2. Nominal Damages

NOMINAL DAMAGES

Nominal damages are adjudged in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. (NCC, Art. 2221) (BAR AREA)

Nature of Nominal Damages

Nominal damages are small sums fixed by the court without regard to the extent of the harm done to the injured party. They are damages in name only and are allowed simply in recognition of a technical injury based on a violation of a legal right. (Robes-Francisco Realty v. CFI, G.R. No. L-41093 October 30, 1978)

Elements of Nominal Damages

• Plaintiff has a right;
• Such right is violated; and
• The purpose of awarding damages is to vindicate or recognize the right violated.

Cases where nominal damages are awarded

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. (NCC, Art. 2222)

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

NOTE: Nominal damages cannot co-exist with compensatory damages. Nominal damages are adjudged in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. (LRTA v. Navidad, G.R. No. 145804, February 7, 2005)

Nominal and temperate damages cannot be awarded concurrently. The two awards are incompatible. Nominal damages are given in order that a right of plaintiff which has been violated or invaded by the defendant, may be vindicated or recognized. On the other hand, temperate damages may be awarded when the court finds that some pecuniary loss has been suffered but its amount cannot be proved with reasonable certainty.

Q: On 15 March 2002, the annual meeting of the stockholders of Philadelphia School, Inc. (“PSI”) was held, wherein a new board of directors was elected, a transfer of certain shares was approved, and a 300% stock dividend was distributed. During the meeting, King was asked to leave the board room because allegedly, he was not a PSI stockholder, while Lim was allowed to vote only for one share during the elections despite the proxies he held for other stockholders who were his brothers. Prior to the meeting, the SEC and the RTC had previously ordered that the 1997 General Information Sheet (“GIS”) of which Lim and King were listed as stockholders be used as basis for the 2000 and 2001 elections of PSI Board of Directors. Thus, on 26 March 2002, Lim and King filed a petition before the RTC of Quezon City, seeking to annul the proceedings and acts resolved on the 15 March 2002 meeting.

Should King and Lim be awarded indemnity for damages?

A: YES. King and Lim should be entitled to an award of damages because they were unjustifiably and obstinately refused recognition of their shareholdings in PSI as well as participation in the annual stockholders’ meeting. The right to vote is inherent in and incidental to the ownership of a capital stock, and the deprivation of which is a violation of property right that entitles the injured party to an award of damages. Articles 2217 and 2220 of the New Civil Code (“NCC”) allow recovery of moral damages in case of willful injury to property. The acts of the other stockholders who refused to recognize the rights of the plaintiffs caused mental anguish, serious anxiety and social humiliation to the latter. Furthermore, under Article 2224 of the NCC, temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered even though not specifically prayed for in the complaint, 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. Similarly, the award of attorney’s fees and litigation expenses was proper because plaintiffs were compelled to litigate to protect or vindicate their stockholders’ rights against the unlawful acts of the other stockholders. (Lydia Lao, et al vs Yao Bio Lim, et al, G.R. 201306, August 9, 2017)

Award of nominal damages in labor termination cases

Where an employee was terminated for a just cause, but the employer failed to comply with the notice requirement, the employee is entitled to the payment of nominal damages. (Agabon v. National Labor Relations Commission, G.R. No. 158693, November 17, 2004) The nominal damages awarded to the employees for a dismissal based on just cause under Art. 297 [282] of the Labor Code, without compliance with the notice requirement was P30,000; while, where the dismissal of the employees was based on authorized cause under Art. 298 [283] of the Labor Code, but without the required notice, the amount was fixed at P50,000. (Celebes Japan Foods Corporation v. Yermo, G.R. No. 175855, October 2, 2009)