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Torts and Damages

Session 10 Art 2195-2206, 2214-2215, Cases 72, 163-180 NPC v CA Abdullah owns fishpond at the foot of Lanao Lake. Agus Dam was subsequently constructed wherein water overflowed for failure of EEs in Agus Dam to release water during rainy season. Thus, fishpond was damaged. Art 2176. Art 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages, which are the natural and probable consequences of the act or omission complained of. It is not necessary that such damages have been foreseen or could have reasonably foreseen by the defendant. Farolan v Solmac Mktg Comp Farolan (acting commissioner of customs) and Parayno (acting chief of Customs Intelligence) has not released the shipment of OPP film waste/scrap for making fibers and films. Customs claim that the products is of higher class considered as polypropylene film which is restricted by LOI. BOI is in conflict in their opinion. Solmac sued Farolan and Parayno claims not releasing it is not done in good faith. RTC: damages in their private capacity. But Farolan not liable, first name is different, must be Ramon not Damian. GOOD FAITH refers to a state of the mind which is manifested by the acts of the individual concerned. It consists of the honest intention to abstain from taking an unconscionable and unscrupulous advantage of another. Good faith is always presumed and it is upon who alleges the contrary that the burden of proof lies. Mistakes concededly committed by public officers are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith. Saba v CA 1934: Pedro de la Cruz. 1949: lease public lot for 15 years. Upon death of Pedro, children sold their share to Emil Ong and Jose Ongchuan. 1966: share of Lourdes Agbayani was sold to Saba. Saba wrote to Emil and jose that all rentals shall be delivered to him but no avail. She sued them. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings and social humiliation. It is not enough that injuries have arisen, it is essential that they have sprung from wrongful act or omission, fraud, malice or bad faith which was the proximate cause. The law could not impose a penalty on the right to litigate. One who exercises his rights does no injury. damnum adsque injuria rule. Saba was in good faith in filing collection suit. A person may have erred but error alone is not a ground for moral damages. Whatever worries, anxieties and expenses respondents may have suffered were only such as are usually caused to a party haled into court as a defendant in a litigation. Hulst v PR Builders Dutch spouse bought a residential lot but PR Builders has not developed lot. Spouse to rescind contract to sell and sue PR. In pari delicto. An exception to such rule where, even as the intent to circumvent the constitutional proscription on aliens owning real property was evident by virtue of the execution of the Contract to Sell, such violation of the law did not materialize because the buyer cased the rescission of the contract before the execution of the final deed transferring ownership. Under Art 1414, one who repudiates the agreement and demands his money before the illegal act has taken place is entitled to recover. Hulst is entitled to the recovery only of the amount of P3,187,500, representing purchase price paid to PR. No damages may be recovered on the bases of a void contract; being nonexistent, the agreement produces no juridical tie between the parties involved. Hulst is not entitled to actual, interest, moral and exemplary damages and attorneys fees. Choa Tek Hee v Phil Publishing Co Manila Times published an article charge P193k was spent in administering P200k. Chinese of Cebu files complaint against wealthy Manila Merchant taken from the file of clerk of court of CFI. Tek Hee, supposed to order hardware products from US but bad reputation because article. ACTUAL actual pecuniary damages sustained and not damages for injury to his feelings and reputation. PECUNIARY damages in tort where the injury is clearly proved, but not the exact amount of damages. The very nature of injuries on such could not be fully compensated by money damages. Pecuniary damages for LOSS of ANTICIPATED PROFITS must not be only capable of proof, but must be proved with a reasonable degree of certainty both in nature and cause from which they proceed . No recovery can be had for loss of profits which are uncertain, contingent, conjectural, or speculative, it must be borne in mind that since profits are prospective they must be uncertain and problematic in some extent, and on that account or on account of difficulties in way of proof, a person complaining of breach of contract cannot be

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deprived of all remedy. Damages must be established by competent evidence the amount of such, courts cannot give judgment for a greater amount than those actually proven. Exception: ill will or express malice punitive damages are allowed in discretion of court. The article was false, published with intent to injure the plaintiffs feelings, and to degrade him in public estimation- implied malice. If the charge complained of is injurious and no justifiable motive for it is apparent, malice is inferred from the falsity of the charge. Mendoza v PAL Mendoza, owner of theatre in Naga, rented a movie, Himala ng Birhen in time for Maskarra festival. It would be shown on Sept 18-19. LVN Pictures sent it thru PAL on Sept 17, it loaded to the plane but sent back to Manila. It was received by Mendoza only on Sept 20. Sued to recover 3k damages loss of profit. Art 2201 damages only those foreseen at the time of perfection of contract. PAL could not foresee that Mendoza suffered damages in the delay in delivering the film his plans to exhibit on fiesta were not called to PALs attention . Lasam v Smith Smith owner of car garage, Lasam rented one with their licensed driver. Driver let his unlicensed assistant to drive, car fell on embankment. Conflict if reckless driving or defect on steering gear. Smiths liability to Lasam was contractual, Smith is liable unless it is shown that the accident was due to a fortuitous event. Expenses incurred as a result of accident greatly exceeded the amount of damages awarded since damages resulting from negligence in the fulfilment of a contractual obligation, the courts have a discretionary power to moderate the liability according to the circumstances. Ilao-Oreta v Ronquillo R check-in in hospital for laparoscopic operation to know the cause of her infertility. IO failed to arrive as scheduled still on return filght form Hawaii. She forgot to consider time difference. No gross negligence. Common human knowledge that excitement attends the preparations for the honeymoon. Her negligence could then be partly attributed to human frailty which rules out its characterization as gross. The doctors negligence not being gross, the spouses are not entitled to recover moral damages. NO Exemplary damages absent of wanton, fraudulent, reckless, oppressive or malevolent manner. NOR attorneys fees not compelled to litigate and incur expenses to protect their interest The list of expenses cannot replace receipts when they should have been issued as a matter of course in business transactions, as in the case of purchase of gasoline and of food. Algarra v Sandejas plaintiff personal injuries commission agent about 20 regular customers. Lost 4 customers. WON value of loss which she suffered can be extended to pain which she experienced by reason of accident. Reparation, to be efficacious and substantial, must rationally include generic idea of complete indemnity. Fraud is not an element. Only when there exists a natural and true relation between such nonfulfillment and the damages, whatever reason there may be to demand them on another account. FORESEEABILITY if such result and the chain of events connecting it with the act complained of had occurred to his mind, the same would have seemed natural and probable and according to the ordinary course of nature. MEASURING damages no distinction is made between damage caused maliciously and intentionally and damages caused through mere negligence in so far as the civil liability of the wrongdoer is concerned. Defendant to repair damage done to put plaintiff in the same position. Exemplary or punitive damages malicious or wilful intention to cause damages aggravating circumstance. Nominal damages only a technical violation of the plaintiffs rights resulting in no substantial injury to him. Mere noncompliance with the obligations of a contract is not sufficient to sustain a judgment for damages. It must be shown that damages actually existed. A release or compromise for personal injury sustained by negligence attributed to the defendant company was held a bar to an action for the recovery of further damages. Performance not proven to be destructive or injurious and generally acquiesced in by society for so long a time as to have ripened into a custom, cannot be held to be unreasonable or imprudent. The measure of damages is an ultimate fact, to be determined from the evidence submitted to the court.

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Profits are not excluded from recovery because they are profits; but when excluded, it is on the ground that there are no criteria by which to estimate the amount with the certainty on which the adjudications of courts, and the findings of juries should be based. Mere fact that loss cannot be ascertained with absolute accuracy, is no reason for denying claim. Raagas v Traya Raagas 3 year old son was ran over by a truck. But Traya claims truck was fully loaded and running low speed. Actual damages must be proved, courts cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend on actual proof that damages had been suffered and on evidence of actual amount. No damages of any kind unforeseen event or fault of boy or his parents Angeles v Lerma Lacson v Quisumbing L arrived at airport to attend business & hired Dollar Taxi as carrier. It was owned by Q, bumped with other private car. L suffered injury. TRANSPORTATION EXPENSES in motor vehicle mishaps resulting in injury of passenger, actual expenses incurred in shuttling back and forth between places to confer with lawyer, filing case, and attending trials, are the natural and probable consequences of carriers breach of obligation Art 2201 CC. No Exemplary damages- defendant is mere owner and operator of common carrier and does not participate in or ratify the negligent act of his driver Associated Realty Devt Co v CA Tin purchased lot 54 and estero lot constructed house 72 sqm but found that estero lot is government property. Sued Tin. If one cannot obtain the thing agreed upon, through no fault of his, but through the fault of the obligor, its stands to reason that he should be indemnified the reasonable value of the thing. Indemnification for damages comprehends not only the value of the loss suffered, but also the profits which the obligee failed to obtain, had he sold it, at the time. Lucro cessante price which the thing could have commanded on the date that the obligation should have been fulfilled and was not difference in the price from date of acquisition to the presentation of complaint. Cariaga v Laguna Tayabas Bus Co C 4th year medical student, injured when bus which he is in crossed train tracks and bumped engine of the train. Unconscious for 35 days. Helpless condition physically and mentally. -guilty of breach of contract but only liable for actual damages not moral damages. Actual damages income that C could have earned if he should finish the medical course and pass the corresponding board exams must be deemed to be within the same category because they could have reasonably foreseen by the parties at the time he boarded. No moral damages because plaintiff spouse not the party to the contract of carriage nor can invoke quasi-delict since they were not themselves injured as a result of the collision between the bus and train. Puentebella v Negros Coal Co A person injured by breach of contract cannot recover damages for any loss which he might have avoided with ordinary care and at reasonable expense. Where plaintiffs had entered into a contract with a corporation which was subsequently dissolved and whose liabilities had been assumed by another person who, through misleading representation and failure to carry out the contract, caused losses to plaintiff he must share the damage. Lemoine v Alkan mechanic illegally dismissed claims incompetent and insubordinate, absent w/o permission. But ER offered to come back but he denied demanding higher wage Action based on a wrongful discharge is one to recover damages for breach of contract. EE should have accepted the offer even under old contract, as long as it does not involve a renunciation of any right already accrued. Mere acceptance of the offer of defendant would not constitute a waiver of his right to recover damages for the time intervening from the date of the wrongful discharge to the time when he returned to work under the new offer which would consist in the loss of wages for that period, and any other damages which might have been sustained and which plaintiff could prove. RATIO: to require an EE to labor if he is given the opportunity; and it does not permit him to remain idle and collect his wages nevertheless when he has an opportunity to return to his former employment. The damages in an action for wrongful discharge are prima facie the amount of wages for the full term. ER, when he wrongfully

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discharges an EE, becomes, with respect to the EE, a debtor in bad faith. De Castelvi v Cia General de Tabacos DC was permitted to cut woods in hacienda but when Got became the Manager again, prevent him from taking cut wood and piled in different places on the hacienda. No damages against company DC did nothing tending to prevent said damages or at least to minimize them, when he could have done so by appealing to the officers of the company for relief. Company conceded him all the facilities in order that he might comply with his obligations, entered into during the time said concession was in force, to furnish various firms and persons with firewood. Borromeo v MERALCO B about to ride electric car after letting his 2 children ride, he fell off, dragged and rear wheels passed over his left foot. It was amputated. He was a 45-year old chief marine engr with a salary of 375. He was awarded costs of expenses incurred but not for the amputation of his left foot. 2 kinds of damages: damages for the loss actually sustained and for the profit which the injured party may have failed to realize. His incapacity to continue in the practice of his profession has put an end to one of his activities and has certainly destroyed the principal source of his professional earning in the future. De Caliston v CA driver of a bus ran over D a USVA pensioner who died. Only daughter sued. Award of pension to deceased accident victim which was lost by his death sure income that was cut short by defendant. Award of pension of 1 year. Civil liability of bus owner for death caused by his driver, subsidiary, and insurance proceeds paid to heir of victim by insurance credited in favor of erring driver. Session 11 Art 2195-2206, 2214-2215, Cases 181-200 Shauf v CA Shauf is a Filipina, married to a US Air Force, applied a vacant position in Clark Air Base as a guidance counsellor. She Masters in UST, Doctoral degree in behavoir and counselling psychology, civil service eligible, worked for 4 years as guidance counsellor in Clark Air Base. Despite such qualifications, his application was refused and instead hired an American living in Maine. Shauf sued them for discrimination and unequal employment opportunities. moral damages, X actual/compensatory damages. Shauf never acquired any vested right to the salaries pertaining to the position as guidance counsellor since she was never appointed to such. Damages which are merely possible are speculative . In actual damages, the court cannot rely on speculation, conjecture or guesswork. Without the actual proof of loss, the award of actual damages is erroneous. Alcantara v Surro & Meralco (1953) A died while attempting to board a bus of Meralco when it was hit by another bus of same company. VP of family corp Factors considered in fixing award 1. Tender age of children 5-13 years old 2. Age and life expectancy of deceased 3. State of health at the time of death 4. Earning capacity of deceased 5. Actual pecuniary damages 6. Pain and suffering of deceased and plaintiffs 7. Pecuniary situation of party liable not less than 6k standard amount of award to heirs of deceased arising from criminal offenses. (other cases includes patrimonial and moral damages physical condition and social standing of injured persons) RPC controlling when civil liability arising from crimes - Art 104: restitution, reparation of damages, indemnification of consequential damages - Art 107: indemnification of consequential damages caused to: injured party and those suffered by family or third person by reason of the crime No exact rule for measuring human life amount depends on facts and circumstances of each case. The life expectancy of deceased or beneficiary, whichever is shorter. Other factors: 1. Pecuniary loss to plaintiff or beneficiary 2. Loss of support 3. Loss of service 4. Loss of society 5. Mental suffering of beneficiaries 6. Medical and funeral expenses

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Introduction of mortality tables is not absolutely essential to prove the life expectancy of a deceased or beneficiary, and if introduced they are not conclusive, and the jury are not bound by them. It depends largely on state of heath, habits, manner of life, social condition. Computed 4 year basis. Civil liability of defendant must be considered but those also of the employer. Bonus is merely a privilege that depends on the financial condition of the ER & not a matter or right, X factor in determining indemnity Junio & Solaria v Manila Railroad (58 phil 176) J & S passengers of a car that hit the train while the car was crossing the railroad. S injured his head, treatment amounted to 300. While Js left leg was amputated. She was a dancer earning 6-8/twice or thrice a week. 2,500 damages & 500 for treatment. Soberano v Manila Railroad (18 scra 732) S vending merchant, passenger in bus, fell in stone embankment injuries left her permanently disfigured, walks with stiff neck & no full freedom of arms, pain from both sides of cheek, loss many teeth. Annual net income of 1,500. Loss of earning capacity-moral damages 15k. Marchan v Mendoza Mendoza and family suffered multiple injuries. Father Mendoza, 26 years old, Asst Supervisor and professional boxer. He was paralyzed. They boarded a bus of Phil Rabbit driven by Marchan which fell into a ditch very high speed and saw a parked 6x6 truck ahead. Compensatory damages 40k 100/month as Asst Supervisor; 100/month as boxer lost use of limbs Exemplary damages given even if not specifically sought of by plaintiff in complaint, as long as prayed for indemnification for damages. When plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises, in effect, therefore, the court is called upon the exercise and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs complaint. - Need not be proved, need not be alleged, merely incidental or dependent upon the award of compensatory damages. But they cannot be recovered as a matter of right, their determination depends upon the discretion of the court. Pleyto v Lomboy (2004) Phil Rabbit bus driven by Pleyto had a head-on collision with the car boarded by Lomboy. R.Lomboy died while his eldest daughter suffered injuries. Failure to present documentary evidence to support a claim for loss of earning capacity of the deceased need not be fatal to its cause. Testimonial evidence suffices to establish a basis for which the court can make a fair and reasonable estimate of the loss earning capacity. Factors considered are: 1. Life Expectancy - # of years victim would have lived 2. Total earnings less expenses necessary in the creation of such earnings and less living and other incidental expenses. Rate of loss sustained by heirs of the deceased NET EARNING CAPACITY = =LIFE EXPECTANCY x [GROSS ANNUAL INCOME (GAI) LIVING EXPENSES] = [2/3 (80-age at the time of death)] x [GAI (50% of GAI)] = [2/3(80-44)] x [96k (50% of 96k) = P 1,152,000 ACTUAL damages must be competent proof of the actual amount of loss, must be duly supported by receipts. But thought incapable of pecuniary estimation, it is in the category of an award designed to compensate the claimant for actual injury and are not meant to enrich complainant at the expense of the defendant. - Awarded to enable the injured party to obtain means, diversions, or amusements that will serve to alleviate moral suffering he/she has undergone, by reason of the defendants culpable action. It is aimed at restoration, as much as possible, of the spiritual status quo ante; thus is must be proportionate to the suffering inflicted. People v Barlaan (2007) D & S was invited for a drink of the 3 suspects Barlaan, Esquillon & Domingo. When bill of P200, S contributed a little and asked E to pay. E enraged, took out his knife and the 3 chased d & s. E & D stabbed S while B prevent him from escaping. Civil indemnity P50K mandatory and granted to heirs of victim without need of proof other than the commission of crime Moral damages P50k awarded in criminal offense resulting in physical injuries, including death Actual damages P43,306.50 supported by receipts.

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Indemnity for loss of earning capacity P2,040K- Art 2206CC GR: documentary evidence is necessary. Exception: testimonial evidence would suffice: 1. a. victim- self-employed- earning less than the minimum wage under labor laws b. line of work, no documentary evidence is available judicial notice 2. employed as daily wage worker earning less than minimum wage under current labor laws. 10k/month Villa Rey Transit v CA (1970) Quintos passenger of bus owned by Villa Rey, hit bullcart with bamboo pole at the end, hit and windshield and penetrated in Qs face. Q died. 29 years old. Life expectancy 33 1/3 years. Different in Alcantara v Surro where 4 year basis was used. None of parties questioned the propriety of the 4-year basis. LOSS or DAMGES sustained by respondents as dependents and intestate heirs of the deceased consists not of the full amount of his earnings, but of the support they received or would have received from him had he not died in consequence of the negligence of petitioners agent. Support = earnings necessary expenses of his own living. Only NET earnings, X GROSS earnings Davila v PAL plane crash on Nov 1960. Davila was one of 33 passengers. Dec 19 letter of condolence from PAL. Pilot did not intercept airway amber I as he was supposed to do. It was a violation of air-traffic rules, weather was clear and accident was directly attributable to such. D was a manager of a radio station -8,400/yr; lawyer & junior partner of father =3,600/yr; farming-3,000/yr. 30 yrs old. Life expectancy of 33 1/3 Computation of loss of earning capacity see Villa Rey Transit case Art 2206(1)- liable for loss of earning capacity of deceased to damages for death caused by crime or quasi-delict. Art 1764 made it expressly applicable to death of a passenger caused by the breach of contract by a common carrier. Parents entitled to moral damages for mental anguish long period of uncertainty & suffering 10k Exemplary of 10k Art 2332 only awarded in contracts and quasi-contract if defendant acted in wanton, fraudulent, reckless, oppressive or malevolent manner. People v Baguio (1991) Paulino, 33 yrs old, stabbed by men, 23 stab wounds. Businessman, brgy tanod, pook leader. 10pm, 910 people passed by, 2 were suspect of theft in the neighbourhood. Statement after stabbed to get even with Bebot and Frankie. The penalties of resclusion perpetua and life imprisonment are 2 different penalties; reclusion perpetua entails imprisonment for at least 30 years and carries with it accessory penalties; whereas life imprisonment has no definite extent or duration, and does not carry with it accessory penalties. Civil liability increased from 12k to 50K conforming to current doctrine. Heirs of Raymundo Castro v Bustos (1969) Bustos was convicted of homicide for killing Castro, 2 mitigating circumstance passion or obfuscation & voluntary surrender. The law regarding the items of damages that are recoverable in cases of death caused by a crime, whether the claim therefor is made in the criminal proceedings itself or in a separate civil action items are identical in both procedures except with attorneys fees and expenses of litigation which can be awarded only when a separate civil action is instituted . Art 2204 does not warrant a complete deletion of said item of damages. Heirs are entitled to the following when death occurs as a result of a crime: 1. indemnity for the death of the victim of the evidence 12k without need of evidence and even if mitigating circumstance is present 2. loss of earning capacity item may be considered included in the prayer for actual damages and for other just and equitable reliefs art 2206 & 1764 3. moral damages mental anguish amount fixed by court. Can be recovered even by illegitimate descendants and ascendants of deceased in case of death, once heirs claim such and are able to prove they are entitled thereto, it becomes the duty of the court to make the award. 4. exemplary damages attended by one or more aggravating circumstances. Fixed by court separate from fines 5. attorneys fees and expenses of litigation actual amount (only when separate civil action has been filed or exemplary damages are awarded) 6. interests in proper cases 7. emphasized that indemnity for loss of earning capacity and moral damages are recoverable separately from and in

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addition to fixed sum in no. 1. Theses damages may be subject to Art 2204. Art 2206 also apply to death of a passenger caused by breach of contract of common carrier. Same rules on damages are generally to be observed, whether death results from a crime or a quasidelict or a breach of contract of carriage. GA Machineries v Yaptinchay GAMi offered to sell a brand new Fordson Dieses Engine to Y. But after a week, malfunction occurred. It was revealed that the engine motor number was tampered. X brand new. Claims lost 54k. Every travel earns P396.88 freight truck business. Even though defendant does not dispute the amount of actual damages does not necessarily imply that the other party outright is entitled to the award of damages. Art 2200, 2201. 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 all remedy for that reason alone. He must produce the best evidence of which his case is susceptible and if that evidence warrants the inference that has been damaged by the loss of profits which he might with reasonable certainty have anticipated but for the defendants wrongful act, he is entitled to recover. Average actual profits should have been presented. Vda De Javellana v CA DJ granted an option of lease to Mobil, to be exercised in 30 days. After a year, DJ leased it to Shell. Mobil sued and filed injunction against them. Is DJ entitled to damages for wrongful filing of a case against her and the issuance of injunction. Liability of respondent for filing a case and improvident issuance of writ of preliminary injuction at instance of respondent. Rentals: 792k + interest, attys fees and expenses of litigation Bautista v Maxino M sold hacienda, fishpond & all its tools and equipments to B for 7k and B assumed the mortgage on said lot to DBP. B sold it to San Jose Devlpt Comp. M again sold it to Guballa, co-resp. G was indebted B. B sued G for conspiracy to defraud her as creditor and rejoinder of M. Failure of vendee of hacienda and fishponds to pay the alleged additional purchase price which resulted in delay in operations of a rural bank will not justify award of damages where no evidence of proprietorship of the rural bank, its projected start of operations, and volume of business was shown. The fact that the vendor of a hacienda and fishpond with mortgage thereon in view of the alleged failure of the vendee, who assumed said mortgage obligation, to pay the same will not justify reimbursement of said expenses as it was not necessary for the vendor to do so. No reimbursement of salaries where such sum was owing to workers before hacienda was sold and was not assumed by vendee. No recovery on the value of fruit gathered by vendee on the land sold to him and after said sale even if the vendee has not complied with the payment of the mortgage indebtedness on the land which was assumed by said vendee. Enjoyment of fruits of property is an attribute of ownership. Circumstances, such as fact that vendor (claimant for damages in counterclaim) sold the land twice, to the vendee-plaintiff below and to another person, and that said vendor had a part in getting another to buy the hacienda in question from the vendee-plaintiff which sale did not fully materialize, will not justify award of moral damages against plaintiff for filing complaint. Rejoinder is not motivated by malice or spite. Benguet Elec Coop v CA Bernardo was a meat vendor. Jan 14, 1985, first to come to a jeep full of slaughtered pigs. Upon stepping on the jeep, he had sort of epileptic seizure. The antenna of the jeep tangled with the hanging open electric wire of Benguet Elec Coop (7 yrs). B was electrocuted. He died. 33 yrs old. Life expectancy of 31 years was decreased to 25 years considering the nature and quality of his work. P150 daily or P54k annual gross income. Exemplary damages 20k - need not be pleaded in complaint, cannot be predetermined. It is awarded at the courts discretion, it can be merely asked to be fixed by courts. It need not be proved determination is contingent upon or incidental to the amount of compensatory damages that may be awarded to claimant. - Imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. It is awarded as a deterrent to socially deleterious actions. In quasi-delicts act or omission is with gross negligence . Precautionary measures were not taken by BEC in wanton disregard of possible consequences.

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Moral damages 50k not intended to enrich the complainant but to serve to obviate his/her spiritual suffering by reason of the culpable action of the defendant. Its award is aimed to restoration of spiritual quo ante, and it must be commensurate to the suffering inflicted. Legaspi Oil Co v CA Legaspi Oil bought copra from Oseraos, resp thru its different agents at prevailing market price at the perfection of contract. There were many contract but O failed to deliver all. L was forced to buy copra at the open market for the balance that O failed to deliver at a higher price. He lost P46,152.76. O did not submit evidence to rebut the testimony of said witness and the fact that the estimate of the expenses is approximate of the expenses make said estimate inadmissible. It was incumbent upon O to submit evidence in rebuttal, or at least ascertain the amount of different items in cross-examination. In case of fraud (voluntary or wilful act naturally arise from act or omission), bad faith, malice or wanton attitude, the guilty party is liable for all damages which may be reasonably attributed to the non-performance of the obligation. Globe Mackay Cable & Radio Corp v Barrios Globe failed to deliver a cable gram form Mercy Hosp, NY admitting Olga B for a rotating internship. As a result, the position was given to someone else. But other cable comp, Eastern Extension was able to deliver such. It caused financial difficulties due to loss of earning capacity for 6mons. Failure to deliver cablegram gross negligence. Globe us a quasi-public corporation affected with public interest, that respondents would have had to incur living and sundry expenses, thereby reduction the net earning which would have received ($2,703), and that wife succeeded in securing another better paying job 6 mons after. Moral 5k, Exemplary 5k, attorneys fees 8k. Floreza v de Evangelista E borrowed P740 from F. F was allowed to build a house of strong materials worth 1k in Es lot. E sold lot to F for 1k (740 debt & 260 cash) with right of repurchase of 6years. Repurchased lot but F refused to vacate it without paying him the value of house built on the lot. E invoked rentals for a year No right of retention to F since house was constructed before buying the lot. Only usufructuary. Damages in form of rentals should be given for continued use and occupation of the property. Perfecto v Gonzales Vista, public school teacher assigned as a poll clerk. P lost candidate filed an administrative complaint against the BEI incldg V for violation of rules of COMELEC allowed voters to use carbon papers in preparing their ballots. But V never participated as poll clerk because she was sick and was substituted by Reyes. V sued P for damages, filing false charges to harass or degrade her. P claims only done good faith and to bring justice. Imposition of compensatory damages upon defendant tantamount to placing a prohibitive premium upon filing of complaints against public officials for misconduct in office. Filing not malicious. ACTUAL or compensatory damages recoverable because of pecuniary loss in business, trade or property, profession, job or occupation, must be proved; otherwise, if proof is flimsy and nonsubstantial, no damages. Actual proof of damages alleged to have been suffered. Rodriquez Luna v IAC Luna died while in go-cart practice area when it collided with Toyota car driven by de la Rose unlicensed, 13-yr old. L bus exec. Being engaged in go-kart racing will not merit reduction of oneslife expectancy. Not a dangerous sport low powered vehicle CA erred in increasing the deceaseds possible expenses without increasing his likely revenues in computing damage awards. CA decreased LE from 30years10years. Increased personal expenses from 20k-30k. Attys fee may be allowed legal interest from time of trial courts decision damages in quasi-delict. Equity not applied when it will not serve justice. Fathers liability for damages made bi his son who later become emancipated but is not abroad and could hardly support himself cannot be merely subsidiary. Luna 33 yrs old life expectancy -30 years, annual net income of 55k (75k annual gross income P20k annual personal expenses). Pres & GM of Rodlum, GM of Esso Greenhills Serv Center; Asst Man of Jose Rodriguez Lanuza Sons; Direcor of Steadfast Investment Corp, chairman & treasurer of Greenhills Industrial Corp, VP of Oasis, Inc. For only 3 years, his income increased, high potential to increase for next 15 years.

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Herbosa v CA (2002) H sued for damages for breach of contract. They hired PVE, division of Solid Corp, to record their wedding ceremony. Through their utter disappoint, PVE failed to record of problems in the equipment. A writ of execution was issued, levied personal properties of Solid Corp. On the day of auction sale, an injunction was issued but was delivered late. It was sold & Solidbank sued for damages moral, exemplary and attorneys fees. The claim for actual, moral and exemplary damages as well as attorneys fees must each be independently identified and justified. MORAL damages -75k - cannot be recovered in an action for breach of contract because such an action is not among those expressly mentioned in Art 2219 of NCC. However, it is recoverable if breach was wanton, reckless, malicious or in bad faith, oppressive or abusive. Exemplary damages 40k a warning to all entitled to observe good faith and due diligence in fulfilling contractual obligations Attorneys fees of 10k

Session 12 Art 1169, 1175, 1226-1230, 1956, 1959-1961, 2209-2213, 2226-2228, CB Circular Nos. 416 and 905, Cases 201-223, 230 NPC v National Merchandising Corp NPC purchased crude sulphur form Maria Cristina Fertilizer Plant from a NY firm thru NAMERCO. The contract provided for liquidated damages in case of

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delay in delivery. It also stipulated that the non-availability of vessel does not constitute as a fortuitous event, w/c does not exempt seller from liquidated damages. Namerco filed a surety bond of 45k. NY firm does not want to include the provision of nonavailability of vessel but Namerco still signed the contract. The sulphur was failed to be delivered because of no available vessel and subsequently, the plant stopped the production of sulphur. NPC sued Namerco & surety. An agent w/c does not disclose to a third person wishing to purchase crude sulphur from its principal, that the principal told it via cable that it should not sign the sales contract unless it wish to assume sole responsibility for the shipment, exceeds the limits of its authority in subsequently signing the contract. An agent who exceeds his authority is personally liable for damages. Art 1403 does not apply in the case at bar when contract is being enforced as to damages against the agent itself for doing what it did without authority. Imposition of interest on principal as of time the complaint was filed is not just where litigation prolonged through no fault of defendant. (1957, now 1982) Where liquidated damages are agreed upon the same should be enforced instead of awarding only nominal damages. Liquidated damages agreed upon may be equitably reduced. Reduced equivalent to the bidders bond or 10% selling price of sulphur. Polytrade Corp v Blanco to recover the purchase price of rawhide delivered. Blance questions the grant of RTC of interest of 1% monthly since no such stipulation appears in sales confirmation orders. SC however ruled that interest is indicated in trust receipts. Blanco also protests that attorneys fees worth 25% of total principal indebtedness as exorbitant. SC: attorneys fees here are in the nature of liquidated damages ad the stipulation therefor is aptly called a penal clause. Such stipulation does not contravene law, morals, or public order, it is strictly binding upon defendant. Sy v CA Distributorship Agreement between Sy and Luzon (producer). He would supply Sy 60 metric tons monthly of ipil-ipil to last for 2 years. The contract stipulates that when a violation of contract occurs, the other shall warn to correct such within 60 days. Failure to correct, a notice of 60 days shall be given for final termination of contract and right to liquidated damages of P20k. For 3 mons delivered but short of 60MT. Sued to cancel without giving notice. SC: both parties violated contract. Liquidated damages was equitably reduced. 10K Albert v University Publishing Co Albert, author of RPC of Philippines, agreed with resp for exclusive printing of his book. UP will pay 30k for 8 installments but A must deliver the manuscript on the specific date. The first instalment given not in full, UP claims justified since A failed to deliver manuscript. It is stipulated in the contract that right to compel for specific performance or recession with interest. In reciprocal obligations, where one of the obligors failed to comply with what is incumbent upon him, the injured party could choose between requiring specific performance of the obligation or its resolution with indemnity for losses and payment of interest. In the case at bar, the stipulation in the contract may be considered as liquidated damages to be paid in case of breach of contract. Reduced to P15k. Joes Radio & Elec v Alto Elec Corp Bolinao Elec Corp dealership agreement with Joes Radio & Elec Supply. BEC will deliver 500 TV sets. It stipulated if BEC will fail to comply, the 1/3 of the price which is deposited would be returned upon demand, with interest at the rate of 6% per annum, plus damages equivalent to 20% of total cost of 250 TV sets. 1 st half delivered but second was not. Liquidated damages - P39,780 -20% of total cost of 250 TV sets (at price of P1,134/set less 30% discount) plus legal interest from date of filing of the original complaint. Penalties and liquidated damages are dealt with separately, nevertheless, the fundamental rules governing them still remain basically the same, making them subject to reduction where equity so requires. Where there is partial or irregular performance in a contract providing for liquidated damages, it can be said, in view of the foregoing cited provision of the Code, that the court may mitigate the sum stipulated therein since it is to be presumed that the parties only contemplated a total breach of the contract. And this is usually so because of the difficulty or sometimes inability of the parties to ascertain or gauge beforehand, the amount of indemnity in case of a partial breach. It is not always the calling of a sum, to be paid for breach of contract, liquidated damages which makes it so. In general, it is the tendency and preference of the law to regard a sum, stated to be payable if a contract is not fulfilled, as a penalty, and not as liquidated damages, because then it may be apportioned to the loss actually sustained. Whether divisible in its nature or not, it was

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Torts and Damages


in fact divided by an offer and acceptance of part performance. It is like the case of an obligation to perform two more independent acts, with a provision for single liquidated damages for nonperformance; if one is performed, and not the other, it is not a case for the recovery of the liquidated damages Country Bankers Ins Corp v CA OVEC, lessor and Sy, lessee of theatres for 6 years. After 2 years, OVEC demands for repossession, made arrears in monthly rentals & non-payment of amusement taxes. OVEC regained possession. A provision which calls for the forfeiture of the remaining deposit still in the possession of the lessor, without prejudice to any other obligation still owing, in the event of the termination or cancellation of the agreement by reason of the lessee's violation of any of the terms and conditions of the agreement is a penal clause that may be validly entered into. A penal clause is an accessory obligation which the parties attach to a principal obligation for the purpose of insuring the performance thereof by imposing on the debtor a special presentation (generally consisting in the payment of a sum of money) in case the obligation is not fulfilled or is irregularly or inadequately fulfilled. Art 1226 (1), 1228. Exceptions: purpose: to punish obligor 1. When there is a stipulation to the contrary 2. Obligo is sued for refusal to pay the agreed penalty 3. When the obligor is guilty of fraud Penalty cant substitute for 100k (a month increase in rental) damage resulting from injunction against 290k cash deposit. Bond shall and may answer only for damages w/c OVEC may suffer as a result of the injunction. The arrears in rental, unmeritted amounts of amusement tax delinquency, 100k, atty fees- damages sustained not as a result of injunction. Limjoco v CTA Limjoco received 5k as earnest money and obliged to sell to Tan 3,148 sqm lot for P85k within 60 days. Failure to perform such, L will return 5k within 15 days after lapse of 60 day period, otherwise he shall be liable for additional 5k. L undertook to arrange with RFC the assumption of mortgage lien but failed to do such. L claims it was because Tan refused to have his credit rating investigated. He also submitted a draft to deed of sale but Tan refused to accept. But it was shown that L was not the sole owner, he was a widower and his children are co-owners. Failed to get their signatures. L claims liquidated damages is immoral and iniquitous. SC: petitioner was under no compulsion to enter into such stipulation. It could not be assailed when the ground of being iniquitous or unconscionable was not mentioned in his brief, in the absence of other considerations. L & T are both property owners and men of affairs who are presumed to know how to protect their interests in dealing with other parties. Lambert v Fox John R. Edgar & Co, stationery and book store, its creditors, including L & F, agreed to take over the business & accept stocks as payment of debt. L & F became the largest stockholder. They made an agreement not to sell the stocks until after 1 year, failure to observe such, the party will pay 1k as liquidated damages. After 9 mons, Fox sold it to E.C. Mc Cullough, its strong competitor. RTC claims agreement it only good until the corporation reached a sound financial basis. GR: Parties who are competent to contract may make such agreements within the limitations of the law and public policy as they desire, and that the courts will enforce them according to their terms. Exceptions: court is authorized to intervene for the purpose of reducing a penalty stipulated in the contract to the extent of benefits - when the principal obligation has been partly or irregularly fulfilled and the court can see that the person demanding the penalty has received the benefit of such or irregular performance. There is no difference between a penalty and liquidated damages, so far as legal results are concerned. Whatever differences exists between them as a matter of language, they are treated the same legally. Primary purpose: to avoid proving the damages to recover sum stipulated. Not an illegal stipulation nor restraint of trade since it protects the corporation and has a reasonable length of time. Lawyers Coop v Tabora Tabora bough Amjur (48 vol plus 4 vols of AmJur Gen Index). On the night delivered, the building where it was stored, burned. T refused to pay the balance since loss is force majeure and he still not the owner until full payment was made. RTC: T to pay balance + legal interest + 25% of such as attys fees (liquidated damages). RTC misapprehended, 25% of amount due as attorneys fees, but must be as liquidated damages, which is in line with an express stipulation of the contract. No liquidated damages in

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absence of bad faith. A debtor should not be made to pay liquidated damages when his denial to pay the balance of the account is not due to bad faith. Ligutan v CA L secured a loan of 120k with interest of 15,189%/annum and penalty of 5% every month of outstanding balance, and 10% of total amount as attorneys fees from Security Bank. L only paid P5,584. PENALTY CLAUSE an accessory undertaking to assume greater liability on the part of an obligor in case of breach of an obligation. Purpose: to strengthen the coercive force of the obligation and to provide, in effect, for what could be the liquidated damages, resulting from such a breach. A stipulated penalty may be equitably reduced by the courts it is iniquitous or unconscionable or it the principal obligation has been partly or irregularly complied with. It is a question that can be partly subjective and partly objective. It depends on type, extent and purpose of the penalty, nature of obligation, mode of breach and its consequencesm supervening realities, standing and relationship of parties and addressed to the sound discretion of the court. INTERESTS: rationale: COST of MONEY, which is not exactly the same as a surcharge or a penalty. A penalty stipulation is not necessarily preclusive of interest, if there is an agreement to that effect, the 2 being distinct concepts which may be separately be demanded. What may justify a court in not allowing the creditor to impose full surcharges and penalties, despite an express stipulation therefor in a valid agreement, may not equally justify the non-payment or reduction of interest. Interest prescribed in loan financing arrangements is a fundamental part of the banking business and the core of a banks existence. Trade & Inv Den Corp v Roblett Industrial Cons Corp R filed a bid in Kuwait to subcontract the supply of skilled and semi-skilled workers for refinery project. R filed a bid bond of 1% of total proposed tender price or 159,781.05 KD. Philguarantee issued a counterguarantee. R granted the project, required to issue performance bond, but CB disapproved. Kuwait deemed breached subcontract and bid bond was confiscated. The amount of P18,029,219.78 is not part of the principal debt but it represents rather the interest and penalty charges on the advances made by petitioner to BKME as of the time of filing of the complaint. Hence, the appropriate interest rate to be applied thereon is 12% per annum reckoned from the time of finality of judgment until fully paid as said amount constitutes a judgment award. Consequently, the 16% interest per annum, on the principal amount of P11,775,611.25 should commence on 5 June 1990, the date of the filing of the complaint. INTEREST RATE of 12% - penalty and interest runs from time of finality of judgment -interest rate per annum on principal amount runs from date of filing of complaint. Gobonseng v Unibancard Corp G applied for credit card with monthly credit limit of 10k from Unibancard. His accumulated P179,638,74, he defaulted in paying. It 3% monthy interest exorbitant and 5% monthly penalty violated Art 1226. Where the contract stipulates the rate of interest and the amount of penalty to be paid in case of failure to pay the obligation within a given period, both the penalty and the interest can be collected by the creditor. It is only when the parties to a contract have failed to fix the rate of interest or when such amount is unwarranted that the Court will apply the 12% interest per annum on a loan or forbearance of money. The court has to enforce the contractual stipulations in the manner that they have been agreed upon for as long as they are not unconscionable or contrary to morals and public policy. Viloria v CA V was the manager of Service Center of Phils. When he resigned he filed a complaint to collect his share in the profitsharing agreement of the company. The company refused and instead sought to recover the unliquidated cash advances. CB Circular No 416: July 29, 1974 By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12 %) per annum. The legal rate of interest before July 29, 1974 was only 6%, and only on such date that it was increased to 12% by CB Circular No 416, Circular should not be given retrospective operation. Liam Law v Olmypic Sawmill Co. Inc Liam Law loaned 10k without interest to Olympic. O was granted an extension of 3

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Torts and Damages


months but loan increased to 16K. The 6K for attorneys fees and legal interest, and other costs. Failed to pay. O claims 6k as usurious interest. 6k additional for 10k principal, lawful as it is considered as liquidated damages. Provision that claim of usury deemed admitted if it was not denied specifically and under oath, not applicable to a case where it is the defendant, not the plaintiff, who is alleging usury. Usury now legally non-existent under CB Circular No 905. Interest chargeable now depends upon agreement of lender and borrower. Rules of Court as to the allegations of usury being procedural in nature, considered repealed with retroactive effect. Phil Phosphate Fertilizer Corp v Kamalig Resources Inc K purchased fertilizer from Philphos issued Sales Official Receipt. K would resell fertilizer to customers and shall issue Delivery Orders, only present to Philphos warehouse for release. P claims K has made overwithdrawals, demanded to pay if not would charge 34% interest per annum. K claims withdrawals signed by unauthorized withdrawals. 34% interest per annum on principal claim of Philphos is its unilateral act and no evidence was presented that it was stipulated by the parties. Art 1956: no interest shall be due unless it has been expressly stipulated in writing. It only presented demand letters which imposes such. Demand letters is not sufficient proof of agreement on 34% interest per annum. PNB v CA and Padilla Padilla asked for a loan of 1.8M with 18% interest per annum. The contract stipulates that interest will be within limits allowed by law. Bank can increase the interest but can also decrease, in accordance with the maximum interest rate imposed by law or Monetary Board. In four months, the 18% interest rate raised to 48%. PD 116 Sec 2 provides that Monetary Board: interest rate changes for loans or renewal thereof shall not be made oftener than once every twelve months . In case at bar, increases in interest is null and void, if Monetary Board is not authorized to make changes for more than every 12 mons, even less so may a bank which is subordinate to the Board. PNB relied on own Board Resolution but such are neither laws nor resolutions of Monetary Board. CB Circular No 905 removed Usury Law ceiling interest rates but it did not authorize PNB to unilaterally and successively increase the agreed interest rates from 18% to 48% in violation of PD 116. Violation of mutuality principle of contracts. The increases in violation of Credit Agreement that its terms may be amended only by an instrument in writing signed by party to be bound as burdened by such amendment Art 1956. Padilla never agreed in writing to pay interest increased fixed by PNB beyond 24% per annum. Floirendo Jr v Metrobank F loaned for 1M for Reymill Realty, with 4 lands mortgaged. It was renewed for another year but with interest at 15.446% per annum for 1 st 30 days, subject to upward/downward adjustment every 30 days thereafter and a penalty charge of 18% per annum based on any unpaid principal to be computed from date of default until payment of the obligation. Interest varied, went to 30.244%. F paid the arrears but M still foreclosed mortgaged lands. Increases of interest rate unilaterally imposed by respondent bank without petitioners assent are violative of the principle of mutuality of contracts in Art 1308 of CC.: The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them. Any contract which appears to be heavily weighed in favor of one of the parties so as to lead to an unconscionable result is void. Art 1310: Courts are granted authority to reduce/increase interest rates equitably. While the Usury Law ceiling on interest rate was lifted by CB Circular No 905, nothing therein could possibly be read as granting the lender carte blanche authority to raise interest rate to levels which would either enslave its borrower or lead to haemorrhaging of his assets. UCPB v Beluso B granted a credit line of P2.35M. UCPB applied interest rates on different promissory notes ranging from 18%-34%. They paid 763,692.03. UCPB demanded payment of total debt of P2,932,543 + 25% attorneys fees. UCPB foreclosed mortgaged to secure payment of debt of P3,783,603. Contract stipulates with interest at the rate indicative of DBD retail rate or as determined by the Branch Head. Violated Art 1308. UCPB was granted both choices which presents opportunity to fix the rate at will. A fixed margin over the reference rate like 3% so that parties can easily determine the interest rate by applying simple arithmetic.

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In case at bar, it does not specify any margin above or below the DBD retail rate. It is sufficient basis to impose a 12% legal interest in favor of petitioner in case at bar as what we have voided is merely stipulated rate of interest and not stipulation that the loan shall earn interest. SC upheld the contract stipulation for compounding of interest. Bulos Jr v Yasuma Dr. Lim loaned form Yasuma 2.5M. promissory notes stipulates interest rate of 4% for 3months, if brought to court, to pay additional amount equivalent to 10% of principal amount plus attorneys fee, shall be no less than 10k. Dr Lim assigned it to Bulos. B offered to Y to pay in terms of his stocks in a rural bank. An interest rate of 4% per month or 48% per annum is highly unconscionable and inordinate. While the Usury Law has been suspended by CB Circular No 905, effective on January 1, 1983, and parties to a loan agreement have been given wide latitude to agree on any interest rate, still stipulated interest rates are illegal if they are unconscionable nothing in the said circular grants leaders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to hemorrhaging of their assets. The legal interest rate of 12% should apply, computed from the date of judicial demand. Svendsen v People Reyes extended a loan to Svendsen for 200k with interest of 10% a month. Interest amounted to 380K. 200k was paid. Balance paid thru check but bounce. Filed complaint for violation of BP 22. S is civilly liable. For in criminal case, the social injury is sought to be repaired through the imposition of the corresponding penalty, whereas with respect to the personal injury of the victim, it is sought to be compensated through indemnity, which is civil in nature.
While the Usury Law has been suspended by CB Circular No 905, effective on January 1, 1983, and parties to a loan agreement have been given wide latitude to agree on any interest rate, still stipulated interest rates are illegal if they are unconscionable nothing in the said circular grants leaders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to hemorrhaging of their assets. Stipulation authorizing such interest

1.

the civil indemnity to P16k = unpaid interest on P200k loan at 12% per annum as of Feb 2, 1999 ( date of the check), 2. 12% interest per annum from April 29, 1999 (date of judicial demand, i.e., date of filing of information up to finality of judgment). 3. 12% interest per annum on total amount after judgment becomes final and executory until obligation is satisfied. Zobel v City of Manila City of Manila wanted to establish a cemetery, 25 hec lot of Zobel minors was bought for such purpose. Manila passed an ordinance for appropriation for such. Found overpricing, as such, it was not paid. Contract contains that 1st instalment was not to bear interest but next 5 instalments were to bear 5% interest per annum. As to 1st instalment. The stipulation that it would draw no interest was made in the expectation that the obligation would be paid upon date stipulated. After default occurred the defendant became liable for interest as damages regardless of the absence of any express stipulation for interest and regardless of the statement that this instalment should draw no interest. After default, it is to be treated as if nothing had been said about interest at all. Sec 510 of CIvPro interest thus accruing must be consolidated with the principal as of the date of the judgment of the lower court; after which interest upon the whole shall be computed at the same rate. Applicable only to debts and claims with respect to which no stipulation for interest has been made As to succeeding instalments, Art 1109. interest accrued up to the date of filing of complaint must be consolidated as of that date with the capital, after which the whole shall bear interest at the contract rate of 5% per annum until paid. Where interest is contracted for at a given rate the contract obligation to pay interest is not merged in the judgment but remains in full force until the debt is paid. Applicable only to obligations containing stipulation for interest. A demand established by judgment must be understood as bearing interest whether expressly so stated or not. A municipal corporation does not enjoy immunity from liability for interest, when assessed as damages for the non-payment of a debt, to the same extent as the general government.

are contra bonos mores, if not against the law, they are inexistent and void from the beginning. The interest rate of 10% monthly is clearly excessive, iniquitous and unconscionable. The Court deems in fair to adjust:

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Seton Donne v Inouye KS Ohta was a guarantor for purchase price in buying a lot to Donna for 30k. KS Ohta died, Inouye, administrator of estate of Ohta. RTC: or for such parts of said amounts as may remain unpaid after execution of this case is returned by this sheriff SC: does not have the effect of rendering the judgment indefinite. Judgment against the administrator should be credited with whatever should be made out of the property of the principal debtor; and it would have been the duty of the sheriff to allow such credit in this case even in the absence of direction to that effect. Where the promissory note contains a stipulation to the effect that if the obligation should become the subject of judicial action a certain percentage of the principal should be added to cover expenses of collection, interest upon this item will not be allowed prior to the date of the judgment in the trial court. Soriano v Cia General de Tabacos crop loan account granted to S. S would deliver piculs of export sugar as payment but a part of such did not include the proceeds of sale. Total indebtedness continue to charge 7% per annum compounded every six months. Accrued interest draws legal interest from the time that the suit is filed for its recovery. Where the plaintiff is entitled to the payment of interest on the various amounts due from the defendant by way of damages, and said interest did not arise from an obligation of the defendant to pay the same on a contractual basis, because the event which gave rise to the plaintiffs right to recover interest was not a conventional obligation, but defendants default in crediting the plaintiff with the proceeds of the sale of sugar, interest is not collectible on the accrued interest. Reformina v Tomol Jr RTc resolution declaring the judgment of 370K shall bear legal interest rate of 12% per annum pursuant to CB Circular No 416 dated July 29, 1974 from the filing of the complaint. CB Circular No 416 was issued pursuant to PD 116 which amended Act No 2655 (Usury Law). Monetary Board increased legal interest rate from 6% per annum to 12%. Usury Law deals with interest on: 1. Loans 2. Forbearances of any money, goods, or credits 3. Rates allowed in judgments referred to judgments in litigations involving loans or forbearance of any money, goods, or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods, or credits does not fall within the coverage of CB Circular No 416 Action for damages for injury to persons and loss of property and does not involve any loan, much less forbearances of any money, goods or credits. The law applicable is Art 2209 CC legal interest is 6% per annum. Session 13 Art 2209-2213, CB Circular Nos. 416 and 905, Cases 224-247 Bachrach Motors v Espiritu E bought 2 trucks but failed to pay full amounts, 12% interest per annum & failure to pay at maturity + 25% penalty of such balance. SC: Such stipulation is not usurious. Art 1152 permits agreement upon penalty apart from interest . Should there be such an agreement, the penalty does not include the interest, and which may be demanded separately. According to this, the penalty is not to be added to the interest for the determination of whether the interest exceeds the rate fixed by the law, since said rate was fixed only for the interest. But considering that the obligation was partly performed, and making use of the power given to the court by article 1154 of the Civil Code, this penalty is reduced to 10% of the unpaid debt. Bareng v CA B bought from Algegria a cinematographic equipment for 15k. 10k already paid, 5K balance to be paid 4 promissory notes. 1st instalment of 1k paid. When B was about to pay the 2nd, Ruiz claims as co-owner & asked B to stop paying. Only 400 was paid even though A is demanding for such. A & R reached a compromise and sued B for the balance. RTC: pay 3,600 + legal interest. B claims not liable for interest since suspension of payment is justified. Right of suspension of payment ended as soon as the vendor has caused the disturbance or danger to cease, when compromise between A & R was reached. Obligation to pay any unpaid balance thereof did not cease to be liquidated and determined simply because vendor and vendee, in the suit for collection, disagreed as to its amount. If vendee is in default in the payment of the price of the thing sold, under Art 2209 CC, he is liable to pay legal interest

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from the date of filing of complaint unless he deposits in Court the amount due at the start of the action. Plaridel Surety & insurance Co v PL Galang Machinery Co PL Galang & San Jose agreed that SJ would peel and cut veneer logs at P60 for PL. Galang. SJ filed a performance bond of P30,600 from Plaridel Surety. PLG filed for advance payment & expected delivery. It already sold the logs to a Japanese company but failed to deliver. PLG sued & asks for bond payment. Creditors suing on a suretyship bond may recover from the surety as part of their damages, interest at the legal rate even if the surety would thereby become liable to pay more than the total amount stipulated in the bond. The surety is made to pay interest, not by reason of the contract, but by reason of its failure to pay when demanded and for having compelled the plaintiff to resort to the courts to obtain payment. Interest does not run from the time the obligation becomes due, but from the filing of the complaint. Tan v CA Tan asked 2 loans amounting to 4M. After a few payments, he defaulted. Debt: 3,411,421.32. Failed to make any payment: 6,088.735.03. CCP sued for payment of Tan but Tan claims merely accommodated a friend but he cannot locate him. Promissory note expressly provides for the imposition of both interest (14% per annum plus 3% service charge) and penalties (2% per month) in case of default on part of petitioner in payment of subject restructured loan. CC permit an agreement upon a penalty apart from the monetary interest. If the parties stipulate this kind of agreement, the penalty does not include the monetary interest, and as such the two are different and distinct from each other and may be demanded separately. The penalty charge of two percent (2%) per month in the case at bar began to accrue from the time of default by the petitioner. There is no doubt that the petitioner is liable for both the stipulated monetary interest and the stipulated penalty charge. The penalty charge is also called penalty or compensatory interest. Penalty clauses can be in the form of penalty or compensatory interest, and compounding it is sanctioned by and allowed pursuant to Art 1959 considering: 1. Express stipulation in the promissory note permitting compounding interest. 2. Art 2212. Interest began to run on the penalty interest upon the filing of the complaint in court. Tan bound to pay interest on total amount of the principal, monetary interest and penalty interest. Petitioner made partial payments which showed his good faith, a reduction of penalty charge is justified. It is changed to a straight 12% per annum. Piczon v Piczon Piczon as guarantor sentence to pay 12,500 with 12% interest. Does interest accrue from the date of first demand or when the obligation becomes due and demandable. The contract expressly stipulates the interest of 12% per annum commence from date of execution of said document . An obligation to pay interest is due without need of demand where the contract stipulates from what time interest will be counted, interest is payable from such time, and not from the date of the filing of the complaint. Firestone Tire & Rubber Co v Delgado Firestone agreed to sell goods and merchandise to Dee for Caltex quick service station. In case of default, F would pay 12% interest a year from the date of default plus 25% attorneys fees and liquidated damages. Outstanding balance of P4,915.62. Whether interest will be paid on the balance from the time that the complaint was flied, or from Nov 1, 1953, as agreed upon by the parties? The defendants admitted not only the amount of the balance of the plaintiff but also the 12% interest from Nov 1, 1953. Reformina v Tomol Jr refer to page 13, last case, important case Eastern Shipping Lines, Inc v Ca 2 fiber drums of riboflavin were shipped from Japan thru delivery vessel of Eastern Shipping. It was insured with Mercantile Insurance Company. Upon arrival, 1 drum was in bad order because it was opened and unsealed. Due to negligence of Eastern, Mercantile was compelled to pay losses. Is interest on claim of Mercantile Insurance should commence from date of filing of complaint at rate of 12% per annum, because the claim is unliquidated? The legal interest to be paid is 6% on the amount due computed from the decision, dated February 3, 1988, of the court a quo. A 12% interest, in lieu of 6% shall be imposed on such amount upon finality of this decision until payment thereof. SC explained the decision:

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Torts and Damages 1. The cases discussed can be classified into 2 groups according to similarity of issues involved and the
corresponding rulings rendered by the court 2. First group - the basic issue focuses on the application of either the 6% (under the Civil Code) or 12% (under the Central Bank Circular) interest per annum. It is easily discernible in these cases that there has been a consistent holding that the Central Bank Circular imposing the 12% interest per annum applies only to loans or forbearance 16 of money, goods or credits, as well as to judgments involving such loan or forbearance of money, goods or credits, and that the 6% interest under the Civil Code governs when the transaction involves the payment of indemnities in the concept of damage arising from the breach or a delay in the performance of obligations in general. Observe, too, that in these cases, a common time frame in the computation of the 6% interest per annum has been applied, i.e., from the time the complaint is filed until the adjudged amount is fully paid. 3. Second group - did not alter the pronounced rule on the application of the 6% or 12% interest per annum, 17 depending on whether or not the amount involved is a loan or forbearance, on the one hand, or one of indemnity for damage, on the other hand. Unlike, however, the "first group" which remained consistent in holding that the running of the legal interest should be from the time of the filing of the complaint until fully paid, the "second group" varied on the commencement of the running of the legal interest. Malayan held that the amount awarded should bear legal interest from the date of the decision of the court a quo, explaining that "if the suit were for damages, 'unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof,' then, interest 'should be from the date of the decision.'" American Express International v. IAC, introduced a different time frame for reckoning the 6% interest by ordering it to be "computed from the finality of (the) decision until paid ." The Nakpil and Sons case ruled that 12% interest per annum should be imposed from the finality of the decision until the judgment amount is paid. 4. Rule of thumb for future guidance

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages. II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. Escani v Ortigas Jr Falcon Corp consists of 2 groups of stockholder in the case at bar. 1 st, scholey, ortigas, inductive. 2 nd:

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Escano, Silos & Matti. Falcon loaned from PDCP $320,000. 2undertakings were signed by stockholders where solidary liability with company in their private capacity. 2 years after, 1 st groups ceded control of corp to avoid debt. PDCP sued for collection of debt, 2nd group claims that if liable, only as joint debtor & interest rate is 6% not 12%. Refer to Eastern Shipping no. 4. Rate of interest thereon shall be 12% per annum to be computed form default, i.e., from judicial or extrajudicial demand. DSM Cons & Dev Corp v CA Megaworld hired DSM to contruct condo. Differences in billings arose. CA: 6 condo units as payment. Nowhere in jurisprudence has a legal rate interest been imposed as a flat rate rather than on a per annum basis. The controversy on the application of the 6% rate of interest, the proper forum for clarifying the same is the CIAC (imposed said rate), not the CA. Country Bankers Insurance Corp v Lianga Bay & Community Multi-Purpose Cooperative, Inc Country Bankers is a domestic corp. Lianga Bay entered into a fire insurance with Country Bankers for stocks-in-trade against fire. It was caught on fire but CB refused claim. FORBEARANCE 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. In case at bar, insurance claim not a forbearance of money, goods or credit. 6% computed from date of filing of complaint. Catungal v Hao The back rental in this case being equivalent to a loan or forbearance of money, the interest is 12% per annum from time of extra-judicial demand. Manufacturers Bldg Inc v CA PMMS leased part of Manufacturers Building. But became delinquent in paying rentals. Sued for ejectment. Compromise agreement. But still failed to comply. PMMS offered to pay obligation within 6mons from execution of 2nd mortgage, with legal interest of 12% per annum, on the outstanding balance. Based on 2nd mortgage, the parties agreed on an increased rate of interest to 12% per annum. The rate of interest which they might have agreed upon earlier has been obliterated or superseded by the new agreement. Not entitled to compounding of interest, no agreed upon. Art 1959. Radiowealth Finance Co v Del Rosario Del Rosario delivered promissory note but defaulted in payment. Petitioner prayed for 14% interest per annum from May 6, 1993 until fully paid. We disagree. The Note already stipulated a late payment penalty of 2,5% monthy to be added to each unpaid instalment until fully paid. Payment of interest was not expressly stipulated in the Note. Deemed included in penalty. Where payment of interest is not expressly provided in the promissory note, then it shall be deemed included in the stipulation for a late payment penalty. Central Azucarera de Bais v CA Def are sugar cane planters milling their sugarcane with petitioner without any written milling contracts. They had a share of 60% in sugar produced. RA 809 was enacted compelling increased participation of majority planters. Central gives 62% share for those who signed but 60% share if without milling contract. Proper interest rate is 6%. Art 2209. Refer to Reformina case Interest is due from the moment there is a delay on the part of the obligor to perform his obligation, i.e., from the time it was judicially or extrajudicially demanded. Art 2213. UNLIQUIDATED DAMAGES or CLAIMS are those which are not or cannot be known until definitely ascertained, assessed and determined by the courts after presentation of proof. What they are claiming are specific percentages definitely provided under the law. It is merely a matter of mathematically computing the exact money value thereof, inasmuch as the annual sugar production and the amount of molasses and bagasse, derived from the production during the crop years involved, are undisputed and are in fact based on the records of petitioner. FNCB Finance v Estavillo E bought a Ford Fiera and made a promissory note for payment of balance and penalty of 2.5% in case of default and acceleration clause. His vehicle was seized for being in arrears but claims on time. Interest must be 12% per annum. Refer to reformina v tomol. PVTA v Tensuan Management contract was executed between resp cooperative of farmers to sell dry tobacco to CCP and CCP, in turn, obligated to redry, procure, service PVTA at government price.

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Advanced payment. But fire destroyed before grading & weighing but was already unloaded. Central Bank Circular No. 416 dated July 29, 1974, which fixes the legal rate of interest at 12% per annum is not applicable here since the circular applies only to loans or forbearance of money, goods or credits and court judgment thereon. The law applicable is Art 2209. To make the latter law applicable to any case other than those specifically provided for by the Usury Law would be to violate the principle of undue delegation of legislative powers since the Monetary Board will be exercising legislative functions which was beyond the intendment of P.D. 116. In the case at bar, it was a contract of sale wherein there was default in the payment of the price and interest was awarded therefor. The interest here is therefore not within the contemplation of the Usury Law. See Reformina v Tomol. State Investment House v CA Refugio & Rafael Aquino accommodated Jose and Marcelina Aquino to a loan of P375k in the State Investment. R & R pledged shares of stock. R & R acquired another loan, 120K. 2nd loan unable to pay but expressed willingness to pay. They requested the release of pledge in the shares of stocks but the State refused claiming that a balance on first loan has not yet paid. R & R claims not their obligation. We believe and so hold that since respondent Aquino spouses were held not to have been in delay, they were properly liable only for: (a) the principal of the loan or P110,000.00; and (b) regular or monetary interest in the amount of seventeen percent (17%) per annum. They were not liable for penalty or compensatory interest, fixed by the promissory note in Account No. IF-82-0904-AA at two percent (2%) per month or twenty-four (24%) per annum. Article 2209 CC. The appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum or money, is the payment of penalty interest at the rate agreed upon; and in the absence of a stipulation of a particular rate of penalty interest, then the payment of additional interest at a rate equal to the regular monetary interest; and if no regular interest had been agreed upon, then payment of legal interest or six percent (6%) per annum. The fact that the respondent Aquino spouses were not in default did not mean that they, as a matter of law, were relieved from the payment not only of penalty or compensatory interest at the rate of twenty-four percent (24%) per annum but also of regular or monetary interest of seventeen percent (17%) per annum. The regular or monetary interest continued to accrue under the terms of the relevant promissory note until actual payment is effected. The payment of regular interest constitutes the price or cost of the use of money and thus, until the principal sum due is returned to the creditor, regular interest continues to accrue since the debtor continues to use such principal amount. Art 1256 People v Iglesia accused stabbed the victim on the left chest with kitchen knife, where on the drinking spree before the incident. When the judgment of the Court awarding a sum of money becomes final and executor, the rate of legal interest shall be 12% per annum from such finality until its satisfaction. The interest on the damages awarded should be computed from the time of the finality of the decision, and not from the filing of the complaint against the accused. Security Bank & Trust Co. V RTC Makati, Br. 61 3 promissory notes granted to Eusebio. 23% interest per annum. Ventura became the co-maker 100k,100k,65k. The balance are 16,665, 83,333, 65k. Filed a collection case. CB Circular No 905, Sec 1 and 2. PNB v CA The rate of interest was agreed upon by the parties freely. Significantly, respondent did not question that rate. It is not for respondent court a quo to change the stipulations in the contract where it is not illegal. Art 1306. In a loan or forbearance of money, the interest due should be that stipulated in writing, and in the absence thereof, the rate shall be 12% per annum. Hence, only in the absence of a stipulation can the court impose the 12% rate of interest. Solangon v Salazar 2 loans with the mortgage on the same land. (1) 60k, 4 months, 6% interest monthly. (2) 136,517 for 1 year, legal rate, (3) 230k, 4mons, legal rate. While the Usury Law ceiling on interest rates was lifted by C.B. Circular No. 905, nothing in the said circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. A stipulated interest rate of 6% per month or 72% per annum is definitely outrageous and inordinate an interest of 12% per annum is deemed fair and reasonable. PNB v CA Isabela issued several checks as payment for medicines purchased. It was delivered to sellers agent but agent did not turn over 23 checks amounting to 98,691.90. Lyndon Phar sued to collect balance. Is interest 6% or 12%?

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Refer to Eastern Shipping. When an obligation arises "from a contract of purchase and sale and not from a contract of loan or mutuum," the applicable rate is "6% per annum as provided in Article 2209 of the NCC and not the rate of 12% per annum as provided in (CB) Cir. No. 416." Once the judgment becomes final and executory, the "interim period from the finality of judgment awarding a monetary claim and until payment thereof, is deemed to be equivalent to a forbearance of credit." Thus, in accordance with the pronouncement in Eastern Shipping the rate of 12% p.a. should be imposed, and to be computed from the time the judgment became final and executory until fully satisfied. The actual base for the computation of this 12% interest after the judgment in this damage suit became final shall be the amount adjudged (P98,691.90). Eastern Assurance & Surety Corp v CA Tan insured his building against fire for 250k with Eastern. The building was destroyed but indemnity was denied. Tan sued for breach of contract. The case became final and executory on August 25, 1993. Eastern filed a motion with check for 448,750 (principal amount + 6% interest). Hence, the payment of 12% legal interest per annum should commence from August 25, 1993, the date the decision of the trial court became final, up to September 30, 1994, the agreed cut-off date for the payment of legal interest. The court allowed the imposition of 12% legal interest p.a. on money judgment from the date of its finality until fully paid. RCBC v Alfa RTW Manufacturing Corp Alfa RTW granted LOC by RCBC for purchase of raw materials of garment business. Trust receipt was executed. Alfas liability must not exceed 4M and 7.5M, and such interest as may accrue thereon and expenses incurred. Trust Receipts stipulated such: 1. 16% interest p.a. 2. 2% p.a. service charge 3. 6% p.a. penalty or liquidated damages 4. Attorneys fees and costs of collection, not less than 10% of value of property

finality of this Decision. A penalty of six percent (6%) per annum of the amount due and unpaid must also be imposed computed from the date of demand (in this case on March 9, 1982), until finality of Judgment. The interest of 16% percent per annum, as long as unpaid, also earns interest, computed from the date of the filing of the complaint (March 12, 1982) until finality of this Courts Decision. From such date of finality, the total unpaid amount (principal + interest + service charge + penalty + interest on the interest) computed shall earn interest of 12% per annum until satisfied.
1wphi1.

TOTAL AMOUNT DUE = principal + interest + service charge + penalty + interest on interest Interest = principal x 16 % per annum x no. of years from date of execution until finality of judgment Service charge = principal x 2% per annum x no. of years from date of execution until finality of judgment Penalty = principal x 6% per annum x no. of years from demand (March 9, 1982) until finality of judgment Interest on interest = Interest computed as of the filing of the complaint (March 12, 1982) x 12% x no. of years until finality of judgment Attorneys fees is 10% of the total amount computed as of finality of judgment Total amount due as of the date of finality of judgment will earn an interest of 12% per annum until fully paid. Session 14 Art 2216-2225, Cases 69 (321 scra 584), 96, 201, 239, 248-268 Ramos v CA The amount of damages which should be

The principal amount of loans corresponding to each trust receipt must earn an interest at the rate of sixteen percent (16%) per annum with the stipulated service charge of two percent (2%) per annum on the loan principal or the outstanding balance thereof, from the date of execution until 20 thil lozada

awarded, if they are to adequately and correctly respond to the injury caused: 1. compensates for pecuniary loss incurred and proved, up to the time of trial; 2. meet pecuniary loss certain to be suffered but which could not, from the nature of the case, be made with

Torts and Damages certainty. In other words, temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing. And because of the unique nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct phases. Temperate damages 1.5M Moral damages 2M - The actual physical, emotional and financial cost of the care of petitioner would be virtually impossible to quantify. Even the temperate damages herein awarded would be inadequate if petitioner's condition remains unchanged for the next ten years.
Go v IAC Jazmin is a retired employee of US Fed Govt residing in 34 Maravilla St, Mangatarem, Pangasinan. 2 dollar checks was deposited by Jasmin residing in Maranilla st. The checks were altered and first Jazmin were sued for estafa. Nominal damages 3K. Art 2221. These are damages recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind, or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. They are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. No right to claim for moral damages, then he may not likewise be entitled to exemplary damages. Petitioners negligence was the root of all the inconvenience and embarrassment experienced by the respondent, they happened after the filing of the complaint with constabulary authorities. Gos negligence in fact led to swindling if his employer. Napocor v National Merchandising Corp NPC purchased crude sulphur form Maria Cristina Fertilizer Plant from a NY firm thru NAMERCO. The contract provided for liquidated damages in case of delay in delivery. It also stipulated that the non-availability of vessel does not constitute as a fortuitous event, w/c does not exempt seller from liquidated damages. Namerco filed a surety bond of 45k. NY firm does not want to include the provision of nonavailability of vessel but Namerco still signed the contract. The sulphur was failed to be delivered because of no available vessel

and subsequently, the plant stopped the production of sulphur. NPC sued Namerco & surety. Where liquidated damages are agreed upon the same should be enforced instead of awarding only nominal damages. The parties foresaw that it might be difficult to ascertain the exact amount of damages for nondelivery of the sulphur. Nominal damages are damages in name only or are in fact the same as no damages. It would not be correct to hold in this case that the NPC suffered damages in name only or that breach of contract was merely technical in character. FNBC Finance v Estavillo E bought a Ford Fiera and made a promissory note for payment of balance and penalty of 2.5% in case of default and acceleration clause. His vehicle was seized for being in arrears but claims on time. Nominal and exemplary damages should be awarded to respondent because of thoughtless, if not malicious acts of the petitioner. The respondent suffered not only actual damages but also humiliation and mental anguish over the unwarranted confiscation of the vehicle he cherished and for which he had already made substantial payments. Petitioner deliberately submitted false statement of accounts, found to have omitted a number of payments for which E produced the corresponding receipts. Northwest Airlines v Cuenca Cuenca official delegate of Philippines, boarded place of petitioner bound for Tokyo as a first class passenger. On arrival in Okinawa, he was transferred to tourist class compartment. He was rudely compelled, in front of other passengers, to move or be left behind in case of noncompliance. He had no choice but to obey. C sued for 50k exemplary, 20K moral damages. SC: 20k nominal damages Nominal damages cannot co-exist with compensatory damages. However, in this case, no award for moral or exemplary damages was given to Nicolas Cuenca. As such, the award for nominal damages is justified. True, Cuenca has a wait-listed ticket, but having been accommodated as a first class passenger in Manila, C was entitled to believe that such was a confirmation of his reservation and he would be kept on the position. Since the agent acted in wanton, reckless, and oppressive manner, with full knowledge that he was an official delegate of Philippines, the sum awarded by CFI as moral damages may well be considered as nominal. At any rate, considering that the said agent had acted in

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the manner described above, said award may also be considered as one of exemplary damages. Medina v Cresencio jeep smashed in Meralco post, resulted in death of Medina as passenger. Heirs filed separate civil action against wife of driver and registered owner, Cresencia. C claims sold to buyer who also sold it to another. But C is still the registeres owner/operator in the Motor Vehicles Office and Public Service Commission. CFI: compensatory-6K, moral 30K, exemplary 10K, nominal 10K, attys fee 5K. Nominal damages cannot exist with compensatory damages. Purpose: vindicate or recognize a right that has been violated, in order to preclude further contest thereon; and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Where the court has already awarded compensatory and exemplary damages that are in themselves a judicial recognition that plaintiffs right was violated, the award of nominal damages is unnecessary and improper. MCC Industrial Sales Corp v Ssangyong Corp MMC, Filipino corporation, ordered from Ssangyong, 220MT stainless steel in Korea. S ordered & paid in full the steel from POSCO, they kept it in warehouse. Through practice, it will be delivered after opening of LC but MMC only got half the amount of LC. S asked several times for the opening but to no avail. S cancelled contract & sought to recover $97,317.37 (losses from warehousing expenses, interests and charges). The steel items indicated in sales contract with Korean corporation are different in all respects from the items ordered by petitioner MCC, even in size and quantity. Actual damages not proven. Nominal damages -200K. Petitioner knowingly breached its contractual obligation and obstinately refused to pay despite repeated demands from respondent. Even asked for several extensions. Nominal damages are recoverable where a legal right is technically violated and must b e vindicated against an invasion that has produced no actual present loss of any king or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Mindanao Academy v Yap Nuqui and son sold land with 2 schools (Mindanao Academy and Misamis Academy) to Yap. Yap took possession and renamed it to Harvardian Colleges. But found out that there are many co-owners in such school that has not consented the sale. They sued for annulment of such. Nominal and exemplary damages not awarded to stockholders already represented by the corporation. Where the interests of the stockholders were already represented by the corporation itself, which was the proper party plaintiff, and no cause of action accruing to them separately from the corporation is alleged in the complaint, the RTC ruling out the claim for moral damages to the corporation also rules out any award from such nominal and exemplary damages to the stockholders. Ingal v People 19 year old was stabbed in a carinderia. Temperate 25K proper in homicide or murder cases when no evidence of burial and funeral expenses is presented in the trial court. Art 2224 Moral 50k it is mandatory in cases of murder and homicide without need of allegation and proof other than the death of the victim. Armovit v CA Dr. Armovit and family planned to spend Christmas in Phils. On return trip, the sales agent wrote in the ticket the time of their departure on 1030am. But upon arrival on 915am, they were rudely informed that the flight was already taking off. They were delayed for a day. Actual damages 1,300. Nominal damages cannot co-exist with actual or compensatory damages. Moral damages 100k each. When they were bumped off rudely is a clear indicia of malice and bad faith and establish that respondents committed a breach of contract. Bongal v Ensoy B sued for damages against their counsel Atty E because of negligence in failure to allege the existence of improvement in the contested land and failed to remit docket fee and estimated cost of printing the record on appeal within the prescribed period upon perfection of appeal. Nominal damages 200 not for indemnification of loss suffered by them but for the vindication of their right violated. Plaintiffs do not appear entitled to actual or compensatory damages but only to nominal damages, award of nominal damages in their favor precludes the recovery of temperate or moderate damages. Where damages sought to be recovered are only speculative and uncertain, no more than nominal damages can be awarded.

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Ventanilla v Centeno Atty Centeno failed to pay the cash appeal bond by client Ventilla in the case for recovery of 4k. Vs cause of action for moral damages is not predicated upon any of those specifically enumerated in Art 2217, 2219, 2220 He is not entitled to actual damages but has been awarded nominal damages by trial court, such award precludes the recovery of temperate or moderate damages. Nominal 200. The assessment of nominal damages is left to the discretion of the court, according to the circumstances of the case. Considering it is 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 claimed in this complaint. 2k nominal is excessive. Rafols v Batangas Transpo Rafols boarded a bus but fell into a ravine and sustained injuries. Nominal damages of 100 must be discarded for the grant of actual necessarily must exclude any nominal, as necessary implication of Art 2221, since nominal is given only if there is no proof of actual, the grant of nominal being the same as though there had been in fact no damages. Araneta v Bank of America Araneta engaged in import and export business. He maintains a dollar current account with the respondent. He experience twice that he issued a check but was dishonoured and stamped Account Closed, eventhough the account has sufficient amount. On the first error, the bank apologized and promised not to happen again. The financial credit of a businessman is a prized and valuable asset, it being a significant part of the foundation of his business. Any adverse reflection thereon constitutes some material loss to him. Art 2217, besmirched reputation The basis of moral damages was the damage itself to his reputation as an established and well known international trader. Temperate damages customers check can be wrongfully refused payment without some impeachment of h is credit, which must in fact be an actual injury, though he cannot, from the nature of the case, furnish independent, distinct proof thereof. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. For instance, injury to ones commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money. The judge should be empowered to calculate moderate damages in such cases, rather than that the plaintiff should suffer, without redress from the defendants wrongful act. SSS v CA Cruz applied for loan in SSS, their residential lot was made a collateral. They paid monthly but only with slight delay. Notice of foreclosure was published thrice. On first publication, no notice that there is no delay in payment but in second and third, there was. An injustice is not perpetrated and that when damage is caused a citizen, the latter should have a right of redress particularly when it arises from a purely private and contractual relationship between said individual and the System. No moral and temperate damages. The SSS was of the belief that it was acting in the legitimate exercise of its right under the mortgage contract in the face of irregular payments made by respondents, and placed reliance on the automatic acceleration clause in the contract. The filing alone of the foreclosure application should not be a ground for an award of moral damages in the same way that a clearly unfounded civil action is not among the grounds for moral damages . Nominal damages 3K clear negligence on the part of SSS when they mistook the loan account of Socorro J. Cruz for that of private respondent Socorro C. Cruz. Its attention was called to the error, but it adamantly refused to acknowledge its mistake. Robes Francisco Realty & Dev Corp v CFI of Rizal Robes sold to Millian a 276sqm lot. M fully paid the price but Robes failed to execute final deed of sale and issuance of TCT. M sued. It was found that Ms lot was included among the properties of corporation mortgaged to GSIS to secure obligation of P10M. Nominal 10k. The right of the vendee to acquire title to the lot bought by her was violated by petitioner and this entitles her at the very least to nominal damages. 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. Nominal damages by their very nature are small sums fixed by the court without regard to the extent of the harm done to the injured party. nominal damage is a substantial claim, if based upon the violation of a legal right; in such case, the law presumes a damage, although actual or compensatory damages are not proven; in truth nominal damages

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are damages in name only and not in fact, and are allowed, not as an equivalent of a wrong inflicted, but simply in recognition of the existence of a technical injury. Northwest case v Medina case - in Northwest Airlines, there is no conflict between that case and Medina, for in the latter, the P10,000.00 award for nominal damages was eliminated principally because the aggrieved party had already been awarded P6,000.00 as compensatory damages, P30,000.00 as moral damages and P10,000.00 as exemplary damages, and "nominal damages cannot coexist with compensatory damages," while in the case of Commissioner Cuenca, no such compensatory, moral, or exemplary damages were granted to the latter. Consolidated Plywood Industries v CA Consolidated verbally agreed with Kho that Kho would overhaul the logs of Consolidated from the concession area to the logpond. C would provide verbal assistance to 180K for the cost of repairs and re-conditioning of trucks. After a year, Khos withdrew all its trucks which violated the terms of their agreement. A Taiwan log importer charged C with cancellation fee of a chartered and LC extension fee for failure to deliver. Moral damages 50k. 200k is excessive. Hauling agreement had no fixed date of termination. There was substantial compliance by Khos obligation in teh contract. His remaining balance owin gin bank was only 30K out of 180k. Lazatin v Twano Lazatin sued Twano for price of 225 autotrucks purchased from the US government. They are partners in buying and selling such. Article 2219 provides that moral damages may be recovered in the following and analogous cases . . . (3) malicious prosecution . The action to recover damages from the attachment plaintiff, for the wrongful issuance and levy of an attachment (malicious attachment) is identical or is analogous to the ordinary action for malicious prosecution. Malice is an essential ingredient. Where there is no issue of malice, damages must be compensatory merely, and confined to the actual loss from deprivation of the property attached or injury to it, or in case of closing business, to the probable profits of the business, during the time of its stoppage. All of which go to show that the attachment defendant is not entitled to moral damages, unless it is alleged and established that the writ was maliciously sued out. No moral damages can be inferred from the mere fact that the redemption price to which defendants were entitled, had been retained by the provincial sheriff for a period of 38 days. Enervida v de la Torre Enervida filed a complaint to annul the sale made by his father to De la Torre alleging that the sale was done with the prohibitive period of 5 years under the Homestead Patent. De la Torre claims that his father is still alive, and that he has the right to avail of the right to repurchase. 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. 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. Soberano v Manila Railroad Soberano boarded BAL, subsidiary of MRR. The bus hit a stone embankment which resulted to Ss serious physical injuries and los of his 3,024 chicken eggs. Her husband sued the defendant for damages. Moral damages cannot be recovered against the employer in actions based on a breach of contract of carriage in the absence of malice, fraud, or bad faith . The terms fraud or in bad faith have reference to wanton, reckless, oppressive, malevolent conduct, or, in the very least, to negligence so gross as to amount to malice. In case of physical injuries, moral damages are recoverable only by the party injured and not by his next of kin, unless there is express statutory provision to the contrary. Negligence of driver does not per se justify an inference of malice or bad faith on the part of the company. Fraud, malice, or bad faith must be proved to support a claim for moral damages if only physical injuries are sustained. San Miguel Brewery v Magno Butuan City passed an Ordinance 11 imposing 2% tax on gross sales receipts on all

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Torts and Damages


alcoholic or malt beverages. It was amended by Ordinance 110, fixing a tax of P.25 per case on sale of beer. San Miguel was religious is paying tax based on Ordinance 11. But City treasurer demand payment of tax according to Or. 110 and warned that in case of non-payment, the properties will be levied. 2 trucks was seized. The Sheriff was sued in its private capacity. Moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like. 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. Nominal damages 100 Mambulao Lumber v PNB Mambulao Lumber granted industrial loan of 100k by PNB. Only 27,500 and 15,500 was released. M failed to pay and the sheriff flied a notice of foreclosure mortgaged land and the chattel mortgage. M requested the suspension of foreclosure of the chattel mortgage, and was granted. However, the sale of the land was done. The proceeds is 56,908. M deposited 738.59 which represents payment of the its whole debt. PNB claims that there is still a balance. No moral damages. An artificial person like Mambulao cannot experience physical sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock or social humiliation which are basis of moral damages. A corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages. The same cannot be considered in this case, Mambulao had already ceased operations at the time of foreclosure sales, and whatever adverse effects of the foreclosure could have upon its reputation or business standing would undoubtedly be the same whether the sale was conducted in Manila or Camarines Norte. Filipinas Broadcasting Network v Ago-Medical & Educ Center Expose is radio program hosted by Algre and Rima wherein they commented that Ago is a dumping ground of moral and physical misfits, greedy for moeny and that its Physical Therapy course is not recognized by DECS. Ago sued for malicious imputations and damages. Moral damages 150K not 300k. Ago did not suffered substantial damage. Article 2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages. Where the broadcast is libelous per se, the law implies damages. In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages. Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages. (see joint tortfeasor discussion) Jardine Davies v CA Purefoods conducted a bidding for the supply and installation of generators in its plant. Out of 3 bidders, the project was granted to FEMSCO. FEMSCO submitted a performance bond, however, Purefoods unilaterally cancelled the award and granted to Jardine (not participated in bidding). FEMSCO sued Purefoods for breach of contract and Jardine for interefence of contractual relations. Moral damages of 1M, reduced from 2M, not to enrich recipient. FEMSCOs reputation was tarnished after it immediately ordered equipment from its suppliers on account of the urgency of the project, only to be cancelled later. Meralco v TEAM Electronics Corp Meralco agreed to supply electricity to the 2 building of TEAM: DCIM Bldg. and NS Bldg. DCIM was leased to Ultra but ejected because of violations in the contract. Meralco found out that the meter in DCIM was tampered and was asked to pay the differential in electricity bill. TEAM asked Ultra to pay but refused. Its electricity was disconnected but TEAM filed a complaint in RTC, and was again reconnected. Meralco inspected and found out that it was again tampered, even the NS Bldg. As a rule, a corporation is not entitled to moral damages because, not being a natural person, it cannot experience physical suffering or sentiments like wounded feelings, serious anxiety, mental anguish and moral shock. The only exception to this rule is when the corporation has a reputation that is debased, resulting in its humiliation in the business realm. But in such a case, it is imperative for the claimant to present proof to justify the award. It is essential to prove the existence of the factual basis of the damage and its causal relation to petitioner's acts.

25 thil lozada

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