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  26   DAMAGES The Code Commission explains that: “ The present code (Spanish civil code then in force) has but a few general principles on the measure of damages. Moreover, practically the only damages in the present Code are compensatory ones and those agreed upon in a penal clause. Moral damages are not expressly recognized in the present Civil Code, although in one instance  –  injury to reputation - such damages have been allowed by the Supreme Court of Spain, and some Spanish  jurist believe that moral damages are allowable. The Supreme Court of the Philippines had awarded moral damages in few cases. “ The measure of damages is of far reaching importance in every legal system. Upon it depends the just compensation for every wrong or breach of contract. “ The Commission therefore, deemed it advisable to include a Title on Damages, which embodies some principles of the American law on the subject. The American courts have developed abundant rules and principles upon the adjudication of damages.”  The provisions on Damages are NEW except articles 2200, 2201, 2209, and 2212. Introduction The fundamental principle of the law on damages is that one injured by a breach of a contract and by a wrongful or negligent act or omission shall have a fair and just compensation, commensurate with the loss sustained as a consequ ences of the defendant‟s act.   General rule:   Actual pecuniary compensation, whether the action is based on a contract or in tort - Generally, the damages awarded should be equal to, and precisely commensurate with the injury sustained. - Recovery of damages are framed with reference to just rights of BOTH PARTIES, not merely what may be right for an injured person to receive, but also what is just to compel the other party to pay, to accord just compensation for the injury. Concept  As used in the Civil Code. Damages may mean either: 1. The injury or loss caused to another by the violation of his legal rights; or 2. The sum of money which the law awards or imposes as pecuniary compensation, recompense, or satisfaction for a injury done or wrong sustained as a consequence either of a breach of contractual obligation or a tortious act. Case: Ong vs. Court of Appeals January 21, 1999 The SC held that the fundamental principle of the law on damages is: that one injured by a breach of contract or by a wrongful or negligent act or omission shall have a fair and just compensation, commensurate with the loss sustained as a consequence of the defendant‟s act.   Purpose Damages are awarded to compensate the plaintiff for the loss or injury that he suffered, not to enrich him, or to impose a penalty on the wrongdoer. Law on damages-where found. The law governing damages is found in articles 2195 to 2235. Damage distinguish from Injury Injury refers to the illegal invasion of a legal right thus the legal wrong to be redressed. Damage is the lost, hurt, or harm which results from the injury or the amount of money to be awarded by the court to compensate for the loss or injury suffered. Principle of damnum absque injuria “damage without injury” Case: Farolan vs. SOLMAC March 13, 1991 Facts: The Bureau of Customs withheld the release of the importation of Solmac ‟s plastic products  considering that the shipment was different from what was authorized and importation of which is restricted, under LOI no. 658-B. Thereafter, Solmac filed the action for mandamus and injunction with the trial court, which  27   ordered Farolan and Parayno to release the importation. The CA ordered Farolan and Parayno solidarily liable in their personal capacity to pay Solmac temperate damages, exemplary. Issue: WON they are liable for damages Held: The SC set aside and annulled the decision of the CA. It further ruled that when a public officer takes his oath of office, he binds himself to perform the duties of his office faithfully and to use reasonable skill and diligence and to act primarily for the benefit of the public. The petitioners acted in good faith in not immediately releasing the imported goods. These cellophane products were competing with locally manufactured products. Hence, the importation of which is restricted. Petitioners could not be said to have acted in bad faith in not immediately releasing the imported goods without obtaining the clarificatory guidelines. As public officers, they had the duty to see to it that the law there tasked to implement was faithfully complied with. Whatever damages they may have caused is in the nature of damnum absque injuria. The law affords no remedy for damages resulting from an act that does not amount to a legal wrong. General principles of recovery To warrant recovery; requisites -there must be both a right of action -a wrong inflicted by the defendant -a damage resulting to the plaintiff 1. An action for recovery of damages for the commission of an injury to a person is a personal action. Personal Action- one brought for the recovery of personal property, for the enforcement of some contract of recovery of damages for its breach or for the recovery of damages for the commission of an injury to the persons or property. Case: Pascual vs. Beltran October 27, 2006 Facts: Raymundo was charged with Conduct Grossly Prejudicial to the Best Interest of the Services/Gross Insubordination/Violation of Reasonable Office Rules and Regulations. The DOTC exonerated Raymundo of the charges. Raymundo filed an action for damages arising from Malicious Administrative suit against Pascual, primarily on the basis of the administrative complaint against her. During the trial, Pascual was represented by the OSG. Raymundo filed a motion to disqualify the OSG since no right or interest of the government is involved and that petitioner is sued in his private capacity. The trial court granted the motion of Raymundo stating that Pascual is being sued for acts which he committed in his official capacity but the cause of action is for torts, for which he may be held personally answerable. It is a suit for damages, the interest of the government is in no way involved so that the appearance of the SG is unjustified. Held: The SC affirmed the decision of the trial court. The OSG has no authority to represent Pascual in a civil suit for damages. The law allows a public official to be represented by the OSG in all civil, criminal and special proceedings, when such proceedings arise from the former‟s acts in his official capacity. In this case, petitioner was actually sued in his personal capacity. The complaint filed by Raymundo merely identified petitioner as Director of Telecommunications Office, but did not categorically state he was being sued in his official capacity. The reliefs sought by Raymundo are directed against Pascual personally and not his office. Raymundo is claiming directly from Pascual. Thus, the OSG has no authority to represent him in such civil suit for damages. 2. Damages and its amount must be proved Every judgment for damages, whether arising from a breach of contract or whether the result of some provision of law, must rest upon satisfactory proof of the existence in reality of the damages alleged to have been suffered. (Rubiso vs. Rivera 41 Phil. 39) Except in those cases where the law authorizes the imposition of punitive or exemplary damages, a party claiming damages must establish by competent evidence the amount of such damages and courts cannot give judgment for a greater amount than that actually prove. (Ventanilla vs. Centeno) 3. Only proximate, not remote, damages are recoverable.  28   Proximate damages  –  said to be such as are the ordinary and natural result of the omission or commission of acts of negligence, and such are usual and might have been reasonably expected or contemplated. Remote Damages  –  the unusual unexpected result not reasonably to be anticipated from an accidental or unusual combination of circumstances-a result beyond and over which the negligent party has no control. In order to maintain an action for damages for injuries claimed to have been caused by a negligent or other tortuous or wrongful act or omission, it should be made to appear that such act or omission was the proximate cause of the injuries complained of. The damages the plaintiff is entitled to recover in a civil action for damages are, in the absence of any statutory modification of the rule, such only as are the natural and probable consequences of the wrongful act or breach of contract. Those which naturally and proximately flow from the srcinal wrongful act. TEST:  whether the facts shown constitute a continuous succession of events so linked together as to make a natural whole or whether there was a new and independent cause intervening between the wrong and the injury. 4. Speculative damages NOT recoverable    Alleged injuries or losses that are uncertain or contingent cannot be used as a basis of recovery for TORT   or contract actions.  An individual cannot be compensated for mere speculative probability of future loss unless he can prove that such negative consequences can reasonably be expected to occur. The amount of damages sought in a lawsuit need not be established with absolute certainty provided they are anticipated with reasonable certainty. Thus, in an action of ejectment, damages claimed by plaintiff on the basis of interest that could have been realized had the lands been converted into a subdivision and sold were too speculative to sustain an award, in the absence of evidence that the lands could have been sold at the price claimed and the purchase money collected.(M.M. Tuason & co. vs. De Guzman) 5. Duty of the injured party to minimize damages “The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. (Article 2203)  A party cannot recover for loss which s/he could have avoided or mitigated through his/her reasonable efforts. A person injured by the wrongful acts of another has a duty to mitigate or minimize the damages and must protect himself/herself if s/he can do so with reasonable effort or at minimal expense, and can recover from the delinquent party only such damages as s/he could not, with reasonable effort, have avoided. General Provisions  ARTICLE 2195: “The provsions  of this Title shall be respectively applicable to all obligations mentioned in article 1157.”   Article 1157: sources of obligations 1. Law 2. Contracts 3. Quasi-contracts 4. Delicts and 5. Quasi-delicts. Classification of Damages:  ARTICLE 2197: Damages may be: 1. Actual or compensatory 2. Moral 3. Nominal 4. Temperate or moderate 5. Liquated or 6. Exemplary or corrective. Actual Damages  –  adequate compensation only for pecuniary loss actually suffered by the plaintiff as he has duly proved (Article 2199). The components of actual damages are: a. value of loss and unrealized profit (Article 2200), b. loss of earning capacity for personal injury suffered (Article 2205), c. injury to plaintiff‟s business standing or commercial credit, attorney‟s fees  (Article 2208) and d. interest (Article 2209) Moral Damages  –  damages, though incapable of pecuniary estimation, are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person. (Article 2217) Nominal Damages  –  adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. (Article 2221)  29   Temperate or moderate damages  –  damages which may be recovered when the Court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. They are more than nominal but less than compensatory damages. (Article 2224) Liquidated Damages  –  damages agreed upon by the parties to a contract, to be paid in case of breach thereof. (Article 2226) Liquidated damages, whether intended as an indemnity or penalty, shall be equitably reduced if they are iniquitous or unconscionable. (Article 2227) Exemplary Damages  –  damages imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidate or compensatory damages (Article 2229). Requirements: 1. Imposed by way of example in addition to other damages. 2. Cannot be recovered as a matter of right 3. The act complained of must be accompanied by bad faith. Concept of SPECIAL AND ORDINARY damages Ordinary Damages   Found in all breaches of contract where there are no special circumstances to distinguish the case specially from other contracts. In all such cases the damages recoverable are such as naturally and generally would result from such a breach, “according to the usual course of things.”     These damages constitute the direct loss suffered by the aggrieved party.   They are estimated on the basis of circumstances prevailing on the date of the breach of the contract.   Generally inherent in a breach of Typical contract Illustration: In contracts for 'sale and purchase', the general rule as regards measures of damages is that the damages would be assessed on the difference between the contract price and the market price on the date of breach.  A agreed to deliver 100 bags of rice at P90 per bag on a future date and finding that the market price on that date has risen to P95 a bag, he refused to deliver them. In a suit for damages by the buyer for breach of contract for delivery of goods, it was held that the measure of damages is the difference between the contract price and the market price i.e. P5 per bag. If, however, the thing contracted is not available in the market, the price of the nearest and best available substitute may be taken into account in calculating damage. In the absence of market at the place of delivery, market price of the nearest place or price prevailing in the controlling market is to be considered. Special Damages   Those which exist because of SPECIAL circumstances and for which a debtor in GOOD FAITH can be held liable only if he had been  previously informed   of such circumstances. Illustration:  A taxi driver gave his taxi for repair to a mechanic informing him that unreasonable delays will result in loss of income of P100 per day. The mechanic unreasonably delays the repair of the taxi. The taxi driver is entitled to recover loss of income at the rate of P100 per day. If a carrier fails to deliver a movie film intended for showing at fiesta, it cannot be held liable for the extraordinary profits realizable at a fiesta showing, if it had not been told that the film had to be delivered in time for fiesta.(Mendoza vs. PAL, 90 Phil 836) Note: If a debtor is in BAD FAITH, special damages can be assessed against him even if he had NO knowledge of the special circumstances. It is enough that the damage can be reasonably attributed to the non-performance of obligation.
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