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PNB vs CA -If a corporation is basing its claim for moral

damages on sufferance of bersmiched reputation,


HELD: A bank is under obligation to treat the accounts then it is entitled to moral damages if warranted by
of its depositors with meticulous care whether such evidence.
account consists only a few hundreds of pesos or of
millions of pesos. Responsibilty arising from negligence -Essential that it enjoys a good reputation
in the performance of every kind of obligation is
demandable. While petitioners negligence in this case -Artificial persons like corporations have also
may not have been attended with malice and bad faith, reputations to protect.
nevertheless, it caused serious anxiety, embarrassment -They do not need a nervous system to possess
and humiliation to private respondent which she is reputation or goodwill to suffer the impairment.
entitled to recover moral damages.
Summing it up, an existing corporation with reputation
MORAL DAMAGES NOT RECOVERABLE IN BREACH to protect is entitled to moral damages. If the basis of
OF CONTRACT OF TRANSPORTATION; the claim is either:
EXCEPTIONS
1. Its good reputation has been besmirched by the
GR: In actions for damages on breach of contract of defendant (Art 2217)
transportation, moral damages are not recoverable 2. If its complaint is for libel or any other form of
XPN: defamation (Art 2219)

1. Where the mishap results in the death of the -resulting in its social humiliation
passenger; and -This is an exception to the GR that juridical persons
2. Where it is proved that the carrier was guilty of like a corporation cannot suffer moral damages for lack
fraud or bad faith, even if death does not result of a nervous system, thus, not susceptible to feelings or
-The fraud, malice or bad faith must be proved. senses.

-Mere carelessness of the carriers driver does not per -A juridical person is not entitled to moral damages
se constitute or justify an inference of malice or bad under Article 2217 but it may avail of moral damages
faith on said carriers part under the analogous cases listed in Article 2219, such
as for libel, slander or any other form of defamation.
AMOUNT OF MORAL DAMAGES MUST BE
REASONABLE -The plaintiff may be natural or juridical person
as there is no distinction made by law.
-should not be scandalously excessive as to indicate
that the amount fixed was the result of passion, -The award of moral damages cannot be granted in
prejudice or corruption on the part of the trial court. favor of a corporation because, being an artificial person
and having an existence only in legal contemplation, it
-should not be out of proportion to the injury has no feelings, no emotions, no senses. It cannot,
suffered. experience physical sufferings and mental anguish,
which can be experienced only by one having a nervous
-Judicial discretion in fixing the award should be system. (ABS-CBN vs CA)
exercised with balanced restraint and measured
objectivity. -The statement in People vs Manero and Mambulao
Lumber Co. vs PNB that a corporation may recover
Ex: The court errs when it awards an exorbitant amount moral damages if it has a good reputation that is
of Php 50,000 as damages, without designating the debased, resulting in social humiliation is an obiter
purpose and basis for such general award of damages dictum.
MAY A CORPORATION WHICH IS AN ARTIFICIAL CIVIL ACTION FOR LIBEL NEEDS ONLY
PERSON SUFFER FROM MORAL DAMAGES PREPONDERANCE OF EVIDENCE
-depends on the specific basis relied upon. -A civil action for libel under Article 33 of the Civil Code
-If the corporation bases its claim for moral shall be instituted and prosecuted for final judgment and
damages on physical sufferings or mental proved by preponderance of evidence separately and
anguish, fright, serious anxiety, wounded entirely independent of the institution, pendency or
feelings, mental shock, social humiliation and result of the criminal action.
similar internal injury, the corporation cannot be
awarded with moral damages.

REASON: An artificial person cannot suffer such internal


feelings for lack of a nervous system.
A CORPORATION MAY BE GRANTED ACTUAL, -In culpa contractual or breach of contract, moral
COMPENSATORY, TEMPERATE, LIQUIDATED OR damages are recoverable only if the defendant has acted
EXEMPLARY DAMAGES fraudulently or in bad faith, or is found guilty of gross
negligence amounting to bad faith, or in wanton
-The same may be granted because a corporation, disregard of its contractual obligations.
although an artificial person may suffer such kind of
damages. -The fundamental principle of law on damages is that
one injured by a breach of contract or by a wrongdoing
-These are not mental feelings and do not require a or negligent act or omission shall have a fair and just
central nervous system to suffer them. compensation, commensurate with the loss sustained as
ART. 2220 Willful injury to property may be a legal a consequence of the defendants acts.
ground for awarding moral damages if the court MORAL DAMAGES IN BREACH OF CONTRACTS
should find that, under circumstances, such INVOLVING TELEGRAPHIC MESSAGES
damages are justly due. The same rule applies to
breaches of contract where the defendant acted USE OF WRONG AND IMPROPER FORUMS
fraudulently or in bad faith.
RCPI vs CA
WILLFUL INJURY TO PROPERTY
HELD:
-entitles to an award of moral damages.
When plaintiffs placed an order for transmission of their
-Malicious mischiefs punishable under Artilces 320-321 social condolence telegram, defendant did not inform
of the RPC are instances of willful injury to property. the plaintiff of the exhaustion of such social condolence
forms. Defendant-appellant accepted through its
-The civil aspects of these crimes are deemed instituted authorized agent or agency the order and received the
with the criminal actions unless reservation is made to corresponding compensation therefore. Defendant did
prosecute them independently of the criminal actions or not comply with its contract as intended by the parties
are filed ahead of the criminal actions. and instead of transmitting the condolence message in
-They are not independent civil actions exempt from the an ordinary form, in accordance with its guidelines,
requirement of reservation placed the condolence message expressing sadness and
sorrow in forms conveying joy and happiness. Under the
BREACHES OF CONTRACTS; WHEN MORAL circumstances, we cannot accept the defendants plea
DAMAGES RECOVERABLE of good faith predicated on such exhaustion of social
condolence forms. Gross negligence or carelessness can
-do not justify moral damages unless it be proved that be attributed to defendant-appellant in not supplying its
the defendant has acted fraudulently or in bad faith. various stations with such sufficient and adequate social
condolence forms when it held out to the public
-Moral damages may be awarded in culpa contractual or
sometime in January 1983, the availability of such social
breach of contract when the defendant acted
condolence forms accepted for fee the transmission of
fraudulently or in and faith or is guilty of gross
messages on such forms. Knowing that there are no
negligence amounting to bad faith or in wanton
such forms as testified to by its Material Control
disregard of his contractual obligations.
Manager Meteo Atienza, and entering into a contract of
MEANING OF MALICE OR BAD FAITH transmission of messages in such forms, defendant-
appellant committed acts of bad faith, fraud and malice.
-implies conscious or intentional design to do a wrongful
act for a dishonest purpose or moral obliquity OMISSION TO DELIVER MESSAGE

-Bad faith in the context of Article 2220, includes gross, TELEFAST COM (Phil) WIRELESS INC vs CASTRO
but not simple negligence
HELD:
Ex:
We find Article 227 of the Civil Code applicable in the
In awarding moral damages for breach of contract of case at bar. It states, Moral damages include physical
carriage, the breach must be wanton and deliberately suffering, mental anguish, fright, serious anxiety,
injurious or for the one responsible acted fraudulently or besmirched reputation, wounded feeling, moral shock,
with malice or bad faith. social humiliation, and similar injury. Though incapable
of pecuniary computation, moral damages may be
-Moral damages may be awarded in a breach of contract recovered if they are the proximate result of the
when the defendant acted in bad faith or was guilty of defendants wrongful act or omission.
gross negligence amounting to bad faith or in wanton
disregard of his contractual obligation. The petitioners act or omission, which amounted to
gross negligence, was precisely the cause of suffering
private respondents had to undergo.
The Court did not sustain the petitioners defense that SECTION 2
technical and atmospheric factors beyond its control,
prevented the sending of the message. Compensatory, NOMINAL DAMAGES
moral and exemplary damages were imposed upon ART 2221. Nominal Damages are adjudicated in
petitioner. order that a right of the plaintiff, which has been
INTERCALATING LIBELOUS MATTERS INTO THE violated or invaded by the defendant, may be vindicated
MESSAGE or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by
RCPI vs DIONELA him.

HELD: HISTORICAL NOTE

A message from the Manila office of the petitioner was -Before the NCC, nominal damages were not
sent to L. Dionela of Legaspi City, reading, Wire arrival recognized.
of check. Petitioners employees added: Sa iyo walang
pakinabang dumating ka diyan. Wala kang padala ditto NOMINAL DAMAGES, CONCEPT
kahit bulbul mo. Dionela filed a libel suit. RCPI -Technical violation of plaintiffs rights resulting in no
committed breach of contract through its employees. It substantial injury to him. (Algarra vs Sandejas)
was made liable for Php 15,000 as moral damages.
-This branch of damages is also unknown under the Civil
DAMAGES IN SEXUAL HARRASSMENT Code. If no damages have actually occurred there can
-An employer is liable to pay moral damages to an be none to repair and the doctrine of nominal damages
employee subjected to sexual harassment, for the is not applicable. Thus it has been often held by the
anxiety, the seen and unseen hurt that she suffered. Supreme Court of Spain that a mere non-compliance
with the obligations of a contract is not sufficient to
DAMAGES IN COMMON CRIMES sustain the judgment for damages. It must be shown
that the damages actually existed.
-The grant in common crimes like robbery, is not
automatic, unlike in rape cases NATURE AND PURPOSE OF NOMINAL DAMAGES

DISCONNECTION OF ELECTRICITY WITHOUT -Not for indemnification of loss but for the vindication or
PRIOR NOTICE CONSTITUTES BREACH OF recognition of a right violated or invaded.
CONTRACT
Ex:
-amounts to independent tort
1. Employees of the SSS attempted to foreclose
-the prematurity of the action is indicative of an intent mistakenly the mortgage of the borrower who was
to cause additional mental suffering to private not delinquent at all. It was held that the SSS was
respondent. liable for nominal damages and attorneys fees. No
moral damages were awarded.
-This is a violation of Article 21 of the Civil Code which
provides that any person who willfully causes loss or ASSESSMENT OF NOMINAL DAMAGES,
injury to another in a manner that is contrary to morals, DISCRETIONARY TO THE COURT
good customs or public policy shall compensate the
latter for damages. -Assessment of nominal damages is left to the sound
discretion of the court in accordance with the
-the award for moral damages is sanctioned by Article circumstances of each case.
2220 which provides that willful injury to property may
be a legal ground for awarding moral damages if the -The court may award nominal damages in every case
court should find that, under the circumstances, such where any property right has been invaded
damages are justly due. NOMINAL AND EXEMPLARY DAMAGES CANNOT
-The same rule applies to breached of contract where CO-EXIST
the defendant acted fraudulently or in bad faith. -cannot be awarded together with compensatory
DEFAULT IN THE PAYMENT OF BILLS CANNOT BE damages
UTILIZED BY PETITIONER TO DEFEAT OR NULLIFY -Where the court has already awarded compensatory
THE CLAIM FOR DAMAGES and exemplary damages that is already a juridical
-Default in the payment of his bills cannot be utilized by recognition that plaintiffs right was violated. Hence,
petitioner to defeat or nullify the claim for damages. At the award of nominal damages is unnecessary
most, this circumstance can be considered as a and improper.
mitigating factor in ascertaining the amount of
damages. (Manila Gas Corporation case)
-Award of actual, moral, temperate or moderate -The court may award nominal damages in any
damages precludes nominal damages. obligation arising from any said sources.

-It is an established rule that nominal damages cannot


co-exist with compensatory damages. -Nominal damages may be awarded where any property
NOMINAL DAMAGES AND ATTORNEYs FEES, right has been invaded such as in trespass upon property
COMPATIBLE
-A violation on the plaintiffs right, even if only technical,
-May be awarded together with attorneys fees. is sufficient to support an award of nominal damages
Instances of Nominal Damages in Labor Case
-The award of nominal damages does not run counter to
1. Where the dismissal is for an authorized cause, the maxim de minimio non curat lex (the law does not
the lack of statutory due process should not cure or bother with trifles)
nullify the dismissal, or render it illegal, or
ineffectual-however, the employer should NOMINAL DAMAGES, ONLY IN NAME
indemnify the employee, in the form of nominal
damages, for the violation of his right to Art 2223. The adjudication of nominal damages
statutory due process. shall preclude further contests upon the right involved
2. In the determination of the amount of nominal and all accessory questions, as between the parties to
damages which is addressed to the sound the suit, or their respective heirs and assigns.
discretion of the court, several factors are taken
RES JUDICATA
into account:
a. The authorized cause invoked -After the final adjudication of nominal damages by the
b. The number of employees to be awarded court, there shall be no further contests upon the right
c. The capacity of the employers to satisfy involved as well as all accessory questions as between
the awards taken into account their the parties or their respective heirs or assigns.
prevailing financial status as borne by the
records SECTION 3
d. The employers grant of other
TEMPERATE OR MODERATE DAMAGES
termination benefits in favor of the
employees ART 2224. Temperate or moderate damages, which
e. Whether there was a bona fide attempt to are more than nominal but less than compensatory
comply with the notice requirements as damages, may be recovered when the court finds that
opposed to giving no notice at all some pecuniary loss has been suffered but its amount
3. Where the dismissal of an employee from the cannot form the nature of the case, be proved with
service is due to dishonesty or a just cause but certainty.
due process was not observed as no hearing was
conducted despite her request, the employer TEMPERATE OR MODERATE DAMAGES, CONCEPT
should be held liable for indemnity in the form
of nominal damages. -These are the damages the amount of which is left to
4. A violation of an employees statutory right to the sound discretion of the court, but it is necessary
two notices prior to the termination of his that there be some injury or pecuniary loss
employment for a just cause entitles him to established, the exact amount of which, could not
nominal damages absent sufficient evidence to be determined by the plaintiff by reason of the
support an award for actual or moral damages. nature of the case.

Art. 2222. The court may award nominal damages RATIONALE BEHIND TEMPERATE OR MODERATE
in every obligation arising from any source DAMAGES
enumerated in Art 1157, or in every case where -Is precisely that from the nature of the case, definite
any property right has been invaded. proof of pecuniary loss cannot be offered.
ALL SOURCES OF OBLIGATION MAY GIVE RISE TO -When the court is convinced that there has been such
NOMINAL DAMAGES a loss, the judge is empowered to calculate moderate
-The five sources of obligations enumerated in Art 1157 damages, rather than let the complainant suffer without
are: redress from the defendants wrongful act.

1. Law -There are cases where from the nature of the case,
2. Contracts; definite proof of pecuniary loss cannot be offered,
3. Quasi-Contracts although that the court is convinced that there has been
4. Acts or omissions punishable by law; and such loss.
5. Quasi-delicts
Ex: SECTION 4

-Injury to ones commercial credit or to the goodwill of LIQUIDATED DAMAGES


the business firm is often hard to show with certainty in
terms of money. Should the damages be denied for that ART 2226. Liquidated damages are those agreed
reason? The judge shall be empowered to calculate upon by the parties to a contract, to be paid in case of
moderate damages in such cases, rather than that the breach thereof.
plaintiff should suffer, without redress, from the NATURE OF LIQUIDATED DAMAGES
defendants wrongful act.
-Fixed damages previously agreed by the parties to the
DAMAGES FOR LOSS OF GOODWILL OR contract and payable to the innocent party in case of
REPUTATION breach by the other.
-Falls under the actual or compensatory damages. Even -Where the principal obligation is void, there is no
if it is not recoverable as compensatory damages, it may contract that could be breached- the nullity of the
still be awarded in the concept of temperate or principal obligation carries with it the nullity of the
moderate damages accessory obligation of the liquidated damages.
REQUISITES TO JUSTIFY AWARD OF TEMPERATE PENALTY DISTINGUISHED FROM LIQUIDATED
OR MODERATE DAMAGES DAMAGES
-It is essential that some pecuniary loss had been Penalty- is the sum inserted in a contract, not a
suffered but its exact amount cannot from the nature of measure of compensation for its breach, but rather as a
the case, be proved with certainty. The court is allowed punishment for default, or by way of security for actual
to calculate the amount. damages which may be sustained by reason of non-
PEOPLE vs PRINCIPE performance, and it involves the idea of punishment.

HELD: -is an agreement to pay a stipulated sum on


breach of contract, irrespective of damages sustained.
The list of expenses incurred for the wake,
funeral and burial of the victim amounting to Php 21,307 -Its essence is payment of money stipulated as
submitted by the victims father is self-serving and not a terrorem of the offending party, while the essence of
proved. Thus, the trial courts award of Php 21, 307 for liquidated damages is a genuine covenanted pre-
funeral expenses cannot be availed of. estimate of damages.

However, under Art 2224, the temperate -The amount is fixed and is not subject to
damages may be recovered if it is shown that such party change; however, if the stipulated sum is deemed to be
suffered some pecuniary loss but the amount cannot, a penalty, it is not enforceable and the nondefaulting
from the nature of the case, be proved with certainty. party is left to recover such actual damages as he can
As there is no doubt that the heirs of the victim incurred prove.
funeral expenses, although the amount thereof has not -A provision for payment of a special sum as
been proved, it is appropriate to award Php 15,000 by compensation for acts contemplated by the contract as
way of temperate damages to the heirs of the victim. opposed to compensation for injury resulting from
Art 2225. Temperate damages must be reasonable breach of the contract, is neither a penalty nor
under the circumstances. liquidated damages.

REASONABLENESS OF TEMPERATE DAMAGES -Also to be distinguished from both a penalty


and liquidated damages is a contractual limitation of
-What is reasonable will depend upon circumstances of liability
each particular case.
SIMILARITY WITH PENALTY IN A CONTRACT
GR: What is reasonable is one which is not excessive WITH A PENALTY CLAUSE
nor very low in the estimation of men of ordinary
intelligence and discretion. -As far as the legal results are concerned, liquidated
damages are identical with penalty under Article 1226.
-Temperate damages should be one half of the
indemnity for death. Art 1226. In obligation with a penal clause, the penalty
shall substitute the indemnity for damages and the
payment of interests in case of noncompliance, if there
is no stipulation to the contrary. Nevertheless, damages
shall be paid if the obligor refuses to pay the penalty or
is guilty of fraud in the fulfillment of the obligation.
The penalty may be imposed only when it is WHEN STIPULATION MAY BE DISREGARDED
demandable in accordance with the provisions of this
Code. -When the breach or violation of the contract is not the
one contemplated by the parties, the determination of
-A stipulation on liquidated damages is a penalty clause damages shall not be based on the stipulation but on
where the obligor assumes a greater liability in case of the law.
breach of an obligation.
-Art 1229 may be applied by analogy in such case
-Courts are empowered to reduce the penalty if it is
iniquitous or unconscionable. Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or
-The injured party in either case, need not prove actual irregularly complied with the debtor. Even if there has
damages. It is so because the parties had already been no performance, the penalty may also be reduced
agreed on the amount of damages to be paid in case of by the courts if it is iniquitous or unconscionable.
breach of the contract.
SECTION 5
-Whether a penalty or indemnity, it is necessary that
there be a contract the violation of which gives rise to EXEMPLARY OF CORRECTIVE DAMAGES
the liquidated damages stipulated thereon. Art. 2229. The exemplary or corrective damages are
-Liquidated damages cannot be awarded where imposed, by way of example or correction for the
the parties did not agree on that kind. public good, in addition to the moral, temperate,
liquidated or compensatory damages.
Ex:
PUNITIVE OR VINDICTIVE DAMAGES
Attorneys fees expressly provided in contracts
recoverable as damages against the other party are in -Also known as punitive or vindictive damages,
the nature of liquidation damages and the stipulation exemplary or corrective damages are intended to serve
may be aptly called a Penal clause. as a deterrent to serious wrongdoings and as a
vindication of undue sufferings and wanton invasion of
Art 2227. Liquidated damages, whether intended as rights of an injured or a punishment for those guilty of
an indemnity or a penalty, shall be equitably reduced if outrageous conduct.
they are iniquitous or unconscionable.
RATIONALE BEHIND EXEMPLARY DAMAGES
HISTORICAL NOTES
-Required by public policy, for wanton acts must be
-the reason for reduction liquidated damages, whether suppressed.
intended as an indemnity or a penalty, is that the
stipulation is contra bonos mores under Art. 1306. It is -To serve as deterrent to serious wrongdoings
a mere technicality to refuse to lessen the damages to -Exemplary damages are imposed not to enrich one
their just amount simply because the stipulation is not party or impoverish another but to serve as a deterrent
meant to be a penalty. An immoral stipulation is against or as a negative incentive to curb socially
nonetheless immoral because it is called indemnity. deleterious actions.
EQUITABLE REDUCTION NATURE OF EXEMPLARY DAMAGES
-If the amount fixed as liquidated damages is iniquitous -Mere accessories to other forms of damages except
or unconscionable, the court may reduce it to a nominal damages.
reasonable level.
-Mere additions to actual, moral, temperate and
-Liquidated damages should be reduced by the court to liquidated damages which may or may not be granted
the equities of the case. at all depending upon the necessity of setting an
EFFECT OF PARTIAL PERFORMANCE example for the public good as a form of deterrent to
the repetition of the same act by any one.
-the total amount of the liquidated damages agreed
upon cannot be enforced. -It is imposed as a corrective measure when the guilty
party has acted in a wanton, fraudulent, reckless,
-Liquidated damages are presumed to be only for a oppressive or malevolent manner.
total breach of the contract.
-Before considering whether exemplary damages should
ART 2228. When the breach of the contract be awarded, it must first be shown that an award of
committed by the defendant is not the one moral, temperate, or compensatory damages obtains.
contemplated by the parties in agreeing upon the Moral damages cannot be lumped with exemplary
liquidated damages, the law shall determine the damages because tehya re absed on different jural
measure of damages, and not the stipulation. foundations.
VEHICLE OWNER NOT LIABLE FOR EXEMPLARY 1. Criminal offense- when the crime
DAMAGES was committed with one or more
aggravating circumstances (Art
-The actual driver of the vehicle who caused the injuries 2230)
to the victim is the one liable for exemplary damages 2. Quasi-delicts- when the defendant
and not the owner of the said vehicle. acted with gross negligence
WHEN CAN AN EMPLOYER BE LIABLE FOR 3. Contracts and Quasi-Contracts-
EXEMPALRY DAMAGES FOR THE ACTS OF HIS when the defendant acted in
EMPLOYER? wanton, fraudulent, reckless,
oppressive, or malevolent manner.
MUNSAYAC vs DE LARA
-While the exact amount of exemplary damages need
HELD: not be proved, there is a sine quo non for its grant.
Plaintiff must prove that he is entitled to:
A principal or master can be held liable for
exemplary or punitive damages based upon the a. Moral;
wrongful act of his agent or servant only when he
participated in the doing of such wrongful act or has b. Temperate; or
previously authorized or subsequently ratified it, c. Compensatory (actual) damages
with full knowledge of the facts. Exemplary
damages punish the intent- and this cannot be FINANCIAL CREDIT WHEN ADVERSELY AFFECTED
presumed on the part of the employer merely because
of the wanton, oppressive, or malicious intent on the -Moral and exemplary damages may be awarded
part of the agent. without proof of pecuniary loss.

LIABILITY OF REGISTERED OWNER OF A VEHICLE -The financial credit of a businessman is a prized and
DRIVEN ON THE HIGHWAY valuable asset, it being a significant part of his business,
and any adverse reflection thereon constitutes some
-even if not used for public service, would primarily be financial loss to him.
responsible to the public or to third persons for injuries
caused the latter while the vehicle was being driven on Art 2230. In criminal offenses, exemplary
the highway or streets. damages as a part of the civil liability may be
imposed when the crime was committed with one
CAN THE AGENCY OF THE STATE BE SUBJECTED TO or more aggravating circumstances. Such damages
TEMPERATE AND EXEMPLARY DAMAGES? are separate and distinct from fines and shall be paid to
the offended party.
-The court finds it proper to award temperate and
exemplary damages in light of NIAss misuse of its EXEMPLARY DAMAGES, WHEN IMPOSABLE IN
power of eminent domain- any arm of the State that CRIMINAL CASES; AGGRAVATING
exercises the delegated power of eminent domain must CIRCUMSTANCES MUST BE PRESENT
wield that power with circumspection and utmost regard
for procedural requirements. -In criminal cases, exemplary damages cannot be
awarded if there is no aggravating circumstance.
UNJUSTIFIED REFUSAL TO GRANT ACADEMIC
HONORS JUSTIFIES GRANT OF EXEMPLARY -The aggravating circumstance whether ordinary or
DAMAGES qualifying, should entitle the offended party to an award
of exemplary damages after proof that the offended
-who through neglect of duty and moral callousness, did party is entitled to moral, temperate and compensatory
not award the academic honors of magna cum laude damages.
which the latter deserved.
AGGRAVATING CIRCUMSTANCE- is one which when
GRANT OF ACADEMIC HONORS IS PART OF present would increase the period of the penalty within
ACADEMIC FREEDOM WHICH WILL NOT BE the range imposable under the law.
DISTURBED UNLESS THERE IS A GRAVE ABUSE OF
DISCRETION IN ITS EXERCISE (University of San THE EMPLOYER CANNOT BE LIABLE MORE THAN
Carlos vs CA) THE EMPLOYEE

CASES WHERE EXEMPLARY DAMAGES MAY BE BANTOTO vs BOBIS


IMPOSED AS ACCESSORY DAMAGES HELD:
-Exemplary damages cannot be recovered as a matter Considering that no exemplary damages were
of right (Art 2233) imposed on the driver, and the master, as person
-They can be imposed in the following cases: subsidiarily liable, cannot incur greater civil liability than
his convicted employee, any more than a guarantor can -The award of these damages is meant to be a
be held responsible for more than the principal debtor. deterrent, to socially deleterious actions.

TERM AGGRAVATING CIRCUMSTANCES TO BE -Gross negligence is tantamount to bad faith.


UNDERSTOOD IN THE BROAD SENSE
-Even if there is gross negligence, the grant is not
-The ordinary or qualifying nature of an aggravating automatic. It is still subject to the discretion of the court.
circumstance is a distinction that should only be of
consequences to the criminal, rather than to the civil, Art. 2232. In contracts and quasi-contracts, the
liability of the offender- relative to the civil aspect of the court may award exemplary damages if the defendant
case. acted in wanton, fraudulent, reckless, oppressive or
malevolent manner.
-Even if the aggravating circumstances which have not
been alleged in the information cannot be appreciated EXEMPLARY DAMAGES IN CONTRACTS AND
for the purpose of fixing a heavier penalty, they can, QUASI-CONTRACTS
however, be considered as bases for an award of -it is essential that the defendant must have acted in a
exemplary damages. wanton, fraudulent, reckless, oppressive or malevolent
-Evidence proving these circumstances forms part of the manner
actual commission of the crime and justifies an award of WILLFUL, WANTON AND RECKLESS MANNER
exemplary damages even when said aggravating
circumstances were not alleged in the information. -They have been grouped together as an aggravated
form of negligence, differing in quality rather than in
GENERIC AGGRAVATING CIRCUMSTANCE MUST degree from ordinary lack of care.
BE ALLEGED
-They apply to conduct which is merely negligent, rather
-although proven by the prosecution and admitted by than actually intended to do harm, but which is so far
the accused, cannot justify the award of exemplary from a proper state of mind that is treated in many
damages if this fact was not alleged in the information. respects as if it were intended.
EXEMPLARY DAMAGES, DISTINCT FROM FINES -Thus, to be held to justify an award of punitive
-In criminal cases, fines may be imposed by the court. damages, warrant a broader duty and more extended
These fines are separate and distinct from the liability for consequences.
exemplary damages. The fines are payable to the State -It will also avoid contributory negligence on the part of
but the exemplary damages to the injured party. the plaintiff.
IS IT NECESSARY THAT THE AGGRAVATING -Moral damages are recoverable only if the defendant
CIRCUMSTANCES BE ALLEGED IN THE has acted fraudulently or in bad faith, or is guilty of
INFORMATION TO JUSTIFY A GRANT OF gross negligence amounting to bad faith, or in wanton
EXEMPLARY DAMAGE? disregard of his contractual obligations
Decisions are conflicting but the better rule is to follow: -Moral damages may be awarded in culpa contractual or
Notwithstanding the failure to allege the aggravating breach of contract cases when the defendant acted
circumstances, the proven presence thereof is still fraudulently or in bad faith.
material in the determination of exemplary damages to BAD FAITH
be awarded to the complainant (People vs Legaspi)
-does not simply connote bad judgment or negligence,
Art. 2231. In quasi-delicts, exemplary damages it imports a dishonest purpose or some moral obliquity
may be granted if the defendant with gross and conscious doing of a wrong, a breach of known duty
negligence. through some motive or interest or ill will partakes the
EXEMPLARY DAMAGES, IN QUASI-DELICTS nature of fraud.

-Gross negligence must be shown on the part of the FRAUDULENT, OPPRESSIVE AND MALEVOLENT
defendant MANNER

-In crimes and quasi-delicts, the defendant shall be -If the act is tainted with deception or injurious
liable for all damages, which are the natural and misrepresentation of which the plaintiff is unaware, the
probable consequences of the act or omission act is considered fraudulent.
complained of. -If it arbitrary or compulsive, it is oppressive
-Article 2231 mandates that in cases of quasi-delicts, -If it is done in bad faith, it is considered malevolent
exemplary damages may be recovered additionally, if
the defendant acted with gross negligence.
Art 2233. Exemplary damages cannot be after the claimants right to them has been
recovered as a matter of right; the court will decide established
whether or not they should be adjudicated 2. That they cannot be recovered as a matter of
right, their determination depending upon the
GRANT OF EXEMPLARY DAMAGES IS amount of compensatory damages that may be
DISCRETIONARY awarded to the claimant
-Exemplary damage cannot be claimed as a matter of 3. The act must be accompanied by bad faith or
right done in a wanton, fraudulent, oppressive and
malevolent manner
-they are merely additional to other forms of damages
(except nominal damages) which the court may or may -This rule applies to moral and temperate damages
not grant. AMOUNT OF EXEMPLARY DAMAGES NEED NOT BE
-If there is a need to set an example for the public good, ALLEGED OR PROVED
the court may grant exemplary damages. -the amount depends upon the sound discretion of the
-Although exemplary damages cannot be recovered as court when the other forms of damages have been
a matter of right, they also need not be proved. established except only nominal damages.

Art 2234. While the amount of exemplary -The amount need not also be alleged because it is
damages need not be proved, the plaintiff must merely incidental or dependent upon what the court
show that he is entitled to moral, temperate or may award as compensatory damages.
compensatory damages before the court may -The amount need not be pleaded in the complaint
consider the question of whether or not exemplary because the same cannot be predetermined
damages should be awarded. In case liquidated
damages have been agreed upon, although no PUBLIC OFFICIALS
proof of loss is necessary in order that such
liquidated damages may be recovered, -ought to act with highest degree of excellence,
nevertheless, before the court may consider the professionalism, intelligence and skill, and for failure to
question of granting exemplary in addition to the act with such, a public official may thus be held liable,
liquidated damages, the plaintiff must show that in his personal capacity, for exemplary damages.
he would be entitled to moral, temperate or Art. 2235. A stipulation whereby exemplary
compensatory damages were it not for the damages are renounced in advance shall be null
stipulation for liquidated damages. and void.
CONDITIONS FOR THE GRANT OF EXEMPLARY FUTURE RENUNCIATION OF EXEMPLARY
DAMAGES: DAMAGES IS NULL AND VOID
-Exemplary damages are merely accessory damages -impliedly, exemplary damages already determined and
granted as addition: granted by the court in a final judgment may be
1. Actual damages renounced by the winning party to a case.
2. Moral damages
3. Temperate damages

-The grant of exemplary damages is discretionary to the


court.

-It cannot be claimed as a matter of right

-While the court has the discretion to grant, it is,


however required of the aggrieved party to establish by
evidence that he is entitled to compensatory, moral or
temperate damages. However, even if it is not alleged,
as long as damages have been established, exemplary
damages may be granted.

-Where the moral and exemplary awards were


eliminated, so must the awards for the attorneys fees

REQUIREMENTS FOR AWARD OF EXEMPLARY DAMAGES

1. The may be imposed by way of example in


addition to compensatory damages, and only