What Is The Concept Of Damages In Law

In this article, we shall explain what is the concept of damages in law. Every manner of loss or injury brought about by transgression of right should be compensated in one way or another. There should be just compensation corresponding to the degree of wrong, whether delict or quasi-delict, or breach of contract or quasi-contract committed, let alone breaches of law.

Damage is contemplated as the detriment, injury, or loss which are occasioned by reason of fault of another to the person or one’s property. Damages is defined as the sum of money awarded or imposed by the law as monetary compensation, recompense, or satisfaction for an injury done or a wrong committed as a result of a breach of a contractual obligation or a tortious act.

Article 2195 to 2235 of the New Civil Code provides rules and principles governing the adjudication of damages that are applicable to all kinds of obligations enumerated in Article 1157. These obligations includes those arising from law; contracts; quasi-contracts; acts or omissions punished by law; and quasi-delicts.¹

On the other hand, Article 2196 is explicit that rules under the Title of Damages are without prejudice to special provisions on damages formulated elsewhere in the Code. One instance provided which is governed by special laws is the compensation for workmen and other employees in case of death, injury or illness .

A complaint for damages is personal in nature. It may be commenced and tried where the defendant or any of the defendant resides or may be found, or where the plaintiff or any of the plaintiffs resides at the election of the plaintiff.

In an action for damages, money must be awarded by the person who committed the tort to the person injured. In Vda. Simeon Borlado vs. Court of Appeals,² the Supreme Court did not sustain the award of “palay” because it is not a legal tender currency in the Philippines.

Concept of Damages in Law: Injury vis-à-vis Damage

Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria.³

In the event of loss or harm which was not a result of violation of legal duty, there is damage but without injury. The connection of damages and wrong is missing. The injured person alone, in this situation, shall suffer the consequences. The law affords no remedy for damages from an act which does not amount to legal injury or wrong.

An action for injuries may only be maintained if the injury incurred by the plaintiff resulted from a breach of duty which the defendant owed to the plaintiff. It can be contemplated that there must be the occurrence of breach before damages may be awarded; and at the same time the breach of duty should be the proximate cause of the injury.

Application of Damnum Absque Injuria

As discussed, there is no liability even if there is damage because there is no injury. In the case of Custodio,⁴ the Court applied the doctrine of damnum absque injuria by ruling in favor of the petitioners who committed the act of enclosing their own property causing unavoidable loss to owners and tenants of the adjoining lots.

The property owners utilized their property in a general and ordinary manner, and the resulting inconvenience is a mere consequence of community life. The damage or loss is damnum absque injuria.

On the other hand, the doctrine cannot be invoked in a case when a building owner suffers damages brought about by the defective and delayed contractor’s work and subsequent abandonment of the project. It is clear that suffered damages was due to defendant’s act or omission of breach.⁵

Kinds of Damages

Some of the things we say or do on a regular basis have the potential to offend or cause damage to someone. Wrongful acts or direful remarks can ruin an individual or a person’s reputation, and it may take time for the wounded to recover.

This is why some people choose to sue after experiencing intense anxiety, shame in public, and dread as a result of moral damages. You will not be compensated if you cannot demonstrate that you have suffered from a wrong done to you. To be taken seriously, claims must be supported by evidence.

As provided in Article 2197 of the New Civil Code, the kinds of damages are the following:

1. Actual or compensatory;
2. Moral;
3. Nominal;
4. Temperate or moderate;
5. Liquidated; or
6. Exemplary or corrective

Actual or Compensatory Damages

In general, a person is only entitled to adequate compensation for monetary losses suffered. These damages are recoverable due to pecuniary loss such as in business, trade, property, profession, job or occupation. The end view of awarding these damages is the reparation of the wrong that has been committed and compensation of the injury inflicted. However, they are not intended to impose a penalty.

In seeking recovery for actual damages, it is necessary that the claimant produce competent proof or the best evidence obtainable such as receipts to justify an award therefore. Actual or compensatory damages cannot be presumed but must be proven with reasonable degree of certainty.⁶

Moral Damages

Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.⁷ They are basically personal to the party claiming them. Moral damages are not awarded to enrich the complainant to the detriment of the defendant. They are compensation to the injury suffered by a party. They are corrective and not punitive in nature.

The requisites for the award of moral damages are the following:

1. there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant;⁸
2. there must be a culpable act or omission factually established;⁹
3. the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and⁹
4. the award of damages is predicated on any of the cases stated in Article 2219.⁹

Article 2219 of the New Civil Code provides the cases where moral damages may be recovered:

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 35.¹⁰

Moral damages may be adjudicated even in the absence of proof of pecuniary loss. The Court will make its assessment based on the circumstances present in every case. It is not expected that every claim for moral damages will be granted by the Court.

Generally, there must be proof that the defendant caused any of the injuries enumerated in Article 2217. These suffering must be alleged and proven for moral damages to be awarded. The factual basis for moral damages and its causal relation to the defendants act must be clearly established.

In certain cases as an exception, injury suffered need not be alleged and proven in criminal proceedings for moral damages to be awarded like in cases of murder and rape.

In the case of Garcia vs. Salvador,¹¹ the Supreme Court ruled that the awarding of the Court of Appeals of moral damages was reasonable due to the mental trauma suffered by the respondent due to the false positive result issued by the Community Diagnostic Center owned by the petitioner that she was afflicted by Hepatitis B, a liver disease, making her unfit for employment.¹²

Nominal Damages

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 kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown.¹³

The award of nominal damages is not intended for the indemnification for an injury or loss suffered. It is the vindication or recognition of the right of the plaintiff which has been invaded. Nominal damages are awarded in the absence of proof of actual damages. Proof of violation of legal right will suffice and presence of pecuniary loss is not necessary.

In the case of Japan Airlines vs. Court of Appeals,¹⁴ the Supreme Court decided that the award of nominal damages is justified because there is a failure on the part of Japan Airlines to make the appropriate arrangement to transport the plaintiff on the first available connecting flight in Manila and worse declassifying the passengers from “transit passengers” to “new passengers” increasing the burden of the plaintiff to make the necessary arrangement. Since there was an absence of proof of actual damages, only nominal damages are deemed appropriate to be awarded.¹⁵

Temperate or Moderate Damages

Article 2224 of the New Civil Code provides “temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty”. Temperate damages must be reasonable under the circumstances.¹⁶

This kind of damages are awarded by court if it finds that indeed there has been loss suffered by the plaintiff but from the nature of the case, definite proof of pecuniary loss cannot be ascertained. When the Court is convinced that there has been a pecuniary loss, the judge is empowered to calculate moderate damages rather than let the complainant suffer without redress.¹⁷

Nominal damages and temperate or moderate damages are said to be incompatible awards, hence, cannot be granted concurrently.

In the case of Equitable PCI Bank vs. Tan,¹⁸ the petitioner drawee bank dishonored the check of the respondent without justifiable grounds causing the disconnection of electrical supply of the respondent which affected the business operation and eventual loss of business opportunity.

The petitioner’s negligence resulted in the respondent’s pecuniary loss. Temperate damages were awarded because there is insufficiency of evidence to define the extent of damage suffered with certainty.

Liquidated Damages

Article 2226 of the New Civil Code provides that liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. When an obligor or obligee enter into an agreement, liquidated damages are agreed upon by the parties.

The obligor has the duty to indemnify the agreed amount without requiring further proof of the existence and measure of damages resulting from the breach.

However, when the breach of the contract committed by the defendant is not the one contemplated by the parties in agreeing upon the liquidated damages, the law shall determine the measure of damages, and not the stipulation.¹⁹

In addition, liquidated damages may be equitably reduced when iniquitous or unconscionable; or there is partial or irregular performance. There must be no infringement of the limits of good customs.

The attachment of liquidated damages to an obligation has a dual function: 1) to provide liquidated damages, and 2) to strengthen the coercive force of the obligation by the threat of greater responsibility in the event of breach.²⁰

It is worth noting that no proof is necessary in awarding liquidated damages. The agreement is the law between the obligor and the obligee, hence it is not subject to any contingency or determination.

In a contract to sell, liquidated damages take the form of forfeiture of downpayment or earnest money. Payment of attorney’s fee in case of breach is also in the nature of contractual provision providing for liquidated damages.

Exemplary Damages

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.²¹

These kind of damages cannot be recovered as matter of right; the court has the discretion whether or not they should be adjudicated.²²

They are imposed to suppress vicious acts in relation to public policy. It is a method of preventing socially deleterious actions.

For exemplary damages to be awarded, the following requisites must be present:

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;²³
2. the claimant must first establish his right to moral, temperate, liquidated or compensatory damages;²⁴
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.²⁴

The New Civil Code also provides the instances where exemplary damages may be imposed in the different sources of obligation. In criminal offenses, they may imposed as part of the civil liability in the presence of aggravating circumstances in commission of crime.²⁵

Gross negligence of the defendant will justify the granting of exemplary damages in quasi-delicts.²⁶ Lastly, if the defendant acted in wanton, fraudulent, reckless or oppressive, or malevolent manner, exemplary damages may also be awarded by the court in contracts and quasi-contracts.

Final Thoughts

The law permits a variety of damages to reflect the non-breaching party’s losses because the basic goal of contractual remedies is to make the non-breaching party whole. Damages that are compensatory make up for a specific loss.

The repercussions of the violation are made up for with consequential damages. The expenses incurred in averting incidental damages are covered. Nominal damages are given out if the actual amount cannot be shown or if there are no actual damages.

When estimating the precise amount is challenging, liquidated damages are agreed with beforehand and are permissible if not a penalty. In some circumstances, punitive damages may be granted if the breaching party’s actions were flagrant or outrageous.

1. Article 1157, Civil Code of the Philippines[↩]
2. G.R. No. 114118, August 28, 2001[↩]
3. Custodio vs. Court of Appeals, G.R. No. 116100, Feb. 9, 1996[↩]
4. Ibid.[↩]
5. FAJ Construction and Development Corporation vs. Saulog, G.R. No. 200759, March 25, 2015[↩]
6. People vs. Ereno, G.R. No. 124706, February 22, 2000[↩]
7. Article 2217, Civil Code of the Philippines[↩]
8. Expert Travel & Tours, Inc. vs. Court of Appeals, G.R. No. 130030, Jun. 25, 1999[↩]
9. Ibid.[↩][↩][↩]
10. Civil Code of the Philippines[↩]
11. G.R. No. 168512, March 20, 2007[↩]
12. Ibid.[↩]
13. Seven Brothers vs. DMC Construction, G.R. No. 193914, November 26, 2014[↩]
14. G.R. No. 118664, August 7, 1998[↩]
15. Ibid.[↩]
16. Article 2225, Civil Code of the Philippines[↩]
17. GSIS vs. Labung-Deang, G.R. No. 135644, September 17, 2001[↩]
18. G.R. No. 165339, August 23, 2010[↩]
19. Article 2228, Civil Code of the Philippines[↩]
20. Atlantic Erectors, Inc. vs. Court of Appeals, G.R. No. 170732, October 11, 2012[↩]
21. Article 2229, Civil Code of the Philippines[↩]
22. Article 2233, Civil Code of the Philippines[↩]
23. Mendoza vs. Spouses Gomez, G.R. No. 160110, June 18, 2014[↩]
24. Ibid.[↩][↩]
25. Article 2230, Civil Code of the Philippines[↩]
26. Article 2231, Civil Code of the Philippines[↩]