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This article was originally published on March 13, 2021 and has been updated to reflect recent legal developments.
This article is provided for general informational purposes only and does not create, nor shall it be construed as creating, a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. For advice on specific legal concerns, you are encouraged to engage the services of a qualified lawyer. You may also directly consult Alburo Alburo and Associates Law Offices for proper guidance tailored to your situation.
The views and information presented herein are based on the laws, rules, and jurisprudence prevailing at the time of writing. They do not take into account subsequent legal developments and should not be relied upon as a substitute for professional legal advice.
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 provides 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.
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.
Actual Damages, defined
Actual damages are such compensation or damages for an injury and will put the injured party in the position in which he was before he was injured. They are those damages which the injured party is entitled to recover, for the wrong done and injuries received when none was intended. They indicate such losses as are actually sustained and susceptible of measurement, and as used in this sense, the phrase, determinate pecuniary loss has been suggested as a more appropriate designation. They include all kinds of damages except exemplary or primitive damages. (Filipinas (Pre-Fab Bldg.) Systems, Inc. v. MRT Development Corp., G.R. Nos. 167829-30, November 13, 2007)
Compensatory damages, defined
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.)
Purpose of Actual and Compensatory Damages
In Algarra vs Sandejas, G.R. No. L-8385, March 24, 1914, the Supreme Court explained that:
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.
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.
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., G.R. No. 213023. April 10, 2019, 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.
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