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Actual/Compensatory Damages o AD must be specifically pleaded

and prayed for.

Art. 2199. Except as provided by law or by o CD may be executed pending
stipulation, one is entitled to an adequate appeal.
compensation only for such pecuniary loss o Sentimental value is not a proper
suffered by him as he has duly proved. Such element of damage.
compensation is referred to as actual or o Appellate court cannot award the
compensatory damages. plaintiff who did not appeal more
- Statutory meaning of actual or than the amount of actual
compensatory damages. damages granted by the lower
court although the actual
DE LEON: damages suffered by him
 Compensatory damages (CD) – damages exceeded such amount.
awarded to a person as compensation or o Insurance will not affect the
indemnity for, or in satisfaction of, such award of actual damages.
pecuniary loss suffered by him as he has
duly proved. Art. 2200. Indemnification for damages shall
o Pecuniary loss – loss of money or comprehend not only the value of the loss
something by which money or suffered, but also that of the profits which the
something of money value may oblige failed to obtain.
be acquired. - Entitles the complainant to recover as
o Indemnity – compensation for compensatory damages not only the
everything then on, about, or value of the loss suffered but also
belonging to the person, as well prospective profits.
as for all bodily injuries which
are proved to be the result of the DE LEON:
accident.  2 Kinds of Damages in 2200:
 Actual damages (AD) – puts the claimant o Daño emergente or damnun
in the position in which he had been emergens is the loss suffered or
before he suffered the loss or injury actual loss, or loss for what a
complained of. person already possesses.
 CD makes good or replace the loss o Lucro cessante or lucrum cessans is
caused by the wrong. They proceed the unrealized profits or the
from a sense of natural justice, and are profits which the complainant
designed to repair that of which one has failed to obtain or the failure to
been deprived by the wrong of another. receive as a benefit that which
 CD is to compensate the injured party would have pertained to him, by
for the injury caused by the wrong, just reason of breach of contract or as
and fair compensation, and only due a result of the commission of
when the wrong is established. quasi-delict, frequently known as
 GEN: CD requires satisfactory proof of ganacias frustades. Absolute
the damages alleged to have been certainty is not necessary to
suffered. establish the amount. Best
 No damages can be awarded if the proof evidence of which his case is
is flimsy and unsubstantial or they are susceptible.
remote or highly speculative. Hence,
receipts are needed.  Some rulings:
 Amount of actual damages suffered o Measure of damages should be
must be proven with reasonable degree the difference between the
of certainty, premised on competent stipulated price under the
proof and on the best evidence contract and the market price on
obtainable by the injured party which the date agreed upon for
usually means official or valid receipts. delivery.
 The burden is on the claimant to o Action must be for both present
establish his case by preponderance of and future salaries, otherwise a
evidence. subsequent suit for the salaries
 XPN: damages may be implied by law. for the remaining portion of the
(i.e, libel cases). term of employment will be
 Some rulings: barred.
o Quarterly ITR may be used as traceable to a defendant’s failure
basis for computing the average to discharge his contract
profits earned by an enterprise. obligation or such duties as are
imposed upon him by law.
Art. 2201. In contracts and quasi-contracts, the  GEN: Unilateral act, without any legal
damages for which the obligor who acted in basis or justification, of one party in
good faith is liable shall be those that are the terminating a contract makes him liable
natural and probable consequences of the for damages.
breach of the obligation, and which the  XPN: Termination is in accordance with
parties have foreseen or could have the stipulations.
reasonably foreseen at the time the obligation  XPN to the XPN: Abuse of rights.
was constituted.  Some rulings:
o Difference between the value of
In case of fraud, bad faith, malice, or wanton the goods sold at the stipulated
attitude, the obligor shall be responsible for date of delivery and the date of
all damages which may be reasonably actual delivery. Reasonable
attributed to the non-performance of the expenses caused by delay of the
obligation. carrier may be added.
- Entitles the complainant to recover all o Seller must prove any special
damages which may be attributed to the damages that he might suffered.
non-performance of the obligation.
- Applies only to contracts and quasi- Art. 2202. In crimes and quasi-delicts, the
contracts. defendants shall be liable for all damages
which are natural and probable consequences
DE LEON: of the act or omission complained of. It is not
 Obligor in GF – liable for damages that necessary that such damages have been
are natural and probable consequences foreseen or could have reasonably foreseen
of the breach of obligation, and which by the defendant.
the parties have foreseen or could have - Accused or defendant shall be
reasonably foreseen at the time the responsible in the same manner as a
obligation was constituted. contractual debtor in bad faith.
 Obligor in BF – responsible for all - Applies only to crimes and quasi-delicts.
damages which may be reasonably
attributed to the non-performance of the DE LEON:
obligation  Defendant cannot be held liable for
o Fraud, BF or wanton attitude – more than the actual loss which he has
sufficient that they may be inflicted and that a plaintiff is entitled to
reasonably attributed to the non- no more than the just and adequate
performance of the obligation. compensation for the injury suffered.
There exists a clear relation of  Some rulings:
cause and effect between such o Damages due to death resulting
non-performance and the from a crime (civil indemnity ex
damages sustained. delicto), the heirs of the deceased
 2 Kinds of Damages in 2201: are entitled to be indemnified,
o General damages are the natural without need of any proof other
and necessary result of the than the commission of the crime
wrongful act or omission asserted and that the accused was
as the foundation of the liability. responsible therefor.
They are damages which are o “Could have been earned had he
traceable to, and the probable become a doctor” is within the
and necessary result of, the category of natural and probable
injury, or which are presumed consequences of the accident.
by, or implied in, law to have o If based on a crime or delict,
resulted therefrom. common carrier’s alleged
o Special damages actually, but not diligence in the selection and
necessarily, result from the supervision of its employees is
injury, and thus, are not implied not a defense. If based on quasi-
by law. They are damages as, by delict, it is a defense.
competent evidence, are directly
Art. 2203. The party suffering loss or injury o Avoidance of multiplicity of
must exercise diligence of a good father of a suits.
family to minimize the damages resulting  Disadvantages:
from the act or omission in question. o Less accuracy in estimating
- Doctrine of Avoidable Consequences. future damages.
o Plaintiff must be a good investor
DE LEON: or he will not have the award
 It is an obligation imposed to the injured when he needs it in the future.
party  Principle of single recovery requires the
 No liability for damages which would courts to “discount to present value”.
have been avoided with ordinary care Rationale: “time” value of money that is
and reasonable expense can be enforced invested today for future needs. The
or such liability may be reduced, when amount of future loss must, therefore,
the claimant, being in a position to do be discounted to present value.
so, did nothing to avoid or minimize his  Loss or impairment of earning capacity
loss. must be shown with reasonable
 The injured party may recover expenses certainty, and not merely speculative.
or for time lost in reasonable efforts to o The amount recoverable is not
prevent or minimize his damages. the loss of the victim’s entire
 Doctrine of Avoidable Consequences: earnings. It covers only the loss
the injured victims have the sustained by the dependents or
responsibility to act reasonably to limit the heirs of the deceased
or mitigate losses incurred. consisting of the support they
 Some rulings: would have received from him
o A discharged employee is under had he not died or become
a continuous obligation to use incapacitated.
reasonable diligence to obtain o GEN: documentary evidence
other suitable employment. needed to establish with certainty
o A victim cannot recover the cost the damages sustained.
of medical treatment abroad if o XPN: (1) self-employed earning
the same could have been less than minimum wage and no
satisfactorily performed by local documentary evidence is
practitioners. available; and (2) employed as a
daily wage worker earning less
Art. 2204. In crimes, the damages to be than the minimum wage under
adjudicated may have respectively increased current labor laws.
or lessened according to aggravating or o Process:
mitigating circumstances.  Determine the extent of
- Liability for damages may be such capacity has been
respectively increased or lessened diminished;
depending on the presence of mitigating  Determine the
or aggravating circumstances. permanency of the
decrease in earning
Art. 2205. Damages may be recovered: capacity; and
(1) For loss or impairment of earning  The fixing of the amount
capacity in cases of temporary or of money which will
permanent personal injury; compensate for the
(2) For injury to the plaintiff’s business determined extent and
standing or commercial credit. length of the impairment,
- Principle of single recovery including a reduction of
the award to its present
DE LEON: worth.
 Advantages: o Life expectancy formula: 2/3 x
o Once trial and appeals have (80 – age of the deceased)
concluded, there is legal closure.
o Once that recovery is obtained,
the legal incentive for the plaintiff Art. 2206. The amount of damages for death
to stay sick or injured disappears. caused by a crime or quasi-delict shall be at
least P3,000, even though there may have o When death occurs as a result of
been mitigating circumstances. In addition: the commission of a crime, the ff
(1) The defendant shall be liable for the may be recoverable: (a) civil
loss of earning capacity of the indemnity ex delicto; (b)
deceased, and the indemnity shall be indemnity for loss of earning
paid to the heirs of the latter; such capacity; (c) AD or CD; (d) Moral
indemnity shall in every case be Damages; (e) Exemplary
assessed and awarded by the court, Damages; (f) temperate damages;
unless the deceased on account of (g) attorney’s fees and expenses
permanent physical disability not of litigation; and (h) interest.
caused by the defendant, had no
earning capacity at the time of his Art. 2207. If the plaintiff’s property has been
death; insured, and he has received indemnity from
(2) If the deceased was obliged to give the insurance company for the injury or loss
support according to the provisions of arising out of the wrong or breach of contract
Art. 291, the recipient who is not an complained of, the insurance company shall
heir called to the decedent’s be subrogated to the rights of the insured
inheritance by the law of testate or against the wrongdoer of the person who has
intestate succession, may demand violated the contract. If the amount paid by
support from the person causing the the insurance company does not fully cover
death, for a period not exceeding 5 the injury of the loss, the aggrieved party
years, the exact duration to be fixed by shall be entitled to recover the deficiency
the court; from the person causing the loss or injury.
(3) The spouse, legitimate and illegitimate - Doctrine of subrogation
descendants and ascendants of the - Applies only to property insurance
deceased may demand moral damages
for mental anguish by reason of the DE LEON:
death of the deceased.  Doctrine of subrogation – insurer, after
- Imposition of civil indemnity paying the amount covered, steps into
- In addition to the indemnity for death the shoes of the insured.
caused by a crime or quasi-delict, the  Prevents the insured from obtaining
defendant shall be liable for the loss of more than the amount of his loss. The
the earning capacity of the deceased, right exists after indemnity has been
and the indemnity shall be paid to the paid by the insurer to the insured who
heirs of the latter. can no longer go after the third party.
He can only recover once.
 The SC has increased the minimum Art. 2208. In the absence of stipulation,
amount for civil indemnity to P75,000, attorney’s fees and expenses of litigation,
independent of the financial capacity of other than judicial costs, cannot be recovered,
the defendant. except:
 Other damages are still recoverable (1) When exemplary damages are
besides the civil indemnity damages awarded;
 Victim unemployed – compensation for (2) When the defendant’s act or omission
loss of earning capacity is allowed. has compelled the plaintiff to litigate
Evidence must be presented with with third persons or to incur expenses
reasonable certainty to complete to protect his interest;
training for a specific profession. (3) In criminal cases of malicious
 Victim a minor – compensation allowed prosecution of the plaintiff;
for loss of earning capacity. Sufficient (4) In cases of a clearly unfounded civil
evidence must be presented to establish action or proceeding against the
the amount thereof. plaintiff;
 Formula: Net earning capacity = Life (5) Where the defendant acted in gross
Expectancy x [Gross Annual Income – and evident bad faith in refusing to
Reasonable and Necessary Living satisfy the plaintiff’s valid, just and
Expenses] demandable claim;
 Life expectancy formula: 2/3 x (80 – age (6) In actions for legal support;
of the deceased)
 Some rulings:
(7) In actions for the recovery of wages of o Even with stipulation, the Court
household helpers, laborers, and may limit the amount agreed
skilled workers; upon by the parties.
(8) In actions for indemnity under the o Agreement between the lawyer
workmen’s compensation and and the client cannot bind 3 rd
employers liability laws; persons.
(9) In separate civil action to recover civil o AF can be recovered when the
liability arising from a crime; defendant’s act or omission
(10) When at least double judicial compelled the plaintiff to litigate
costs are awarded; and incur expenses.
(11) In any other case where the o Discretionary upon the trial
court deems it just and equitable that court.
attorney’s fee and expenses of Art. 2209. If the obligation consists in the
litigation should be recovered. payment of a sum of money, and the debtor
incurs in delay, the indemnity for damages,
In all cases, the attorney’s fees and expenses there being no stipulation to the contrary,
of litigation must be reasonable. shall be the payment of the interest agreed
- GEN: Attorney’s fees and expenses of upon, and in the absence of stipulation, the
litigation can be recovered in these legal interest, which is 6% per annum.
instances - Interest imposed may serve as a penalty
- XPN: Express stipulation of indemnity for damages.

 2 Concepts of Attorney’s Fees:  Damage dues do not include and are not
o Ordinary sense – represent the included in the computation of
reasonable compensation paid to monetary interest.
a lawyer by his client for the legal  Rate of penalty interest payable shall be
services he has rendered to the that agreed upon, absent any
latter. stipulation, legal interest.
o Extraordinary concept – awarded  Obligation consists in the payment of
by the court as indemnity for money – interest stipulated. Legal
damages to be paid by the losing interest in the nature of AD or CD for
party in litigation to the non-compliance with an obligation to
prevailing party, and not his pay a sum of money is recoverable even
counsel, unless there is an if not expressly stipulated in writing.
agreement that the award shall  Interest due shall earn legal interest
pertain to the lawyer as from the time it is judicially demanded.
additional compensation or as  Loan or forbearance of money – 12% per
part thereof. annum as per CB Circular No. 905
 The grant of attorney’s fees, as part of  Other than loan or forbearance of
damages, is the exception rather than the money – 6% per annum as per CB
rule as they are not awarded every time Circular No. 416
a party prevails in a suit. Rationale: no  Final and executory judgment awarding
premium should be placed on the right a sum of money – 12% per annum
to litigate.
 Some rulings: Art. 2210. Interest may, in the discretion of
o Decision of the court should state the court, be allowed upon damages awarded
why attorney’s fees are being for breach of contract.
o It is necessary for the trial court Art. 2211. In crimes and quasi-delicts, interest
to make findings of fact and law as a part of the damages may, in a proper case,
that would bring the case within be adjudicated in the discretion of the court.
the ambit of the enumerated - Interest is discretionary upon the court.
circumstances to justify the grant
of the award and in all cases must DE LEON:
be reasonable.  The amount thereof cannot be left to
o Reason or grounds for the award speculation or conjecture but must have
must be set forth in the decision some factual, legal and equitable bases.
Art. 2212. Interest due shall earn legal interest mitigate the damages under circumstances
from the time it is judicially demanded, other than the case referred to in the
although the obligation may be silent upon preceding article, as in the following
this point. instances:
- Compound interest (1) That the plaintiff himself has
contravened the terms of the contract;
DE LEON: (2) That the plaintiff has derived some
 Compound interest is interest earned benefit as a result of the contract;
upon interest due. (3) In cases where exemplary damages are
 It contemplates a situation where the to be awarded, that the defendant acted
interest stipulated by parties had upon the advice of counsel;
accrued which would earn legal interest (4) That the loss would have resulted in
from the time of judicial demand or a any event; and
suit is filed for its recovery. (5) That since the filing of the action, the
 Applicable only to obligations defendant has done his best to lessen
containing a stipulation for the payment the plaintiff’s loss or injury.
of interest. - Court is mandated to reduce damages in
 If no interest stipulated, there would be these instances.
no compounding interest.
Art. 2213. Interest cannot be recovered upon  Contributory Negligence – negligence of
unliquidated claims or damages, except when the plaintiff which merely contributes to
the demand can be established with his injured. He contributes to the
reasonable certainty. principal occurrence as one of its
- Interest cannot be computed since the determining factors, he cannot recover.
amount is undetermined.  Courts may equitably mitigate damages
in the instances enumerated in 2215. It is
DE LEON: not exclusive. The court may mitigate
 Demand is established with reasonable damages recoverable in other cases
certainty, the interest shall run from the when the circumstances of the case so
time the claim is made judicially or warrant.
 Interest shall begin to run only from the Doctrine of Doctrine of
date of judgment of the court is made. Avoidable Contributory
The actual base for the computation of Consequences Negligence
legal interest shall, in any case, be on the Cannot arise until a Based upon the
amount finally adjudged. cause of action has plaintiff’s obligation
 In Eastern Shipping Lines, Inc. vs CA, the accrued which will or duty under the
Court laid down the guidelines: entitle the plaintiff to contract or its
o When an obligation is breached, at least nominal incidents.
the contravenor shall be liable for damages.
damages, which is governed by Failure on the part of He contributes to the
the Civil Code. the plaintiff to use principal occurrence
o Loan or forbearance of money – due care to prevent as one of its
12% per annum as per CB or diminish determining factors
Circular No. 905 consequences which
o Other than loan or forbearance of are avoidable in
money – 6% per annum as per CB whole or in part.
Circular No. 416
o Final and executory judgment  Both defenses can be used since the
awarding a sum of money – 12% Doctrine of Contributory Negligence
per annum happens before or during the
commission of the act, the Doctrine of
Art. 2214. In quasi-delicts, the contributory Avoidable Circumstances reduces the
negligence of the plaintiff shall reduce the amount of recoverable damages. Both
damages that he may recover. defenses serve to mitigate the
recoverable damages.
Art. 2215. In contracts, quasi-contracts, and
quasi-delicts, the court may equitably