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Actual or Compensatory Damages

The document discusses actual or compensatory damages under Philippine law, noting they are awarded to compensate for pecuniary losses proved by the injured party. It explains the two types of actual damages - dano emergente for losses suffered and lucro cesante for lost profits. The document also outlines when a person is entitled to actual damages and how they are calculated in cases involving contracts, crimes, and death.

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Quinciano Morillo
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178 views28 pages

Actual or Compensatory Damages

The document discusses actual or compensatory damages under Philippine law, noting they are awarded to compensate for pecuniary losses proved by the injured party. It explains the two types of actual damages - dano emergente for losses suffered and lucro cesante for lost profits. The document also outlines when a person is entitled to actual damages and how they are calculated in cases involving contracts, crimes, and death.

Uploaded by

Quinciano Morillo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ACTUAL OR

COMPENSATORY
DAMAGES
Actual or Compensatory Damages

 Except as otherwise provided by law or by


stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages. (Article 2199, New
Civil Code)
 Actual or compensatory damages are those
awarded in satisfaction of, or in recompense for,
loss or injury sustained. (SNOW MOUNTAIN
DAIRY CORPORATION vs. GMA VETERANS
FORCE, INC., G.R. No. 192446, November 19,
2014)
When is a person entitled to recover actual or
compensatory damages?

 A person is entitled to adequate compensation only for such


pecuniary loss suffered by him as he has duly proved.

 In order to collect damages, the injured party must:


(P-P-P)
 1. Present the best evidence available;
 2. Prove the loss;
 3. Pray for the relief that the claim for loss be granted.
INDEMNIFICATION OF
DAMAGES
 Indemnification of damages shall comprehend
not only the value of the loss suffered, but also that
of the profits which the obligee failed to obtain.
(Article 2200)

 WHAT ARE THE TWO (2) KINDS OF ACTUAL


OR COMPENSATORY DAMAGES?

 1. DANO EMERGENTE - Loss suffered

 2. LUCRO CESANTE - Unrealized profits


 DANO EMERGENTE  LUCRO CESANTE

 1. Destruction of things;  1. Profits that could have


earned had there been no
interruption in the plaintiff’s
 2. Fines or penalties that had business as evidenced by
to be paid; reduced receipt of enterprise;

 3. Medical and  2. Interest on rentals that


hospitalization expenses; were not paid;

 4. Rents and agricultural  3. Profits because of a


products NOT received in an proposed future re-sale of the
agricultural lease. property.
EXTENT FOR LIABILITY FOR DAMAGES
IN CONTRACTS AND QUASI-CONTRACTS
(ARTICLE 2201)

Obligor acted in Obligor acted in


GOOD FAITH BAD FAITH
1. Liable for the natural and probable The obligor shall be responsible for
consequences of the breach of all damages which may be
obligation; reasonably attributed to the non-
performance of the obligation
2. Liable for those which the parties
have foreseen or could have
reasonably foreseen at the time of the
obligation was constituted.
EXTENT FOR LIABILITY FOR DAMAGES
IN CRIMES AND QUASI-DELICTS
(ARTICLE 2202)

 Defendant shall be liable for:

 The damages which are the natural and probable consequences of the act
or omission complained of.

 NOTE: It is not necessary that such damages have been forseen or could
have reasonably foreseen by the defendant.
 In 1973, the petitioner's daughter, Lucrecia Europa, was employed as sample maker
by the private respondent Hunter Garments Manufacturing (Philippines)
Incorporated.

 Sometime during the course of her employment, or on March 9, 1978, Lucrecia got
electrocuted by the high speed sewing machine which had been assigned to her by the
private respondent.

 There is no indication that the management had ever shown any serious concern for
the safety of those operating said machines. (There is an express finding of gross
negligence)

 Supreme Court held that in an action based on quasi-delict, all damages for the
natural and probable consequences of the act or omission complained of are
recoverable.

 (EUROPA VS. HUNTER GARMENTS MFG. PHIL. Gr No. 72827, July 18,
1989)
 ARTICLE 2205

 Damages may be recovered:

(1) For loss of earning capacity in cases of temporary or permanent


personal injury;

 Example : If a dancer’s leg is amputated.

(2) For injury to the plaintiff’s business standing or commercial


credit.

 An award for dames for lost of goodwill or reputation falls under


Article 2205. (Tanay Recreation Center VS. Fausto G.R. No.
140182. April 12, 2005)
ARTICLE 2206
Damages for DEATH caused by crime or quasi-delict:
(S-E-M-I)

1. Support (if the deceased is obliged to give support);

2. Earning Capacity;

3. Moral Damages;

4. Indemnity provided by jurisprudence .


CIVIL INDEMNITY IN CASES OF DEATH

 Every person criminally liable for a felony is also civilly liable


(People VS Abesamis GR No. 140985, August 28, 2007)

 When death occurs due to a crime the following damages may be


awarded:

1. Civil Indemnity ex delicto for the death of the victim;


2. Actual or compensatory damages;
3. Moral damages;
4. Temperate damages;
5. Exemplary damages;
CIVIL INDEMNITY IN CASES OF DEATH

 Jurisprudence provides:

 Thecourt awarded P75,000 as civil indemnity if the


imposable penalty was DEATH.

 Ifthe imposable penalty was RECLUSION


PERPETUA, the court awarded P50,000 as civil
indemnity.
Such awards are mandatory without need of
allegation and proof other than death of the
victim owing to the fact of the commission of murder or
homicide. (Razon VS People GR No. 158053, June 21, 2007)

The award for civil indemnity is mandatory and is granted to


the heirs of the victim without need of proof other than the
commission of the crime. (People VS Tubongbanua. GR No.
171271, August 31, 2006)
JURISPRUDENCE

In the following cases of homicide the amount of


P50,000 was awarded by the court as civil indemnity.

People VS Rodriguez GR No. 90255, January 23, 1991

People VS Algarme GR No. 175315 February 12, 2009

People VS Canaveras GR No. 193839, November 27,


2013
JURISPRUDENCE

In the following cases of murder the amount of P75,000


was awarded by the court as civil indemnity.

People VS Tubongbanua GR No. 171271, August 31, 2006;

People VS Ranin GR No. 173023, June 25, 2008;

People VS Victoriano Villar GR No. 202708, April 13,


2015;
LOSS OF EARNING
CAPACITY
 Not for loss of earnings but for loss to earn money.

Net
Earning = Life Expectancy X (GROSS ANNUAL INCOME - LIVING EXPENSES)
Capacity
 
 
Life Expectancy is determined in accordance with this formula:
2/3 x (80 – age at death)

Adopted in the American Expectancy Table of Mortality or the Actuarial of Combined


Experience Table of Mortality. (The Heirs of George Y. Poe vs Malayan Insurance Co.,
G.R. No.156302, April 7, 2009 and Villa Rey Transit, Inc. VS Court of Appeals, G.R. No. L-
25499 February 18, 1970)
CASE SAMPLE
(Cadano Shipping Lines, Inc. VS Sugata-on, GR No. 163212, March 13, 2007)

Life expectancy = 2 / 3 x [80 – age of deceased at the time of death]

2 /3 x [80 – 56]

2 / 3 x [24]

Life expectancy = 16

With 16 more years of life expectancy and a monthly income of P7,800.00, as evidenced by the
pay slips duly presented before the RTC, Melquiades’ earning capacity is computed as follows:

Net Earning Capacity = life expectancy x (gross annual income - reasonable and necessary
living expenses).

= 16 x ( P93,600.00 – P 46,800.00)
= 16 x ( P 46,800.00 )
NEC = P748,800.00
 May the court award damages for earning capacity DESPITE
the absence of documentary evidence?

 General Rule : No. Documentary evidence must be presented

 Exceptions:
1. The deceased is self-employed and earning less than the
minimum wage under current labor laws, in which case judicial
notice may be taken of the fact that in the deceased’s line of work
no documentary evidence is available; or

2. The deceased is employed as a daily wage worker earning less


than the minimum wage under the current labor laws. (Philippine
Hawk Corporation vs. Lee, 612 SCRA 576, February 16, 2010 )
ARTICLE 2207
INSURER’S RIGHT OF SUBROGATION

1. If the insurer paid for the injury or loss arising out of the
wrong or breach of contract, the insurance company will be
subrogated to the rights of the insured.

2. If the amount paid by the insurance company does not fully


cover the loss or injury, the aggrieved party shall be entitled
to recover the deficiency to the person causing the loss or
injury.
EXCEPTIONS:

1. If the assured by his own act releases the wrongdoer or third party
liable for the loss or damage from liability.

2. Where the insurer pays the assured value of the lost goods without
notifying the carrier in good faith settled the assured’s claim for loss,
the settlement is binding on both the assured.

3. Where the insurer pays the assured for a loss which is not a risk
covered by the policy thereby affecting voluntary payment, the
former has no right of subrogation.

(Pan Malayan Insurance Corp. VS Court of Appeals GR No.


81026, April 3, 1990)
 ARTICLE 2208. In the absence of stipulation,
attorney’s fees and expenses for litigation, other
than judicial costs, cannot be recovered,

EXCEPT:

(ELMUR’S WISe DJ must be reasonable.)


 (ELMUR’S WISe DJ must be reasonable.)
1. When Exemplary damages are awarded;
2. When the defendant’s act or omission has compelled the plaintiff to Litigate with third
persons or to incur expenses to protect his interest;
3. In criminal cases of Malicious prosecution against the plaintiff;
4. In case of a clearly Unfounded civil action or proceeding against the plaintiff;
5. Where the defendant acted in gross and evident bad faith in Refusing to satisfy the
plaintiff’s valid, just and demandable claim.
6. In actions for legal Support;
7. In actions for the recovery of Wages of household helpers, laborers and skilled workers;
8. In actions for Indemnity under workmen’s compensation and employer’s liability laws;
9. In a Separate civil action to recover civil liability arising form a crime;
10. When at least Double judicial costs are awarded;
11. In any other case where the court deems it Just and equitable that attorney’s fees and
expenses of litigation should be recovered.
 In all cases, the attorney’s fees and expenses of litigation must be reasonable.
REMEMBER
 Attorney’s fees in Article 2208 is not a payment
for services rendered by a lawyer BUT an award
in favor of the litigant, who is a judgment
creditor who may enforce judgment. (Quirante vs
IAC, GR No. 73886 January 31, 1989)
 The Court’s award of attorney’s fees is an indemnity given to
the party NOT to the counsel, unless they have agreed that the
award shall pertain to the lawyer as additional compensation
or part thereof. (Masmud vs NLRC, 579 SCRA 509, February
13, 2009)

 The grant of attorney’s fees as part of damages is the exception


rather than the general rule, and the counsel’s fees are not
awarded every time a party prevails in the suit. (Philippine
Phosphate Fertilizer Corporation vs Kamalig Resources Inc.
540, SCRA 139, December 13, 2007)
In all cases, attorney’s fees and expenses of
litigation must be reasonable.

The award of attorney’s fees lies within the discretion of the


court.
Art. 2204. In crimes, the damages to be adjudicated
may be respectively increased or lessened according to
the aggravating or mitigating circumstances.
MITIGATION OF DAMAGES

Art. 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:
 (1) That the plaintiff himself has contravened the terms of the contract;
 (2) That the plaintiff has derived some benefit as a result of the contract;
 (3) In cases where exemplary damages are to be awarded, that the
defendant acted upon the advice of counsel;
 (4) That the loss would have resulted in any event;
 (5) That since the filing of the action, the defendant has done his best to
lessen the plaintiff's loss or injury.

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