the right of way, because they
failed to appeal the decision. The decision has become final. As to the award of damages, the CA erred
in awarding damages in favor of private respondents Mabasa. The mere fact that Mabasa suffered
losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must
be both a right of action for a legal wrong inflicted by Custodio, and damage resulting to Mabasa. Wrong
without damage, or damage without wrong does not constitute a cause of action, since damages are
merely part of the remedy allowed for the injury caused by a breach or wrong. In the case at bar, there
were no previous easements existing in favor of Mabasa. The construction of the adobe fence is a
natural use and enjoyment of one’s property in a general and ordinary manner. Nobody can complain of
being injured here, because the inconvenience arising from said use can be considered as a mere
consequence of community life.

Article 2195. The provisions of this Title shall be respectively applicable to all obligations mentioned in
article 1157.

Article 2197. Damages may be:

(1) Actual or compensatory;

(2) Moral;

(3) Nominal;

(4) Temperate or moderate;

(5) Liquidated; or

(6) Exemplary or corrective.

Heirs of Borlado vs. Vda. De Bulan G.R. 114118 (2001)

Facts: A parcel of land owned by Serapio Borlado, grandfather of petitioners, was sold for
consideration to Francisco Bacero who in turn sold it to the Spouses Bienvenido Bulan and Salvacion
Borbon, respondents herein. The respondents had been in continuous, peaceful, uninterrupted,
adverse and exclusive possession of the lot until petitioners forcibly entered and wrested physical
possession thereof from them.

Respondents filed an ejectment suit against petitioners, which was decided in their favour. The court
ordered petitioners to vacate the land and to pay to respondents a total amount of One Thousand One
Hundred (1,100) cavans of palay as well as attorney’s fees and the cost of suit.

Issue: Whether the CA erred in declaring the respondents as owners of the lot.

Held: The petition was denied since the issue involved was factual and did not fall under the exceptions
that the SC may not review factual findings of the CA on appeal via certiorari. However, the court
modified the judgment with respect to the award of the cavans of palay as a form of damages in the
absence of legal basis since "Palay" is not legal tender currency in the Philippines.

Lazatin vs. Twano GR No. L-12736 (July 31, 1961)

Facts: Properties of appellant Lazatin were levied and sold in public auction to satisfy a judgment in
favour of herein appellees Twaño and Castro. Lazatin deposited the redemption price with the Sheriff
before the expiration of the redemption period. To ensure payment of claim in the present action,
Lazatin secured a writ of attachment on the amount deposited.

Issue: Whether the estate of Lazatin is liable to pay damages for the alleged malicious attachment

Held: The defendants, Twaño and Castro, are not entitled to moral damages. The law on damages is
found on Title XVII of the Civil Code but rules governing damages laid down in other laws, and the
principles of the general law on damages are adopted in so far as they are not in consistent with the
Code.

Moral damages may be recovered, among others, in cases of malicious prosecution. But in order that
moral damages may be recovered in connection with a writ of attachment, malice must exist.

The Rules of Court requiring the attachment plaintiff to provide a bond from which the costs and all
damages are to be enforced should the court find that the plaintiff is not entitled to the attachment
merely provides recovery on the bond based on the undertaking and not from any tortious act.
Consequently, the appellees may recover only the actual damages and not moral damages.

Damnum Absque Injruria

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right;
damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal duty. These situations are
often called damnum absque injuria

Aquino pp 843 – 845

Board of Liquidators vs. Heirs of Kalaw 20 SCRA 987 (1967)

Facts: Maximo Kalaw was a general manager and chairman of the board of NACOCO (National Coconut
Corp.)

Defendant Juan Bocar and Garcia were members of Board. After the passage of a law that empowers
NACOCO to buy, sell, barter, export their products, NACOCO embarked on Copra trading Activities.
Kalaw executed contracts. However, due to the typhoons, the copra industry was affected, resulting to
impending financial losses on the contracts executed by Kalaw. A meeting was held with the board of
directors and the disclosure of the impending loss was communicated to the members but no action
was taken thereafter.

Some of the buyer like Louis Dreyful and Co. filed a suit against the Corporation for damages due to
undelivered copra. Settlement was made with the buyer. NACOCO on the other hand seeks recovery
from Kalaw and the other directors charging them with negligence under Art 2176 with bad faith or
breach of trust for having approved the contracts.

Issue: Whether or not Kalaw is liable for damages.

Held: Kalaw had authority to execute the contracts without need of prior approval due to the nature of
his position as general manager. Also, doubts were only thrown when the contracts turned out to be
unprofitable for NACOCO.

Rightfully had it been said that bad faith does not simply connote bad judgment or negligence; it imports
a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known
duty thru some motive or interest or ill will; it partakes of the nature of fraud. Applying this precept to
the given facts herein, we find that there was no "dishonest purpose," or "some moral obliquity," or
"conscious doing of wrong," or "breach of a known duty," or "Some motive or interest or ill will" that
"partakes of the nature of fraud."

Nor was it even intimated that the NACOCO directors acted for personal reasons, or to serve their own
private interests, or to pocket money at the expense of the corporation. As the trial court correctly
observed, this is a case of damnum absque injuria. Conjunction of damage and wrong is absent. There
cannot be an actionable wrong if either one or the other is wanting.

Custodio vs. Court of Appeals 253 SCRA 483 (February 9, 1996) SUPRA

Facts: Mabasa bought a parcel of land with an apartment in Interior P. Burgos St., Taguig, Metro Manila.
There were tenants occupying the apartment at the time of purchase. Taking P. Burgos St. as the point
of reference, on the left side going to Mabasa’s apartment, the row of houses are as follows: That of
Custodio, then of Santos, then that of Mabasa. On the right side is that of Morato and a septic tank. The
first passageway from the apartment to P. Burgos St. is through these houses. The second passageway
goes through the septic tank, with a width of less than 1 meter.

Sometime later, one of the apartment’s tenants vacated it. Mabasa checked the premises and saw that
the Santoses built an adobe fence, making the first passageway narrower. Morato also built an adobe
fence in such a way that the entire passageway was enclosed. Then the remaining tenants vacated the
area. Santos claimed that she built the fence because of an incident involving her daughter and a passing
bicycle. She also mentioned that some drunk tenants would bang their doors and windows. The RTC
granted a right of way and damages in favor of Custodio and the Santoses. The CA modified it, ordering
an award of damages to Mabasa. Custodio questioned the right of way and award of damages in the SC.

Issue: Whether or Not the award of damages is proper.

Held: The mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To
warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the
defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without
wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for
the injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right;
damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal duty. These situations are
often called damnum absque injuria.

In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish
that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a
concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying
basis for the award of tort damages is the premise that an individual was injured in contemplation of
law. Thus, there must first be the breach of some duty and the imposition of liability for that breach
before damages may be awarded; it is not sufficient to state that there should be tort liability merely
because the plaintiff suffered some pain and suffering.

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to
another but which violate no legal duty to such other person, and consequently create no cause of
action in his favor. In such cases, the consequences must be borne by the injured person alone. The law
affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong.

In other words, in order that the law will give redress for an act causing damage, that act must be not
only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person
sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal
injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as
damnum absque injuria.

In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private
respondents, petitioners could not be said to have violated the principle of abuse of right. In order that
the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that
the following requisites concur: (1) The defendant should have acted in a manner that is contrary to
morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury
to the plaintiff.
TORTS – KINDS OF DAMAGES – ACTUAL OR COMPENSATORY

Article 2216. 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.

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

only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as
actual or compensatory damages.

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

Article 205. Indemnities that must be paid by either spouse on account of a crime or of a quasi-delict
shall be paid from the common assets, without any obligation to make reimbursement.

Algarra vs. Sandejas GR No L-8385 (March 24, 1914)

Facts: Plaintiff filed a civil action against defendant for injuries resulting from an automobile collision
due to the latter’s fault. At the time of the accident, plaintiff sold the products of a distillery and made
an average of P50 per month. As a result of the collision, plaintiff incurred medical expenses, and
suffered business losses with only four out of his twenty regular customers remaining.

The lower court refused to grant plaintiff’s claim for injuries to his business due to his enforced absence
therefrom.

Issue: Whether plaintiff is entitled to damages for injuries to his business

Held: An action for damages is based on Article 1902, which provides: “A person who, by act or
omission, causes damage to another where there is fault or negligence shall be obliged to repair the
damage so done.”

Actual damages include not only loss already suffered, but loss of profits which may not have been
realized. Under both American Law and the Spanish Civil Code, actual damages for a negligent act or
omission include those foreseen at the time of the injury or its necessary consequence. Evidently,
plaintiff is entitled to recover damages resulting from his actual incapacity. With respect to the damage
to his business the court ruled that “the profits of an established business may be considered in
calculating the measure of damages for an interruption of it”.

TORTS – KINDS OF ACTUAL DAMAGES

PNOC V. CA

Facts: September 21, 1977 early morning: M/V Maria Efigenia XV, owned by Maria Efigenia Fishing
Corporation on its way to Navotas, Metro Manila collided with the vessel Petroparcel owned by the
Luzon Stevedoring Corporation (LSC)

Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro found Petroparcel to
be at fault 
Maria Efigenia sued the LSC and the Petroparcel captain, Edgardo Doruelo praying for an award of
P692,680.00 representing the value of the fishing nets, boat equipment and cargoes of M/V Maria
Efigenia XV  with interest at the legal rate plus 25% as attorney’s fees and later on amended to add
the lost value of the hull  less the P200K insurance and unrealized profits and lost business
opportunities 

During the pendency of the case, PNOC Shipping and Transport Corporation sought to be substituted in
place of LSC as it acquired Petroparcel

Lower Court: against PNOC ordering it to pay P6,438,048 value of the fishing boat with interest plus
P50K attorney's fees and cost of suit

CA: affirmed in toto

ISSUE: W/N the damage was adequately proven

HELD: YES. affirming with modification actual damages of  P6,438,048.00 for lack of evidentiary bases

therefor. P2M nominal damages instead.

in connection with evidence which may appear to be of doubtful relevancy or incompetency or

admissibility, it is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but
admitting them unless plainly irrelevant, immaterial or incompetent, for the reason that their rejection
places them beyond the consideration of the court.  

If they are thereafter found relevant or competent, can easily be remedied by completely discarding or
ignoring them

two kinds of actual or compensatory damages: 

loss of what a person already possesses (daño emergente)

failure to receive as a benefit that which would have pertained to him

in the case of profit-earning chattels, what has to be assessed is the value of the chattel to its owner as a
going concern at the time and place of the loss, and this means, at least in the case of ships, that regard
must be had to existing and pending engagements

If the market value of the ship reflects the fact that it is in any case virtually certain of profitable
employment, then nothing can be added to that value in respect of charters actually lost, for to do so
would be pro tanto to compensate the plaintiff twice over.

if the ship is valued without reference to its actual future engagements and only in the light of its profit-
earning potentiality, then it may be necessary to add to the value thus assessed the anticipated profit on
a charter or other engagement which it was unable to fulfill.

damages cannot be presumed and courts, in making an award must point out specific facts that could
afford a basis for measuring whatever compensatory or actual damages are borne

proven through sole testimony of general manager without objection from LSC

Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to
considered at all. On the other hand, the probative value of evidence refers to the question of whether
or not it proves an issue

Hearsay evidence whether objected to or not has no probative value.

In the absence of competent proof on the actual damage suffered, private respondent is `entitled to
nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has
been violated or invaded by defendant, may be vindicated and recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered

awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by
law, and quasi-delicts, or in every case where property right has been invaded.

damages in name only and not in fact

amount to be awarded as nominal damages shall be equal or at least commensurate to the injury
sustained by private respondent considering the concept and purpose of such damages

Ordinarily, the receipt of insurance payments should diminish the total value of the vessel quoted by
private respondent in his complaint considering that such payment is causally related to the loss for
which it claimed compensation.

Its failure to pay the docket fee corresponding to its increased claim for damages under the amended
complaint should not be considered as having curtailed the lower court’s jurisdiction since the unpaid
docket fee should be considered as a lien on the judgment

Integrated Packaging Corp. vs. CA GR No. 115117 (June 8, 2000)

Facts: Petitioner, Integrated Packaging, and private respondent, Fil-Anchor Paper Co., Inc., entered into
a contract whereby private respondent would deliver 3450 reams of printing paper on specified
schedules to be paid within a maximum period of ninety days. Private respondent delivered 1097 out of
3450 reams to petitioner, but the latter failed to pay the amount due causing private respondent to file
a collection suit against petitioner.

In its counterclaim petitioner contends that by reason of respondents failure to deliver the 3450 reams
as agreed upon, it was unable to complete its printing obligation with Philacor resulting to actual
damages and unrealized expected profits.

Issue: Whether private respondent is liable for petitioner’s breach of contract with Philacor.

Held: Private respondent was justified in suspending its deliveries when petitioner failed to pay within
ninety days from receipt of the goods as agreed upon. Neither may private respondent be held liable for
the breach of contract committed by petitioner against Philacor when respondent was not a party
thereto.

Indemnification for damages includes loss suffered or actual damages (damnum emergens) and profits
which the obligee failed to obtain or compensatory damages (lucrum cessans); however, it is necessary
to prove actual amount of loss. The court ruled that it was erroneous to conclude that petitioner would
have earned a profit of P 790, 324.30 since these were based on speculation and were hypothetical.
Neither is petitioner entitled to moral damages in the absence of bad faith, or gross negligence
amounting to bad faith.

TORTS – EXTENT OF ACTUAL DAMAGES

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

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

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

TORTS – CERTAINTY IN ACTUAL DAMAGES

DBP VS CA

Facts: Lydia P. Cuba is a grantee of a Fishpond Lease Agreement from the Government

Cuba obtained loans from DBP stated under promissory notes dated September 6, 1974; August 11,
1975; and April 4, 1977 executing 2 Deeds of Assignment of her Leasehold Rights as security

Upon failure to pay, without foreclosure proceedings it was appropriated and DBP executed in turn
a Deed of Conditional Sale of the Leasehold Rights in her favor 

Her offer to repurchase was accepted and a new Fishpond Lease Agreement was issued by the Ministry
of Agriculture and Food in her favor alone excluding her husband

Failing to pay her amortizations, she entered into a temporary agreement with DBP 

Soon, she was sent a Notice of Rescission and DBP took possession of the Leasehold Rights of the
fishpond

After the public bidding, DBP executed a Deed of Conditional Sale in favor of defendant Agripina
Caperal 

Cuba filed against DBP since no foreclosure proceedings was done thus, contrary to Article 2088 of the
Civil Code

RTC: favored Cuba, it being a pactum commissorium  

return leasehold rights to Cuba

entitling P1,067,500 actual damages, P100,000 moral and P50,000 exemplary damages and P100,000

attorney’s fees

CA:  leasehold rights to Caperal as valid but same damages 

ISSUE: W/N Cuba should be awarded with actual and compensatory damages

HELD: NO. CA reversed except the P50,000 as moral damages. REMANDED to the trial court for the
reception of the income statement of DBP, as well as the statement of the account of Lydia P. Cuba, and
for the determination of each party’s financial obligation to one another

assignment of leasehold rights was a mortgage contract (Article 2087) 

not novated, cession (Article 1255 of the Civil Code), dation in payment (Article 1245 of the civil
Code), pactum commissorium

condition no. 12 did not provide that CUBA’s default would operate to vest in DBP ownership of the said
rights

The fact that CUBA offered and agreed to repurchase her leasehold rights from DBP did not estop her
from questioning DBP’s act of appropriation. 

estoppel cannot give validity to an act that is prohibited by law or against public policy

alleged loss of personal belongings and equipment was not proved by clear evidence. Other than the
testimony of CUBA and her caretaker, there was no proof as to the existence of those items before DBP
took over the fishpond in question. Neither was a single receipt or record of acquisition presented.

dated 17 May 1985, CUBA included “losses of property” as among the damages resulting from DBP’s
take-over of the fishpond.  Yet, it was only in September 1985 when her son and a caretaker went to the
fishpond and the adjoining house that she came to know of the alleged loss of several articles

bangus which died also not duly proved nor was it expressed in her later 7 months after DBP took over

The award of actual damages should, therefore, be struck down for lack of sufficient basis

Exemplary or corrective damages in the amount of P25,000 should likewise be awarded by way of
example or correction for the public good. There being an award of exemplary damages, attorney’s fees
are also recoverable

Fuentes VS CA

Facts: During a benefit dance at Dump Site, Alejandro Fuentes, Jr. was witnessed by Alberto Toling and
Honorio Osok who knew him for quite some time to have stabbed Malaspina in the abdomen with a
hunting knife

Alejandro Fuentes, Jr. and his uncle Felicisimo contends that it was Zoilo Fuentes, Jr. a.k.a "Jonie" who
did it and fleed but it was dismissed because only hearsay

RTC: guilty of murder qualified by treachery and imposed on him an indeterminate prison term of ten
(10) years and one (1) day of prision mayor as minimum to seventeen (17) years and four (4) months of
reclusion temporal as maximum, to indemnify the heirs of Malaspina the amount of P50,000.00 and to
pay P8,300.00 as actual damages plus costs.

CA: Affirmed

ISSUE: W/N the heirs of Malaspina should be awarded actual damages

HELD: NO. AFFIRMED with the modification that the penalty imposed should be as it is corrected to
reclusion perpetua, and the award of actual damages is deleted

the Court can only give credence to those supported by receipts and which appear to have been
genuinely expended in connection with the death of the victim. Since the actual amount was not
substantiated, the same cannot be granted

TORTS – DAMAGE TO PROPERTY ACTUAL DAMAGES

PNOC VS CA SUPRA

TORTS – PERSONAL INJURI AND DEATH ACTUAL DAMAGES

Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical disability not caused by the defendant,
had no earning capacity at the time of his death;

(2) If the deceased was obliged to give support according to the provisions of article 291, the recipient
who is not an heir called to the decedent's inheritance by the law of testate or intestate succession, may
demand support from the person causing the death, for a period not exceeding five years, the exact
duration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand
moral damages for mental anguish by reason of the death of the deceased.

Ramos vs. CA 321 SCRA 584 (December 29, 1999)

Facts: Erlinda Ramos was a robust woman except for occasional complaints of discomfort due to pains
caused by the presence of a stone in her gall bladder. She was advised to undergo an operation for the
removal of the stone in her gall bladder. She underwent a series of examinations which included
blood and urine tests which indicated she was fit for surgery.

She and her husband, Rogelio, met Dr. Hozaka, one of the defendants in this case, for the first time.
They agreed on the date of the operation and the doctor decided that she undergo a “cholecystectomy”
operation. Erlinda was admitted in the hospital and was accompanied by her sister-in-law, Herminda
Cruz. At the operating room, Cruz saw about two or three nurses and Dr. Perfecta Gutierrez, the other
defendant, who was to administer the anesthesia. Although not a member of the hospital staff,
Herminda Cruz introduced herself as the Dean of the College of Nursing at the Capitol Medical Center
and was allowed to stay inside the operating room.
Hours later, Cruz, who was inside the operating room with the patient, heard somebody say “Dr. Hosaka
is already here.” As she held the hand of Erlinda, she then saw Dr. Gutierrez intubating the hapless
patient. She thereafter heard Dr. Gutierrez say, “ang hirap maintubate nito, mali yata ang pagkakapasok.
O lumalaki ang tiyan”. Due to the remarks of Dr. Gutierrez, she focused her attention on what Dr.
Gutierrez was doing. She noticed a bluish discoloration of the nailbeds of the left hand of Erlinda. Cruz
then heard Dr. Hosaka issue an order for someone to call Dr. Calderon, another anesthesiologist. After
Dr. Calderon arrived in the operating room, Cruz saw him trying to intubate Erlinda. Erlinda’s nailbed
became bluish and the patient was placed in a trendelenburg position. Immediately, thereafter, Cruz
went out of the operating room, and told Erlinda’s husband (her brother) “that something wrong was
happening”. Cruz immediately rushed back, and saw Erlinda was still in trendelenburg position. On that
fateful day, she saw Erlinda taken to the Intensive Care Unit (ICU). Erlinda stayed for about four months
in the hospital and has been in a comatose condition.

When asked by the hospital to explain what happened to the patient, Doctors Gutierrez and Hosaka
explained that the patient had bronchospasm. After being discharged from the hospital, she has been
staying in their residence, still needing constant medical attention, with her husband Rogelio incurring
monthly expenses. She was diagnosed to be suffering from “diffuse cerebral parenchymal damage.”

The Ramoses filed a civil case for damages against the private respondents alleging negligence in the
management and care of Erlinda Ramos.

ISSUES: (1) Whether or not the doctrine of res ipsa loquitur is applicable. (2) Whether or not private
respondents were negligent in the care of Erlinda during the anesthesia phase of the operation and, if in
the affirmative, whether the alleged negligence was the proximate cause of Erlinda’s comatose
condition. (3) Is the hospital liable?

Held: YES. The doctrine of res ipsa loquitur is appropriate in the case at bar. As will hereinafter be
explained, the damage sustained by Erlinda in her brain prior to a scheduled gall bladder operation
presents a case for the application of the doctrine. In holding that res ipsa loquitur is available to the
present case we are not saying that the doctrine is applicable in any and all cases where injury occurs to
a patient while under anesthesia, or to any and all anesthesia cases. Each case must be viewed in its own
light and scrutinized in order to be within the res ipsa loquitur coverage. Res ipsa loquitur is a Latin
phrase which literally means “the thing or the transaction speaks for itself.” The phrase “res ipsa
loquitur” is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff’s
prima facie case, and present a question of fact for defendant to meet with an explanation. However,
res ipsa loquitur is not a rule of substantive law and, as such, does not create or constitute an
independent or separate ground of liability. Instead, it is considered as merely evidentiary or in the
nature of a procedural rule. Mere invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. It is simply a step in the process of such proof. Still, before resort to
the doctrine may be allowed, the following requisites must be satisfactorily shown: 1.The accident is of a
kind which ordinarily does not occur in the absence of someone’s negligence; 2. It is caused by an
instrumentality within the exclusive control of the defendant or defendants; and 3. The possibility of
contributing conduct which would make the plaintiff responsible is eliminated.

In the above requisites, the fundamental element is the “control of the instrumentality” which caused
the damage. Such element of control must be shown to be within the dominion of the defendant.
But it does not automatically apply to all cases of medical negligence as to mechanically shift the burden
of proof to the defendant to show that he is not guilty of the ascribed negligence. The real question,
therefore, is whether or not in the process of the operation any extraordinary incident or unusual event
outside of the routine performance occurred. If there were such extraneous interventions, the doctrine
of res ipsa loquitur may be utilized and the defendant is called upon to explain the matter, by evidence
of exculpation, if he could.

(2) YES. Private respondents were unable to disprove the presumption of negligence on their part. Their
negligence was the proximate cause of her condition. Dr. Gutierrez failed to properly intubate the
patient. She admitted that she saw Erlinda for the first time on the day of the operation. And no prior
consultations with, or pre-operative evaluation of Erlinda was done by her. She was unaware of the
physiological make-up and needs of Erlinda. This is an act of exceptional negligence and professional
irresponsibility.

Private respondents repeatedly hammered the view that the cerebral anoxia which led to Erlinda’s coma
was due to bronchospasm mediated by her allergic response to a drug introduced into her system.
Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces injury, and without which the result would not have occurred.

Respondent Dr. Hosaka’s negligence can be found in his failure to exercise the proper authority (as the
“captain” of the operative team) in not determining, if his anesthesiologist observed proper anesthesia
protocols. No evidence on record exists to show that Dr. Hosaka verified if respondent Dr. Gutierrez
properly intubated the patient. Furthermore, it does not escape us that respondent Dr. Hosaka had
scheduled another procedure in a different hospital at the same time as Erlinda’s cholecystectomy, and
was in fact over three hours late for the latter’s operation. Because of this, he had little or no time to
confer with his anesthesiologist regarding the anesthesia delivery.

(3) We now discuss the responsibility of the hospital. The unique practice (among private hospitals) of
filling up specialist staff with attending and visiting “consultants,” who are allegedly not hospital
employees, presents problems in apportioning responsibility for negligence in medical malpractice
cases. The truth is, Private hospitals, hire, fire and exercise real control over their attending and visiting
“consultant” staff. While “consultants” are not, technically employees, a point which respondent
hospital asserts in denying all responsibility for the patient’s condition, the control exercised, the hiring,
and the right to terminate consultants all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages.

The basis for holding an employer solidarily responsible for the negligence of its employee is found in
Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for
those of others based on the former’s responsibility under a relationship of patria potestas. Such
responsibility ceases when the persons or entity concerned prove that they have observed the diligence
of a good father of the family to prevent damage. In other words, while the burden of proving
negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the respondents
(parent, guardian, teacher or employer) who should prove that they observed the diligence of a good
father of a family to prevent damage.

In the instant case, respondent hospital, apart from a general denial of its responsibility over respondent
physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family
in the hiring and supervision of the latter. Upon these disquisitions we hold that private respondents are
solidarily liable for damages under Article 2176 of the Civil Code.

Gatchalian VS Delim

Facts: On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned
by respondents. While the bus was running along the highway, a “snapping sound” was heard, and after
a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers
were confined in the hospital, and their bills were paid by respondent’s spouse on July 14. Before Mrs.
Delim left, she had the injured passengers sign an already prepared affidavit waiving their claims against
respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner
filed a claim to recover actual and moral damages for loss of employment opportunities, mental
suffering and inferiority complex caused by the scar on her forehead. Respondents raised in defense
force majeure and the waiver signed by petitioner. The trial court upheld the validity of the waiver and
dismissed the complaint. The appellate court ruled that the waiver was invalid, but also that the
petitioner is not entitled to damages.

Issues: (1) Whether there was a valid waiver

(2) Whether the respondent was negligent

(3) Whether the petitioner is entitled to actual and moral damages

Held: 1) We agree with the majority of the Court of Appeals who held that no valid waiver of her cause
of action had been made by petitioner. A waiver, to be valid and effective, must in the first place be
couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up
a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person
when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in
such person.

The circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be
considered. Petitioner testified that she was still reeling from the effects of the vehicular accident when
the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while
reading the same, she experienced dizziness but that, seeing the other passengers who had also
suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its
entirety. Considering these circumstances, there appears substantial doubt whether petitioner
understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent)
she signed and whether she actually intended thereby to waive any right of action against private
respondent.

Finally, because what is involved here is the liability of a common carrier for injuries sustained by
passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must
construe any such purported waiver most strictly against the common carrier. To uphold a supposed
waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited
in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law
from common carriers and hence to render that standard unenforceable. We believe such a purported
waiver is offensive to public policy.

(2) In case of death or injuries to passengers, a statutory presumption arises that the common carrier
was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as
prescribed in Articles 1733 and 1755." To overcome this presumption, the common carrier must show to
the court that it had exercised extraordinary diligence to present the injuries. The standard of
extraordinary diligence imposed upon common carriers is considerably more demanding than the
standard of ordinary diligence. A common carrier is bound to carry its passengers safely "as far as
human care and foresight can provide, using the utmost diligence of a very cautious person, with due
regard to all the circumstances".

The records before the Court are bereft of any evidence showing that respondent had exercised the
extraordinary diligence required by law. The obvious continued failure of respondent to look after the
roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus
after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers,
constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on
the part of respondent and his driver.

(3) At the time of the accident, she was no longer employed in a public school. Her employment as a
substitute teacher was occasional and episodic, contingent upon the availability of vacancies for
substitute teachers. She could not be said to have in fact lost any employment after and by reason of the
accident. She may not be awarded damages on the basis of speculation or conjecture.

Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another
matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or
diminished, actual injury is suffered for which actual or compensatory damages are due and assessable.
Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before
the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon
her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio
ante.

Moral damages may be awarded where gross negligence on the part of the common carrier is shown.
Considering the extent of pain and anxiety which petitioner must have suffered as a result of her
physical injuries including the permanent scar on her forehead, we believe that the amount of
P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as attorney's fees is in fact
even more modest.
TORTS – ACTUAL DAMAGES – ATTORNEYS FESS

Article 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;

(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.

Quirante v. Intermediate Appellate Court G.R. No. 73886 (January 31, 1989)

Facts: On June 18, 1983, herein petitioner Quirante filed a motion in the trial court for the confirmation
of his attorney's fees. According to him, there was an oral agreement between him and the late
Dr.Casasola with regard to his attorney's fees, which agreement was allegedly confirmed in writing by
the widow, Asuncion Vda. De Casasola, and the two daughters of the deceased, namely Mely C. Garcia
and Virginia C. Nazareno. Petitioner avers that pursuant to said agreement, the attorney's fees would be
computed as follows:

A. In case of recovery of the P120,000.00 surety bond, the attorney's fees of the undersigned counsel
(Atty. Quirante) shall be P30,000.00. B. In case the Honorable Court awards damages in excess of the
P120,000.00 bond, it shall be divided equally between the Heirs of I. Casasola, Atty. John C. Quirante and
Atty. Dante Cruz.

The trial court granted the motion for confirmation in an order dated March 20, 1984, despite an
opposition thereto. It also denied the motion for reconsideration of the order of confirmation in its
second order dated May 25, 1984. The Court of Appeals set aside the two orders and made the previous
restraining order permanent.
Issue: Whether or not Petitioner Quirante is allowed to recover his attorney’s fees even if the case has
not yet been decided?

Held: What is being claimed here as attorney's fees by petitioners is, however, different from attorney's
fees as an item of damages provided for under Article 2208 of the Civil Code, wherein the award is made
in favor of the litigant, not of his counsel, and the litigant, not his counsel, is the judgment creditor who
may enforce the judgment for attorney's fees by execution. 14 Here, the petitioner's claims are based on
an alleged contract for professional services, with them as the creditors and the private respondents as
the debtors.

Since the main case from which the petitioner's claims for their fees may arise has not yet become final,
the determination of the propriety of said fees and the amount thereof should be held in abeyance. This
procedure gains added validity in the light of the rule that the remedy for recovering attorney's fees as
an incident of the main action may be availed of only when something is due to the client. Thus, it was
ruled that:

... an attorney's fee cannot be determined until after the main litigation has been decided and the
subject of recovery is at the disposition of the court. The issue over attorney's fee only arises when
something has been recovered from which the fee is to be paid. 15

As regards to the effect of the alleged confirmation of the attorney's fees by some of the heirs of the
deceased. We are of the considered view that the orderly administration of justice dictates that such
issue be likewise determined by the court a quo inasmuch as it also necessarily involves the same
contingencies in determining the propriety and assessing the extent of recovery of attorney's fees by
both petitioners herein. The court below will be in a better position, after the entire case shall have been
adjudicated, inclusive of any liability of PHILAMGEN and the respective participations of the heirs of
Dr.Casasola in the award, to determine with evidentiary support such matters like the basis for the
entitlement in the fees of petitioner Dante Cruz and as to whether the agreement allegedly entered into
with the late Dr.Casasola would be binding on all his heirs, as contended by petitioner Quirante.

We, therefore, take exception to and reject that portion of the decision of the respondent court which
holds that the alleged confirmation to attorney's fees should not adversely affect the non-signatories
thereto, since it is also premised on the eventual grant of damages to the Casasola family, hence the
same objection of prematurity obtains and such a holding may be pre-emptive of factual and evidentiary
matters that may be presented for consideration by the trial court. WHEREFORE, with the foregoing
observation, the decision of the respondent court subject of the present recourse is hereby AFFIRMED.

TORTS – ACTUAL DAMAGES – INTEREST

Article 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay,
the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per
annum. (1108)

Article 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach
of contract.
Article 2211. In crimes and quasi-delicts, interest as a part of the damages may, in a proper case, be
adjudicated in the discretion of the court.

Article 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point. (1109a)

Article 2213. Interest cannot be recovered upon unliquidated claims or damages, except when the
demand can be established with reasonable certainty.

Crismina Garments, Inc. vs. CA G.R. No.128721 (March 9, 1999)

Facts: Petitioner (Crismina Garments) contracted the services of the respondent (D’Wilmar Garments)
for sewing 20,762 pairs of denims. The total of which amounted to 76,410.

Petitioner failed to pay the aforesaid amount. As a result, Respondent filed a complaint against
petitioner for the collection of payment. Trial Court ruled in favor of the respondent and ordered the
petitioner to pay the sum of 76,140 with interest at 12% per annum. CA affirmed the trial Courts ruling.
Hence, a Petition for review was filed.

Petitioner submits that the interest rate should be 6% pursuant to Art. 2209 of the Civil Code. On the
other hand private respondent maintains that the interest rate should be 12% per annum in accordance
with Central bank Act, since the money sought to be recovered by her is in the form of forbearance.

Issue: Whether or not it is proper to impose interest at the rate of 12% per annum for an obligation that
does not involve a loan or forbearance of money in the absence of stipulation of the parties.

Held: Because the amount due in this case arose from a contract for a piece of work, not from a loan or
forbearance of money, the legal interest of six percent (6%) per annum should be applied.

Furthermore, since the amount of the demand could be established with certainty when the complaint
was filed, the six percent (6%) interest should be computed from the filing of the said complaint. But
after the judgment becomes final and executory until the obligation is satisfied, the interest should be
reckoned at twelve percent (12%) per year.

Private respondent maintains that the twelve percent (12%) interest should be imposed, because the
obligation arose from a forbearance of money. This is erroneous. In eastern Shipping, the Court
observed that “forbearance” in the context of the usury law is a “contractual obligation of lender or
creditor to refrain, during a given period of time, from requiring the borrower or debtor to repay a loan
or debt then due and payable.” Using this standard, the obligation in this case was obviously not a
forbearance of money, goods or credit.

TORTS – ACTUAL DAMAGES – MITIGATION OF LIAILITY

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

Article 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened
according to the aggravating or mitigating circumstances.

Article 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that
he may recover.
Article 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the
damages under circumstances other than the case referred to in the preceding article, as in the
following instances:

(1) That the plaintiff himself has contravened the terms of the contract;

(2) That the plaintiff has derived some benefit as a result of the contract;

(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of
counsel;

(4) That the loss would have resulted in any event;

(5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or
injury.

Cerrano vs. Tan Chuco 38 Phil 392 (August 1, 1918)

Facts: Tan Chuco, who was then the owner of casco No. 1033, rented it to Vicencio Cerrano at a monthly
rental of P70. Tan Chuco notified Vicencio Cerrano that in the following month it would be necessary to
send the casco to Malabon for repairs. Cerrano then informed Tan Chuco that he would like to rent the
casco again after repairs had been completed. Tan Chuco indicated that he was willing to rent it, but
would expect P80 a month for it, by which Cerrano acceded to the demand. About one week before the
end of the repair period, Tan Chuco sold the casco to Siy Cong Bieng & Co. Santos, the man who had
been employed by Cerrano, upon hearing of the said sale went to the office of Siy Cong Bieng & Co. and
asked for employment in the same capacity. Cerrano, claiming that he was entitled to the possession of
the casco under his contract with Tan Chuco, regardless of its sale to Siy Cong Bieng & Co. induced
Santos to refuse to take orders from the new owners.

As a result Siy Cong Bieng & Co. were obliged to bring an action of replevin against Santos for the
recovery of the possession of their casco. Upon this judgment was entered for the delivery of casco to
Siy Cong Bieng& Co. and for damages. Cerrano, paid the judgment in favor of Siy Cong Bieng& Co. in the
replevin suit, for which he had become liable under the terms of the delivery bond.

Issue: Whether Tan Chuco is liable for damages for breach of contract.

Ruling: Yes. Under the terms of his contract Tan Chuco was bound to deliver the casco to Cerrano for
one month from the date upon which the repairs were ended, but was under no obligation to renew the
contract at the end of the month. By selling the casco to Siy Cong Bieng & Co. he broke his contract with
Cerrano and is responsible for the damages caused by his failure to give Cerrano possession of the casco
for the term of one month. The Court is of the opinion that Cerrano is entitled to recover damages for
the breach of contract, the profit by which he would have been able to make had the contract been
performed.

Article 1106 of the Civil Code establishes the rule that prospective profits may be recovered as
damages, while article 1107 of the same Code provides that the damages recoverable for the breach of
obligations not originating in fraud (dolo) are those which were or might have been foreseen at the time
the contract was entered into. Applying these principles to the facts in this case, we think that it is
unquestionable that defendant must be deemed to have foreseen at the time he made contract that in
the event of his failure perform it, the plaintiff would be damaged by the loss of the profit he might
reasonably have expected to derive from its use

TORTS – MORAL DAMAGES – CONCEPT

Article 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate result
of the defendant's wrongful act for omission.

Kierulf vs. CA G.R. No. 99301 (March 13, 1997)

Facts: The Pantranco bus was traveling along EDSA from Congressional Avenue towards Clover Leaf,
Balintawak. The driver lost control of the bus along the way, causing it to swerve to the left, and then to
fly over the center island occupying the east-bound lane of EDSA. The front of the bus bumped the front
portion of an Isuzu pickup driven by Legaspi. Damages to both vehicles occured and physical injuries
were inflicted on Legaspi and his passenger Lucila Kierulf, both of whom were treated at the Quezon City
General Hospital. The bus also hit and injured a pedestrian who was then crossing EDSA. Despite the
impact, said bus continued to move forward and its front portion rammed against a Caltex gasoline
station, damaging its building and gasoline dispensing equipment. As a consequence of the incident,
Lucila suffered injuries. The injuries sustained by Lucila required major surgeries like "tracheotomy,
open reduction, mandibular fracture, intermaxillary repair of multiple laceration" and prolonged
treatment by specialists. Legaspi also suffered injuries.The front portion of the pickup truck, owned by
Spouses Kierulf, was smashed to pieces. The cost of repair was estimated at P107,583.50.

Pantranco in its petition alleged that it was driven by Jose Malanum. While cruising along EDSA, a used
engine differential accidentally and suddenly dropped from a junk truck in front of the bus. Said
differential hit the under chassis of the bus, throwing Malanum off his seat and making him lose control
of said bus. The bus swerved to the left, hit the center island, and bumped the pickup of the spouses.

The plaintiffs alleged that the moral damages awarded by Respondent Court are "clearly and woefully
not enough." The established guideline in awarding moral damages takes into consideration several
factors, some of which are the social and financial standing of the injured parties and their wounded
moral feelings and personal pride. The Kierulf spouses add that the Respondent Court should have
considered another factor: the loss of their conjugal fellowship and the impairment or destruction of
their sexual life and that the moral damages awarded in favor of Lucila should be increased to
P1,000,000.00, not only for Lucila but also for her husband Victor who also suffered "psychologically."
Pantranco rebuts that Article 2219 of the Civil Code provides that only the person suffering the injury
may claim moral damages. Additionally, no evidence was adduced to show that the consortium had
indeed been impaired and the Court cannot presume that marital relations disappeared with the
accident.

Issue: How much moral, exemplary and actual damages are victims of vehicular accidents entitled to?

Held: The Supreme Court ruled in this case that “the Rodriguez case clearly reversed the original
common law view first enunciated in the case of Deshotel vs. Atchison, that a wife could not recover for
the loss of her husband's services by the act of a third party. Rodriguez ruled that when a person is
injured to the extent that he/she is no longer capable of giving love, affection, comfort and sexual
relations to his or her spouse, that spouse has suffered a direct and real personal loss. The loss is
immediate and consequential rather than remote and unforeseeable; it is personal to the spouse and
separate and distinct from that of the injured person.

Whether Rodriguez may be cited as authority to support the award of moral damages to Victor and/or
LucilaKierulf for "loss of consortium," however, cannot be properly considered in this case.

Victor's claim for deprivation of his right to consortium, although argued before Respondent Court, is
not supported by the evidence on record. His wife might have been badly disfigured, but he had not
testified that, in consequence thereof, his right to marital consortium was affected. Clearly, Victor (and
for that matter, Lucila) had failed to make out a case for loss of consortium, unlike the Rodriguez spouse.
Again, we emphasize that this claim is factual in origin and must find basis not only in the evidence
presented but also in the findings of the Respondent Court. For lack of factual basis, such claim cannot
be ruled upon by this Court at this time. The social and financial standing of Lucila cannot be considered
in awarding moral damages. The factual circumstances prior to the accident show that no "rude and
rough" reception, no "menacing attitude," no "supercilious manner," no "abusive language and highly
scornful reference" was given her. The social and financial standing of a claimant of moral damages
may be considered in awarding moral damages only if he or she was subjected to contemptuous
conduct despite the offender's knowledge of his or her social and financial standing.

Be that as it may, it is still proper to award moral damages to Petitioner Lucila for her physical sufferings,
mental anguish, fright, serious anxiety and wounded feelings. She sustained multiple injuries on the
scalp, limbs and ribs. She lost all her teeth. She had to undergo several corrective operations and
treatments. Despite treatment and surgery, her chin was still numb and thick. She felt that she has not
fully recovered from her injuries. She even had to undergo a second operation on her gums for her
dentures to fit. She suffered sleepless nights and shock as a consequence of the vehicular accident. In
this light and considering further the length of time spent in prosecuting the complaint and this appeal,
we find the sum of P400,000.00 as moral damages for Petitioner Lucila to be fair and just under the
circumstances.

TORTS – MORAL DAMAGES – PROOF AND PRXIMATE CAUSE

Miranda-Ribaya vs. Carbonell G.R. No. L-49390 January 28, 1980

Facts: Mrs. Niceta Miranda-Ribaya was engaged sometime in 1968 in the pawnshop business and in the
buying and selling of jewelry.

Prior to April 23, 1968 one of her agents, Mrs. Josefina Roco-Robles, informed her that a millionaire
logger by the name of Marino Bautista was interested to buy big diamond stones.

Mrs. Ribaya accompanied by her agent, Mrs. Robles dropped by the house of Mr. and Mrs. Marino
Bautista on April 23, 1968 at La Salle Street, Greenhills Mandaluyong, Rizal. Mrs. Ribaya was convinced
that the Bautistas were millionaires as represented by her agent. On that occasion both Mr. and Mrs.
Bautista were present together with Gloria Duque, the secretary of Mr. Bautista, and the couple's
daughter, Teresita.
Mrs. Ribaya sold to the Bautistas 10 pieces of jewelry for the price of P222,000.00 (originally priced at
P224,000.00). Mr. Bautista acknowledged the receipt of the jewelry as well as the agreed purchase price
by signing the receipt and Mrs. Ribaya in turn was paid in the form of the two (2) Equitable Banking
Corporation checks Nos. 10767485-A for P112,000.00 (Annex B of the complaint) and No. 10755100-A
for P110,000.00, both checks postdated June 23, 1968. Mrs. Ribaya then executed a voucher evidencing
said payment.

Mrs s. Ribaya, accompanied by Miss Narcisa Gosioco, went back the next day to request Bautista to
break up the Equitable Banking Corporation Check No. 10755100-A for P110,000.00 into separate check
inasmuch as part of the jewelry sold to Bautista the previous day belonged to Mrs. Gosioco. Bautista
accommodated them with four (4) Bank of Amerca checks DD-8112 for P14,000.00, DD-8113 for
P34,000.00, DD- 8114 for P12,000.90 and DD-9115 for P50,000.00 P110,000.00, all postdated June 23,
1968. Mrs. Ribaya delivered Account Nos. 8113 and 8114 to Miss. Gosioco and kept for herself checks
Nos. 8115 and 8112. On the same day, she also sold to the Bautistas 4 pieces worth P94,000.00. Bautista
issued Bank of America Checks Nos. DD-8106 forP12,000.00, DD-8111 for P12,000.00, DD-8110 for
P35,000.00, and DD-8107 for P35,000.00, all post dated June 23, 1968.

As some of the owners of the jewelry sold to the defendants by Ribaya on April 23, 1968 and April 24,
1968 wanted to get back their jewelry, Mrs. Ribaya on May 15, 1968 went back to the house of the
Bautistas accompanied by Gloria Duque bringing with her 3 pieces of jewelry in exchange for some
pieces previously sold to defendant Bautista. She left the jewelry with Bautista but instead of exchanging
the jewelry Bautista issued to Mrs. Ribaya another Bank of America check No. DD-8130 for P45,000.00
postdated July 17, 1968.

Ribaya tried to contact Bautista when the checks matured, but were unable to do so. She deposited the
checks to her account but they were dishonored by the bank for the reason that the accounts of the
defendant were closed.

Suspecting that the Bautistas might have pawned the pieces of jewelry purchased from her, she went to
the pawnshop section of the Manila Police Department and discovered that most of the jewelry she had
sold to the defendants were pledged to various pawnshops in Manila.

Mrs. Ribaya confronted Marino Bautista, who assured her that he would pay her their obligation. After
failing to comply, Mrs. Ribaya demanded from Bautista the surrender of the pawnshop tickets covering
the pledge of the jewelry he obtained from her. She was able to redeem part of the jewelry she
delivered to the Bautistas.

It was computed that Bautista's obligations amounted to P125,460.79.

The trial court rendered judgment sentencing the Bautistas to pay petitioners the sum of P125,460.79
with interest and 25% thereof for attorney's fees and expenses of litigation. The claim for moral and
exemplary damages was denied on the ground that the evidence adduced by the plaintiffs [was]
insufficient to warrant its grant.

ISSUE: Are petitioners entitled to moral and exemplary damages?

HELD: Yes. In Francisco vs. Government Service Insurance System, the Court had sustained the trial
court's appealed decision denying the therein prevailing plaintiff's claim for moral and exemplary
damages "not only on account of the plaintiff's failure to take the witness stand and testify to her social
humiliation, wounded feelings, anxiety, etc., but primarily because a breach of contract like that of
defendant, not being malicious or fraudulent, does not warrant the award of moral damages.

Here, the facts and circumstances are totally different. In that case, therein plaintiff failed to take the
witness stand and defendant's breach of contract was held to be not malicious and fraudulent. In the
present case, petitioner took the witness stand and established by uncontradicted testimony that due to
respondents' deceitful and malevolent acts of defraudation, she had suffered "extreme" anguish and
"could not sleep for three months," since she was forced to close her pawnshop, sell some of her
personal jewelries and borrow money in order to pay off the owners of the jewelries wrongfully gotten
by respondents from her. The evidence of record shows the magnitude of respondents' wanton,
fraudulent and malevolent acts of defraudation.

Petitioners' testimonial evidence to the effect that she suffered "extremely" and that for three months
she could not sleep was a clear demonstration of her physical suffering, mental anguish and serious
anxiety and similar injury, resulting from respondents' malevolent acts that show her to be clearly
entitled to moral damages.

Petitioners having established the more damages, are entitled in addition thereto, to exemplary
damages. The wantonness and malevolence through which respondents defrauded petitioners,
deceitfully incurring and then evading settlement of their just liability certainly justifies the award of
exemplary damages by way of example and correction for the public good and also to serve as a
deterrent to the commission of similar misdeeds by others, even if the transaction were viewed as a
breach of civil contract.

Del Rosario vs. CA G.R. No. 118325 (January 29, 1997)

Facts: In selling to the public roofing materials known as "Banawe" shingles, Metal Forming Corporation
(MFC) made representations on the durability of the product and the sturdiness of its installation,
characterizing the shingles as "STRUCTURALLY SAFE AND STRONG" and that the "BANAWE METAL TILE
structure acts as a single unit against wind and storm pressure due to the strong hook action on its
overlaps". It prompted the Del Rosarios to buy the "Banawe" shingles and have them installed at their
residence.

Two months after installation, portions of the roof of the Del Rosarios were blown away by the typhoon
"Ruping", and the same acted in parts (instead of as a single unit) when strong winds blew, a part
remaining while another part was blown off.

The Del Rosarios' filed a complaint on November 21, 1990, charging MFC with a violation of Section 3 of
Act No. 3740, "An Act to Penalize Fraudulent Advertising, Mislabeling or Misbranding of Any Product,
Stocks, Bonds, etc." After due proceedings, the DTI rendered judgment sentencing MFC to pay an
"administrative fine of P10,000.00".

MFC however declined to concede liability for the other damages claimed by the Del Rosario Spouses to
have been caused to the interior of their home. The spouses sought to recover from MFC, damages
resulting from the events just narrated, contending that aside from the destruction of the roof of their
house, injury was also caused to its electrical wiring, ceiling, furtures, walls, wall paper, wood parquet
flooring and furniture. They reckoned their actual damages at P1,008,003.00 and prayed for an award to
them of moral damages in the sum of P3,000,000,00, exemplary damages in the amount of
P1,000,000.00, and attorney's fees in the sum of P1,000,000.00.

MFC moved to dismiss the complaint for lack of cause of action, alleging that it had no contractual
relationship with the Del Rosarios since the contract for the purchase and installation of the roofing,
upon which the latter's claims were based, was actually entered into between it and another person,
Jesus M. Puno (an engineer identified as the Del Rosarios' contractor).

Judgment was rendered in favor of the Del Rosarios.

Issue: Are the Spouses entitled to moral damages? Held: Yes. It is indisputable that (1) the tiles were
delivered to the Del Rosarios and used in fabricating the roof of their home, and (2) that it was the
employees and workers of MFC who (a) delivered the shingles or metal tiles to the construction site of
the Del Rosarios' home, and (b) undertook and completed the installation thereof. These they did in bad
faith, using inferior materials and assembling them in a manner contrary to MFC's express
representations in its brochures and advertisements circulated and broadcast to the general public —
which representations had, in the first place, induced the Del Rosarios to choose the metal tiles in
question for their roofing. In fine, since MFC, in bad faith and with gross negligence, infringed the
express warranty made by it to the general public in connection with the "Banawe" tiles brought to and
set up in the house of the Del Rosarios who had relied on the warranty, and thereby caused them
considerable injury, the identity of the individual who actually dealt with MFC and asked the latter to
make such delivery and installation is of little moment.

That MFC did in truth act with bad faith, in flagrant breach of its express warranties made to the general
public and in wanton disregard of the rights of the Del Rosarios who relied on those warranties, is
adequately demonstrated by the recorded proofs. The law explicitly authorizes the award of moral
damages "in breaches of contract where the defendant acted fraudulently or in bad faith." There being,
moreover, satisfactory evidence of the psychological and mental trauma actually suffered by the Del
Rosarios, the grant to them of moral damages is warranted. In Makabili v. Court of Appeals, the court
held that:

It is essential. . . . in the award of damages that the claimant must have satisfactorily proven during the
trial the existence of the factual basis of the damages and its causal connection to defendant's acts. This
is so because moral damages though incapable of pecuniary estimation, are in the category of an award
designed to compensate the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer (Enervida v. De la Torre, 55 SCRA 340 [1974.] and are allowable only when specifically prayed
for in the complaint. (San Miguel Brewery, Inc. v. Magno, 21 SCRA 292 [1968])

Raagas vs. Traya G.R. No. L-20081, February 27, 1968

Facts: Spouses Melquiades Raagas and Adela Laudiano Raagas filed on April 1, 1960, a complaint with
the Court of First Instance of Leyte against Octavio Traya, his wife, and Bienvenido Canciller, alleging in
essence that on or about April 9, 1958, while the latter was "recklessly" driving a truck owned by his co-
defendants, along the public highway in MacArthur, Leyte, the said vehicle ran over the plaintiffs' three-
year old son Regino causing his instantaneous death. The plaintiffs ask for actual damages in the sum of
P10,000, moral, nominal and corrective damages in a sum to be determined by the court, P1,000 as
attorney's fees, P1,000 for expenses of litigation, plus costs.

Defendants specifically denied that Canciller was "driving recklessly" at the time of the mishap, and
assert that the truck "was fully loaded and was running at a very low speed and on the right side of the
road"; that it was the child who "rushed from an unseen position and bumped the truck so that he was
hit by the left rear tire of the said truck and died", and consequently the defendants are not to blame for
the accident which was "entirely attributable to an unforeseen event" or due to the fault of the child
and negligence of his parents; that the defendant-spouses have exercised due diligence in the selection
and supervision of their driver Canciller, whom they hired in 1946 only after a thorough study of his
background as a truck driver; and that each time they allowed him to drive it was only after a check of
his physical condition and the mechanical fitness of the truck assigned to him.

On June 24 it rendered a judgment on the pleadings, condemning the defendants, jointly and severally,
to pay "to the plaintiffs the sum of P10,000 for the death of their child Regino Laudiano Raagas, P2,000
for moral damages, P1,000 actual damages, P1,000 for attorney's fees, and the costs."

On May 4 the plaintiffs' moved for a judgment on the pleadings, upon the claim that the defendants'
answer not only "failed to tender an issue" but as well "admitted material allegations" of the complaint.

The court reasoned that the denial in the answer of the charge of reckless driving "did not affect the
plaintiffs' positive allegation in their complaint that the truck . . . did not have a current year registration
plate . . . for the year 1958 when the accident occurred that "this failure . . . has the effect of admitting
hypothetically that they operated ... the said truck without proper license . . . when the accident
occurred," and that "unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation (article
2185, new Civil Code)." The court went on to conclude that under the circumstances a judgment on the
pleadings was "irremediably proper and fitting."

Issue: Did the court act correctly in rendering judgment on the pleadings? Held: No. The plaintiffs' claim
for actual, moral, nominal and corrective damages, was controverted by the averment in the answer to
the effect that the defendants "have no knowledge or information sufficient to form a belief as to the
truth of the allegations" as to such damages, "the truth of the matter being that the death of Regino
Raagas was occasioned by an unforeseen event and/or by the fault of the small boy Regino Raagas or his
parents." Such averment has the effect of tendering a valid issue.

The court has previously held that we held even if the allegations regarding the amount of damages in
the complaint are not specifically denied in the answer, such damages are not deemed admitted. It has
also declared in no uncertain terms that actual damages must be proved, and that a court cannot rely on
"speculation, conjecture or guesswork" as to the fact and amount of damages, but must depend on
actual proof that damage had been suffered and on evidence of the actual amount.

Moreover, in Malonzo vs. Galang et. al., L-13851, July 27, 1960, the court reaffirmed the rule that
although an allegation is not necessary in order that moral damages may be awarded, "it is,
nevertheless, essential that the claimant satisfactorily prove the existence of the factual basis of the
damage and its causal relation to defendant's acts."

There is a need of a full-blown trial on the merits.

Enervida vs. Dela Torre G.R. No. L-38037 (January 28, 1974)

Facts: Petitioner, Roque Enervida, filed a complaint against the defendant-spouses de la Torre, praying
that the deed of sale executed on December 3, 1957 by his deceased father, Ciriaco Enervida, over a
parcel of land covered by a Homestead Patent be declared null and void for having been executed
within the prohibited period of five years, in violation of Section 118 of Commonwealth Act 141 (Public
Land Law) and that he be allowed to repurchase said parcel of land for being the legitimate son and sole
heir of his deceased father.

The defendants filed their answer, stating that the plaintiff has no cause of action against them as his
father, Ciriaco Enervida, is still living, the petitioner is not only son of Ciriaco Enervida as he has also four
other living children and that the sale of the property in question did not take place within the
prohibited period provided for in Section 118 of the Public Land Law, the sale having taken place on
November 20, 1957, although ratified and acknowledged on December 3, 1957, before a Notary Public.

During the pre-trial conference, petitioner admitted that his father is still living and that he has four
other living brothers and sisters who were not joined as party-plaintiffs. He also admitted that the sale
of the land in question actually took place on November 20, 1957, but was formalized only on December
3, 1957. He likewise admitted that the homestead patent was issued on November 17, 1952 to his
father, which was beyond the prohibited period of 5 years. The CFI ruled that petitioner has no cause of
action and was prompted with malice and bad faith in taking his action to court by alleging false
statement in his complaint. The court dismissed the case and ordered the petitioner to pay the
defendants P2000 as actual moral and exemplary damages and pay also the attorney’s fees. On appeal
to Court of Appeals, it certified the case to the Supreme Court for it involved purely question of law.

Issue: Whether or not it is proper to award the defendant an actual moral and exemplary damages
when plaintiff filed unfounded civil case.

Held: NO. The Supreme Court ruled that with regard to the award of TWO THOUSAND PESOS "in
concept of actual, moral and exemplary damages ...", the same is not proper for it would ran counter to
the decision of this Court in Deogracias Malonzo vs Gregoria Galang9 where it was ruled:

It will be observed that unlike compensatory or actual damages which are generally recoverable in tort
cases as long as there is satisfactory proof thereof (Art. 2202), the Code has chosen to enumerate the
cases in which moral damages, may be recovered (Art. 2219). A like enumeration is made in regard to
the recovery of attorney's fees as an item of damage (Art. 2208). But the two enumerations differ in the
case of a clearly unfounded suit, which is expressly mentioned in Art. 2208 (par. 4), as justifying an
award of attorney's fees, but is not included in the enumeration of Art. 2219 in respect to moral
damages. It is true that Art. 2219 also provides that moral damages may be awarded in "analogous
cases" to those enumerated, but we do not think the Code intended" a clearly unfounded civil action or
proceedings" to be one of these analogous cases wherein moral damages may be recovered, or it would
have expressly mentioned it in Art. 2219, as it did in Art. 2208; or else incorporated Art. 2208 by
reference in Art. 2219. Besides, Art. 2219 Specifically mentions "quasidelicts causing physical injuries",
as an instance when moral damages may be allowed, thereby implying that all other quasi-delicts not
resulting in physical injuries are excluded (Strebel vs. Figueras, 96 Phil. 321), excepting, of course, the
special torts referred to in Art. 309, par. 9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, and 34, 35 on
the chapter on human relations (par. 10, Art. 2219).
Furthermore, while no proof of pecuniary loss is necessary in order that moral damages may be
awarded, the amount of indemnity being left to the discretion of the court (Art. 2216), it is,
nevertheless, essential that the claimant satisfactorily prove the existence of the factual basis of the
damage (Art. 2217) and its causal relation to defendant's acts. This is so because moral damages, though
incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant
for actual injury suffered and not to impose a penalty on the wrongdoer (Algara vs. Sandejas, 27 Phil.
294).

The trial court and the Court of Appeals both seem to be of the opinion that the mere fact that
respondent were sued without any legal foundation entitled them to an award of moral damages, hence
they made no definite finding as to what the supposed moral damages suffered consist of. Such a
conclusion would make of moral damages a penalty, which they are not, rather than a compensation for
actual injury suffered, which they are intended to be. Moral damages, in other words, are not corrective
or exemplary damages.

People vs. Bugayong G.R. No. 126518 (December 2, 1998)

Facts: Alberto Cauan and Leticia Yu Cauan got married on May 14, 1978. Out of this marital union they
begot 3 children: Albert, Honeylet and Arlene. They separated in 1983. Albert and Arlene stayed with
their mother Leticia while Honeylet stayed with her grandmother Anita Yu. Leticia cohabited with the
accused Rodelio Bugayong and had one child, Catherine Bugayong.

On October 15, 1994 Bugayong had Arlene hold his penis inside the room he shared with Leticia. At that
time, Catherine Bugayong, who was 6 years old was also inside the same room and her father, the
accused was letting her sleep. Bugayong threatened to maim Arlene if she did not hold his penis. When
the penis was already hard and stiff, he placed it inside the mouth of Arlene and a white substance came
out from the penis. Catherine saw this incident.

On the basis of a medico-legal examination conducted by the NBI, and testimonies, Bugayong was
convicted. Upon appeal, among other issued involving the defects of the information, he questions the
award of PhP50,000.00 in damages ex-delicto in favor of the offended party:

Issue: Does the award damages by the trial court have basis? Held: The court affirmed his conviction.
The trial court correctly awarded P50,000 as indemnity ex delicto, an amount which is automatically
granted to the offended party without need of further evidence other than the fact of the commission of
rape. Consistent with recent jurisprudence, appellant should also be ordered to pay the victim the
additional amount of P50,000 as moral damages. In People v. Prades, the Court resolved that "moral
damages may additionally be awarded to the victim in the criminal proceeding, in such amount as the
Court deems just, without the need for pleading or proof of the basis thereof as has heretofore been the
practice."

TORTS – MORAL DAMAGES- CASES WHERE ALLOWED

Article 2219. Moral damages may be recovered in the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

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

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

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

(8) Malicious prosecution;

(9) Acts mentioned in article 309;

(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may
also recover moral damages.

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

Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

Francisco vs. GSIS 7 SCRA 577 (March 30, 1963)

Facts: Trinidad Francisco, in consideration of a loan in the amount of P400,000.00, mortgaged in favor of
the GSIS a parcel of land with twenty-one (21) bungalows, known as VicMari Compound, located at
Baesa, Quezon City, payable within ten (10) years in monthly installments and with interest of 7%per
annum compounded monthly.

Because of her failure to comply with the mortgaged, GSIS extra-judicially foreclosed the mortgage.
GSIS itself was the buyer of the property in theforeclosure sale.

On 20 February 1959, the Trinidad’s father, Atty. Vicente J. Francisco, sent a letter to the general
manager of the GSIS offering a compromise that P30,000 which GSIS owes him be credited to Trinidad’s
unpaid monthly installments and that GSIS would take over the administration of the mortgaged
property and collect all monthly installments amounting to about P5,000 of more than 31 lots and
houses until the debt is fully covered. This was approved by GSIS through Andal.

Remittances were made, totaling P698,726.10 sent by Trinidad to GSIS through Andal, all of which were
received and duly receipted for. However, GSIS sent 3 letters, all of which were signed by Andal, asking
Trinidad for a proposal for the payment of her indebtedness, since according to GSIS the one-year
period for redemption had expired.

Atty. Francisco protested against the GSIS’ request for proposal of payment because of the existence of
the agreed offer dated 20 February 1959. However, GSIS countered stating that the telegram should be
disregarded in view of its failure to express the contents of the board resolution due to the error of its
minor employees in couching the correct wording of the telegram which provides that approval of the
compromise is “subject to the condition that Mr. Vicente J. Francisco shall pay all expenses incurred by
the GSIS in the foreclosure of the mortgage.”

GSIS moved for the consolidated the title to the compound in its name, and gave notice thereof to the
plaintiff and to each occupant of the compound. Hence, the plaintiff instituted the present suit, for
specific performance and damages.

After trial, the court below found the following:

(a) Declaring null and void the consolidation in the name of the defendant, Government Service
Insurance System, of the title of the VIC-MARI Compound; said title shall be restored to the plaintiff; and
all payments made by the plaintiff, after her offer had been accepted by the defendant, must be
credited as amortizations on her loan; and (b) Ordering the defendant to abide by the terms of the
contract created by plaintiff's offer and it's unconditional acceptance, with costs against the defendant.

Both parties appealed. GSIS appealed the decision of declaring null and void the consolidation of the
lots, while Trinidad appealed because the trial court did not award the P535,000.00 damages and
attorney's fees she claimed.

Issue: Is the lower court correct in not awarding damages to plaintiff?

Held: YES. The court a quo correctly refused to award such actual or compensatory damages because it
could not determine with reasonable certainty the difference between the offered price and the actual
value of the property, for lack of competent evidence. Without proof we cannot assume, or take judicial
notice, as suggested by the plaintiff, that the practice of lending institutions in the country is to give out
as loan 60% of the actual value of the collateral.

There was no error also denying moral damages, not only on account of the plaintiff's failure to take the
witness stand and testify to her social humiliation, wounded feelings, anxiety, etc., as the decision holds,
but primarily because a breach of contract like that of defendant, not being malicious or fraudulent,
does not warrant the award of moral damages under Article 2220 of the Civil Code.

There is also no basis for awarding exemplary damages either, because this species of damages is only
allowed in addition to moral, temperate, liquidated, or compensatory damages, none of which have
been allowed in this case.

As to attorneys' fees, we agree with the trial court's stand that, in view of the absence of gross and
evident bad faith in defendant's refusal to satisfy the plaintiff's claim, and there being none of the other
grounds enumerated in Article 2208 of the Civil Code, such absence precludes a recovery. The award of
attorneys' fees is essentially discretionary in the trial court, and no abuse of discretion has been shown.

Expertravel & Tours, Inc. vs. Court Of Appeals 309 SCRA 141 (June 25, 1999)

Facts: On 07 October 1987, Expertravel& Tours, Inc., ("Expertravel"), a domestic corporation engaged in
the travel agency business, issued to private respondent Ricardo Lo four round-trip plane tickets for
Hongkong, together with hotel accommodations and transfers, for a total cost of P39,677.20. Alleging
that Lo had failed to pay the amount due, Expertravel caused several demands to be made. Since the
demands were ignored by Lo, Expertravel filed a court complaint for recovery of the amount claimed
plus damages.
Respondent Lo explained, in his answer, that his account with Expertravel had already been fully paid.
The outstanding account was remitted to Expertravel through its then Chairperson, Ms. Ma. Rocio de
Vega, who was theretofore authorized to deal with the clients of Expertravel. The payment was
evidenced by a Monte de Piedad Check for P42,175.20 for which Ms. de Vega, in turn, issued City Trust
Check No. 417920 in favor of Expertravel for the amount of P50,000.00, with the notation "placement
advance for Ricardo Lo, etc." Per its own invoice, Expertravel received the sum on 10 October 1987.

The trial court, affirmed by the appellate court, held that the payment made by Lo was valid awarding
moral damages, attorney’s fees and cost of the suit in favor of Lo. Hence, this petition.

Issue: Can moral damages be recovered in a clearly unfounded suit? Can moral damages be awarded for
negligence or quasi-delict that did not result to physical injury to the offended party?

Held: NO. Although the institution of a clearly unfounded civil suit can at times be a legal justification for
an award of attorney's fees, such filing, however, has almost invariably been held not to be a ground for
an award of moral damages. The rationale for the rule is that the law could not have meant to impose a
penalty on the right to litigate. The anguish suffered by a person for having been made a defendant in a
civil suit would be no different from the usual worry and anxiety suffered by anyone who is haled to
court, a situation that cannot by itself be a cogent reason for the award of moral damages. If the rule
were otherwise, then moral damages must every time be awarded in favor of the prevailing defendant
against an unsuccessful plaintiff.

NO. An award of moral damages would require certain conditions to be met; to wit: (1) First, there must
be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) second,
there must be a culpable act or omission factually established; (3) third, the wrongful act or omission of
the defendant is the proximate cause of the injury sustained by the claimant; and (4) fourth, the award
of damages is predicated on any of the cases stated in Article 2219.Under the provisions of this law, in
culpa contractual or breach of contract, moral damages may be recovered when the defendant acted in
bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of his
contractual obligation and, exceptionally, when the act of breach of contract itself is constitutive of tort
resulting in physical injuries. By special rule in Article 1764, in relation to Article 2206, of the Civil Code,
moral damages may also be awarded in case the death of a passenger results from a breach of carriage.
In culpa aquiliana, or quasi-delict, (a) when an act or omission causes physical injuries, or (b) where the
defendant is guilty of intentional tort, moral damages may aptly be recovered. This rule also applies, as
aforestated, to contracts when breached by tort. In culpa criminal, moral damages could be lawfully due
when the accused is found guilty of physical injuries, lascivious acts, adultery or concubinage, illegal or
arbitrary detention, illegal arrest, illegal search, or defamation. Malicious prosecution can also give rise
to a claim for moral damages. The term "analogous cases," referred to in Article 2219, following the
ejusdem generis rule, must be held similar to those expressly enumerated by the law.
TORTS- MORAL DAMAGES- UNFOUNDED SUITS

Editha and Glicerio Mijares vs. CA and Metro Drug, Inc. G.R. No. 113558 (April 18, 1997)

Facts: Petitioners Editha Mijares and Glicerio T. Mijares owners of Aklan Drug had been buying
pharmaceutical products from private respondent Metro Drug since 1976. Editha Mijares, aside from
being the operator of Aklan Drug, was also an officer of the Ospital Ng Maynila Consumers Cooperative,
a concessionaire of a small area right inside the hospital compound where it operated a drugstore. The
Ospital ng Maynila Cooperative also had some transactions with Metro Drug as supplier of
pharmaceutical products. Subsequently, the Cooperative was dissolved and stopped its operations in
October 1986.

On November 1, 1986, a Contract of Lease was entered into between the City of Manila as lessor and
Solomon Silverio, Jr. as lessee. Silverio, Jr. as the new lessee, put up a drugstore on the same area
occupied by the Cooperative. On November 26, 1986, Metro Drug delivered pharmaceutical products to
the said store thru Dioscoro Lamenta, its salesman/collector. More deliveries of pharmaceutical
products were made in the same place by Metro Drug, the total value of which amounted to
P32,034.42. In partial payment of these receivables, a check was drawn by Silverio, Jr. under the account
name Farmacia delos Remedios amounting to P14,180.46. The check however was subsequently
dishonored due to insufficient funds.

Metro Drug filed a telegram addressed to Aklan Drug demanding full payment of outstanding account
for P27,938.06. Lamenta tried to collect from Editha Mijares for the disputed claim, but Editha referred
him to Mr. Silverio as the new operator and concessionaire of the drugstore. She informed him verbally
that they have no more business inside the Ospital ng Maynila as the cooperative drugstore has already
stopped operations. Despite said verbal notice, the demand telegram addressed to Aklan Drug was still
sent to Editha Mijares. On Lamenta's follow-up of said telegram, Editha again directed Lamenta to see
Solomon Silverio, the new owner of the drugstore.

Thereafter, Metro Drug filed before the Regional Trial Court of Manila a complaint for a sum of money
against petitioners Editha Mijares and Glicerio T. Mijares. Petitioners in their "Answer with Compulsory
Counterclaim," denied Metro Drug's allegations and interposed a counterclaim for malicious prosecution
and prayed for moral damages, attorney’s fees and expenses of suit.

The RTC concluded that the Mijareses were not the owners of said drugstore when the deliveries were
made and the absence of any privity of relations between the parties at the time of the deliveries
precludes any cause of action in favor of Metro Drug against the Mijareses. Thus, the RTC dismissed the
complaint and ordered Metro Drug to pay the petitioners P30,000.00 for moral damages, P10,000.00 as
attorney's fees and the costs of suit. The Court of Appeals however reversed the decision of the RTC.

Issue: Whether the award of moral damages in favor of the Mijareses was proper.

Held: No. The Mijareses have failed to show that Metro Drug was motivated by bad faith when it
instituted the action for collection. In China Banking Corporation vs. Court of Appeals, we held that:

x x x Malicious prosecution, both in criminal and civil cases, requires the presence of two elements, to
wit: a) malice; and b) absence of probable cause. Moreover, 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
knowing that the charge was false and baseless (Manila Gas Corporation vs. Court of Appeals, 100 SCRA
602 [1980]). Hence, mere filing of a suit does not render a person liable for malicious prosecution should
he be unsuccessful, for the law could not have meant to impose a penalty on the right to litigate (Ponce
v. Legaspi, 208 SCRA 377 [1992]; Saba v. Court of Appeals, 189 SCRA 50 [1990]); Rubio v. Court of
Appeals, 141 SCRA 488 [1986]). Settled in our jurisprudence is the rule that moral damages cannot be
recovered from a person who has filed a complaint against another in good faith, or without malice or
bad faith (Philippine National Bank v. Court of Appeals, 159 SCRA 433 [1988]; R & B Surety and Insurance
v. Intermediate Appellate Court, 129 SCRA 736 [1984]). If damage results from the filing of the
complaint, it is damnum absque injuria (Ilocos Norte Electrical Company v. Court of Appeals, 179 SCRA 5
[1989]).

For the same reasons, the award for attorney's fees and expenses of litigation must likewise be deleted.

De la Pena vs. Court of Appeals G.R. No. 81827 (March 28, 1994)

Facts: Ciriaco Reducto was occupying a 24 hectare parcel of land in Davao Del Norte for which he filed a
Homestead Application. At the same time, a certain Potenciano Nazaret likewise filed an application for
the same lot.

Reducto later transferred his possessory right over the 6 hectares of the lot to petitioner Pantaleon de la
Pena. After it was ascertained in a field verification that de la Pena had a better right to acquire the
portion claimed by him being its actual occupant and cultivator, the Director of Lands directed de la
Pena to apply for the portion himself within sixty (60) days after its survey or else "lose his preferential
right thereto." However, no such application was filed.

Meanwhile, Ciriaco transferred his rights over another 1 ½ hectare portion of the lot to Michael
Doble who in turn sold his rights to Ricardo Tan (private respondent’s father).

When a survey of the lot was conducted, it was found out that the lands occupied by de la Pena
was bigger by ¾ hectare than what he actually bought and paid for from Ciriaco and the land sold to
Doble’s (later acquired by Tan) was very much smaller than what he actually bought. Although the 3/4-
hectare portion was part of the area acquired by Doble, it was de la Peña who cultivated the same
without objection from Doble. However, when Ricardo Tan acquired the lot, he built a fence to reclaim
the portion, but de la Pena kept destroying it; hence, the start of a boundary dispute.

On April 1977, de la Pena then filed a complaint for forcible entry against Tan. The MTC which
ruled in favor of de la Pena concluded that de la Pena had prior possession of the land. The decision was
affirmed by the CFI.

On July 1977, during the pendency of the forcible entry case, de la Pena instituted the present
action for reconveyance with damages against Tan with the RTC. De la Pena alleged that Tan
fraudulently registered the ¾ hectare portion which was actually cultivated by the former. The trial court
ruled in favor of the Tan since the disputed ¾ hectare portion was not part of the area bought and paid
for by de la Pena. De la Pena was declared a mere trespasser and planter in bad faith. His prayer for
damages was likewise denied. Court of Appeals affirmed the decision of the lower court, hence this
petition. Issue: Whether or not the award for attorney's fees, moral damages and expenses of litigation
against the petitioner are proper. Held: It is well-settled that reconveyance is a remedy granted only to
the owner of the property alleged to be erroneously titled in another's name. In the case at bench, de la
Pena does not claim to be the owner of the disputed portion. Admittedly, what he has is only a
"preferential right" to acquire ownership thereof by virtue of his actual occupation since January 1947.
However, de la Pena's possession is not one that could ripen into ownership. Title to alienable public
lands can be established through open, continuous, and exclusive possession for at least thirty (30)
years. It must be noted that the dispute regarding the 3/4-hectare portion started even before a free
patent and OCT could be issued to private respondent in 1975. As early as 1956, the controversy already
began between de la Pena and Tan's father. Hence,petitioner's possession falls short of the required
period. Not being the owner, de la Pena cannot maintain the present suit.

An award for attorney's fees and moral damages on the sole basis of an action later declared to be
unfounded in the absence of a deliberate intent to cause prejudice to the other party is improper. The
right to litigate is so precious that penalty should not be charged on those who may exercise it
erroneously.

J Marketing vs. Sia 285 SCRA 580 (January 29, 1998)

Facts: J Marketing, herein petitioner, a company engaged in the business of appliances and motorcycles,
received on April 24, 1983 from Kawasaki Motors (Phils.) a brand new Kawasaki motorcycle, color Blue,
Mode HD-11 (1985) with Engine No. G7E-04848 and Chassis No.KG-805535. Upon receipt, petitioner’s
representative placed motorcycle in the bodega of YKS Bldg.. However, petitioner found out that the
motorcycle unit was missing in the bodega and the loss immediately reported to the police authorities
specifically to the Headquarters Constabulary Highway Patrol District. Petitioner upon tracing found the
motorcycle in possession of FelicidadSia Jr., herein respondent, who bought a motorcycle from one
Renato Pelande, Jr.

Petitioner’s representative went to the house of the private respondent and examined the chassis and
motor numbers of the motorcycle and found out that the chassis and motor numbers of the motorcycle
in private respondent’s possession have been tampered to jibe with the chassis and motor numbers of
the motorcycle unit previously purchased by Renato Pelande, Jr. from petitioner. When petitioner’s
representative confronted private respondent at the Constabulary Highway Patrol Group office anent
the questionable motorcycle, private respondent refused to return the said motorcycle to petitioner and
instead told petitioner’s representative to file a case in court. Hence, petitioner filed a complaint for
replevin with damages against private respondent Felicidad C. Sia, Jr. before the Regional Trial Court of
Tacloban City, Branch 8.

Private respondent filed a third party complaint against Renato Pelande Jr., Said third party complaint
was declared in default.

After trial, the lower court rendered a decision dismissing petitioner’s complaint but awarded damages
and attorney’s fees to private respondent. On appeal, the CA affirmed the decision of the court a
quo.Hence this petition.

Issue: Whether the award of damages and attorney’s fee is proper?

Held: NO. A person’s right to litigate should not be penalized by holding him liable for damages,
especially when he believes he has a rightful claim against another although found to be erroneous.
In the case at bar, petitioner filed for replevin case against private respondent because of the latter’s
own challenge that if he has a right over the motorcycle petitioner should file a case in court. Therefore,
it cannot be said that the institution of the replevin suit was tainted with gross or evident bad faith or
was done to maliciously to harass, embarrass, annoy or ridicule private respondent.

Moreover, the adverse result of an action – dismissal of petitioner’s complaint – does not per se make
an act unlawful and subject the actor to the payment of moral damages. It is not a sound public policy
to place a premium on the right to litigate. No damages can be charged on those who may exercise such
precious right in good faith, even if done erroneously.

Further, the award of exemplary damages has no factual basis. It is a requisite that the act must be
accompanied by bad faith or done in wanton, fraudulent or malevolent manner - circumstances which
are absent in this case. In addition, exemplary damages cannot be awarded as the requisite element of
compensatory damages was not present.

As to the attorney’s fees, an adverse decision does not ipso facto justify the award thereof to the
winning party. Petitioner honestly thought that they had a good cause of action, so notwithstanding the
dismissal of their case, no attorney’s fees can be granted to private respondent. Considering that the
latter claims to be the owner of the motorcycle, petitioner was compelled to sue him. When the former
“necessarily” became a party defendant no attorney’s fees and litigation expenses can automatically be
recovered even if he should win, it is not the fact of winning alone that entitles recovery of such items
but rather the attendance of special circumstances - the enumerated exceptions in Article 2208 of the
New Civil Code. There being no bad faith reflected in petitioner’s persistence in pursuing its case, other
than an erroneous conviction of the righteousness of its cause, attorney’s fees cannot be recovered as
cost.

Cometa vs. Court of Appeals G.R. No. 141855 (February 6, 2001)

Facts: Petitioner State Investment Trust, Inc. (SITI) extended loans in various amounts to Guevent
Industrial Development Corp., (GIDC). However, GIDC failed to pay on the dates the loans became due.
For this reason, GIDC agreed to mortgage several parcels of land to SITI. When GIDC again defaulted,
SITI foreclosed the mortgages and it acquired the properties as the highest bidder.

Thereafter, GIDC filed a case alleging that there were irregularities in the foreclosure of the
mortgages. The case was eventually settled through a compromise agreement. A dispute later arose
concerning the interpretation of the said agreement, as Honeycomb Builders, Inc. (HBI) offered to
purchase from GIDC the lot covered by the agreement and the latter agreed but SITI as mortgagee
refused to give its consent to the sale. The trial court directed SITI to accept the offer of HBI. On appeal,
the Court of Appeals affirmed the same

Meanwhile, respondent HBI applied to the Housing and Land Use Regulatory Board (HLURB) for a permit
to develop the property in question. Its application was granted, on account of which respondent HBI
built a condominium on the property. When respondent HBI applied for a license to sell the
condominium units it was required by the HLURB to submit an Affidavit of Undertaking which in effect
stated that the mortgagee (SITI) of the said property to be developed agrees to release the mortgage on
the said property as soon as the full purchase price of the same is paid by the buyer. Respondent HBI
submitted the required affidavit purportedly executed by Cometa as president of SITI (mortgagee).
Petitioner Cometa denied that he ever executed the affidavit. The National Bureau of Investigation (NBI)
found Cometa's signature to be forgery on the basis of which a complaint for falsification of public
document was filed against HBI president Guevara. However, the Rizal Provincial Prosecutor's Office
found no probable cause against Guevara and accordingly dismissed the complaint.

On appeal, Secretary Drilon reversed the decision of the prosecutor and ordered it to file
information against Guevara. The trial court dismissed the criminal case. Thereafter, Guevara and HBI
file a complaint for malicious prosecution against Cometa and SITI.

Issue: Whether or not the case for malicious prosecution states a cause of action.

Held: A complaint for malicious prosecution sates a cause of action if it alleges that (1) the defendant
was himself the prosecutor or that at leas he instigated the prosecution; (2) the prosecution finally
terminated in the plaintiff's acquittal; (3) that in bringing the action the prosecutor acted without
probable cause; and (4) that the prosecutor was actuated by malice, i.e. by improper and sinister
motives.

The mere allegation in a complaint for malicious prosecution that an information was filed after
preliminary investigation and that a warrant of arrest was there after issued does not by itself negate
allegations in the same complaint that the prosecution was malicious. All criminal prosecutions are by
direction and control of the public prosecutor. To sustain petitioners' stand that an allegation in a
complaint for malicious prosecution that the information in the criminal case was filed after appropriate
preliminary investigation negates a contrary allegation that the filing of the case was malicious would
result in the dismissal of every action for malicious prosecution.

TORTS – LABOR CASES

Triple Eight Integrated Services, Inc vs. NLRC 299 SCRA 608 (December 3, 1998)

Facts: In August 1992, private respondent Osdana was recruited by petitioner for employment with the
latter’s principal, Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia. Under the
original employment contract, Osdana was engaged to work as “Food Server” for a period of thirty-six
(36) months with a salary of five hundred fifty Saudi Rials.

Osdana claims she was required by petitioner to pay a total of P11,950.00 in placement fees and other
charges, for which no receipt was issued. She was likewise asked to undergo a medical examination
conducted by the Philippine Medical Tests System, a duly accredited clinic for overseas workers, which
found her to be “Fit of Employment.”

Petitioner asked Osdana to sign another “Contractor. Employee Agreement” which provided that she
would be employed as a waitress for twelve (12) months with a salary of two hundred eighty US dollars
($280). It was this employment agreement which was approved by the Philippine Overseas Employment
Administration(POEA).

Osdana left for Riyadh, Saudi Arabia, and commenced working for GCC. She was assigned to the College
of Public Administration of the Oleysha University and, contrary to the terms and conditions of the
employment contract, was made to wash dishes, cooking pots, and utensils, perform janitorial work and
other tasks which were unrelated to her job designation as waitress. She was made to work a gruelling
twelve-hour shift, without overtime pay.
Osdana suffered from numbness and pain in her arms. The pain was such that she had to be confined at
a housing facility of GCC from June 18 to August 22, 1993, during which period, she was not paid her
salaries.

Osdana was allowed to resume work, this time as Food Server and Cook at the Hota Bani Tameem
Hospital, where she worked seven days a week from August 22 to October 5, 1993. Again, she was not
compensated. Then, from October 6 to October 23, 1993, Osdana was again confined for no apparent
reason. During this period, she was still not paid her salary.

On October 24, 1993, she was re-assigned to the Oleysha University to wash dishes and do other menial
tasks. Osdana worked long hours and under harsh conditions. She was diagnosed as having Bilateral
Carpal Tunnel Syndrome, a condition precipitated by activities requiring “repeated flexion, pronation,
and supination of the wrist and characterized by excruciating pain and numbness in the arms.”

Osdana underwent two surgical operations. Between these operations, she was not given any work
assignments even if she was willing and able to do lightwork in accordance with her doctor’s advice.
Again, Osdana was not paid any compensation for the period between February to April 22, 1994.

Osdana was discharged from the hospital on April 25,1994. The medical report stated that “she had very
good improvement of the symptoms and she was discharged on the second day of the operation.” Four
days later, however, she was dismissed from work, allegedly on the ground of illness. She was not given
any separation pay nor was she paid her salaries for the periods when she was not allowed to work.

Upon her return to the Philippines, Osdana sought the help of petitioner, but to no avail. She was thus
constrained to file a complaint before the POEA. ISSUES: Whether or not NLRC committed grave abuse
of discretion for the following reasons: (a) ruling in favor of Osdana even if there was no factual or legal
basis for the award; and (b) holding petitioner solely liable for her claims despite the fact that its liability
is joint and several with its principal, GCC. HELD: The decisions of both the labor arbiter and the NLRC
were based mainly on the facts and allegations in Osdana’s position paper and supporting documents.
We find these sufficient to constitute substantial evidence to support the questioned decisions.

Generally, findings of facts of quasi-judicial agencies like the NLRC are accorded great respect and, at
times, even finality if supported by substantial evidence. This Court, therefore, upholds the finding of
herein public respondents that the facts and the evidence on record adduced by Osdana and taken in
relation to the answer of petitioner show that indeed there was breach of the employment contract and
illegal dismissal committed by petitioner’s principal.

Article 284 of the Labor Code is clear on the matter of termination by reason of disease or illness, viz:

Art. 284. Disease as a ground for termination – An employer may terminate the services of an employee
who has been found to be suffering from any disease and whose continued employment is prohibited
bylaw or prejudicial to his health as well as the health of his co-employees: x x x

Specifically, Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code provides:

Sec. 8. Disease as a ground for dismissal – Where the employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his health or to the health of his coemployees, the
employer shall not terminate his employment unless there is a certification by competent public
authority that the disease is of such nature or at such a stage that it cannot be cured within a period of
six (6) months with proper medical treatment. If the disease or ailment can be cured within the period,
the employer shall not terminate the employee but shall ask the employeeto take a leave. The employer
shall reinstate such employee to his former position immediately upon the restoration of his normal
health.

Viewed in the light of the foregoing provisions, the manner by which Osdana was terminated was clearly
in violation of the Labor Code and its implementing rules and regulations. Osdana’s continued
employment despite her illness was not prohibited by law nor was it prejudicial to her health, as well as
that of her co-employees.

In fact, the medical report issued after her second operation stated that “she had very good
improvement of the symptoms.” Besides, “Carpal Tunnel Syndrome” is not a contagious disease.

Petitioner has not presented any medical certificate or similar document from a competent public
health authority in support of its claims. If, indeed, Osdana was physically unfit to continue her
employment, her employer could have easily obtained a certification to that effect from a competent
public health authority in Saudi Arabia, thereby heading off any complaint for illegal dismissal. The
requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with;
otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or
extent of the employee’s illness and thus defeat the public policy on the protection of labor.

As regards the monetary award of salaries for the unexpired portion of the employment contract,
unpaid salaries and salary differential granted by public respondents to Osdana, petitioner assails the
same for being contrary to law, evidence and existing jurisprudence, all of which therefore constitutes
grave abuse of discretion.

Although this contention is without merit, the award for salaries for the unexpired portion of the
contract must, however, be reduced. Paragraph 5, Section 10 of R.A. No. 8042, applies in this case, thus:

“In case of termination of overseas employment without just, valid or authorized cause as defined by
law or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest
at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.”

While it would appear that the employment contract approved by the POEA was only for a period of
twelvemonths, Osdana’s actual stint with the foreign principal lasted for one year and seven-and-a-half
months. It may be inferred, therefore, that the employer renewed her employment contract for another
year. Thus, the award for the unexpired portion of the contract should have been US$1,260 (US$280 x 4
½ months) or its equivalent in Philippine pesos, not US$2,499 as adjudged by the labor arbiter and
affirmed by the NLRC.

As for the award for unpaid salaries and differential amounting to US$1,076 representing seven months’
unpaid salaries and one month underpaid salary, the same is proper because, as correctly pointed out
by Osdana, the “no work, no pay” rule relied upon by petitioner does not apply in this case. In the first
place,the fact that she had not worked from June 18 to August 22, 1993 and then from January 24 to
April 29,1994, was due to her illness which was clearly workrelated. Second, from August 23 to October
5, 1993,Osdana actually worked as food server and cook for seven days a week at the Hota Bani
Tameem Hospital, but was not paid any salary for the said period. Finally, from October 6 to October 23,
1993, she was confined to quarters and was not given any work for no reason at all.

With respect to the award of moral and exemplary damages, the same is likewise proper but should be
reduced. Worth reiterating is the rule that moral damages are recoverable where the dismissal of the
employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in
amanner contrary to morals, good customs, or public policy. Likewise, exemplary damages may be
awarded if the dismissal was effected in a wanton, oppressive or malevolent manner.

Finally, petitioner alleges grave abuse of discretion on the part of public respondents for holding it solely
liable for the claims of Osdana despite the fact that its liability with the principal is joint and several.
Petitioner misunderstands the decision in question. It should be noted that contrary to petitioner’s
interpretation, the decision of the labor arbiter which was affirmed by the NLRC did not really. Petitioner
was the only one held liable for Osdana’s monetary claims because it was the only respondent named in
the complaint and it does not appear that petitioner took steps to have its principal included as co-
respondent. Thus, the POEA, and later the labor arbiter, did not acquire jurisdiction over the foreign
principal.

TORTS – TAKING OF LIFE

People of the Philippines vs. Pirame G.R. No. 121998 (March 9, 2000)

Facts: Teodorico Cleopas and Florencio Pirame were both convicted by the trial court for murder, the
eye-witness Cipriano Supero saw them killing one Pedro Torrenueva by hitting him with iron pipe while
being held by the accused Florencio Pirame. The trial court ordered to indemnify the surviving spouse of
the deceased victim Pedro Torrenueva in the amount of P50,000.00 each and the amount of P23,214.00
representing burial and incidental expenses and P50,000 representing moral and exemplary damages
and in all instances without subsidiary imprisonment in case of insolvency. Pirame appealed the trial
court’s decision denying his participation in the crime and alleging that the evidence against him was
weak to begin with as the eye-witness’ testimony was unbelievable, improbable and unreliable, as he
claims that Supero’s testimony were inconsistent and that he only volunteered to testify two months
after the crime. And so the case was elevated to the Supreme Court.

Issue: Whether or not the trial court erred regarding the conviction and awarding of damages

Held: The Supreme Court upheld the decision of the trial court. Although there may be inconsistencies
on minor details, the same do not impair the credibility of the witnesses where there is consistency in
relating the principal occurrence and positive identification of the assailants. Slight contradictions in fact
even serve to strengthen the sincerity of the witness and prove that his testimony is not rehearsed. They
are safeguards against memorized perjury. As to the delay, it was a result of the fear that was instilled
upon him upon seeing the killing with his own eyes.

Regarding the amount of the damages awarded, the order to pay the widow of the victim
P50,000.00 as civil indemnity and P23,214.00 as actual damages, as well as the costs was AFFIRMED, but
the award of P50,000.00 as moral and exemplary damages was DELETED, there being no legal and
factual basis. The award of P50,000.00 from each accused as moral and exemplary damages, however, is
unsupported. The widow of the victim did not testify on any mental anguish or emotional distress, which
she suffered as a result of her husband's death. The absence of any generic aggravating circumstance
attending the crime likewise disqualified the award of exemplary damages. The attendance of evident
premeditation in the commission of the crime, though alleged in the information, is not supported by
the evidence, as there is no showing as to when appellant and his co-accused determined to kill the
victim. Likewise, abuse of superior strength, being absorbed by treachery, cannot be considered as an
aggravating circumstance in this case.

Arcona vs. Court of Appeals G.R. No. 134784 (December 9, 2002)

Facts: In the evening of June 27, 1986, Napoleon Ong and Edgardo Talanquines were walking along the
national highway at Barangay Labog, Brooke’s Point, Palawan, on their way home after coming from a
birthday party. When they were near the house of Jerry Boston, Edgardo heard a loud thud. He turned
around saw Napoleon slump to the ground. Suddenly, someone hit Edgardo from behind with a piece of
bamboo, causing him to fall. He saw no one in the immediate premises except Carlos Arcona, the
petitioner. Edgardo then stood up and ran towards the house of Cesar Umapas to ask for help.

Petitioner voluntarily surrendered. In his defense, petitioner alleged that in the evening of June 27,
1986, he was walking alone when he met Napoleon Ong and Edgardo Talanquines. Without any
provocation, Napoleon suddenly drew his bolo and swung the bolo at him twice but missed him. He
then drew out his knife and stabbed Napoleon. When he saw Edgardo Talanquines rushing towards him,
he grabbed a piece of bamboo from the newly constructed culvert and hit the former on the left arm.
Talanquines ran away. Petitioner also left the premises and went home. On the way, he met his brother,
Benito, and together they proceeded to their house. After trial, the court a quo rendered judgment
convicting Carlos of Homicide and acquitting Benito Arcona and ordered that the former pay the amount
of 30,000 pesos for the death of Napoleon Ong and 10,000 pesos moral damages. For the charge of
Slight Physical Injuries Benito Arcona was found guilty and Carlos was acquitted. On appeal, the Court
affirmed the decision of the lower court but increased the civil indemnity to the heirs of Napoleon Ong
to 50,000 pesos.

Petitioner Carlos Arcona y Moban and his brother Benito Arcona y Moban were charged with Murder
and Frustrated Murder in separate informations. The charges arose from the death of Napoleon Ong
after he was attacked and stabbed by Carlos and Benito Arcona y Moban.

Issue: Whether or not the Court of Appeals was correct in increasing the civil indemnity due to the heirs
of Napoleon Ong.

Held: Yes. The Court of Appeals was correct in increasing the amount of civil indemnity to P50,000.00, in
line with existing jurisprudence. In cases of murder, homicide, parricide and rape, civil indemnity in the
amount of P50,000.00 is automatically granted to the offended party or his heirs in case of his death,
without need of further evidence other than the fact of the commission of the crime.

On the other hand, the award of moral damages in the sum of P 10,000.00 must be increased to
P50,000.00. As borne out by human nature and experience, a violent death invariably and necessarily
brings about emotional pain and anguish on the part of the victim’s family. It is inherently human to
suffer sorrow, torment, pain and anger when a loved one becomes the victim of a violent or brutal
killing. Such violent death or brutal killing not only steals from the family of the deceased his precious
life, deprives them forever of his love, affection and support, but often leaves them with the gnawing
feeling that an injustice has been done to them. For this reason, moral damages must be awarded even
in the absence of any allegation and proof of the heirs’ emotional suffering.

TORTS – MORAL DAMAGES- FACTORS DETERMINING THE AMOUNT

Philippine National Bank vs. Court of Appeals G.R. No. 116181 (April 17, 1996)

Facts: Carmelo H. Flores (Flores) purchased from petitioner at its Manila Pavilion Hotel unit, two (2)
manager's checks worth P500,000.00 each. A receipt for said amount was issued by the petitioner.
Subsequently, Flores presented these checks at the Baguio Hyatt Casino unit of petitioner. Petitioner
refused to encash the checks but after a lengthy discussion, it agreed to encash one (1) of the checks.
However, it deferred the payment of the other check until after Flores agreed that it be broken down to
five (5) manager's checks of P100,000.00 each. Furthermore, petitioner refused to encash one of the five
checks until after it is cleared by the Manila Pavilion Hotel unit. Having no other option, Flores agreed to
such an arrangement. However, upon his return to Manila, he made representations to PNB through its
Malate Branch so that the check may be encashed but to no avail. Flores, thereafter, wrote a letter to
his counsel informing the latter of the aforementioned events. A Formal Demand was made by private
respondent's counsel but petitioner persisted in its refusal to honor the check. Left with no other choice,
Flores filed a case with the Regional Trial Court which ruled in his favor ordering PNB, among others, to
pay the amount of the checks dishonored plus moral damages in the amount of 1,000,000.00 pesos. The
same was affirmed by the Court of Appeals.

Issue: Whether or not the award of P1,000,000.00 moral damages in addition to actual claim of
inordinately disproportionate and unconscionable

Held: YES. We concur with the findings of the trial court and the Court of Appeals as to the award of
moral damages, however the amount of P1,000,000.00 for moral damages in addition to Flores' actual
claim of P100,000.00 is "inordinately disproportionate and unconscionable." The following factors were
taken into consideration:

First, Flores' contention that he lost the opportunity to purchase a house and lot in Baguio City due to
petitioner's gross negligence is based solely on his own testimony and a mere general statement at that.
The broker he named during his cross-examination, Mr. Nick Buendia was not even presented to
confirm the aforementioned allegation.

Second, the award of moral damages in the amount of P1,000,000.00 is obviously not proportionate to
the actual losses of P100,000.00 sustained by Flores. The moral damages awarded must be
commensurate with the loss or injury suffered. Moral damages though incapable of pecuniary
estimations, are in the category of an award designed to compensate the claimant for actual injury
suffered and not to impose a penalty on the wrongdoer. It is not intended to enrich a complainant at the
expense of the defendant. They are awarded only to enable the injured party to obtain means, diversion
or amusements that will serve to obviate the moral suffering he has undergone, by reason of the
defendant's culpable action. Its award is aimed at the restoration, within the limits of the possible, of
the spiritual status quo ante, and it must be proportional to the suffering inflicted.
Gregorio Fule vs. Court of Appeals G.R. No. 112212 (March 2, 1998)

Facts: Gregorio Fule, a corporate secretary of Rural Bank of Alaminos and also a jeweler on the side,
acquired a 10hectare property in Tanay, Rizal. The property used to be under the name of Fr. Antonio
Jacobe. Fr. Jacobe had mortgaged it earlier to the Rural Bank of Alaminos to secure a loan, but the
mortgage was later foreclosed and the property was offered for public auction. Fule, as corporate
secretary of the bank, asked Remelia Dichoso and Oliva Mendoza to look for a buyer who might be
interested in the Tanay property. The two found a buyer in private respondent Dr. Ninevetch Cruz. At
the same time, it so happened that Fule had shown interest in buying a pair of emerald-cut diamond
earrings owned by Dr. Cruz. Subsequently, negotiations for the barter of the jewelry and the property
ensued. However, it was later on found out that no barter was feasible because the 1-year period of
redemption had not yet expired. To get over this legal impediment, Fule executed a deed of redemption
on behalf of Fr. Jacobe, the latter purportedly sold the property to Fule.

One day, Fule arrived at Atty. Belarmino’s (private petitioner’s lawyer) residence with Dichoso and
Mendoza to execute a deed of absolute sale. Fule issued a certification stating that the actual
consideration of the sale was Php200,000.00 and not Php80,000.00 as indicated in the deed. Since the
earrings were appraised at only Php160,000.00, the remaining Php40,000.00 was to be paid later in
cash. This was done apparently to minimize the capital gains tax which Fule would have to shoulder.

Fule later headed for the bank to meet Cruz and pick up the earrings. There, Dr. Cruz and the bank
cashier then opened the safety deposit box. Dr. Cruz retrieved a transparent plastic or cellophane bag
with the jewelry inside and handed the same to Fule. The latter took the jewelry from the bag, went
near the electric light at the bank’s lobby, held the jewelry against the light and examined it for ten to
fifteen minutes. After a while, Dr. Cruz asked, “Okay na ba iyan?” Petitioner expressed his satisfaction
by nodding his head. When asked if the jewelry was ok, Fule nodded to express his satisfaction. Fule
paid the agents $300 and some pieces of jewelry.

On the evening of the same day, Fule arrived at the residence of Atty. Belarmino complaining that the
jewelry given to him, as proven by a tester, was fake. Fule then accused Dichoso and Mendoza of
deceiving him which they, however, denied. They countered that Fule could not have been fooled
because he had vast experience with jewelry. Nevertheless, Fule took back the $300 and the jewelry he
paid them.

Fule filed a complaint before the Regional Trial Court against Cruz and Atty. Bellarmino praying, among
other things, that the contract of sale over the Tanay property be declared null and void on the ground
of fraud and deceit. The lower court issued a temporary restraining order directing the Register of Deeds
of Rizal to refrain from acting on the pertinent documents involved in the transaction. However, the
same court lifted its previous order and denied the prayer for a writ of preliminary injunction.

After trial, the lower court rendered its decision in favor of Cruz and Atty. Bellarmino. In awarding
damages to the defendants, the lower court found that Fule acted in bad faith. The court awarded Cruz
and Atty. Bellarmino moral damages and exemplary damages. The court also granted both P25,000.00
each as attorney’s fees and litigation expenses. A petition with the Court of Appeals yielded the same
result, hence this petition.

Issue: Whether or not the appellate court erred in awarding damages.

Held: No. In the instant case, the trial court awarded damages analogous to malicious prosecution
under Article 2219(8) of the NCC for the following reasons: The malice with which Fule filed the case is
apparent. As an experienced jeweler who thoroughly examined the earrings himself and went so far as
to sketch them earlier, it is illogical that he would fail to exert extra effort to check its genuineness at the
precise moment of the exchange. His acts thus failed to accord with what an ordinary prudent man
would have done in the same situation.

As an experienced businessman and banker, he was shrewd enough to bloat the property’s price from
Php25,000.00 to Php75,000.00 only a few days after he had purchased it for a far lower cost, the value
of which still fell short of the diamond earrings’ price.

Also, it took him 2 hours of unexplained delay before complaining that the earrings were counterfeit—a
period in which anything could have happened while Fule was in possession of the jewelry. Given this, it
would appear that the cause of action in the instant case was contrived by Fule himself in hopes of
obtaining a favorable outcome in his complaint to take the real jewelry, return a fake, and get back the
property. This is plain and simple, unjust enrichment. All that considered the damages prayed for were
reasonably proportionate to the sufferings Cruz and Atty. Bellarmino underwent. Petitioner filed a
malicious and unfounded case all the while dragging down private respondents, whose reputations had
been soiled by Fule’s coming to court with unclean hands. Because of the falsity, malice and baseless
nature of the complaint, Cruz and Atty. Bellarmino were compelled to litigate and are thus also entitled
to the awarding of attorney’s fees under Article 2208.

Philippine Airlines vs. Court of Appeals G.R. No. 120262 (July 17, 1997)

Facts: Pantejo, then City Fiscal of Surigao City, boarded a PAL plane in Manila and disembarked in Cebu
City where he was supposed to take his connecting flight to Surigao City However, due to typhoon
Osang, the connecting flight to Surigao City was cancelled.

To accommodate the needs of its stranded passengers, PAL initially gave out cash assistance and, the
next day for their expected stay of two days in Cebu. Pantejo requested instead that he be billeted in a
hotel at PAL's expense because he did not have cash with him at that time, but PAL refused. Thus,
respondent Pantejo was forced to seek and accept the generosity of a co-passenger. when the flight for
Surigao was resumed, respondent Pantejo came to know that the hotel expenses of his co-passengers,
were reimbursed by PAL. At this point, respondent Pantejo informed Oscar Jereza, PAL's Manager for
Departure Services at Mactan Airport and who was in charge of cancelled flights, that he was going to
sue the airline for discriminating against him. It was only then that Jereza offered to pay respondent
Pantejo P300.00 which, due to the ordeal and anguish he had undergone, the latter decline. The
Regional Trial Court of Surigao City, rendered judgment in the action for damages filed by Pantejo
against Philippine Airlines, Inc., ordering the latter to pay Pantejo among others, P150,000.00 as moral
damages. On appeal, respondent court affirmed the decision of the court a quo, but with the exclusion
of the award of attorney's fees and litigation expenses.

Issue: WON the award of P 150,000.00 as moral damages was proper.

Held: Yes. Moral damages are emphatically not intended to enrich a plaintiff at the expense of the
defendant. They are awarded only to allow the former to obtain means, diversion, or amusements that
will serve to alleviate the moral suffering he has undergone due to the defendant's culpable action and
must, perforce, be proportional to the suffering inflicted. However, substantial damages do not translate
into excessive damages. Under the peculiar circumstances of this case, the awards for actual, moral and
exemplary damages granted in the judgment of respondent court, for the reasons meticulously analyzed
and thoroughly explained in its decision, are just and equitable.

Valenzuela vs. CA G.R. No. 115024 (February 7, 1996)

Facts: Ma. Lourdes Valenzuela was driving along Aurora Blvd. when she realized she had a flat tire. She
parked along the sidewalk, put on her emergency lights, and opened the car’s trunk. She was at the left
side of the rear of her car. While she was talking to a man who will help her fix the tire, she was
suddenly bumped by a car driven by defendant Richard Li which was registered in the name of
Alexander Commercial, Inc.

Because of the impact, Valenzuela was thrown against the windshield of Li’s car and fell onto the
ground. The car’s windshield on the other hand, was also destroyed,. Valenzuela's left leg was severed
up to the middle of her thigh, with only some skin and sucle connected to the rest of the body. She was
confined in the hospital for 20 days and was eventually fitted with an artificial leg. She then filed a claim
for damages against Li.

Li’s alibi was that he was driving at 55kph when he was suddenly confronted with a speeding car coming
from the opposite direction. He instinctively swerved to the right to avoid colliding with the oncoming
vehicle, and bumped Valenzuela's car. He claimed to not have seen the car due to its midnight blue
color. He argued that there was no parking light or an early warning device, and that the area was poorly
lighted. Li and Alexander Commercial, Inc. counterclaimed for damages, alleging that Valenzuela was the
one who was reckless or negligent. The RTC found Li and Alexander Commercial, Inc. solidarily liable. CA
absolved Alexander Commercial, Inc.

Issue: Whether nor not the damages should be mitigated due to the contributory negligence of
Valenzuela for parking along Aurora Blvd, which happens to be a no parking zone.

Held: Contributory negligence is a conduct on the part of the injured party, contributing as a legal cause
to the harm he has suffered, which falls below the standard to which he is required to conform for his
own protection. The "emergency rule," on the other hand, as adopted by this Court in Gan vs. Court of
Appeals, is where an individual who suddenly finds himself in a situation of danger and is required to act
without much time to consider the best means that may be adopted to avoid the impending danger, is
not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be
a better solution, unless the emergency was brought by his own negligence.

While the emergency rule applies to those cases in which reflective thought or the opportunity to
adequately weigh a threatening situation is absent, the conduct which is required of an individual in
such cases is dictated not exclusively by the suddenness of the event which absolutely negates
thoughtful care, but by the over-all nature of the circumstances. A woman driving a vehicle suddenly
crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient
for her to do so and which is not a hazard to other motorists. She is not expected to run the entire
boulevard in search for a parking zone or turn on a dark street or alley where she would likely find no
one to help her.
As a result of the accident, Valenzuela underwent a traumatic amputation of her left lower extremity at
the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived of the full
ambulatory functions of her left extremity, even with the use of state of the art prosthetic technology.
Well beyond the period of hospitalization (which was paid for by Li), she will be required to undergo
adjustments in her prosthetic devise due to the shrinkage of the stump from the process of healing. The
damage done to her would not only be permanent and lasting, it would also be permanently changing
and adjusting to the physiologic changes which her body would normally undergo through the years.
The replacements, changes, and adjustments will require corresponding adjustive physical and
occupational therapy. All of these adjustments, it has been documented, are painful.

The foregoing discussion does not even scratch the surface of the nature of the resulting damage
because it would be highly speculative to estimate the amount of psychological pain, damage and injury
which goes with the sudden severing of a vital portion of the human body. A prosthetic device, however
technologically advanced, will only allow a reasonable amount of functional restoration of the motor
functions of the lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness,
psychological injury, mental and physical pain are inestimable.

As the amount of moral damages are subject to this Court’s discretion, we are of the opinion that the
amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and nature of the
injury -physical and psychological - suffered by Valenzuela as a result of Li’s grossly negligent driving of
his Mitsubishi Lancer in the early morning hours of the accident.

Aurelio Sumaplong vs. Court of Appeals G.R. No. 123404 (February 26, 1997)

Facts: Sumalpong shot Ramos after the former slapped Ramos’s wife. Before the incident, the accused
called upon the spouses and inquired if they knew the person who stoned his house. During the
conversation, Sumalpong accused Ramos of throwing stones at his house. Because of this, Leodarda, the
wife of Ramos, remarked that Sumalpong should first confirm the information he received before
accusing anyone. after hearing Leonarda’s remark, Sumalpong shot her at the back of her head (though
apparently, Leonarda was not harmed). Ramos rushed towards Sumalpong who then shot Ramos twice
but missed. They wrestled and in the act, Sumalpong bit on Ramos’ ear, causing its mutilation.

The trial court conviicted Sumalpong of attempted homicide. It awarded Ramos P 16,800.00 for the loss
of his crops due to his failure to attend to his farm due to the injuries inflicted upon him by Sumalpong.
The court also awarded Ramos P2,000.00 for hospitalization expenses, and P5,000.00 by way of moral
damages. On appeal, the CA affirmed Sumalpong’s conviction. It however removed the award for loss of
crops and hospitalization expenses, increased moral damages to P10,000.00, and awarded nominal
damages in the same amount. Issue: Whether or not the petitioner is guilty and liable for damages.
Ruling: In view of the foregoing, this Court cannot but concur with the trial court and the Court of
Appeals in finding the petitioner guilty beyond reasonable doubt of the crime charged. Anent the award
of damages, however, this Court upholds the Court of Appeals' ruling on the matter. Eliminating the
award of actual or compensatory damages in the form of hospitalization expenses and loss of income,
the Court of Appeals cited the failure of the complainant to offer any proof of the same. To justify a
grant of actual or compensatory damages, it is necessary to prove with a reasonable degree of certainty,
premised upon competent proof and on the best evidence obtainable by the injured party, the actual
amount of loss.
 Anent the increase in the amount of moral damages awarded, suffice it to state that the nature of the
injuries and the degree of physical suffering endured by the complainant warrants the same. The tragic
incident caused a mutilation of complainant's left ear and a permanent scar on his right forearm. These
injuries have left indelible marks on the complainant's body and will serve as a constant reminder of this
traumatic experience. The Court finds the award of nominal and moral damages both in the amount of
P10,000.00 justified under the circumstances.

Lopez vs. Pan-American World Airways G.R. No. L-22415 (March 30, 1966)

Facts: Sen. Fernando Lopez, his wife, son-in-law, and his daughter made reservations, through their
agency, for first class accommodations in the Tokyo – San

Francisco flight of PAN-AM. PAN-AM's San Francisco head office confirmed their reservations.
Subsaquently, first class tickets were issued, with the total fare having been previously paid.

As scheduled, they left Manila and as soon as they arrived in Tokyo, they contacted PAN-AM's Tokyo
office regarding their accommodations. PAN-AM's Tokyo office informed them that the first class seats
were all already booked and that they could not take the flight unless they took the tourist class. Due to
pressing engagements in the US, they were constrained to take PAN-AM's flight as tourist passengers.

Sen. Lopez filed a suit for damages alleging breach of contracts done in bad faith by PAN-AM out of
racial prejudice against Orientals. He asked for actual and moral damages, exemplary damages, and
attorney's fees plus costs. PAN-AM asserted that its failure to provide first class accommodations to Sen.
Lopez and his family was due to honest error of its employees.

Issue: Whether or not the award for moral damages and exemplary damages could be increased.

Held: The Court ruled in favor of Sen. Lopez and his family and increased the amounts of moral and
exemplary damages.

Moral damages are recoverable in breach of contracts where the defendant acted fraudulently or in bad
faith (Art. 2220). While exemplary or corrective damages may be imposed by way of example or
correction for the public good in breach of contracts where the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner (Art. 2229, 2232). Written contracts for an
attorney's services, on the other hand, shall control the amount to be paid unless found by the court to
be unconscionable or unreasonable (Sec. 24, Rule 138, ROC).

Factors in determining amount for moral damages:

The amount of damages awarded in this appeal has been determined by adequately considering the
official, political, social, and financial standing of the offended parties on one hand, and the business and
financial position of the offender on the other. The present rate of exchange and the terms at which the
amount of damages awarded would approximately be in U.S. dollars has also been considered.

MORAL DAMAGES

As a proximate result of PAN-AM’s breach in bad faith of its contracts, Sen. Lopez and his family
suffered social humiliation, wounded feelings, serious anxiety and mental anguish. It may not be
humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as such, contrary to
what is rightfully to be expected from the contractual undertaking.
Sen. Lopez was then Senate President Pro Tempore. International carriers like defendant know the
prestige of such an office. For the Senate is not only the Upper Chamber of the Philippine Congress, but
the nation's treaty-ratifying body. He was also former Vice-President of the Philippines. Mrs. Maria
Lopez, as wife of the Senator, shared his prestige and therefore his humiliation. In addition, she suffered
physical discomfort during the 13-hour trip; her reason for going to the US was actually for medical
check-up and relaxation. The fact that the seating spaces in the tourist class are quite narrower than in
first class will suffice to show that she indeed experienced physical suffering during the trip. Mr. and
Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the family of Sen. Lopez. Even if
they initially wanted to change their seat reservations from first class to tourist class, they eventually
paid for first class seats. Hence, they also suffered social humiliation.

EXEMPLARY DAMAGES

In view of its nature, it should be imposed in such an amount as to effectively deter similar breach of
contracts in the future by defendant or other airlines.

Producers Bank of the Philippines vs. CA and Spouses Chua G.R. No. 111584 (September 17, 2001)

Facts: Salvador Chua was originally a depositor of Pacific Banking Corporation. He was offered by the
manager of Producers Bank of the Philippines to transfer his account with them. The manager assured
Chua that if he was to transfer his account the latter would enjoy longer loan terms and lower interest
rates. Chua later on decided to transfer his account to Producers Bank. There, he maintained substantial
savings and current deposits with the bank’s Bacolod branch. He also obtained various loans, one of
which amounted to P 2,000,000.00 which was secured by a real estate mortgage.

Later on, unfortunate events started to happen to Chua as a client of Producers Bank. The amount which
he deposited into his savings account was never credited. It was discovered that the branch manager
absconded with the money of the bank’s depositors. The bank also dishonored the checks drawn by
Chua on the ground of insufficient funds despite the fact that there was a balance deposit sufficient to
cover the amount of the checks.

These events prompted Chua and his wife to request for copies of their ledgers covering their savings
and current accounts. However, the bank refused to grant their request. Due to the bank's refusal, the
couple instituted an action for damages against the bank. The bank, on the other hand, filed a petition
for extrajudicial foreclosure of the real estate mortgage which covered Chua’s previous loan. As a result,
spouses Chua’s filed a complaint for injunction and damages, alleging that the petition for extrajudicial
foreclosure was without basis and was instituted maliciously in order to harass them. The trial court and
the appellate court ruled in favor of Spouses Chua, hence awarding damages.

Issue: Are Spouses Chua entitled to moral, exemplary, and actual damages?

Held: The Court held that Spouses Chua are entitled to moral and exemplary damages. Moral and
exemplary damages may be awarded without proof of pecuniary loss. In awarding both, the court shall
take into account the circumstances surrounding the case and assess damages according to its
discretion.

The dishonor of Chua’s checks and the foreclosure case initiated by the bank against Chua adversely
affected his credit standing, as well as his business dealings. Article 2217, in relation to Article 2220,
entitles Spouses Chua to moral damages. Obviously, the bank's wrongful acts caused serious anxiety,
embarrassment, and humiliation to Chua. The acts of the bank (the malicious and unwarranted
application for extrajudicial foreclosure done by the bank to harass, embarrass, annoy, and ridicule
Chua, as well as the bank's failure to credit the deposit of Chua which constituted gross negligence in the
performance of the bank’s contractual obligation) were accompanied by bad faith and done in wanton,
fraudulent and malevolent manner warranting the award of exemplary damages in favor of Chua, in
accordance with Article 2232 of the Civil Code. Of course, a plaintiff need not prove the actual extent of
exemplary damages, for its determination is addressed to the sound discretion of the court upon proof
of the plaintiff's entitlement to moral, temperate, or compensatory damages (Article 2234, Civil Code).
Anent the award of actual damages, the injured party must prove his case in order to recover. When the
existence of a loss is established, absolute certainty as to its amount is not required. The benefit to be
derived from a contract which one of the parties has absolutely failed to perform is of necessity to some
extent, a matter of speculation, but the injured party is not to be denied for that reason alone. He must
produce the best evidence of which his case is susceptible and if that evidence warrants the inference
that he has been damaged by the loss of profits which he might with reasonable certainty have
anticipated but for the defendant's wrongful act, he is entitled to recover (Cerreno vs. Tan Chuco, 28
Phil. 312 [1914] quoted in Central Bank of the Philippines vs. Court of Appeals, 63 SCRA 431 [1975]).
Applying the foregoing test to the instant case, the Court finds the evidence of Chua insufficient to be
considered within the purview of "best evidence." The bare assertion of Salvador Chua that he lost an
average of P18,000.00 per month is inadequate if not speculative and should be admitted with extreme
caution since it is not supported by independent evidence. Chua could have presented evidence as
reports on the average actual profits earned by their gasoline business, their financial statements, and
other evidence of profitability which could aid the court in arriving with reasonable certainty at the
amount of profits which private respondents failed to earn. Thus there can be no award of exemplary
damages.
TORTS – MORAL DAMAGES – WHO MAY RECOVER

Strebel vs Figueras 96 PHIL 321 (December 29, 1954)

Facts: Emilio Strebel seeks to recover damages against Figueras (acting Secretary of Labor), Jose (Dir. of
labor) and Ruperto (Asst. City Fiscal of Manila) alleging as ground, three causes of action:

1. That out of spite against him and his family, defendants used their political influence in attempting to
build a drainage through a gasoline station operated by a partnership, to which Strebel is a partner.

2. That defendants, by making use of their official and political connections, was able to induce the
Secretary of Justice to transfer one Dr. Hernandez from being an officer of the Bureau of Immigration to
that of the Bureau of Prisons. Strebel claims that Dr. Hernandez is his son-inlaw, being the husband of
his (Strebel’s) stepdaughter.

3. Defendants caused the laborers of Strebel’s gasoline station to file false cases against him for violation
of a Commonwealth Act prohibiting compulsion of vwork beyond eight (8) hours. While the case was
dismissed, Defendants issued a press conference questioning the dismissal besmirching his reputation
nonetheless.

Issue: Is plaintiff entitled to damages?

Held: No, on all causes of action. As to the first cause of action, the Supreme Court ruled that the
drainage project has not begun, therefore, no damage was suffered by plaintiff.

As to the third cause of action, the court ruled that since no information has been filed by the Fiscal, the
charge of malicious prosecution cannot prosper. While plaintiff also maintains that at any case,
defendants are liable under their misconduct via tortuous act, the old civil code, which was the law in
effect at the time of the commission of the crime, moral damages may not be recovered in cases of
crime or tort unless it results from “physical injuries”.

NOTE: FOCUS on this-- As to the second cause of action, Strebel claims that by reason of the malicious
transfer of Dr. Hernandez to the Office of the Bureau of Prisons, he has suffered moral and mental
suffering and therefore entitled to moral damages. As to the alleged press conference, no mention of
the case number of a specific person was made, hence, there could be no damage suffered.

The Supreme Court elucidates "As a general rule, the right of recovery for mental suffering resulting
from bodily injuries is restricted to the person who has suffered the bodily hurt, and there can be no
recovery for distress caused by sympathy for another's suffering, or for fright due to a wrong against a
third person. So the anguish of mind arising as to the safety of others who may be in personal peril from
the same cause cannot be taken into consideration” It furthered by saying that “damages are not
recoverable for fright or shock even when sustained as result of willful act, unless such act was directed
toward person or property or person seeking recovery.”

The rule on this point, as stated in the American Jurisprudence, is: "In law mental anguish is restricted as
a rule, to such mental pain or suffering as arises from an injury or wrong to the person himself, as
distinguished from that form of mental suffering which is the accompaniment of sympathy or sorrow for
another's suffering or which arises from a contemplation of wrongs committed on the person of
another. Pursuant to the rule stated, a husband or wife cannot recover for mental suffering caused by
his or her sympathy for the other's suffering." It should be noted that plaintiff is not even related to Dr.
Hernandez. The latter's wife is a daughter of Mrs. Strebel by a previous marriage. Hence Dr. Hernandez
is merely related by affinity, not to Strebel, but to a relative by affinity of said plaintiff.

ABS-CBN vs. Court of Appeals G.R. No. 128690 (January 29, 1999)

Facts: In 1990, ABS-CBN and Viva executed a Film Exhibition Agreement whereby Viva gave ABS-CBN an
exclusive right to exhibit some Viva films. ABS-CBN shall have the right of first refusal to the next twenty-
four (24) Viva films for TV telecast under such terms as may be agreed upon by the parties hereto,
provided, however, that such right shall be exercised by ABS-CBN from the actual offer in writing.

Viva, through defendant Del Rosario, offered ABSCBN, through its vice-president Charo Santos-Concio, a
list of three(3) film packages (36 title) from which ABS-CBN may exercise its right of first refusal. ABS-
CBN, however "can tick off only ten (10) titles" (from the list) "we can purchase" and therefore did not
accept said list. Subsequently, Del Rosario approached ABS-CBN's Ms. Concio, with a list consisting of 52
original movie titles (i.e. not yet aired on television) including the 14 titles subject of the present case, as
well as 104 re-runs (previously aired on television) from which ABSCBN may choose another 52 titles, as
a total of 156 titles, proposing to sell to ABS-CBN airing rights over this package of 52 originals and 52 re-
runs.

Del Rosario and ABS-CBN general manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in
Quezon City to discuss the package proposal of Viva. Mr. Lopez testified that he and Mr. Del Rosario
allegedly agreed that ABS-CRN was granted exclusive film rights to fourteen (14) films for a total
consideration of P36 million; that he allegedly put this agreement as to the price and number of films in
a "napkin'' and signed it and gave it to Mr. Del Rosario.

On the other hand, Del Rosario denied having made any agreement with Lopez regarding the 14 Viva
films; denied the existence of a napkin in which Lopez wrote something; and insisted that what he and
Lopez discussed at the lunch meeting was Viva's film package offer of 104 films (52 originals and 52 re-
runs) for a total price of P60 million. Mr. Lopez promising to make a counter proposal which came in the
form of a proposal contract. Thereafter, Del Rosario and Mr. Graciano Gozon discussed the terms and
conditions of Viva's offer to sell the 104 films, after the rejection of the same package by ABS-CBN. On
April 07, 1992, defendant Del Rosario received through his secretary, a handwritten note from Ms.
Concio, which reads: "Here's the draft of the contract. I hope you find everything in order," to which was
attached a draft exhibition agreement a counter-proposal covering 53 films, 52 of which came from the
list sent by defendant Del Rosario and one film was added by Ms. Concio, for a consideration of P35
million.

The said counter proposal was however rejected by Viva's Board of Directors on the evening of the same
day, April 7, 1992, as Viva would not sell anything less than the package of 104 films for P60 million
pesos and such rejection was relayed to Ms. Concio. After the rejection of ABS-CBN and following
several negotiations and meetings defendant Del Rosario and Viva's President Teresita Cruz, in
consideration of P60 million, signed a letter of agreement granting RBS the exclusive right to air 104
Viva-produced and/or acquired films including the fourteen (14) films subject of the present case.

Thereafter, ABS-CBN filed before the RTC a complaint for specific performance with a prayer for a writ of
preliminary injunction and/or temporary restraining order against private respondents Republic
Broadcasting Corporation, Viva Production and Del Rosario. RTC rendered a decision in favor of RBS and
VIVA and against ABS-CBN, ordering the latter to pay, among others, P5 million as and by way of moral
damages. On appeal, respondent court found reasonable basis for the award of moral damages holding
that RBS's reputation was debased by the filing of the complaint and denied VIVA and Del Rosario's
appeal because it was "RBS and not VIVA which was actually prejudiced when the complaint was filed by
ABS-CBN."

Issue: Whether or not ABS-CBN is entitled to the award of moral damages.

Held: No. As to moral damages, RBS's claim for moral damages could possibly fall only under item (10) of
Article 2219, thereof which reads:

“(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.”

Moral damages are in the category of an award designed to compensate the claimant for actual injury
suffered. and not to impose a penalty on the wrongdoer. The award is not meant to enrich the
complainant at the expense of the defendant, but to enable the injured party to obtain means,
diversion, or amusements that will serve to obviate then moral suffering he has undergone. It is aimed
at the restoration, within the limits of the possible, of the spiritual status quo ante, and should be
proportionate to the suffering inflicted. Trial courts must then guard against the award of exorbitant
damages; they should exercise balanced restrained and measured objectivity to avoid suspicion that it
was due to passion, prejudice, or corruption on the part of the trial court. The award of moral damages
cannot be granted in favor of a corporation because, being an artificial person and having existence only
in legal contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience
physical suffering and mental anguish, which call be experienced only by one having a nervous system.
65 The statement in People v. Manero and Mambulao Lumber Co. v. PNB that a corporation may
recover moral damages if it "has a good reputation that is debased, resulting in social humiliation" is an
obiter dictum. On this score alone the award for damages must be set aside, since RBS is a corporation.

National Power v. Philipp Brothers G.R. No 126204 (November 20, 2001)

Facts: The National Power Corporation (NAPOCOR) issued invitations to bid for the supply and delivery
of 120,000 metric tons of imported coal for its Batangas Coal-Fired Thermal Power Plant in Calaca,
Batangas.

The Philipp Brothers Oceanic, Inc. (PHIBRO) prequalified and was allowed to participate as one of the
bidders. After the public bidding was conducted, PHIBRO's bid was accepted. NAPOCOR's acceptance
was conveyed in a letter dated July 8, 1987, which was received by PHIBRO on July 15, 1987. On July 10,
1987, PHIBRO sent word to NAPOCOR that industrial disputes might soon plague Australia, the
shipment's point of origin, which could seriously hamper PHIBRO's ability to supply the needed coal.
From July 23 to July 31, 1987, PHIBRO again apprised NAPOCOR of the situation in Australia, particularly
informing the latter that the ship owners therein are not willing to load cargo unless a "strike-free"
clause is incorporated in the charter party or the contract of carriage. In order to hasten the transfer of
coal, PHIBRO proposed to NAPOCOR that they equally share the burden of a "strike-free" clause.
NAPOCOR refused. Consequently, in October 1987, NAPOCOR once more advertised for the delivery of
coal to its Calaca thermal plant. PHIBRO participated anew in this subsequent bidding.
On November 24, 1987, NAPOCOR disapproved PHIBRO's application for pre-qualification to bid for not
meeting the minimum requirements. Upon further inquiry, PHIBRO found that the real reason for the
disapproval was its purported failure to satisfy NAPOCOR's demand for damages due to the delay in the
delivery of the first coal shipment. This prompted PHIBRO to file an action for damages with application
for injunction against NAPOCOR. In its complaint, PHIBRO alleged that NAPOCOR's act of disqualifying it
in the October 1987 bidding and in all subsequent biddings was tainted with malice and bad faith and
prayed for actual, moral and exemplary damages and attorney's fees. Trial court rendered a decision in
favor of PHIBRO, ordering NAPOCOR among others, to pay PHIBRO actual, moral, exemplary damages
and costs.

Issue: Whether or not PHIBRO is entitled to the award of moral damages.

Held: No. Moral damages are not, as a general rule, granted to a corporation. While it is true that
besmirched reputation is included in moral damages, it cannot cause mental anguish to a corporation,
unlike in the case of a natural person, for a corporation has no reputation in the sense that an individual
has, and besides, it is inherently impossible for a corporation to suffer mental anguish. In LBC Express,
Inc. v. Court of Appeals, it was ruled that "Moral damages are granted in recompense for physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury. 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. Mental suffering can be experienced only by one
having a nervous system and it flows from real ills, sorrows, and griefs of life — all of which cannot be
suffered by respondent bank as an artificial person."
TORTS – NOMINAL DAMAGES

Article 2221. 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.

Article 2222. 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.

Article 2223. The adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their respective heirs and
assigns.

Ventanilla vs. Gregorio Centeno G.R. No. 14333 (January 28, 1961)

Facts: Ventanilla instituted this action to recover damages against his lawyer, Atty. Centeno for
neglecting to perfect within the reglementary period his appeal from an adverse judgment rendered by
the CFI of Manila. Trial court’s facts showed that the required appeal bond was not filed by Atty.
Centeno. The fact that the record on appeal was admitted for filing is the best evidence that Atty.
Centeno had not in fact filed any appeal bond. The record on appeal was disapproved because it was
filed out of time and no appeal bond had been filed by the plaintiff. Trial court rendered judgment in
favor of Ventanilla ordered Centeno to pay Ventanilla the sum of P200 as nominal damages and the
costs. Ventanilla appealed to the Court of Appeals and claimed that the trial court erred, among others,
in ordering Centeno to pay only the sum of P200, and not P2,000 as nominal damages.

Issue: Whether or not the trial court erred in the amount of the award of nominal damages.

Held: No. Relative to the sufficiency of the sum of P200 as nominal damages awarded by the trial court
to the appellant, article 2221 of the new Civil Code provides: “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.”

The assessment of nominal damages is left to the discretion of the court, according to the circumstances
of the case. Considering the circumstances, as found by the trial court, and the degree of negligence
committed by the appellee, a lawyer, in not depositing on time the appeal bond and filing the record on
appeal within the extension period granted by the court, which brought about the refusal by the trial
court to allow the record on appeal, the amount of P200 awarded by the trial court to the appellant as
nominal damages may seem exiguous. Nevertheless, considering that nominal damages are not for
indemnification of loss suffered but for the vindication or recognition of a right violated or invaded; and
that even if the appeal in civil case No. 18833 had been duly perfected, it was not an assurance that the
appellant would succeed in recovering the amount he had claimed in his complaint, the amount of
P2,000 the appellant seeks to recover as nominal damages is excessive. After weighing carefully all the
considerations, the amount awarded to the appellant for nominal damages should not be disturbed.

Robes-Francisco Realty and Development Corp. vs.CFI G.R. No. L-41093 (October 30, 1978)

Facts: On May 1962, private respondent Millan bought a lot from petitioner corporation Robes-Francisco
Realty and Development Corporation (Robes-Francisco for brevity). Millan paid the installments in full
on December 22, 1971, but it was only on March 2, 1973 that a Deed of Absolute Sale was executed in
her favor. Notwithstanding the lapse of almost three (3) years since she made her last payment, Robes-
Francisco still failed to convey the corresponding transfer certificate of title (TCT) to Millan. Due to this,
Millan was compelled to file a complaint for specific performance and damages against Robes-Francisco
in 1974. One of the prayers in the complaint include the payment of damages, corrective and actual in
the sum of P15,000.00.

The trial court ruled in favor of Millan and ordered Robes-Francisco to pay her nominal damages in the
amount of P20,000.00 plus attorney’s fees in the amount of P5,000.00 and costs. Robes-Francisco now
questions the award for nominal damages of P20,000.00 and attorney’s fees of P5,000.00 which are
allegedly excessive and unjustified.

Issue: Whether or not the trial court was correct in awarding nominal damages?

Held: The trial court did not err in awarding nominal damages. However, the circumstances of the case
warrant a reduction of the amount granted to Millan. There can be no dispute that Robes-Francisco was
guilty of delay, amounting to nonperformance of its obligation, in issuing the TCT to Millan who had fully
paid her installments. Article 1170 of the Civil Code expressly provides that those who in the
performance of their obligations are guilty of fraud, negligence or delay and those who in any manner
contravene the tenor thereof, are liable for damages. However, Millan submitted her case without
presenting evidence on the actual damages suffered by her as a result of the non-performance of
RobesFrancisco’s obligation under the deed of sale.

NONETHELESS, the facts show that the right of the vendee to acquire title over the lot was violated by
RobesFrancisco. This entitles her at the very least to nominal damages. Nominal damages are not
intended for indemnification of loss suffered but for the vindication or recognition of a right violated or
invaded. They are recoverable where some injury has been done the amount of which the evidence fails
to show, the assessment of damages being left to the discretion of the court according to the
circumstances of the case.

In the situation before Us, We are of the view that the amount of P20,000.00 is excessive. The admitted
fact that Robes-Francisco failed to furnish Millan the TCT because said lot was mortgaged to GSIS does
not in itself show that there was bad faith. Bad faith cannot be presumed. Millan’s contention that the
P20,000.00 award may be considered in the nature of exemplary damages cannot be upheld because in
case of breach of contract, exemplary damages may be awarded if the guilty party acted in wanton,
fraudulent, reckless, oppressive or malevolent manner.

People vs Gopio G.R. No. 133925 (November 29, 2000)

Facts: Agustin Gopio was accused of committing statutory rape on Ma. Princess Millano y, San Diego, an
11 year-old girl, against her will.

The incident was said to have taken place while the Brgy. San Pascual, Obando Bulacan, was celebrating
its town fiesta. The victim allegedly went to Gopio’s store to buy cooking oil around 10:00 am but
instead was taken to the bedroom where she was raped. The victim kept silent about the incident for
fear of Gopio and of what her parents would do to her. Likewise, the victim was ashamed and worried
that her friends would spread the news regarding her unfortunate experience.
On two other occasions, also in 1995, the victim related that she was again raped by Gopio but
remained silent about it.

It was only when the victim was examined Municipal Health Clinic for complaints of pain in her navel
that her mother, Luzviminda, discovered that her daughter was no longer a virgin. Upon inquiry,
Princess admitted that Gopio had raped her.

The trial court convicted Gopio guilty of statutory rape, sentencing him to suffer the penalty of reclusion
perpetua. The court further ruled that Gopio is liable to indemnify the heirs of the victim in the amount
of P3,727.00 as actual damages, P30,000.00, as moral damages, and to pay the costs of the suit.

Issues: (1) Whether Gopio is liable of statutory rape and (2) whether Gopio is liable to pay the heirs of
the victim actual and moral damages

Held: (1) The Court affirmed the ruling of the trial court convicting the accused of statutory rape. The
testimony of the victim was clear and categorical, positively identifying the accused as the perpetrator of
the crime.

(2) However, with respect to the award of actual damages, the court ruled that the award of actual
damages in the amount of P 3727.00 was deleted in the absence of proof as required in Article 219910.

“To be entitled to actual and compensatory damages, there must be competent proof constituting
evidence of the actual amount thereof, such as receipts showing the expenses incurred on account of
the rape incident”.

Among the evidence presented by the mother to establish a claim for actual damages, only the
laboratory fee in the amount of P350.00 was duly receipted, the rest were merely a doctor’s
prescription and a handwritten list of expenses.

Nevertheless, the court ruled that under Article 2221 of the Civil Code, the complainants were entitled
to nominal damages. Nominal damages are adjudicated in order that the 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.

As has been held, “whenever there has been a violation of an ascertained legal right, although no actual
damages resulted or none are shown, the award of nominal damages is proper.”

The victim’s family evidently incurred expenses due to the crime committed and the victim also suffered
pains in her navel. Hence, the court awarded them P2,000 for nominal damages and increased the moral
damages from P30,000.00 to P50,000.00.

Dr. Armovit, et al. vs. CA and Northwest Airlines, Inc. G.R. No. 88561 (April 20, 1990)

Facts: Dr. Herman Armovit, a Filipino physician residing in the United States, along with his family, came
home to the Philippines for a Christmas visit.

They purchased three round plane tickets from Northwest Airlines, and was confirmed as “OK” by a
Northwest Airlines’ ticket sales agent. The Armovits even reconfirmed their date of departure through
their representative Ernesto Madriaga who personally presented the three (3) tickets at the Northwest
Airlines’ Roxas Boulevard office.
For their return flight, the Armovits arrived in the airport at 9:15 in the morning for their 10:30 AM
flight, only to be rudely informed that they cannot be accommodated because the 10:30 AM flight was
erroneous and that the 9:15 AM flight was already taking off.

The family was bumped off at the Manila International Airport. Dr. Armovit complained that as a result
of the “bump off” he was not able to keep his appointments with his patients and that the family
suffered anguish, wounded feelings, and serious anxiety day and night until they were informed that
seats were available for them the following day.

The trial court awarded the Armovits actual, moral, exemplary and nominal damages; but on appeal the
Court of Appeals deleted the award of moral and nominal damages.

Issue: Whether the Armovits are entitled to moral and exemplary damages arising from the breach of
the contract of carriage

Held: The deletion of the moral damages on the ground that petitioners did not take the witness stand
to testify on "their social humiliation, wounded feelings and anxiety, and that the breach of contract was
not malicious or fraudulent" was improper. Northwest Airlines was found guilty of gross negligence in
the issuance of the tickets with the erroneous entry of date of departure and its failure to change the
same when the Armovits had reconfirmed their flight. The gross negligence of the airline amounted to
malice and bad faith and tainted the breach of air transportation contract.

There was sufficient indicia of malice and bad faith on the part of the airline when it issued the tickets,
failed to correct the dates and rudely informed the Armovits that they were not to be accommodated.

The petitioners are evidently entitled to moral damages. Their failure to testify is of no moment since it
was explained the assassination of Senator Benigno Aquino, Jr. resulting to turmoil in the country
refrained the Armovits from coming back to testify; nevertheless, Atty. Raymundo Armovit who was
with the complainants at the time of the incident, took the witness stand. By the same token to provide
an example for the public good, an award of exemplary damages is also proper. Nevertheless, the
deletion of the nominal damages by the appellate court is well-taken since there is an award of actual
damages. Nominal damages cannot co-exist with actual or compensatory damages.
TORTS – TEMPERATE DAMAGES

Article 2224. 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.

Article 2225. Temperate damages must be reasonable under the circumstances.

Pleno VS CA, Philippine Paper Products Inc., and Florante De Luna

Facts: Maximo Pleno filed an action for damages against Philippine Paper Products and Florante De
Luna, alleging that Philippine Paper Products is the owner of a delivery truck and one of its drivers is
Florante de Luna. That due to the reckless and imprudent driving of De Luna, the delvery truck
bumped and sideswiped plaintiffs Volkswagen Delivery Van. As a result, plaintiff suffered various
serious injuries, was hospitalized, and because he suffered injuries affecting his brain, he acted
beyond normalcy at times.

Philippine Paper Products, in its answer, stated that it exercises and continues to exercise the
requisite diligence in the employment and supervision of its employees and laborers as well as in
keeping in constant repair and in good condition all its vehicles; and that plaintiff is the one grossly
negligent, careless and imprudent in driving and operating his vehicle who has neither the license
nor the permit to drive the said vehicle.

The trial court rendered a decision sentencing jointly and severally defendants to pay plaintiff (1) P
48,244.08 actual damages: (2) temperate or moderate damage of P200,000.00; (3) moral damages
of P200,000.00; (4) exemplary damages of P50,000.00; (5) attorney's fees of P30,000.00; and (6)
costs of suit.

CA affirmed, stating that Having been found negligent, which negligence resulted to serious injuries,
the lower court did not err in sentencing defendant driver De Luna to pay actual, moral, temperate
and exemplary damages, likewise to pay attorney's fees.

The appellate court educed the amount of temperate and moral damages as well as the amount of
attorney's fees on the ground that the awards were "too high" .The award of temperate damages
was reduced by the appellate court on the ground that the amount of P200,000.00 is rather "too
high" especially considering the fact that the driver De Luna is a mere driver and defendant-appellant
Corporation is only subsidiarily liable thereof. The award was reduced to P100,000.00.

The petitioner now assails the reduction of the damages as without justification.

Issue: WON CA erred in reducing the amount of damages

Held: As stated earlier, the employer's liability in quasi-delict is primary and solidary. The award of
temperate, moral, and exemplary damages as well as attorney's fees lies upon the discretion of the
court based on the facts and circumstances of each case.

The court's discretion is, of course, subject to the condition that the award for damages is not excessive
under the attendant facts and circumstance of the case.

The trial court based the amounts of damages awarded to the petitioner on the following
circumstances:
Coming now to the damages suffered by plaintiff Maximo Pleno, it is not controverted that Pleno was
hospitalized for about five months beginning December 21, 1971, the day of the incident, up to May 9,
1972. While in the hospital, he underwent several major operations on his legs and in spite of Id
operations, a deformity still resulted and that his left leg is shorter than the right. The medical expenses,
hospital bills and doctor's fees were properly exhibited and not rebutted by defendants. This being the
case, actual expenses of P48,244.08 may be awarded.

As to the loss or impairment of earning capacity, there is no doubt that Pleno is an enterpreneur and the
founder of his own corporation, the Mayon Ceramics Corporation. It appears also that he is an
industrious and resourceful person with several projects in line and were it not for the incident, might
have pushed them through. On the day of the incident, Pleno was driving homeward with geologist
Langley after an ocular inspection of the site of the Mayon Ceramics Corporation. His actual income
however has not been sufficiently established so that this Court cannot award actual damages, but, an
award of temperate or moderate damages may still be made on loss or impairment of earning capacity.
That Pleno sustained a permanent deformity due to a shortened left leg and that he also suffers from
double vision in his left eye is also established. Because of this, he suffers from some inferiority complex
and is no longer active in business as well as in social life.

We rule that the lower court's awards of damages are more consonant with the factual circumstances of
the instant case. The trial court's findings of facts are clear and well-developed. Each item of damages is
adequately supported by evidence on record. On the other hand, there are no substantial reasons and
no references to any misimpressions of facts in the appellate decision. The Court of Appeals has shown
no sufficient reasons for altering factual findings which appear correct. We, therefore, affirm the lower
court's awards of damages and hold that the appellate court's reduction of the amounts of temperate
and moral damages is not justified. However, we modify the award of attorney's fees to P20,000.00
which we deem to be just and equitable under the circumstances of the case.

People vs. Singh G.R. No. 129782 (June 29, 2001)

Facts: Dilbang Singh, the private compalinant in the frustrated murder case, recalled that while he was
cleaning his motorbike in front of his appartment, Dalvir, Balwinder, Gurmok, Jarnail, Amarjit, Mohinder,
Dial, Kuldip --all surnamed Singh-- Johander Singh Dhillon, and Malkit Singh Dhillon arrived, shouting foul
remarks in their native language and demanded Surinder Singh to come out of the apartment. When
Surinder Singh came out of his apartment, Dalvir Singh tried to stab him but Surinder was able to move
away. Dalvir Singh told his companions to hold Surinder Singh and thereafter, Dial and Johinder each
held the arms of Surinder, while Kuldip pushed Surinder. Dalvir Singh then stabbed Surinder on the right
side of his stomach, causing the latter to fall.

Dial Singh said that Surinder failed to give money and if others will also refuse, the same fate will
happen to them. As Surinder Singh tried to get up, Malkit and Jarnail started hitting him with lead pipes,
while Johinder and Dial punched and kicked him. Amarjit, who was holding a gun, warned everyone not
to help Surinder or else he will shoot.

While all these things were going on, private complainant Dilbag Singh tried to stop them but Balwinder
Singh stabbed him on his back. Gurmok likewise stabbed him with a bolo, but he was not hit as he was
able to move to one side. After that, the ten (10) accused Indians left. Thereafter, Dilbag Singh and
Surinder Singh, were brought to the hospital. Surinder was pronounced dead on arrival.
Issue: Whether or not the court a quo erred in awarding excessive damages against accused-appellants.

Held: In the criminal case for frustrated murder, the trial court awarded private complainant Dilbag
Singh the amount of P16,000.00 representing his hospitalization and medical expenses, and P 30,000.00
as attorney’s fees. For his hospitalization and medical expenses, the receipts submitted to support said
claim amounted only to P370.50. Hence, Dilbag Singh is entitled only to the said amount. The award of
attorney’s fees is hereby deleted. Nonetheless, private complaint is entitled to moral damages in the
amount of P50,000.00 for the suffering he endured from appellants’ felonious acts.

In the criminal case for murder, only the following expenses were proven to recover actual damages:
funeral expenses and air ticket/freight of the cadaver. The amounts for hospitalization expenses are
deleted since it is not supported by evidence. Attorneys’ fees and the compensation for loss of earning
capacity, are likewise deleted for lack of basis. However, the trial court’s award of P50,000.00 as civil
indemnity, and P50,000.00 moral damages are affirmed.

Awards for loss of earning capacity partake of damages which must be proven not only by credible and
satisfactory evidence, but also by unbiased proof. The testimony of Balwinder Singh Gill, first cousin of
the deceased, on the alleged income of the deceased, is not enough. The best evidence to substantiate
income earned by foreigners while in the Philippines is the payment of taxes with the Bureau of Internal
Revenue. Absent such proof, bare allegation is insufficient. Nevertheless, considering that the definite
proof of pecuniary loss cannot be offered, and the fact of loss has been established, appellants shall pay
the heirs of Surinder Singh temperate damages.

People of the Philippines vs. Edison Plazo G.R. No. 120547 (January 29, 2001)

Facts: Leonor Fabula went out of her house in May-anao, Tigaon, Camarines Sur to buy sugar at a nearby
store. When she reached the store, she saw appellant boxing her son Romeo Fabula and banging his
head on the post of the store, while asking him why he told the police about his brother and the location
of appellant's house. When Leonor sought to intervene, appellant got angry at her.

She became afraid and asked for help but nobody went near them. Romeo freed himself from the hold
of appellant and ran away. Appellant chased Romeo with a small bolo known locally as "gatab." Leonor
shouted at appellant to stop but the latter did not heed her pleas. Appellant caught up with Romeo and
stabbed him at the back causing Romeo to fall on the ground. Appellant continued to stab Romeo in the
upper and lower chest area. Leonor continued shouting for help and eventually someone came to help.
However, when she saw her son no longer moving, she told the people not to touch or move him

When Patrolmen Virgilio Azucena and Jose Madera arrived at the scene of the crime, they saw the fallen
body of Romeo with a small bolo imbedded on his chest and the detached handle of the bolo on the
ground near his body. On June 10, 1991, appellant was charged with the crime of murder After trial, the
trial court rendered its decision finding appellant guilty of the crime of murder and ordered Plazo to
indemnify the heirs of the late Fabula for the latter's death the sum of Fifty Thousand Pesos
(P50,000.00); the sum of Fifteen Thousand Seven Hundred Twelve Pesos (P15,712.00) as actual
damages; and the sum of Ten Thousand Pesos (P10,000.00) as moral damages.

Issue: Whether or not the lower court erred in the award of actual damages.
Held: The trial court correctly awarded the amount of P50,000.00 as indemnity. However, the award of
actual damages in the amount of P15,712.00 was based solely on the bare assertions of the mother of
the victim. The Court can only grant such amount for expenses if they are supported by receipts. In the
absence thereof, no actual damages can be awarded. However, in lieu of actual damages, TEMPERATE
DAMAGES under Art. 2224 of the Civil Code may be recovered where it has been shown that the victim's
family suffered some pecuniary loss but the amount thereof cannot be proved with certainty. We find
the award of P15,000.00 as temperate damages reasonable. Moral damages cannot be awarded in the
absence of any evidence to support its award.

TORTS – LIQUIDATED DAMAGES

Article 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case
of breach thereof.

Article 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably

reduced if they are iniquitous or unconscionable.

Article 2228. 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.

TORTS – EXEMPLARY DAMAGES

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.

Article 2234. 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.

Article 2235. A stipulation whereby exemplary damages are renounced in advance shall be null and void.
PNB vs. CA G.R. No. 108630 (April 2, 1996)

Facts: private respondent Loreto Tan is the owner of the land which has been expropriated by the
government. After the proceedings, Tan requested the release to him of the expropriation price of P32,
480.00. The trial court ordered the PNB to release the same to Tan as deposited in it by the government.
Petitioner’s Asst.branch manager, Juan Tagamolilia, issued managers check for the said amount and
delivered it to Sonia Gonzaga without Tan’s knowledge. As a consequence, Tan demanded the payment
from PNB which refused on the ground that they had already paid the same based on the SPA allegedly
executed in her favour by Tan. Tan therefore executed an affidavit contending that he had never
executed such SPA nor authorized Gonzaga to receive it. PNB, on the other hand, failed to produce the
SPA as directed by the court. The TC ruled against the PNB. CA affirmed the same but deleted the award
of P5, 000.00 for exemplary damages and P5, 000.00 for attorney’s fees.

Issues: (1) Whether or not an SPA existed. (2) Whether or not the award of attorney’s fees and
exemplary damages is proper.

Held: (1) No. Under the best evidenced rule, only the original document is the best evidence of the fact
as to whether the creditor authorized a third person to receive the payment from the debtor and in the
absence of such document, the debtor’s argument regarding due payment must fail.

In this case, since PNB failed to prove the SPA as an evidence, its contention that they paid petitioner
must fail.

(2) The award of attorney’s fees is proper under Art. 2208 of the CC since Tan is forced to litigate to
protect his rights, but the award of exemplary damages is properly deleted. Under Art. 2232 of the CC,
exemplary damages may be awarded if a part acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner. However, they cannot be recovered as a matter of right; the court has yet to decide
whether or not they should be adjudicated. In the case at bar, while there is a clear breach of petitioners
obligation to pay private respondents, there is no evidence that it acted in a fraudulent, wanton,
reckless or oppressive manner. Furthermore, there is no award to compensatory damages which is a
prerequisite before exemplary damages may be awarded.