JESSE JR L. GALIAS LLB-2 CHAPTER IV DAMAGES FOR BREACH OF CONTRACT OF COMMON CARRIERS Art. 1764.

Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.
Art. 2197 Damages may be: (1) Actual or compensatory; (2) Moral; (3) Nominal; (4) Temperate or moderate; (5) Liquidated; or (6) Exemplary or corrective. ACTUAL OR COMPENSATORY Art. 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. Art. 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) Art. 2203 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. Cariaga v. Laguna Tayabas Bus Co. (1960) From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the injuries suffered by Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical student; that he has become completely misfit for any kind of work; that he can hardly walk around without someone helping him, and has to use a brace on his left leg and feet. The lower court found that the removal of the right frontal lobe of the brain of Edgardo reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death." The impression one gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both physically and mentally. His award of actual damages is thus increased to (a measly) P25,000. However, he cannot recover moral damages as LTB never acted fraudulently or in bad faith. Villa Rey v. CA (1970) The determination of the amount involves 2 factors. 1. The number of years on the basis of which the damages shall be computed and 2. The rate at which the losses sustained by his sisters should be fixed The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. Much is left to the discretion of the court considering the moral and material damages involved, and so it has been said that "(t)here can be no exact or uniform rule for measuring the value of a human life and the measure of damages cannot be arrived at by precise mathematical calculation, but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor. As to the rate: total earnings less expenses necessary in the creation of such earnings and income (net earnings) Pan Am World v. IAC, supra (1988) The rule laid down in Mendoza vs PAL is clear: Under Art. 1107, a debtor in good faith like the defendant herein, may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of transportation was entered into. In the absence of a showing that PAN AMs attention was called to the special

circumstances requiring prompt delivery of respondent Pangans luggages, PAN AM cannot be held liable for the cancellation of Pangans contracts as it could not have foreseen such an eventuality when it accepted the luggages for transit MORAL DAMAGES Art. 2206 The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: (3) 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. Art. 2216 No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case. Art. 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. Art. 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.

Art. 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. Fores v. Miranda (1959) Moral damages are not recoverable in damage actions predicted on a breach of the contract of transportation, in view of Articles 2219 and 2220 of the new Civil Code. By contrasting the provisions of these two articles it immediately becomes apparent that: (a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral damages; and (b) That a breach of contract can not be considered included in the descriptive term "analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but because the definition of quasi-delict in Art. 2176 of the Code expressly excludes the cases where there is a "preexisting contractual relation between the parties." An exception to this rule is Art 1764 which makes the common carrier expressly subject to the rule of Art. 2206, that entitles the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased" but where the injured passenger does not die, moral damages are not recoverable unless it is proved that the carrier is guilty of malice or bad faith. Air France v. Carrascoso (1966) There was a contract to furnish a first class passage. The contract was breached when the airline failed to furnish the first class ticket at Bangkok. There was bad faith when Air Frances employee compelled Carrascoso to leave his first class seat for an economy class one by forcibly ejecting him. PAL v. Miano (1995) In breach of contract of carriage by air, moral damages are awarded only if the defendant acted fraudulently or in bad faith. Bad faith means a breach of a known duty through same motive of interest or ill will. "Bad faith does not simply connote bad judgment or negligence, it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or ill-will that partakes of the nature of fraud. If the breach does not result in death, then there is a need to prove fraud or bad faith in order to obtain the award of moral damages. Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages.

EXEMPLARY Art. 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. Art. 2232 In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Art. 2233 Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. Mecenas v. CA As for the captain, he was playing mahjong before and up to the time of the collision. Whether or not he was then off-duty is immaterial. There is, both realistically speaking and in contemplation of law, no such thing as off-duty hours for the master of a vessel at sea that is a common carrier upon whom the law imposes the duty of extraordinary diligence. As for Negros Navigation, in permitting or in failing to discover and correct the regularity of the captains mahjong sessions while the ship was at sea, it must be deemed grossly negligent. In discussin the rule of exemplary damages in law, the Supreme Court looks to it as an instruction to serve the ends of law and public policy by reshaping socially deleterious behaviors, specifically in the case, to compel common carriers to control their employees, to tame their reckless instincts, and to force them to take adequate care of humans beings and their property. NOMINAL, TEMPERATE AND LIQUIDATED Art. 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 Art. 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 can not, from the nature of the case, be provided with certainty. Art. 2226 Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.

Art. 1757 The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise. Alitalia v. IAC (1990) There are some species of injury was caused to Dr. Pablo because Alitalia misplaced her baggage and failed to deliver it to her at the time appointed, a breach of the contract of carriage, with the result that she was unable to read her paper. She is not entitled to be compensated for loss or damage to her luggage since they were ultimately delivered to her. She is however entitled to nominal damages, which is adjudicated in order that the right of the passenger, which has been violated or invaded, may be vindicated or recognized, and not for the purpose of indemnifying the passenger for any loss suffered. Saludo v. CA The lamentable actuations of TWA's employees leave much to be desired, particularly so in the face of petitioners' grief over the death of their mother, exacerbated by the tension and anxiety wrought by the impasse and confusion over the failure to ascertain over an appreciable period of time what happened to her remains. Airline companies are hereby sternly admonished that it is their duty not only to cursorily instruct but to strictly require their personnel to be more accommodating towards customers, passengers and the general public. ATTORNEYS FEES AND INTEREST Art. 2208 In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (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 plainly 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 from 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.

Art. 2210 Interest may, in the discretion of the court, be allowed upon damages awarded for breach of contract. Art. 2212 Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. (1109a)

Art. 1765. The Public Service Commission may, on its own motion or on petition of any interested party, after due hearing, cancel the certificate of public convenience granted to any common carrier that repeatedly fails to comply with his or its duty to observe extraordinary diligence as prescribed in this Section.
* This function of the defunct Public Service Commission is now transferred to the Land Transportation Franchising and Regulatory Board (LTFRB). Executive Order 202, Sec. 5(b) provides: x x x b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor x x x

Art. 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws.