VDA. DE MEDINA v.

CRESENCIA
G.R. No. L-8194
July 11, 1956
Plaintiff-appellees Emerenciana M. Vda. De Medina, et al
Defendant-appellant Guillermo Cresencia
summary

Reyes, J.B.L., J.

In a separate civil action for damages due to a breach in a contract of carriage (which caused
the death of Medina), Cresencia was held solidarily liable with the driver of the jeepney. The
Court held: (1) Since sale of jeep was not made known to PSC, Cresencia as registered owner
and operator is liable (2) nominal damages cannot be awarded when compensatory and
exemplary damages have already been awarded.

facts of the case

May 31, 1953 a passenger jeep driven by Brigido Avorque smashed into a Meralco post on Azcarraga street,
resulting in the death of Vicente Medina (passenger). A crim case for homicide thru reckless imprudence was filed against
driver to which he pleaded guilty on Sept. 9, 1953.
Heirs of Medina reserved their right to file a separate action for dmgs and brought suit on June 16, 1953 against driver
and Cresencia (registered owner and operator of jeep). Cresencia disclaimed liability saying that he had sold the jeep in
question to Cudiamat (and that there were many subsequent sales after that until it was purchased in 1953 by Rosario
Avorque). The complaint was amended to include Rosario who admitted to buying the jeep but denied being the public
utility operator of the same. C & R made manifestations admitting that based on the records of the Motor Vehicles Office
and Public Service Commission, Cresencia was still the registered operator of the jeep while Rosario was the owner at the
time of the accident.
LC: as far as the public is concerned, Cresencia is still the owner and is liable solidarily with Brigido. Awarded 6k
compensatory dmgs, 30k moral dmgs, 10k exemplary dmgs, 10k nominal dmgs, 5k attys fees and costs. Rosario is
absolved from liability.

issue
Who is the liable with Brigido (Cresencia or Rosario)? Cresencia
What is the basis of the liability? Culpa contractual
WoN the award of Nominal damages was proper. NO. Nominal damages deleted. Decision affirmed.

ratio
Wrt ownership of the jeep
As held in the case of Montoya v Ignacio: Sec. 20 (g) CA No. 146 as amended, requires approval of the Public
Service Commission (PSC) in order a franchise/any privilege pertaining thereto may be sold/leased without infringing
the certificate issued to the grantee. This means that:
(1) if property covered by the franchise is transferred/leased without this requisite approval, the transfer isnt
binding against the public or the PSC; and
(2) in contemplation of law the grantee of record continues to be responsible under the franchise in relation to the
Commission and to the public.
Reason for the rule: franchise is personal in nature + so that PSC may take proper safeguards (WoN there are
justifiable grounds for the transfer/lease of property covered by franchise OR WoN sale/lease is detrimental to public) to
protect the interest of the public. Since the sale of the jeepney was without the approval of PSC, Cresencia being the
registered owner and operator, is correctly held liable.
Wrt basis of liability
Cresencia: the basis of the action is ERs subsidiary liability under the RPC for dmgs arising from EEs criminal acts. Since
Rosario admitted that she is the employer, she should be the one subsidiarily liable for Brigidos acts.
SC: The basis for the action isnt ERs subsidiary liability but on a breach of the carriers contractual obligation to carry its
passengers safely to their destination. Since the liability for culpa contractual is direct and immediate, theres no need to
prove Brigidos insolvency before damages can be recovered from Cresencia.
Wrt Nominal Damages
While the award is not questioned, the Ct said that the award of nominal damages in this case is untenable since the
same cannot co-exist with compensatory damages. The purpose for nominal damages is to vindicate or recognize a right
that has been violated and not to indemnify the plaintiff for any loss suffered by him (Art 2221, 2223 NCC). Since the LC
already awarded compensatory and exemplary damages, the award for nominal damages is unnecessary and improper.

Northwest v. Cuenca
G.R. No. L-22425

August 31, 1965

CONCEPCION, J.:

petitioners NORTHWEST AIRLINES, INC

respondents NICOLAS L. CUENCA and COURT OF APPEALS
summary Cuenca was kicked out from 1st class on his flight to Tokyo, hence, he sued for

damages. Nominal damages cannot be awarded along with compensatory damages.

facts of the case

Cuenca boarded petitioner's plane in Manila with a first class ticket to Tokyo, he was, upon arrival at Okinawa,
transferred to the tourist class compartment
Even with the fact the he revealed that he was travelling in his official capacity as official delegate of the Republic to a
conference in Tokyo, an agent of petitioner rudely compelled him in the presence of other passengers to move, over
his objection, to the tourist class, under threat of otherwise leaving him in Okinawa.
In order to reach the conference on time, respondent had no choice but to obey.
CFI: granted the sum of P20,000 as moral damages, together with the sum of P5,000 as exemplary damages, with legal
interest thereon from the date of the filing of complaint,"
CA affirmed except as to the P5,000.00 exemplary damages, which was eliminated, and the P20,000.00 award for moral
damages, which was converted into nominal damages.

issue
Did the court err in awarding P20,000 as nominal damages? NO

ratio
Petitioners based upon their argument on Medina vs. Cresencia and Quijano vs. Philippine Air Lines but the court said
that neither case was in point.
pq The court in those cases eliminated a P10,000 award for nominal damages, because the aggrieved party had already
been awarded P6,000 as compensatory damages, P30,000 as moral damages and P10,000 as exemplary damages, and
"nominal damages cannot coexist with compensatory damages."
In the case at bar, the Court of Appeals has adjudicated no such compensatory, moral and exemplary damages
to respondent herein.
It is true that said ticket was marked "W/L," but respondent's attention was not called thereto. Much less was he advised
that "W/L" meant "wait listed."
Upon the other hand, having paid the first class fare in full and having been given first class accommodation as he
took petitioner's plane in Manila, respondent was entitled to believe that this was a confirmation of his first class
reservation and that he would keep the same until his ultimate destination, Tokyo.
Northwest has not tried to explain or even alleged that the person to whom respondent's first class seat was given had a
better right thereto. In other words, since the offense had been committed with full knowledge of the fact that
respondent was an official representative of the Republic of the Philippines, the sum of P20,000 awarded as
damages may well be considered as merely nominal. At any rate, considering that petitioner's agent had acted in a
wanton, reckless and oppressive manner, said award may also be considered as one for exemplary damages.

Cogeo-Cubao Operators v. CA
G.R. No. 100727
March 18, 1992
J. Medialdea
petitioners COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION
respondents THE COURT OF APPEALS, LUNGSOD SILANGAN TRANSPORT SERVICES,
CORP., INC.
summary The court may award nominal damages in every obligation arising from any source
enumerated in Article 1157, or in every case where any property right has been invaded.

facts of the case

A certificate of public convenience to operate a jeepney service was ordered to be issued in favor of Lungsod
Silangan to ply the Cogeo-Cubao route on the justification that public necessity and convenience will best be
served, and in the absence of existing authorized operators on the lined apply for.
On the other hand, defendant-Association was registered as a non-stock, non-profit organization with the main
purpose of representing plaintiff-appellee for whatever contract and/or agreement it will have regarding the
ownership of units, and the like, of the members of the Association.
Perturbed by plaintiffs' Board Resolution No. 9 which adopting a Bandera System under which a member of the
cooperative is permitted to queue for passenger at the disputed pathway in exchange for the ticket worth twenty
pesos, the proceeds of which shall be utilized for Christmas programs of the drivers and other benefits, and on
the strength of defendants' registration as a collective body with the Securities and Exchange Commission,
defendants, led by Romeo Oliva decided to form a human barricade on November 11, 1985 and assumed the
dispatching of passenger jeepneys, bringing this suit for damages.
Defendant-Association's Answer contained vehement denials to the insinuation of take over and at the same time
raised as a defense the circumstance that the organization was formed not to compete with plaintiff cooperative.
It, however, admitted that it is not authorized to transport passengers
TC: defendant to pay plaintiff P50k for actual damages and 10k as attys fee.
CA affirmed but also awarded nominal damages of 10k.

issue
WON the petitioner usurped the property right of the respondent which shall entitle the latter to the award of nominal
damages (YES)

ratio
Petitioner: not to compete with defendant but was organized for the common protection of drivers from abusive traffic
officers who extort money from them, and for the elimination of the practice of respondent corporation of requiring
jeepney owners to execute deed of sale in favor of the corporation to show that the latter is the owner of the jeeps under
its certificate of public convenience. Petitioner also argues that in organizing the association, the members thereof are
merely exercising their freedom or right to redress their grievances.
SC: Devoid of merit. Under the Public Service Law, a certificate of public convenience is an authorization issued by the
Public Service Commission for the operation of public services for which no franchise is required by law. In the instant
case, a certificate of public convenience was issued to respondent corporation on January 24, 1983 to operate a public
utility jeepney service on the Cogeo-Cubao route.
A certification of public convenience is included in the term "property" in the broad sense of the term. Under the Public
Service Law, a certificate of public convenience can be sold by the holder thereof because it has considerable material
value and is considered as valuable asset. Although there is no doubt that it is private property, it is affected with a public
interest and must be submitted to the control of the government for the common good. Hence, insofar as the interest of
the State is involved, a certificate of public convenience does not confer upon the holder any proprietary right or interest
or franchise in the route covered thereby and in the public highways. However, with respect to other persons and other
public utilities, a certificate of public convenience as property, which represents the right and authority to operate its
facilities for public service, cannot be taken or interfered with without due process of law.
In the case at bar, the trial court found that petitioner association forcibly took over the operation of the jeepney
service in the Cogeo-Cubao route without any authorization from the Public Service Commission and in violation of
the right of respondent corporation to operate its services in the said route under its certificate of public convenience.

Article 21 of the Civil Code provides that any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the damage. It presupposes loss or
injury, material or otherwise, which one may suffer as a result of such violation. It is clear from the facts of this case that
petitioner formed a barricade and forcibly took over the motor units and personnel of the respondent corporation. This
paralyzed the usual activities and earnings of the latter during the period of ten days and violated the right of
respondent Lungsod Corp.

DAMAGES PART:
As to the propriety of damages in favor of respondent Lungsod Corp., Court upheld appellate court which stated:
it does not necessarily follow that plaintiff-appellee is entitled to actual damages and attorney's fees. While there may
have been allegations from plaintiff-cooperative showing that it did in fact suffer some from of injury it is legally
unprecise to order the payment of P50,000.00 as actual damages for lack of concrete proof therefor. There is, however, no
denying of the act of usurpation by defendants-appellants which constituted an invasion of plaintiffs'-appellees' property
right. For this, nominal damages in the amount of P10,000.00 may be granted. (Article 2221, Civil Code).
No compelling reason exists to justify the reversal of the ruling of the respondent appellate court in the case at bar. Article
2222 of the Civil Code states that the court may award nominal damages in every obligation arising from any source
enumerated in Article 1157, or in every case where any property right has been invaded. Considering the circumstances
of the case, the respondent corporation is entitled to the award of nominal damages.

Araneta v. Bank of America

G.R. No. L-25414
Date July 30, 1971
J. Makalintal
petitioners Leopoldo Araneta
respondents Bank of America
summary Check bouncing caused by Bank of Americas errors. The CA removed temperate
damages as an award for lack of proof of actual loss. The Court explained that temperate
damages may be awarded despite lack of proof if the court is convinced that there has
been loss suffered.

facts of the case

Petitioner is a merchant engaged in the import and export business. He issued a check for $500 payable to
cash and drawn against the San Francisco main office of the Bank of America. He had a credit balance of
$523.81 as stated in a letter to him dated Sept 7, 1961. The check was received the following day but was
dishonored and stamped the notation Account Closed. When petitioner inquired, the respondent said that it
was their error and would fix it accordingly. Unfortunately, another similar incident happened later.
Petitioner issued two checks, check 110 and check 111, payable to cash and to be drawn against the Bank of
America. The first check was received by a certain Rufina Saldana who deposited it to her account. The same
happened to the second check. Though petitioner had enough balance to cover both checks, they were again
stamped with Account Closed and returned to their respective clearing banks. The error regarding check 110
was however fixed by respondent, albeit a little too late.
Petitioner wrote to respondent bank and demanded a sum of $20k as damages. The respondent admitted
its liability but found the amount to be excessive. It offered back P2000 but this was refused. Petitioner then
filed a complaint for the recovery of actual, moral, temperate and exemplary damages as well as attorneys
fees.
The TC granted all the awards of damages but upon appeal by respondent to the CA, the awards were
reduced and eliminated the award for compensatory and temperate damages. Hence this petition for review.

issue
WON Temperate or Moderate Damages may be awarded without proof of actual pecuniary loss? YES

ratio
The Court held that the CA erred in disallowing the award of temperate damages. The Court agreed with
the provisions invoked (Art 2205 and 2216) and case cited by the petitioner, Atlanta National Bank v Davis,
where temperate damages are held to be recoverable though no exact proof can be shown.
The true question in this case is whether or not, petitioner did suffer some pecuniary loss although no
substantial proof of the amount may be adduced. The CA referred to the petitioners failure to prove the
existence of a supposed contract for him to buy jewels at a profit, when it rejected the claim for temperate
damages. The SC pointed out that the CA itself found that actual damages have been suffered, in the form of
harm done to petitioners financial credit. The petitioner, being a businessman, suffers material loss because of
any adverse reflection to his financial credit.
The Court cited the Code Commission who explained the concept of temperate damages under article
2224. To wit,
In some States of the American Union, temperate damages are allowed. 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 one's commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money.
Should damages be denied for that reason? The judge should be empowered to calculate moderate damages in such cases,
rather than that the plaintiff should suffer, without redress from the defendant's wrongful act.

The Court believed that the award of P5000 as temperate damages is justified, even though the respondent
tried to rectify the error, but it remains that the rectification came after the damage has been made.
The petitioner is also entitled to moral damages, as correctly held by the CA in the amount of P8,000 as
well as attorneys fees in the amount of P4000 [from P10k (TC) to P1k (CA)]

Manila Banking Corp v. IAC

G.R. No. L-66123
Aug 22, 1984
petitioners Manila Banking Corporation
respondents IAC and Wilfredo J. Rivera
summary

Relova, J.

Wil deposited money at MBC. Wil received letter from Collins Philippines that his check was
dishonored. Wil complained to the bank, it seems that the bank deposited the money of Wil in
another account that is why his check could not be encashed. Wil filed a case against MBC
assailing that the banks gross negligence made him suffer humiliation and was embarrassed.
Court awarded him DAMAGES but on appeal IAC MODIFIED the award for damages and
eliminated some that did not have merit or factual basis.

facts of the case

- July 10, 1975 herein private respondent Wilfredo J. Rivera deposited with petitioner bank the sum of
P80,189.19. In the afternoon of the same day, private respondent Rivera issued a Manila Banking Corporation
Check No. 16756626 in the amount of P80,000.00 under Current Account No. 6-05350-5 payable to Collins
Philippines with whom he had a business transaction.
- July 15, 1975: Wils wife received a demand letter from Collins Philippines.
- Wils wife immediately informed him in the province about the letter of demand. Upon receipt of the
message, Mr. Rivera complained to the Public Relations Officer of petitioner bank, inviting attention to the
letter received by him from Collins Philippines complaining against the dishonor of his check. The Public
Relations Officer of the bank, upon investigation, found that the money deposited was credited into another
account and that was the reason why the check issued by him could not be encashed upon presentation.
- As a consequence, private respondent claimed that he suffered humiliation and embarrassment due to the
bank's gross negligence. Complaint was filed in court which awarded private respondent damages, as follows:
1) P75,000.00 as actual damages, to compensate plaintiff for the loss of business and business opportunities;
2) P25,000.00 as moral damages, to compensate plaintiff for the embarrassment, humiliation and mental anguish
suffered;
3) P10,000.00 as exemplary damages;
4) P25,000.00 as and for attorney's fees; and
5) Cost of suit. (pages 25-26, rollo).

- On appeal to the Intermediate Appellate Court, the judgment of the trial court was modified in the sense that:
... the award of actual damage in the sum of P75,000.00 be eliminated and instead the sum of Ten Thousand
(P10,000.00) Pesos be awarded as temperate damage and the reduction of the award of attorney's fees to the
sum of Fifteen Thousand (P15,000.00) Pesos, the decision is affirmed in toto in all other respects. (page 28,
rollo).

issue
- WON the Intermediate Appellate Courts award for damages was proper? YES

ratio
- It is the submission of petitioner that (1) there is no evidence on record to support an award of temperate
damages in favor of respondent Rivera; (2) private respondent is not entitled to moral damages because his
credit and business standing was not impaired and he did not suffer serious anxiety and/or mental anguish;
and (3) petitioner should not be made to pay exemplary damages, attorney's fees and the costs of suit.
- It will be noted that in respondent appellate court's decision, judgment was rendered eliminating the award
of actual damages and, instead, the amount of P10,000.00 was awarded the private respondent by way of
temperate damages and attorney's fees in the reduced amount of P15,000.00, and affirming the lower court's
decision in all other respects. This would mean that the amount of P25,000.00 as moral damages and
P10,000.00 as exemplary damages still stay.
- We agree with petitioner that private respondent is not entitled to moral damages considering that in a
matter of four hours the mistake was rectified and the payee, Collins Philippines, was paid the full amount of
the check. In the case of Singson vs. Bank of Philippine Island, 23 SCRA 1117, the plaintiffs commenced the action
against the bank and its President, Santiago Freixas for damages (P100,000.00 as moral damages, P20,000.00 as
exemplary damages, P20,000.00 as nominal damages, and P10,000.00 for attorney's fees and expenses of

litigation, plus the costs) in consequence of illegal freezing of plaintiff's account. This Court held that since "the
wrong done to the plaintiffs was remedied as soon as the President of the bank realized the mistake he and his
subordinate employee had committed, the Court finds that an award of nominal damages the amount of
which need not be proven in the sum of P1,000.00, in addition to attorney's fees in the sum of P500.00,
would suffice to vindicate plaintiff's rights."
- In the case at bar, temperate or moderate damages are proper not for indemnification of loss suffered but
for the vindication or recognition of a right violated or invaded. Considering the facts of the case under
appeal, the sum of P5,000.00 as temperate or moderate damages would suffice, plus attorney's fees of
P5,000.00.
- WHEREFORE, the judgment appealed from is MODIFIED in the sense that petitioner bank is hereby
sentenced to pay private respondent Wilfredo J. Rivera the sums of P5,000.00, as temperate or moderate
damages and P5,000.00, as attorney's fees, apart from the costs.

PEOPLE v. TORRES
G.R. No. 176262
Sept 11, 2007
J. Chico-Nazario
plaintiff People of the Philippines
accused Edilberto & Jose Torres
summary Temperate damages are awarded where no documentary evidence of actual damages
was presented in the trial because it is reasonable to presume that, when death occurs,
the family of the victim incurred expenses for the wake and funeral the Court
awarded P25k in this case.

facts of the case

Feb 17, 2002, 1AM: Witness Emilio was walking home after spending hours guarding the fruits of the

mango trees. As he was passing through Calbays rice field, he noticed Noel, who was 40- 50 meters away,
also walking on his way home. Suddenly, three men emerged from the middle of the rice field and attacked
Noel, the victim. Emilio recognized the assailants as appellants and accused Rodolfo Torres.
While Rodolfo held both arms of Noel behind his back, Edilberto seized the head of Noel by his left
hand and stabbed the victim on the nape and on the left side of his body. Rodolfo then pushed the
victim to the ground. When the victim hit the ground, Jose poked a gun on the victims head and shot the
latter. Thereafter, the Torres brothers fled the scene.
RTC found Edilberto and Jose guilty of MURDER (qualified by treachery) despite their denial and alibis
to suffer reclusion perpetua. Note: Rodolfo remains at large.
The two are ordered to indemnify, jointly and severally, the heirs of the victim: P60,000 as civil
indemnity, P50,000 as moral damages and P20,000 as exemplary damages, and to pay the costs.
CA: affirmed RTC in toto. Hence, this case.

issue
WON the two are guilty beyond reasonable doubt. YES.

(MAIN) How much damages should be awarded to the heirs of Noel? Civil indemnity=P50k, Moral
damages=P50k, Exemplary damages=P25k, and Temperate damages=P25k.

ratio
Emilio, the eyewitness to the incident, described with clarity the circumstances prior to, during and after the killing of
the victim. He saw the incident and was able to identify the assailants as he was about 40-50 meters away from the
scene. Not only was the situs criminis lit up by moonlight, it was also brightened by the flashlight held by the victim,
which remained on even when it fell from the victims hand. Thus, contrary to appellants postulation, the prosecution
witness sufficiently demonstrated that the scene received ample illumination when the killing took place.
The autopsy report also confirms the testimony of Emilio that the victim died of cardiac respiratory arrest due to the
gunshot and stab wounds sustained by him. Moreover, the eyewitness could not have been mistaken about the identity
of appellants since he knew them.
In contrast to the trustworthy, positive and detailed evidence arrayed against appellants, all they could muster for
their defense was denial and alibi. Given that in this case, they were positively identified they must demonstrate by
positive, clear and satisfactory proof that it was physically impossible for them to be at the scene of the crime during its
commission. They failed to do such.
In addition, Emilios act of just reporting the incident the day after the incident is still in accord with human
experience. His fear of reprisal or avoiding participation in the investigation could be a credible excuse for the one-day silence
of a prosecution witness before divulging to authorities what he had just witnessed.
The essence of treachery is a deliberate and sudden attack that renders the victim unable and unprepared to defend
himself by reason of the suddenness and severity of the attack. During the said incident, it was impossible for the victim
to defend himself against the onslaught of appellants and their brother. They deliberately adopted means and methods
in ensuring his barbaric demise. Other than the aggravating circumstance of treachery, the information alleged evident
premeditation1 but this was not proven.
Three requisites needed to prove evident premeditation: (a) the time when the offender determined to commit the crime; (b) an
act manifestly indicating that the offender had clung to his determination; and (c) a sufficient interval of time between the
determination and the execution of the crime to allow him to reflect upon the consequences of his act.
1

SC affirmed the ruling of the lower courts which imposes upon the appellants the penalty of reclusion perpetua.

WRT damages:
SC affirmed the award of moral damages worth P50,000. However, the award of civil indemnity worth
P60,000 was reduced to P50,000 in accordance with prevailing jurisprudence.
The award of exemplary damages is likewise in order, since the qualifying circumstance of treachery
was proven. When a crime is committed with an aggravating circumstance, either qualifying or generic, an
award of P25,000 as exemplary damages is justified under Art 2230 NCC. This kind of damage is intended to
serve as deterrent to serious wrongdoings, and as a vindication for undue sufferings and wanton invasion of
the rights of an injured or as punishment for those guilty of outrageous conduct.
The award of temperate damages in the amount of P25,000 to the heirs of the victim is justified.
Temperate damages are awarded where no documentary evidence of actual damages was presented in the
trial because it is reasonable to presume that, when death occurs, the family of the victim incurred expenses for
the wake and funeral.

NATIONAL POWER CORP. v. NAMERCO

G.R. No. L-33819 and L-33897
October 23, 1982
J. Aquino
plaintiff-appellant National Power Corporation
defendant-appellee National Merchandising Corporation and Domestic Insurance Company of the
Philippines
summary NPC contracted with NAMERCO for the delivery of sulfur. Breach on NAMERCOs
part. No proof of pecuniary loss is required for the recovery of liquidated damages.
The stipulation for liquidated damages is intended to obviate (avoid or prevent)
controversy on the amount of damages.

facts of the case

NAMERCO represents the International Commodities Corporation of New York City. NPC and
NAMERCO entered into a contract whereby NPC will buy from ICC sulfur to power NPCs fertilizer plant in
Iligan City at a price of P450,716. Domestic Insurance Company executed a performance bond in favor of NPC
to guarantee ICCs obligations.
The contract stipulated that ICC would deliver the sulfur at Iligan City within sixty days from notice of the
establishment of a letter of credit for $212,210 in NAMERCOs favor. In the event that ICC fails to deliver the
sulfur, ICC and Domestic Insurance will pay NPC 0.4% of the full contract price for first thirty days of default
and 0.8% for every day thereafter until complete delivery is made as liquidated damages.
NPC opened a letter of credit that would expire on January 15, 1957. This means that the deadline of the
delivery is also the same date.
NAMERCO was not able to deliver the sulfur because it did not secure shipping space. NPCs fertilizer
plant shut down from January 20-26, 1957 because there was no sulfur. Consequently, no fertilizer was
produced. NPC issued a demand that NAMERCO and Domestic Insurance should pay since nonavailability
of the vessel is not deemed a fortuitous event to absolve itself from the obligation. On June 8, 1957, NPC
demanded that NAMERCO should pay the former P360,572.80 as liquidated damages.

procedural
NPC sued ICC, NAMERCO and Domestic Insurance. TC dismissed the case as to ICC for lack of
jurisdiction. Melvin Wallick, assignee of ICC, sued NAMERCO for damages in connection with the same
sulfur transaction. TC dismissed this as well, since the assignment was champertous in character. As to the
NPCs claim against NAMERCO and Domestic Insurance, TC ruled in favor of NPC but the damages prayed
for were reduced.2

issue
[minor] Who principally pays for the liquidated damages? NAMERCO.
[main] How should damages be computed? Refer to #2.

ratio
1. As provided in the contract: on Item #4 and #15 the availability of vessel to transport the sulfur shall
be the responsibility of the bidder and that unforeseeable causes beyond the control and without the
fault or negligence of the contractor and force majeure as used herein shall not be deemed to embrace
or include lack or nonavailability of bottom or vessel. Furthermore, in NAMERCOs bid, it explicitly
admitted responsibility for the availability of bottom or vessel and that it guarantees the availability of
the vessel.
ICC communicated with NAMERCO that the sale was subject to the availability of a steamer.
Not explicitly stated in the case but this is a reasonable inference since NAMERCO and Domestic Insurance presented its appeal arguing
that its obligation is conditioned on the availability of a vessel to carry the shipment and that NAMERCO acted within the scope of its
authority as agent in signing the contract of sale. Also, in the last part of the case, it was said that TC reduced the amount of damages
awarded to NPC to P45,100 so I suppose that NPC won the case but it appealed in GR L-33897 to recover the full amount.
2

10

NAMERCO did not disclose this fact to NPC and contrary to its principals instruction, it agreed that
nonavailability of the steamer was not a justification for nonpayment of the liquidated damages. TC
was correct in concluding that NAMERCO acted beyond the bounds of its authority.
NAMERCO is liable for damages because under Art. 1897 of the NCC, the agent who exceeds the limits
of his authority without giving the party with whom he contracts sufficient notice of his powers is
personally liable to such party. Also presented in evidence, ICC advised NAMERCO that if the latter
should sign the contract, it should assume responsibility for the shipment.
As an attempt to escape liability, NAMERCO contends that Art. 1403 applies. Art. 1403 provides that a
contract entered into the name of another person by one who has acted beyond his powers is
unenforceable. The Court holds that this defense is untenable because Art. 1403 refers to the
unenforceability of the contract against the principal. The contract containing the stipulation for
liquidated damages is not being enforced against ICC but against NAMERCO and Domestic Insurance.
On Domestic Insurances part, it tries to escape liability by stating that it is not liable to NPC because
the bond was posted, not for NAMERCO, but for ICC, which is not liable on the contract of sale. The
SC holds that the argument is untenable because it was NAMERCO who solicited the bond from
Domestic Insurance and that Domestic Insurance acted as a surety for NAMERCO.
2. WRT legal interest: defendants argue that legal interest should not be collected. The Court agrees. To
impose the legal interest on the damages from 1957, or a quarter of a century ago from the decision of
the case will be inequitable since it was not the defendants fault why the case was delayed.
WRT limiting liability to nominal damages: This is contrary to the intention of the parties since the
contract clearly provides that liquidated damages are recoverable for delay in the delivery of the sulfur,
and with more reason, for nondelivery. No proof of pecuniary loss is required for the recovery of
liquidated damages. The stipulation for liquidated damages is intended to obviate controversy on the
amount of damages.
WRT the total amount recoverable by NPC: NPC contends that it is entitled to the full amount of
liquidated damages of P360,572.80. The TC reduced the award to P45,100 relying on Art. 2227, which
provides that liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable. The basis was that NAMERCO and ICC exerted
effort to charter a steamer to comply with the contract. The SC agrees with the decision of the TC in the
reduction.

11

Titan v. Uni-field
G.R. No. 153874
March 1, 2007
J. Carpio
petitioners Titan Construction Corporation
respondents Uni-Field Enterprises, Inc.
summary Petitioner failed to pay remaining balance due to respondent. Penalty clause that in
case of failure to pay, 25% liquidated damages based on total outstanding damages
and attorneys fees of 25% on total claims including liquidated damages, will be paid.
Attorneys fees in this case is in the nature of liquidated damages and can be reduced
by the courts if found to be iniquitous or unconscionable.

facts of the case

Titan is engaged in the construction business, while respondent Uni-Field is engaged in the business of
selling various construction materials. From 1990 to 1993, petitioner purchased on credit various construction
supplies and materials from respondent. Petitioners purchases amounted to P7,620,433.12 but petitioner was
only able to pay P6,215,795.70, leaving a balance of P1,404,637.42.
On 19 October 1994, respondent sent a demand letter to petitioner. But the balance remained unpaid.
On 26 June 1995, respondent filed with the trial court a complaint for collection of sum of money with
damages against petitioner.
TC: Titan to pay the ff: 1. The principal amount of P1,404,114.00; 2. Interest Charges in the amount of
P504,114.00 plus accrued interest charges at 24% per annum compounded yearly reckoned from July, 1995 up
to the time of full payment; 3. Liquidated Damages in the amount of P324,147.94; 4. Attorneys Fees
equivalent to 25% of whatever amount is due and payable and accumulated appearance fees at P1,000.00 per
hearing; and 5. Costs of suits.
CA: Affirmed.

issue
WON the award of liquidated damages is proper? YES.

ratio
Delivery receipts and sales invoices formed part of petitioners formal offer of evidence.
Titan claims that the receipts and invoices were not formally offered as evidence. Records show that
the delivery receipts and sales invoices formed part of petitioners formal offer of evidence. The delivery
receipts and sales invoices expressly stipulated the payment of interest, liquidated damages, and attorneys
fees in case of overdue accounts and collection suits.
Cotracts of adhesion are binding as ordinary contracts
Those who adhere to the contract are in reality free to reject it entirely and if they adhere, they give
their consent. It is true that on some occasions the Court struck down such contract as void when the weaker
party is imposed upon in dealing with the dominant party and is reduced to the alternative of accepting the
contract or leaving it, completely deprived of the opportunity to bargain on equal footing.
Petitioner $ respondent has been doing businesses from 1990-1993 and is not a small time construction
company. Petitioner is "presumed to have full knowledge and to have acted with due care or, at the very least,
to have been aware of the terms and conditions of the contract." He was free to contract the services of another
supplier if respondents terms were not acceptable.
Petitioner did not only bind itself to pay the principal amount, it also promised to pay (1) interest of
24% per annum on overdue accounts, compounded with the principal obligations as they accrue; (2) 25%
liquidated damages based on the outstanding total obligation; and (3) 25% attorneys fees based on the total
claim including liquidated damages.
Attorneys Fees here in the nature of liquidated damages.

12

The attorneys fees here are in the nature of liquidated damages and the stipulation therefor is aptly
called a penal clause. It has been said that so long as such stipulation does not contravene law, morals, or
public order, it is strictly binding upon defendant. The attorneys fees so provided are awarded in favor of the
litigant, not his counsel. On the other hand, the law also allows parties to a contract to stipulate on liquidated
damages to be paid in case of breach. A stipulation on liquidated damages is a penalty clause where the
obligor assumes a greater liability in case of breach of an obligation. The obligor is bound to pay the stipulated
amount without need for proof on the existence and on the measure of damages caused by the breach.
Articles 1229 and 2227 of the Civil Code empower the courts to reduce the penalty if it is iniquitous or
unconscionable.
The Court notes that respondent had more than adequately protected itself from a possible breach of
contract because of the stipulations on the payment of interest, liquidated damages, and attorneys fees. The
Court finds the award of attorneys fees "equivalent to 25% of whatever amount is due and payable" to be
exorbitant because it includes (1) the principal of P1,404,114.00; (2) the interest charges of P504,114.00 plus
accrued interest charges at 24% per annum compounded yearly reckoned from July 1995 up to the time of full
payment; and (3) liquidated damages of P324,147.94. Moreover, the liquidated damages and the attorneys fees
serve the same purpose, that is, as penalty for breach of the contract. Therefore, we reduce the award of
attorneys fees to 25% of the principal obligation, or P351,028.50.

13

Singson et al v. Aragon and Lorza

No. L- 5164

Jan. 27, 1953

Bautista Angelo, J.
petitioners Conrado Singson, Carolina Crisostomo, and Florentino de Lima
respondents Crisanto Aragon and Miguel Lorza
summary Complaint for actual damages, attys fees and exemplary damages. The court held
that exemplary damages are dependent on actual damages, and that its amount need
not be alleged in the complaint. It is also awarded based on the discretion of court and
not as a matter of right. It is also subject to waiver, if filed in a court of limited
jurisdiction, such that its award added with actual damages, could not exceed the
limit. Check Arts. 2229, 2233-34

facts of the case

The respondents filed in the municipal trial court a complaint against the petitioner to recover
compensatory damages, attys fees (P500), and exemplary damages. The petitioners moved for a bill of
particulars to specify the amount of actual and exemplary damages. However, only the amount of actual
damages was specified (P1321.80) and the amount for exemplary damages was left to the discretion of the
court. Petitioners filed a motion for specification of exemplary damages but the same was denied. So they filed
a motion to dismiss because the amount being prayed was beyond the jurisdiction of the court. (Not exceeding
P2,000)

issue
WON the amount of exemplary damages needs to be pleaded in the complaint? NO, it depends on the
discretion of the court. Motion to dismiss is denied.

ratio
Exemplary damages may be imposed by way of example or correction, and only in addition to compensatory
damages. It is not recoverable as a matter of right because it is dependent on the discretion of the court.
Furthermore, the amount of damages need not be proved because it is merely incidental and dependent on the
amount of compensatory damages to be awarded to the complainant. Since the amount of actual damages
should be proven in trial, a dependent award of exemplary damages could not be pleaded in the complaint.
Otherwise it is a mere surmise or speculation as it cannot be predetermined prior to the actual award of
compensatory damages.
The fact that the amount of exemplary damages has not been specified in the complaint does not oust the court
of its jurisdiction. When the case was filed before the municipal trial court, which of a limited jurisdiction, it is
presumed that the respondents had full knowledge that the totality of his claim should not exceed the sum of
P2,000. Should the court decide to award exemplary damages as warranted by evidence, it can only do so
without exceeding the limit of its jurisdiction. The respondents were deemed to have waived recovery of the
amount of exemplary damages that if added to the actual damages, would exceed the amount P2,000.

14

Munsayac v. De Lara
G.R. No. L-21151
June 26, 1968
Makalintal, J.
petitioners Lourdes Munsayac
respondents Benedicta De Lara, CA
summary Owner of jeepney is being made to pay exemplary damages for the injuries caused by
his negligent ee. Employer is not liable for exemplary damages for the wrongful act of
his employee without a showing that the former approved or ratified the acts of the
latter.

facts of the case

Munsayac owned and operated a jeepney which got involved in an accident causing injuries to passenger
De Lara. An action for recovery of damages was filed in CFI where the judge found the driver recklessly
negligent [excessive speed despite the bad condition of road] and ordered Munsayac to pay compensatory
damages, 1k exemplary damages and P500 attorneys fees.
Munsayac questioned the award of exemplary and attys fees. CA affirmed CFIs ruling saying that
exemplary damages was justly awarded because of Munsayacs failure or refusal to placate the sufferings of
De Lara necessitating the filing of action.
Munsayacs contention: act referred to in Article 2232 3 must be one which is coetaneous with and
characterizes the breach of the contract on which the suit is based [i.e ees reckless negligence in driving], and
not one which is subsequent to such breach and therefore has no causal relation thereto [failure to placate the
sufferings of the plaintiff]. Cited Rotea v Halili4 as support for her argument.

issue
WON exemplary damages was properly awarded - NO [award deleted]

ratio
Employer is not liable for exemplary damages for the wrongful act of his employee without a showing that
the former approved or ratified the acts of the latter.
It is difficult to conceive how the defendant in a breach of contract case could be held to have acted in a
wanton, fraudulent, reckless, oppressive or violent manner within the meaning of Article 2232 for
something he did or did not do after the breach, which had no causal connection therewith. The law
does not contemplate a vicarious liability on his part: the breach is his as party to the contract, and
so if he is to be held liable at all for exemplary damages by reason of the wrongful act of his agent, it
must be shown that he had previously authorized or knowingly ratified it thereafter, in effect
making him a co-participant.
There is nothing to show previous authority or subsequent ratification by appellant insofar as the
recklessness of the driver was concerned. The mere statement that the defendant failed, even refused,
to placate the suffering of the plaintiff, necessitating the filing of the action, is too tenuous a basis to
warrant the conclusion that the defendant approved of the wrongful act of his servant with full
knowledge of the facts.
The causative negligence here is personal to the employee actually driving so he should be made to pay
exemplary damages unless by the demonstrated tolerance or approval of the owners they themselves
can be held at fault and their fault is of the character described in Article 2232 of the Civil Code.
the Court may award exemplary damages if the defendant acted in wanton, fraudulent, reckless, oppressive or malevolent manner
4 According to the rule adopted by many courts, a principal or master can be held liable for exemplary or punitive damages based upon
the wrongful act of his agent or servant only where he participated in the doing of such wrongful act or has previously authorized or
subsequently ratified it with full knowledge of the facts. Reasons given for this rule are that since damages are penal in character, the
motive authorizing their infliction will not be imputed by presumption to the principal when the act is committed by an agent or servant, and
that since they are awarded not by way of compensation, but as a warning to others, they can only be awarded against one who has
participated in the offense, and the principal therefore cannot be held liable for them merely by reason of wanton, oppressive or malicious
intent on the part of the agent.
3

15

 OCTOT v. YBANEZ
G.R. No. L-48643
January 18, 1982
J. Teehankee
petitioner Diosdado Octot
respondents Jose Ybanez, Regional Director of Regional Health Office No. VII; Clemente
Gatmaitan, Secretary of Health; and Jacobo Clave, Presidential Executive Assistant
summary Dismissed security guard reinstated after acquittal from libel case. Court didnt grant
his prayer for exemplary damages, among others, as the same is not supported by the
facts of the case, there being no bad faith that needs to be corrected in the interest of
public policy.

facts of the case

Petitioner was employed as a Security Guard in 1970. On October 1, 1975, he was summarily dismissed
pursuant to P.D. No. 6 and LOI Nos. 14 and 14-A directing heads of departments and agencies of the government to
weed out undesirable government officials and employees, specifically those who were facing charges or were
notoriously undesirable on ground of dishonesty, incompetence or other kinds of misconduct defined in the Civil Service
Law. Earlier, petitioner had been convicted by the CFI of the crime of libel, but his appeal therefrom was
pending in the Court of Appeals.
Believing that his dismissal was illegal, petitioner continued reporting to work the whole month of October
1975, but respondent Regional Director refused to order the release of his salary for the period and instead
ordered that his name be deleted from the office payroll.
In due time, petitioner was acquitted in the libel case by the Court of Appeals. Thus, his reinstatement
was recommended and ultimately approved by Office of the President, which upon returning the
reinstatement papers to the Secretary of Health, invited the latters attention to the provision of LOI No. 647.
Petitioner was then informed that his request for reinstatement may now be given due course.
On multiple occasions, petitioner failed to appear before the respondent officials to settle his new
appointment. Instead, he reiterated his request for reinstatement and demanded back salaries from the date of
his dismissal from the service. Ultimately, he filed the instant petition for mandamus where he prays that
respondents be ordered: (1) to reinstate him to his former position; (2) to pay his back salary, as well as the cost
of living allowance of P50.00 a month from the date of his alleged dismissal; (3) to grant him compensatory,
exemplary and moral damages; and (4) to pay his attorney's fees and cost of the suit.

issue
WON petitioner is entitled to claim exemplary damages NO.

ratio
Exemplary damages are not generally recoverable in a special civil action for mandamus unless the
defendant patently acted with vindictiveness or wantonness and not in the exercise of honest judgment.
The claim for exemplary damages must presuppose the existence of the circumstances enumerated in Arts.
2231 and 2232 of the Civil Code.
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. Such damages are required by public
policy, for wanton acts must be suppressed.
Thus, our jurisprudence sets certain conditions when exemplary damages may be awarded, as follows:
(1) They may be imposed by way of example or correction only in addition, among others, to
compensatory damages, and cannot be recovered as a matter of right, their determination depending
upon the amount of compensatory damages that may be awarded to the claimant.
(2) The claimant must first establish his right to moral, temperate, liquidated or compensatory
damages.
(3) The wrongful act must be accompanied by bad faith, and the award would be allowed only if the
guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
In this case, respondent officials were not motivated by ill will or personal malice in dismissing
petitioner, but only by their desire to comply with the mandates of P.D. NO. 6. This is evidenced by

16

respondents prompt willingness to reinstate petitioner to his position as security guard after he was
acquitted by the CA in the libel case against him. This lack of bad faith, in addition to the clear mandate of LOI
No. 647 that was pointed out by the Office of the President upon its approval of petitioners reinstatement, is
also the reason for the Courts inability to award to petitioner the backwages he prayed for in his complaint.
Likewise, this lack of bad faith, coupled with the instant case not falling among the cases in Arts. 2219 and
2220 of the Civil Code, precludes the Court from awarding moral damages to petitioner. It should also be
noted that if there was any delay in petitioners reinstatement, it was attributed to his own fault and
negligence, as he was the one who, in numerous occasions, failed to appear before the authorities who were
supposed to accomplish the necessary papers for his reinstatement.
From the foregoing, it is obvious that petitioners case doesnt meet the conditions set forth by
jurisprudence as to the award of exemplary damages. Thus, his prayer for exemplary damages, along with
backwages and moral damages cannot be granted.

17

SARKIES TOURS v IAC

G.R. No. L-63723
Sept. 2, 1983
petitioners Sarkies Tours Philippines
respondents IAC, Arsenio S. Dizon, Jr. and Violeta R. Dizon
summary

J. Melencio-Herrera

Boat capsized going back from Corregidor tour. Exemplary damages deleted, no showing that
Sarkies (company) acted in wanton manner. Negligence personal to employees, they should be
the ones made to pay this kind of damages.

facts of the case

The Dizon family bought six tickets from Sarkies Tours for the Corregidor tour on Independence Day.
Along with their 4 children, they went on a guided tour conducted by Sarkies representative. On the way back
to Manila, the boat capsized. The spouses and two of their children were rescued by a passing yacht while
their other child was picked up by one of the watercrafts that came to help. However, their 6-year-old
daughter Merceditas was missing. Six days later, the spouses were summoned to the funeraria where they
identified the lifeless body of their child.
Sps. Dizon filed a complaint for damages against Sarkies and Julian V. Mendoza, the owner and operator
of M/V Edisco (he collected tickets when thepassengers boarded). M/V Edisco, as it turned out, is an
oversized motorized banca which was not registered to ferry passengers nor licensed to operate as a
watercraft. On that fateful trip, it had 146 passengers on board and was overloaded and lacked adequate
lifesaving equipment.
Sarkies: not the owner nor charterer of the boat, just a booking agent, exercised due diligence in relying on
Mendozas representations that his vessel was seaworthy.
Mendoza: not the registered owner but merely a passenger with his son who also died in the tragedy, the
contract of carriage was between Sarkies and Dizons.
TC: Sarkies no liability, neither an agent nor operator of M/V Edisco. Mendoza solely responsible as
owner-operator for negligence consisting of "unscrupulous conversion of a fishing boat into a ferry boat
without first securing a license to operate as such."
CA: Reversed. Joint and severally liable for damages because it was a single operation for:
P12,000.00 in actual damages for the death of Merceditas Dizon;
P1,650.00 for loss of cash and personal belongings;
P3,000.00 for funeral expenses;
P100,000.00 for moral damages;
P50,000.00 as exemplary damages;
P5,000.00 as attorney's fees;
and the costs of suit."

issue
WON exemplary damages should be eliminated? YES

ratio
SC agreed with the CA that both were liable. However, they was no showing that Sarkies as the
company acted in a wanton or malevolent manner.
Court cited Munsayac vs. De Lara, It is not enough to say that an example should be made, or
corrective measures be employed, for the public good especially in accident cases where public carriers are
involved. The causative negligence in such cases is personal to the employees actually in charge of the vehicles,
and it is they who should be made to pay this kind of damages by way of example or correction, unless by the
demonstrative tolerance or approval of the owners they themselves can be held at fault and their fault is of the
character described in article 2232 of the Civil Code."
Moral damages reduced to 30k. Sarkies has right of action against Mendoza for reimbursement.

18

SAN MIG BREWERY v. MAGNO

G.R. No. L-21879
petitioners
respondents
summary

Sept.29, 1967

J.Angeles

San Miguel Brewery, Inc.

Francisco Magno
SanMig failed to pay taxes despite several demands. City Treasurer issued a warrant of
distraint and levy against its 2 delivery trucks to enforce the collection of the taxes, seized and
impounded. Filed complaint vs CT in his individual/PVT capacity. CT filed counterclaim for
moral and exemplary damages. CFI ruled in CTs favor, awarding him damages. SC ruled that
CT not entitled to damages. For moral damages, no proof of the existence of injuries suffered
and causal connection to wrong-doers acts. For exemplary damages, mere findings that certain
allegations in the complaint are not true, and the plaintiff committed a mistake in instituting
the action against the wrong party, do not justify such award. It infringes upon the right of a
citizen to have access to the courts and to protect his rights.

facts of the case

Dec.14, 1950: Municipal Board of Butuan City passed City Ordinance No. 11, amending Ord. No. 7,
imposing a 2% tax on the gross sales or receipts of those engaged in the sale, trading in, or disposal of all
alcoholic or malt beverages, wines and mixed or fermented liquors, including tuba, basi and tapuy.
June 6, 1960: Passed Ord. No. 110, amending Ord. No. 11, fixing instead a tax on the sale of beer at the rate
of P0.25 per case of 24 bottles, and on the sales of soft drinks at the rate of P0.10 per case of 24 bottles of
Coke, Pepsi, Royal, 7-Up, Bireley, Soda Water, and any other kind of soft drinks or carbonated drinks.
San Miguel Brewery maintains a warehouse/branch office in Butuan City and is engaged in the sale of beer
and soft drinks. It has paid taxes under Ord. No. 11 promptly and religiously upon its effectivity, but later
on stopped paying taxes, thus incurring back taxes Verbal demands were made by the City Treasurer on
SanMigs representative with warnings that a warrant of distraint and levy will be issued against its
properties unless it settles its tax liability.
Sept.23, 1960: SanMig wrote a letter to the City Treasurer questioning city governments power to levy upon
its properties pointing out that under its Charter (RA No. 523), such power is limited only to delinquencies
in the payment of real estate taxes. City Treasurer replied after 3 days that he has power to do so under City
Ord. No. 26. Formal letter demanding tax liability payment and several other demand letters were sent to
SanMigs branch officials, but no action was made.
Jan.6, 1961: City Treasurer, with Mayors approval, issued a warrant of distraint and levy against SanMigs
Butuan properties to enforce the collection of the taxes assessed against it under Ord. No.11, amounting to
P9,129.42, including penalties for the May 1957-Aug.15, 1960 period, and under Ord. No. 110, amounting to
P15,618.96, including penalties for the June 6-Oct.30, 1960 period, OR a grand total of P24,747.32.
Jan.9: A notice of seizure by virtue of the warrant of distraint and levy was served on SanMig Butuans
Branch Manager, who voluntarily surrendered 2 delivery trucks.
Jan.12: SanMig instituted present action in CFI Manila, praying for an order directing City Treasurer
Francisco Magno, in his individual not official capacity, to release the delivery trucks seized and
impounded by the Butuan City Government allegedly "without authority and for reasons unknown to the
company", and to order Magno to pay SanMig damages in the amount of P6k corresponding to the period
from Jan. 9-10, 1961, and P3k for each day thereafter that the trucks remain impounded and unused by the
plaintiff, plus the costs of the suit.
Magno: In seizing the delivery trucks, he was acting, and was in the performance of his official duty, as City
Treasurer, and cannot be held liable to pay the company any damages. Set up a counterclaim of P40k as
moral damages and P10k as exemplary damages allegedly sustained by him and family members on
account of the shock, fright, wounded feelings, mental anguish, besmirched reputation, and social
humiliation they suffered by reason of the filing of the case against him, plus P2k atty's fees.
During the pendency of the action, SanMig paid under protest the taxes assessed against it, and the
impounded trucks were then released.

19

 CFI: dismissed complaint. Ordered SanMig to pay Magno P2k damages (not specified what kind), P1k attys
fees, and litigation costs. No testimonial evidence was submitted, only a stipulation of facts along with
documentary evidence, which became basis for decision.

Issue (relevant to topic: Exemplary damages)

WoN Magno should have been awarded damages - NO

ratio
In order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental
anguish, fright and the like. 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, NCC), it is, nevertheless,
essential that the claimant should satisfactorily prove the existence of the factual basis of the damages
(Art.2217) and its causal connection 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 wrong-doer.
Neither did the SC consider the award as exemplary damages, because the mere findings that certain
allegations in the complaint are not true, and the plaintiff committed a mistake in instituting the action
against the wrong party, do not justify the award of this kind of damages. It infringes upon the right of a
citizen to have access to the courts. The portals of the courts of justice should not be closed to litigants who
ask for the protection of their rights. Penalty in the concept of damages should not be imposed simply
because a complaint is found unmeritorious by the courts.
As to attys fees and other awards
The amount of attorney's fees, on the other hand, is addressed to the sound discretion of the court. It may be awarded
along with expenses of litigation, other than judicial costs, in cases where the court deems it just and equitable under the
circumstances of the case.
In this case, Magno was sued in his private capacity for acts done in the performance of official duty required by law,
and was forced to employ the services of private counsel to defend his rights. SC deemed it proper that attorney's fees be
charged against SanMig. Nominal damages may also be adjudicated (No further explanation given as to why nominal
damages was awarded ). SC increased attorney's fees to P2,000.00 and awarded P100 as nominal damages.
As to CFIs dismissal of complaint
SanMig: Seizure of trucks was made for reasons unknown to SanMig. It was only at the time that the stipulation of facts
was being prepared that Magno mentioned for the first time of his alleged authority to issue a warrant of distraint and
levy against properties of tax delinquents under Ord.No.26. Besides, Ord.No.26 is ultra vires. Magno, therefore, was
without authority of law.
SC: (1) In par.8 of the stipulation of facts, it is admitted that SanMigs counsel was informed that the city government was
exercising its power of levy and distraint against properties of taxpayers under Ord.No.26. It cannot feign ignorance.
(2) In cases where the constitutionality of statutes are directly put in issue, the general rule is, that the question of
constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings, ordinarily it may not be
raised at the trial, and if not raised in the trial court, it will not be considered on appeal. As the constitutionality/validity
of Ord.No.26 was raised on appeal and it is not under exceptions granted under jurisprudence, it can no longer be
considered.
(3) Magno is sued not in his capacity as City Treasurer but in his individual capacity. He is not the proper party against
whom the alleged invalidity of the ordinance in question should be pleaded, nor is this the proper proceeding wherein
the alleged infirmity of the said ordinance may be raised. A municipal ordinance is not subject to collateral attack (vs
public policy).
As to CFIs error in not ordering Magno to pay SanMig damages
SanMig: Due to the trucks seizure and impoundment, it was compelled to hire 2 delivery trucks for P80/truck/day.
SC: It erroneously assumes that Magno is personally liable for damages, disregarding the established fact that Magno had
issued the warrant of distraint and levy against its properties in his capacity as City Treasurer who, under the law, is
empowered to issue the warrant, and thus, in the lawful performance of his duty. Not shown by evidence that Magno,
either as a private citizen or as City Treasurer, had acted in bad faith. Therefore, he cannot be made to answer personally
for damages to SanMig.

20