In order to set an example for the public good, exemplary or corrective damages are awarded in addition to moral, temperate, liquidated or compensatory damages.
Lopez v. Pan American World Airways
G.R. No. L-22415, 30 March 1966
Plaintiffs were entitled to exemplary damages. “The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages (Articles 2229, 2232, New Civil Code).
“In view of its nature, it should be imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other airlines. In this light, we find it just to award P75,000.00 as exemplary or corrective damages.”
Criminal cases and civil liability
In criminal cases, exemplary damages may be included in the civil liability when there is a finding of one or more aggravating circumstances. These damages are “separate and distinct” from fines to be paid to the offended party. 
In quasi-delicts, exemplary damages are awarded whenever the defendant acted with “gross negligence.” Meanwhile, in contracts and quasi-contracts, exemplary damages are awarded whenever the defendant acted in a “wanton, fraudulent, reckless, oppressive, or malevolent manner.”
Tan v. OMC Carriers, Inc.
G.R. No. 190521, 12 January 2011
Reduction of exemplary damages proper – Exemplary or corrective damages are imposed “by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.” The death of the deceased and the destruction of petitioner’s home and tailoring shop “were unquestionably caused by the respondents’ gross negligence. The law allows the grant of exemplary damages in cases such as this to serve as a warning to the pubic and as a deterrent against the repetition of this kind of deleterious actions. The grant, however, should be tempered, as it is not intended to enrich one party or to impoverish another. From this perspective, [the Court finds] the CA’s reduction of the exemplary damages awarded to the petitioners from P500,000.00 to P200,000.00 to be proper.”
Not as a matter of right – A complainant is not entitled to exemplary damages as a matter of right; it is the court that will decide whether the same is proper. In fact, a complainant needs first to prove that he is entitled to moral, temperate or compensatory damages – even in the existence of stipulation for liquidated damages – before the court may consider the question of granting exemplary damages, and, if applicable, on top of liquidated damages. Parties cannot agree to renounce in advance any claim to exemplary damages as the same is imposed for the public good.
– – –
 Ibid. Article 2229.
 Ibid. Article 2230.
 CIVIL CODE. Article 2231.
 Ibid. Article 2232.
 Ibid. Article 2233.
 Ibid. Article 2234.
 Ibid. Article 2235.
 Ibid. Article 2229.