Corporations and Moral Damages

One of the things that sticks to a lawyer’s mind about damages is that a corporation is not entitled to moral damages.  Moral damages are a form of compensation decreed by a court in instances where the defendant suffers:

physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury

Corporations don’t experience any of the above — when was the last time a corporation suffered wounded feelings or experience physical suffering?  In one case, though, the Supreme Court recognized that Corporations can be entitled to moral damages if their financial reputation had been harmed.

Well, now the Supreme Court has added another instance where corporations can collect moral damages — in libel cases.  In Filipinas Broadcasting Network, Inc. v. Ago Medical and Educational Center-Bicol Christian College ofMedicine, the Court held that in all cases of libel, corporations can be awarded moral damages.  The Court, through Justice Antonio Carpio (who, as a law student, authored a good law journal article on intentional torts), said:

A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. The Court of Appeals cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages. However, the Court’s statement in Mambulao that “a corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages” is an obiter dictum.

Nevertheless, AMEC’s claim for moral damages falls under item 7 of Article 2219 of the Civil Code.  This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages.

Moreover, where the broadcast is libelous per se, the law implies damages. In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages. Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages. In this case, the broadcasts are libelous per se.  Thus, AMEC is entitled to moral damages.

I was talking to someone today about a corporation filing a libel case and I wondered out loud if it would prosper.  Apparently, this case says that it will. 

The big question, of course, is how much the court can give by way of damages.  I have yet to read a case where the amount of moral damages was large.  In the case I cited above the Court reduced the award from P300K to P150K.  It’s fashionable for them to do so and there are perhaps thousands of cases where they’ve done it. 

For some reason, defendants are not particularly entitled to large monetary awards (except for actual damages which have been proven), or so the Court thinks so.  I believe the problem stems from the fact that there is little to guide the courts in imposing these damages.  Give them a framework and the jurisprudence will change overnight.  The one that has the greatest promise is that put forward by economic analysis of tort law.  But I’ll leave that for a later time.

For now, don’t say or write anything bad about corporations and non-physical beings.  They may sue you for hurting their feelings . . . and win!