AT A GLANCE:
Actual damages include all damages that the plaintiff may have suffered, which may be proven by specific facts and mere speculation or guesswork. Compensatory damages are awarded to the injured party to compensate for the wrong that was established, whether it was committed maliciously or not.
Recovery of Damages
Article 2199 of the Civil Code of the Philippines states that except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages.
Actual Damages, defined
The Supreme Court has defined Actual Damages in Michael C. Guy v. Raffy Tulfo, G.R. No. 213023, April 10, 2019, as follows:
“They pertain to such injuries or losses that are actually sustained and susceptible of measurement. Actual damages constitute compensation for sustained pecuniary loss. Nevertheless, a party may only be awarded actual damages when the pecuniary loss he or she had suffered was duly proven.”
When are Actual Damages awarded?
Actual damages are compensation for an injury that will put the injured party in the position where it was before the injury. (Michael C. Guy v. Raffy Tulfo)
Compensatory damages, defined
On the other hand, the Supreme Court defined Compensatory damages in Lucio Algarra v. Sixto Sandejas, G.R. No. L-8385, March 24, 1914, as:
“Compensatory damages’ as indicated by the word employed to characterize them, simply make good or replace the loss caused by the wrong. They proceed from a sense of natural justice, and are designed to repair that of which one has been deprived by the wrong of another.”
When are Compensatory Damages awarded?
Compensatory damages are awarded as an equivalent for the injury done. It is synonymous with actual damages (Filipinas (Pre-Fab Bldg.) Systems, Inc. v. MRT Development Corp., G.R. Nos. 167829-30, November 13, 2007)
In Algarra vs Sandejas, G.R. No. L-8385, March 24, 1914, the Supreme Court explained that Compensatory damages are such as awarded to compensate the injured party for caused by the wrong, and must be only such as make just and fair compensation, and are due when the wrong is established, whether it was committed maliciously — that is, with evil intention — or not.
Purpose of Actual and Compensatory Damages
The purpose of the law in awarding actual damages is to repair the wrong that has been done, to compensate for the injury inflicted, and not to impose a penalty. Actual damages are not dependent on nor graded by the intent with which the wrongful act is done. The words “actual damages” shall be construed to include all damages that the plaintiff may he has suffered in respect to his property, business, trade, profession, or occupation, and no other damages whatever. Compensatory damages as indicated by the word employed to characterize them, simply make good or replace the loss caused by the wrong. They proceed from a sense of natural justice, and are designed to repair that of which one has been deprived by the wrong of another. (Algarra vs Sandejas)
When may such damages be recovered?
Under Article 2205 of the Civil Code, damages may be recovered:
- For loss or impairment of earning capacity in cases of temporary or permanent personal injury;
- For injury to the plaintiff’s business standing or commercial credit.
Two kinds of Actual or Compensatory Damages
In Filipinas Synthetic Fiber Corporation v. Santos et al., G.R. No. 152033, March 16, 2011, the Court stated that there are two kinds of actual or compensatory damages one is the loss of what a person already possesses (daño emergente), and the other is the failure to receive as a benefit that which would have pertained to him (lucro cesante).
Burden of proof
The burden of proof is on the party who would be defeated if no evidence would be presented on either side. The burden is to establish one’s case by a preponderance of evidence which means that the evidence, as a whole, adduced by one side, is superior to that of the other. Actual damages are not presumed. The claimant must prove the actual amount of loss with a reasonable degree of certainty premised upon competent proof and on the best evidence obtainable. Specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne must be pointed out. Actual damages cannot be anchored on mere surmises, speculations or conjectures. (Filipinas Synthetic Fiber Corporation v. Santos et al.)
Proof required
In Guy v. Tulfo et al.,the Supreme Court rule time and again, emphasized that actual damages cannot be presumed and courts, in making an award, must point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne.
An award of actual damages is dependent upon competent proof of the damages suffered and the actual amount thereof. The award must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative and unsubstantial proof.
Read also: What Are Moral Damages?
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
All rights reserved.