Damages. Article 1170.

Those who in the performance of their obligations

are guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages. (1101) Article 1165.
If the obligor delays, or has promised to deliver the same thing to two or
more persons who do not have the same interest, he shall be responsible for
any fortuitous event until he has effected the delivery.

l.Kinds of Damages (MENTAL)

Moral. Article 2217. Moral damages include physical suffering, mental

anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant's wrongful act for omission. Article
2219. Moral damages may be recovered in the following and analogous
cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts
causing physical injuries; (3) Seduction, abduction, rape, or other lascivious
acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or
arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;(9) Acts mentioned in article 309;(10) Acts and
actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.The
parents of the female seduced, abducted, raped, or abused, referred to in
No. 3 of this article, may also recover moral damages.The spouse,
descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.

Article 2220. Willful injury to property may be a legal ground for

awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad
faith. General Rule, not recoverable in breaches of contract.

• Exemplary. Article 2229. Exemplary or corrective damages are imposed,

by way of example or correction for the public good, in addition to the
moral, temperate, liquidated or compensatory damages.

•Nominal. Article 2221. Nominal damages are adjudicated in order that a

right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him. When no other kind of damages
may be recovered.
A.)Cannot co-exist with compensatory damages and exemplary.
B.)Nominal and temperate cannot be awarded at the same time.

Temperate. Article 2224. Temperate or moderate damages, which are

more than nominal but less than compensatory damages, may be recovered
when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be provided with certainty.

•Actual. Pecuniary losses suffered and duly proved by the plaintiff. This is
the only type of damage that would require proof.
a. Article 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be those that
are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall
be responsible for all damages which may be reasonably attributed to
the non-performance of the obligation. (1107a)
b. Article 2202. In crimes and quasi-delicts, the defendant shall be
liable for all damages which are the natural and probable
consequences of the act or omission complained of. It is not necessary
that such damages have been foreseen or could have reasonably been
foreseen by the defendant.
I. Death Indemnity (P50,000) - separate and distinct from other
forms of indemnity for damages and is automatically awarded
without need of further proof other than the fact of death and the
responsibility of the accused therefor.
II. Loss of earning capacity - he indemnity for the deceased’s lost
earning capacity is meant to compensate the heirs for the income
they would have received had the deceased continued to live.
III. Support -
IV. Moral Damages - But only the spouse, legitimate and illegitimate
descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the
deceased. Brothers and sisters and other collateral blood relatives
are not included among the persons entitled to recover moral
damages for mental anguish by reason of the death of the
deceased.
•Liquidated. Article 2226. Liquidated damages are those agreed upon by
the parties to a contract, to be paid in case of breach thereof.

II. Specific Circumstances affecting obligations in general

1. Fraud. Article 1171. Responsibility arising from fraud is demandable
in all obligations. Any waiver of an action for future fraud is void.
Why? Contrary to law and public policy for such will encourage the
commission of crime (1102a) liability for past fraud may be waived
provided public interests are not involved. However, if the past fraud
involves a public crime, the waiver of civil damages made by the
private complainant in favor of the defendant will not bar the state
from continuing the prosecution of criminal case. What is public
crime?
a) Dolo causante (causal fraud) – fraud in obtaining
consent/applicable only to obligations where consent is
necessary such as contract affecting the validity thereof making
it voidable. Article 1338. There is fraud when, through
insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which,
without them, he would not have agreed to. (1269) what is the
remedy of the party whose consent was obtained through fraud?
Annulment.
b) Dolo incidente (incidental fraud) – the deliberate and intentional
evasion of the normal fulfillment of the obligation. what is the
proper remedy? Action for damages. Why not annulment?
Because the contract is valid.
2. Negligence. Article 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is required by the
nature of the obligation and corresponds with the circumstances of
the persons, of the time and of the place. When negligence shows bad
faith, the provisions of articles 1171 and 2201, paragraph 2, shall
apply. If the law or contract does not state the diligence which is to be
observed in the performance, that which is expected of a good father
of a family shall be required. (1104a) Article 1172. Responsibility
arising from negligence in the performance of every kind of obligation
is also demandable, but such liability may be regulated by the courts,
according to the circumstances. (1103)
a) What is negligence? Negligence is the failure to observe for the
protection of the interests of another person, that degree of
care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury.
b) What are factors to be considered?
I. nature of the obligation
II. circumstances of the persons
III. circumstances of time
IV. circumstances of the place
c) Degree of care required
I. Required by law; or
1.Contract of common carrier – extraordinary diligence
2.Contract of necessary deposit – extraordinary diligence
3.Banks - extraordinary diligence
•Agreed upon by the parties. Orally or in writing;
•In the absence of the two above, diligence of a good father
of a family.
d) Kinds of Negligence as to SOURCE
Culpa Culpa Culpa
Contractual Aquiliana Criminal
Negligence Negligence Negligence
is merely is direct, is direct,
incidental to substantive, substantive
the and , and
performance independent independen
of an t
obligation
arising from
contract
Pre-existing No Pre- No Pre-
contractual existing existing
relations contractual contractual
relations relations
Defense of a Defense of a Not a
good father good father proper
of a family in of a family in defense.
the selection the selection Employee’s
and and guilt is
supervision supervision automatical
of employees of employees ly the
is not a is a proper employer’s
proper complete civil guilt, if
complete defense. the former
defense. is insolvent.
Though this
may
mitigate.
MASTER
AND
SERVANT
 RULE
When the Ordinarily, Presumptio
contract is the victim n of
not carried has to prove innocence,
out, it is the prosecution
presumed negligence has the
that the of the burden of
debtor is defendant. proving the
negligent, negligence
and it is his of the
duty to prove accused
otherwise
Preponderan Preponderan Guilt
ce of ce of beyond
evidence evidence reasonable
doubt

e) Negligence on the part of the supposed creditor/injured party

II. If his negligence was the immediate and proximate cause –
no recovery of damages
III. If his negligence was only contributory – may still recover
damages, but the courts can mitigate or reduce the same

f) Fraud distinguished from Negligence

Fraud Negligence
Deliberate Although voluntary,
intention to still there is no
cause damage deliberate intention to
cause damage
Liability Liability may be
arising from mitigated in certain
dolo cannot cases. Discretion of
be mitigated the court to fix amount
or reduced by of damages.
the courts Damages where both
parties are mutually
negligent, the fault of
one may cancel or
 neutralize the
negligence of the
other (in pari delicto)
Waiver of an Waiver of an action to
action to enforce liability due to
enforce future culpa may in a
liability due certain sense be
to future allowed
fraud is void Except where the
nature of the
obligation requires the
exercise of
extraordinary
diligence

g) Stipulation regarding negligence (future negligence)

I. Gross negligence can never be excused in advance for this
would be contrary to public policy. Where negligence is gross
or shows bad faith, it is considered equivalent to fraud.
II. Simple negligence may in certain cases be excused or
mitigated.
III. Three usual kins of stipulation in a bill of lading
1.Exempts the carrier from all liabilities for loss or damage
occasioned by its own negligence- against public policy and is
void.
2.Limits the liability to an agreed valuation, no matter how
much damage is caused, the value that can be recovered is
the same – void, actual damage may still be recovered
3.Limits the liability to an agreed value UNLESS the shipper
declares a higher value and pays a higher rate of freight –
valid and enforceable

3. Delay. Article 1169. Those obliged to deliver or to do something

incur in delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation. There is no
delay in obligation not to do.
However, the demand by the creditor shall not be necessary in
order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it
appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was a controlling motive for
the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered
it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other
does not comply or is not ready to comply in a proper manner with
what is incumbent upon him. From the moment one of the parties
fulfills his obligation, delay by the other begins. (1100a)
a)Meaning of delay
I. Ordinary delay – merely failure to perform an obligation on
time
II. Legal delay – failure to perform an obligation which failure
constitutes a breach of the obligation
b)To put a debtor in default, demand is needed.
I. Exceptions:
1.When stipulated.
2.When the law so declares.
.Article 1786. Every partner is a debtor of the partnership
for whatever he may have promised to contribute thereto.He
shall also be liable for the fruits thereof from the time they
should have been delivered, without the need of any demand.
(1681a)
3.When from the nature and the circumstances of the
obligation it appears that the designation of the time when
the thing is to be delivered or the service is to be rendered
was a controlling motive for the establishment of the contract
4.When demand would be useless
5.In reciprocal obligations

c)Kinds of Delay
•Mora Solvendi – delay on the part of the debtor
1. Effects:
a.The debtor becomes liable for damages; The debtor
becomes liable for the interest
i.Article 2209. If the obligation consists in the payment
of a sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to the
contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest,
which is six per cent per annum. (1108)
ii.Article 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay, and
 those who in any manner contravene the tenor thereof,
are liable for damages. (1101)
b.when it has for its object a determinate thing, the delay
or default places the risk of loss on the debtor. Liable for
fortuitous events
i.Article 1165. If the obligor delays, or has promised to
deliver the same thing to two or more persons who do not
have the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery. (1096)
ii.Article 2215. In contracts, quasi-contracts, and quasi-
delicts, the court may equitably mitigate the damages
under circumstances other than the case referred to in the
preceding article, as in the following instances: (4) That
the loss would have resulted in any event;
iii.Article 1263. In an obligation to deliver a generic
thing, the loss or destruction of anything of the same kind
does not extinguish the obligation. (n) Article 1170.
Those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for
damages. He can still be compelled to deliver a thing of
the same kind or held liable for damages.
2. Requisites:
a. Failure of the debtor to perform his positive obligation
on the date agreed upon;
b.Judicial or extrajudicial demand. What is the difference
between judicial or extrajudicial demand?
c. Failure of the debtor to comply with such demand

•Mora Accipiendi – delay on the part of the creditor

Effects:
a. The creditor becomes liable for damages
b.The debtor may relieve himself of the obligation by the
consignation of the thing after a valid tender of payment
c.The creditor bears the risk of the loss of the determinate
thing
i.Article 1256. If the creditor to whom tender of payment
has been made refuses without just cause to accept it, the
debtor shall be released from responsibility by the
consignation of the thing or sum due.
 Consignation alone shall produce the same effect in the
following cases:
(1) When the creditor is absent or unknown, or does not
appear at the place of payment;
(2) When he is incapacitated to receive the payment at the
time it is due;
(3) When, without just cause, he refuses to give a ireceipt;
(4) When two or more persons claim the same right to
collect;
(5) When the title of the obligation has been lost. (1176a)
d.The responsibility of the debtor for the loss of the
determinate thing is reduced and limited to fraud and
gross negligence.
e.All expenses for the preservation of the thing after the
delay or the default shall be chargeable to the creditor

•Compensatio Morae – delay on the part of both parties.

Compensated or offset
1.Article 1192. In case both parties have committed a
breach of the obligation, the liability of the first infractor
shall be equitably tempered by the courts. If it cannot be
determined which of the parties first violated the contract,
the same shall be deemed extinguished, and each shall
bear his own damages. (n)

4.Any other manner of contravention – violation of the terms and

conditions or defects in the performance of the obligation. Except:
Article 1174. Except in cases expressly specified by the law, or when
it is otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable. (1105a)

5.Fortuitous events- Article 1174. Except in cases expressly

specified by the law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the assumption of risk,
no person shall be responsible for those events which could not be
foreseen, or which, though foreseen, were inevitable. (1105a)
A.Elements of Fortuitous Events:
i.The cause or the failure of the debtor to comply with
obligations must be independent of human will;
 ii.It must be impossible to foresee or if it can be foreseen,
it must be impossible to avoid;
iii.The occurrence must be such as to render it impossible
for the debtor to fulfill obligations in a normal manner;
and
iv.The obligor must be free from any participation in the
aggravation of the injury or loss.
B.Exceptions:
i.Declared by stipulations; clearly expressed
Article 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy.
ii.When the nature of the obligation requires the
assumption of risk (contract of insurance). Risk of loss or
damage is an essential element in the obligation.
iii.Expressly specified by law:
1.The debtor is guilty of fraud, negligence or delay or
contravention of the tenor of the obligation
a.Article 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof,
are liable for damages. Article 1165. If the obligor
delays, or has promised to deliver the same thing to two
or more persons who do not have the same interest, he
shall be responsible for any fortuitous event until he has
effected the delivery.
Article 1262. An obligation which consists in the delivery
of a determinate thing shall be extinguished if it should be
lost or destroyed without the fault of the debtor, and
before he has incurred in delay.
When by law or stipulation, the obligor is liable even for
fortuitous events, the loss of the thing does not extinguish
the obligation, and he shall be responsible for damages.
The same rule applies when the nature of the obligation
requires the assumption of risk.
2.promised to deliver the same thing to two or more
persons who do not have the same interest. the reason is
because it would impossible to comply with obligation to
both even without any fortuitous event taking place.
3.the obligation to deliver a specific thing arises from a
crime
Article 1268. When the debt of a thing certain and
determinate proceeds from a criminal offense, the debtor
shall not be exempted from the payment of its price,
whatever may be the cause for the loss, unless the thing
having been offered by him to the person who should
receive it, the latter refused without justification to accept
it. (1185) mora accipiendi
4.The thing to be delivered is generic. Genus never
perishes
Article 1263. In an obligation to deliver a generic thing,
the loss or destruction of anything of the same kind does
not extinguish the obligation. (n)

iv.When negligence, delay or fraud concurred with the

fortuitous event