IV.

NOMINAL DAMAGES

A. PURPOSE AND WHEN RECOVERABLE

1. Violation of a Right
GONZALES V PCIB (VELASCO 2011)
Gonzales was an account holder in PCIB and had a foreign currency deposit. Gonzales
and the Sps Panlilo then obtained two loans in PCIB, in which they were solidarily liable,
but it was stated that Gonzales was merely an accommodation party and only lent his
name and credit to the Sps. Panlilo. Panlilo failed to pay the loan, and PCIB suspended
Gonzales foreign currency account. This caused the check he issued to a former friend,
Unson, to bounce which then turned into a heated argument inside the PH Columbian
Association (PCA) which caused his embarrassment. Gonzales then filed a case for
damages against PCIB. Both the lower courts ruled in favor of PCIB, since Gonzales was
solidarily liable, he was then obliged to pay in the default of the Panlilo sps.

The Supreme Court reversed on the ground that Gonzales cannot be required to pay
the default without prior appraisal of the said default, and it also failed to inform
Gonzales of the suspension of his account. It also emphasized that the bank is impressed
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with public interest and extraordinary diligence is expected of the banks. Court also
noted that it falls under abuse of right as embodied in Art 19. Court awards nominal
damages because Gonzales had the right to be informed of the accrued
interest and most especially, for the suspension of his foreign currency
account. Failure to do so the bank is liable to pay nominal damages. The amount of
such damages is addressed to the sound discretion of the court, taking into
account the relevant circumstances 50k.

2. No actual loss caused or proven

Nominal damages are recoverable where a legal right is technically violated and
must be vindicated against an invasion that has produced no actual present loss of
any kid or no injury sustained

AREOLA V CA (ROMERO, 1994)

For facts, see insurance notebook.
The trial court awarded actual, moral, and exemplary damages. However, the Supreme
Court deleted all these damages and awarded nominal damages for the following
reasons: (1) although the cancellation of the insurance policy is a breach of contract,

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the insurance company took steps to rectify its wrong; and (2) no actual or
substantial damage/injury was inflicted. Nominal damages 30k.

PNOC V CA (ROMERO, 1998)

Vessel owned by Maria Efigenia collided with vessel owned by Luzon Steevedoring Corp.
The Board of Marine Inquiry of the PH Coast Guard conducted an investigation and
declared that it was Petroparcel who was at fault. Maria Efigenia Fishing Corporation
then filed a case for damages. The lower courts awarded actual damages based on the
evidence presented by Del Rosario, the General Manager. He presented several
quotations from their suppliers. But the Court held that although these evidence are
admissible, they are given no probative value because they are merely hearsay (not
considered as a commercial list, should have presented the dealers). Therefore, actual
damages cannot be recovered. However, the court awarded nominal damages
(2M). IN the absence of competent proof on the actual damages suffered, private
respondent is entitled to nominal damages. It has been proved that: (1) petitioner
sustained injury, unfortunately, it was no adequately proved; and (2) the case has been
dragged on for almost two decades.

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FRANCISCO V FERRER (PARDO, 2001)
Ferrer ordered a three layer cake from Fountainhead Bakeshop, but it failed to arrive on
the wedding day. The newlyweds were then forced to settle with a Sansrival cake. The
cake did arrive late, 10 PM, but it was not accepted because it was a two layered cake,
as opposed to the three layered cake that they had ordered. Francisco, the owner of the
bakeshop, sent a letter of apology and 5k (twice) check because they had lost the order
bill, but the customer refused because she felt that it was not enough. They then filed an
action for damages, and the lower court awarded: (1) the cost of the cake; (2) moral
damages; (3) attys fees; (4) exemplary; and (5) cost of litigation.

The Supreme Court removed moral and exemplary damages due to lack of bad faith and
negligence. However, the court awarded nominal damages for insensitivity and
inadvertence to their customers anxiety. Nominal damages are recoverable where
a legal right is technically violated (although there is no actual loss), or breach of
contract and no injury. 10k.

TWIN ACES V RUFINA (CHICO-NAZARIO, 2006)

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Twin Aces filed an action for a writ of replevin against Rufina to seize the Tanduay
Distillery Bottles issued by it, which Rufina allegedly used as its containers for its food
seasonings (which it then sold to Lorenzana, in the case Twin Aces v CA). Both the lower
courts ruled in favor of Rufina, citing RA 623 as amended by RA 5700, which relieves
from criminal liability though to whom registered manufactured bottles are transferred
by way of sale (Rufina got the bottles from junk dealers. Rufina was also awarded
nominal damages.

The Supreme Court sustained the ruling, as well as the nominal damages. The
Court held that the court may award nominal damages (1) in every obligation arising
from every source in Art 1157; (2) vindication of a right, not indemnification; and (3)
injury not enough to warrant an award of actual damages 50k.

CASIS: The statement of the court is different from the previous rule because it seems
as if that there is a certain threshold in order to award actual damages, and if it is not
met, only nominal damages may be awarded. This case served as the basis of China
Airlines v CA.

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CHINA AIRLINES V CA (CARPIO, 2003)

Morelia Travel Agency booked Salvador and Lao with China Airlines (CAL) for their trip to
Los Angeles. But they found out that the booking fee is cheaper in AMEXCO (Lao was a
card holder), so they dropped Morelia and booked their flight with AMEXCO. AMEXCO
then used the relocator of Morelia to confirm the tickets of the respondents with CAL.
CAL then called Morelia to confirm, but Morelia did not confirm, therefore CAL cancelled
the tickets of the respondents. Because of this, they werent able to leave on that day
and AMEXCO had to look for another flight for them the following day with Northwest.
They filed a case for damages against CAL and AMEXCO.

The Supreme Court held that CAL breach its contract but it ruled out bad faith,
therefore they cannot be held liable for exemplary and attys fees. They may also be
awarded actual damages, but they did not shell out any money for the CAL tickets. As
for the price they paid for Northwest, the CAL tickets were actually more expensive
(629) than the Northwest tickets (625). They cannot be reimbursed for this because it
would be akin for them to have flown to LA without paying any fare. Undeniably, the
respondents suffered some injury. They went through the trouble of going to the
airport but were just prevented by CAL personnel from boarding. When the plaintiff
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suffers some species of injury not enough to warrant an award of actual
damages, the court may award nominal damages 5k.

CASIS: The degree of injury should not be the basis of the award of nominal damages
because it would be contrary to the nature of nominal damages. However, the rule that
nominal damages may take the place of actual damages when it is not proven
is consistent with the rule stated in several cases that nominal damages cannot co-exist
with compensatory damages.

3. Under considerations of equity

SPS GUANIO V MAKATI SHANGRI-LA (CARPIO-MORALES, 2011)

Luigi and Anna Guanio booked at the Shangri-la Hotel Makati for their wedding
reception. However, they had several complaints against the service of the hotel during

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the said event. The petitioners sent a complaint to the respondent and received an
apologetic reply. Nevertheless they filed a complaint for breach of contract before RTC.

Complaint Hotel
Salmon instead of king Prawns (smaller Petitioners requested a combination of
and higher price) both
Respondents representatives did not show They were present during the event but
up during the event not permanent, three other hotel
functions
Waiters were rude and delay in service Sudden increase of guests to 470 from
350-380
Makati RTC rendered a decision in favor of the petitioner, relying heavily in the
apologetic letter of the hotel and awarded: (1) actual; (2) moral; (3) exemplary; and (4)
attys fees. However, the Court of Appeals reversed the decision of the RTC.

The Supreme Court held that breach of contract is defined as the failure
without legal reason to comply with the terms of a contract. The provisions of
the Banquet and Meeting Services Contract state that the petitioners should have
informed the hotel at least 48 hours before the event the increase of the expected
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guests if they are more than 10% of the original number. If they are not informed, the
hotel cannot be held liable for any damage or inconvenience which may be caused by
such increase. Petitioners were remiss in their obligation to inform the respondent of the
change in the number of guests, therefore it excused the respondent for any damage or
inconvenience. However, the Court notes that the hotel could have managed
the situation better. The court took note of the hotels vast experience, and that it
should have been prepared for such situations. It also noted that the delay in services
might have been evaded if they had just been precise in the scheduling of their events.
Petitioners are not expected to get married twice. The court then awarded
nominal damages (50K) under considerations of equity and for the discomfiture
they were subjected during the event.

CASIS: On the basis of equity means that they were not really entitled to said damage.
The court did not say what right was violated. They were negligent, but not necessarily a
violation.

B. NATURE AND DETERMINATION OF AMOUNT

1. Small but substantial

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 Small sums by nature, amount of which should not be on the extent of harm to
the injured party
BUUT it is also a substantial claim

2. Commensurate to the injury suffered

Nominal damages should not be commensurate to the injury, but merely
recognition of a violation of a right. The magnitude of the injury would not
change the fact that an injury has been inflicted, or a right has been violated.
Maybe, it can be adjusted depending on the gravity of the right violated.
However, jurisprudence provides otherwise.

GONZALES V PEOPLE (QUISIMBING, 2007)

Gonzales was convicted by the lower courts of arson for setting fire to the building
owned by Canlas.

The Supreme Court upheld the conviction, as well as the award for nominal
damages. Since there was not enough proof or evidence produced to determine the
reasonable amount for actual damages, the court awarded nominal and temperate
damages. Here, the Court said that nominal damages are by their nature small
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sums fixed by the court without regard to the extent of the harm done to the
injured party. However, it is generally held that a nominal damage is a
substantial claim if based upon the violation of a legal right, the law presumes
damage although actual or compensatory damages are not proven. Not
equivalent to the injury, but merely a recognition of a right. 10k for each private
complainant.

CASIS: Despite the nature of nominal damages, the Supreme Court still awards nominal
damages which are commensurate to the injury. (see PNOC award of 2M, which is
probably the value of the ship). However, conflict would be resolved if damage will be
equated to injury. (see CAL v CA, older case)

PEDROSA V CA (QUISIMBING, 2001)

Petitioner Maria Elena Rodriguez was the adoptive daughter of Miguel and Rosalina
Rodriguez. Upon the death of Miguel Rodriguez, the private respondents filed a case to
annul the adoption of Maria Elena. While the case was pending, they entered into a Deed
of Extrajudicial Partition with Pilar (Miguels sister). Pilar represented the interest of
Miguels other heirs, while Rosalina represented her own interests. The estate of Miguel
was partitioned, but none was given to Maria Elena, because she was not a blood
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relative. The petition to annul the adoption was dismissed by the CA with finality.
Petitioner then filed a case to annul the Deed of Extrajudicial Partition, but it was
dismissed by both the RTC and CA.

The Supreme Court granted the petition on the ground that the action has not
yet prescribed, but ruled that it was not the proper forum to rule on the
validity of the TCTs already transferred. On the issue of damages, the Court noted
that in the absence of any factual basis, actual damages and moral damages cannot be
awarded. But, the Court awarded nominal damages of 100k because: (1)
technically, petitioner sustained an injury, but not adequately proved; (2) she was
unlawfully deprived of her legal participation; (3) respondents had already transferred
parts of the properties to third persons; and (4) the case has dragged on for more than a
decade. The award must be at least commensurate to the injury sustained,
considering the purpose of said damage.

CASIS: This is wrong, because it goes against the nature of nominal damages. The
injury to the right does not change depending on the gravity of the offense, because the
source or cause of the damage will always be the right. It may, however, be proper to

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make a variance depending on the right or nature of injury considered. Primary rights
(Right to life) > right of secondary importance (right to business).

3. Special reasons extant in the case

ROBES-FRANCISCO V CFI (MUNOZ-PALMA, 1978)

Robes-Francisco and Lolita Milan had an agreement to the sale of a parcel of land. Millan
complied with her obligation under the contract and completed the payment. Millan
demanded the execution of Deed of Absolute Sale and the transfer of the titles to her
name. The petitioner was able to comply with the Deed of Absolute Sale, but petitioner
was unable to transfer the title of the land because it was mortgaged to GSIS for a 10M
loan despite the lapse of 6 months (as according to their agreement). Millan then filed
for specific performance, and the trial court ruled that the petitioner company was in
delay non fulfillment of his obligation, and awarded nominal damages.

The Supreme Court upheld the ruling of the lower court but reduced the
nominal damages. The vendee failed to show evidence on the actual damages that
she suffered, but she is still entitled to nominal damages. The circumstances of the case
will determine Won the amount asses as nominal is within the scope or intent of the law
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(vindication of a right transgressed, not indemnification). The court noted the lack of bad
faith on the part of the petitioner company, since the parcel of land was mortgaged to
GSIS. Bad faith is not to be presumed. The award was reduced to 10k.

CASIS: The special extant in this case was the absence of bad faith in causing the injury.

PEOPLE V BERNARDO (MELO, 2002)

Bernardo was convicted of the crime kidnapping and failure to return a minor for running
away with the 15 day old baby. The Supreme Court affirmed the conviction, but reduced
the nominal damages from 50k 10k given the relatively short duration of the
childs kidnapping.

CASIS: The time should not be taken into consideration, because the length of time
does not alter the fact that a right has been violated, but goes into the moral suffering.

C. EFFECT OF THE AWARD

ART 2223. The adjudication of nominal damages shall preclude further contest upon
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the right involved and all accessory questions, as between the parties to the suit, or
their respective heirs and assigns.

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