SECOND DIVISION
ROMEL P. ALMEDA,
IN SUBSTITUTION OF THE LATE
PONCIANO L. ALMEDA
AND/OR ALMEDA, INC.,
Petitioners,
G.R.
No.
152143
January 13, 2003
-versus-
chanroblesvirtualawlibrary
LEONOR
A.
CARIÑO,
THE SURVIVING SPOUSE AND HIS CHILDREN,NAMELY: ROSARIO
C. SANTOS, REMEDIOS C. GALSIM, RAMON A. CARIÑO,REGINALDO A.
CARIÑO,
RANIEELA C. DIONELA AND RACHELLE C. SAMANIEGO,IN SUBSTITUTION
OF THE LATE AVELINO G. CARIÑO,
Respondents. |
D E C I S I O N
MENDOZA, J.:
This is a Petition for Review on
Certiorari of the Decision,[1]
dated February 12, 2002, of the Court of Appeals in CA-G.R. CV No.
57778,
affirming the decision[2]
of the Regional Trial Court of Laguna, the dispositive portion of which
reads:chanrobles virtuallaw libraryred
WHEREFORE, premises
considered, judgment is hereby rendered in favor of the plaintiff
(Avelino
G. Cariño) and against the defendants (Ponciano L. Almeda and
Almeda,
Inc.) as follows: chanrobles virtuallaw libraryred
1. Ordering
the latter to pay the former jointly and severally the amount of
P477,589.47
with a 12% rate of interest per annum as agreed upon from the date of
demand
on March 9, 1983 until fully paid; chanrobles virtuallaw libraryred
2. Ordering
the latter to pay the former jointly and severally the amount of
P150,000.00
as nominal damages; and chanrobles virtuallaw libraryred
3. Ordering
the latter to pay the former jointly and severally the amount of
P15,000.00
as and for attorney’s fees plus costs of this suit.cralaw:red
Plaintiff’s claim for
moral and exemplary damages is hereby dismissed for want of merit.cralaw:red
SO ORDERED.[3]chanrobles virtuallaw libraryred
The facts of the case
are undisputed:
On April 30, 1980, Ponciano
L. Almeda and Avelino G. Cariño, predecessors-in-interest of
petitioners
and respondents, entered into two agreements to sell, one covering
eight
titled properties[4]
and another three untitled properties,[5]
all of which are located in Biñan, Laguna. The agreed price of
the
eight titled properties was P1,743,800.00, 20% of which was to be paid
upon the signing and execution of the agreement and the balance to be
paid
in four equal semi-annual installments, beginning six months from the
signing
thereof, with the balance earning 12% interest per annum. On the other
hand, the purchase price of the three untitled properties was
P1,208,580.00,
15% of which was to be paid upon the signing and execution of the
agreement,
and the balance, bearing a 12% annual interest from the signing
thereof,
to be paid as follows: 15% of the purchase price plus interest to be
paid
upon the issuance of titles to the lots, and the balance plus interests
to be paid in semi-annual installments starting from the date of
issuance
of the respective certificates of title to the lots involved, which
must
be not later than March 30, 1982. chanrobles virtuallaw libraryred
On April 3, 1982, Cariño
and Almeda executed an amendment to their agreements to sell (a)
extending
the deadline for the production of the titles to the untitled
properties
from March 31, 1982 to June 30, 1982, (b) providing for a partial
payment
of P300,000.00 for the titled properties, (c) requiring Cariño
to
render an accounting of the proceeds of the sugar cane crop on the
properties
subject of the sale up to the 1982 harvest season and (d) obliging the
vendor (Cariño) to pay the vendee (Almeda) the sum of P10,000.00
a month in case of the failure of the former to produce the
certificates
of title to the untitled properties by June 30, 1982. chanrobles virtuallaw libraryred
Before the end of April
1982, Almeda asked Cariño for the execution of a Deed of
Absolute
Sale over the eight titled properties although they had not been fully
paid. Cariño granted the request and executed on May 3, 1982 the
deed of sale over the eight titled lots in favor of Almeda, Inc.[6]
On April 30, 1982, Almeda executed an undertaking[7]
to pay Cariño the balance of the purchase price. Deeds of sale
for
two of the three untitled lots were also executed on July 2, 1982 and
October
9, 1982.[8]
Subsequently, Cariño
made demands for the full and final payment of the balance due him in
the
amount of P477,589.47 and the interests thereon. Despite demand letters
sent to Almeda on March 9, 1983 and on July 20, 1983, however, the
balance
was not paid. Hence, Cariño filed before the RTC of Biñan
a complaint against Almeda and Almeda, Inc., in whose name the titles
to
the properties had been transferred. Cariño prayed that Almeda
and/or
Almeda, Inc. be ordered to pay to him the balance of P477,589.47, the
legal
interests thereon from demand until full payment, 15% of all the
amounts
due, including interests as attorney’s fees, P10,000.00 as litigation
expenses,
P100,000.00 as moral, exemplary and nominal damages and the costs of
suit.chanrobles virtuallaw libraryred
Almeda and Almeda, Inc.
contended that the purchase price, including interest charges, of the
eight
titled properties had been fully paid as of April 3, 1982. With respect
to the three untitled lots, they contended that the purchase price of
Lot
Nos. 2272 and 2268-B had likewise been fully paid, while that of Lot
No.
3109 had only a remaining balance of P167,522.70. chanrobles virtuallaw libraryred
The RTC of Biñan,
Laguna found the claim of Cariño to be well founded and gave
judgment
in his favor as quoted at the beginning of this opinion.cralaw:red
Without questioning
the amount of judgment debt for which they were held liable, Ponciano
Almeda
and Almeda, Inc. appealed to the Court of Appeals for a modification of
judgment, contending that the lower court erred in awarding nominal
damages
and attorney’s fees in favor of Cariño and imposing a 12% annual
interest on the judgment debt from the time of demand on March 9, 1983
until it was fully paid. They maintained that they were not guilty of
any
unfair treatment or reckless and malevolent actions so as to justify an
award of nominal damages. They claimed that they refused to pay the
remaining
balance because the proceeds of certain harvests from the lands in
question
and liquidated damages were also due them. As for the award of
attorney’s
fees, they contended that there was no finding that they acted in gross
and evident bad faith in refusing to satisfy Cariño’s demand so
as to justify its award under Art. 2208 (5) of the Civil Code, because
they had acted on the basis of what they honestly believed to be
correct
as their residual obligations. Finally, they contended that the
imposition
of a 12% interest rate was contrary to law and jurisprudence since
Cariño
sought payment of legal interest, which, under Central Bank Circular
No.
416, was only 6%. chanrobles virtuallaw libraryred
During the pendency
of the case, Almeda died. He was substituted by his heirs, namely, his
wife Eufemia P. Almeda and their children, Elenita A. Cervantes, Susan
A. Alcazar, Florecita A. Datoc, Laurence P. Almeda, Edwin P. Almeda,
Marlon
P. Almeda, Wenilda A. Diaz, Carolyn A. Santos, Alan P. Almeda and Romel
P. Almeda, the last having been designated to act as their
representative.[9]chanrobles virtuallaw libraryred
The Court of Appeals
affirmed the decision of the lower court. It held that the award of
nominal
damages was justified by the unjust refusal of Almeda and Almeda, Inc.
to settle and pay the balance of the purchase price in violation of the
rights of Cariño. The award of attorney’s fees was also
affirmed,
it being shown that Cariño was forced to litigate to protect his
interests. Finally, the appeals court also affirmed the 12% interest
rate
per annum, as agreed upon by the parties in their contracts, following
Art. 2209 of the Civil Code. The appeals court also ruled that the
amount
of the unpaid purchase price, P477,589.47, should be awarded to
Cariño,
considering the failure of Almeda and/or Almeda, Inc. to respond to the
two demand letters and the computation sheet sent to them by
Cariño,
as well as their failure to rebut the correctness of the outstanding
balance
before the lower court. chanrobles virtuallaw libraryred
Hence, this petition
for review on certiorari under Rule 45 filed by Romel P. Almeda, based
on the following assignment of errors:
I. THE
COURT OF APPEALS ERRED IN AWARDING NOMINAL DAMAGES IN THE AMOUNT OF
P150,000.00.chanrobles virtuallaw libraryred
II. THE
COURT OF APPEALS ERRED IN AWARDING ATTORNEY’S FEES IN THE AMOUNT OF
P15,000.00
IN FAVOR OF THE RESPONDENT.cralaw:red
III. THE
COURT OF APPEALS ERRED IN ORDERING THE PETITIONER TO PAY JOINTLY AND
SEVERALLY
THE AMOUNT OF P477,589.47 WITH A 12% RATE OF INTEREST PER ANNUM FROM
THE
DATE OF DEMAND ON MARCH [9], 1983 UNTIL FULLY PAID.[10]chanrobles virtuallaw libraryred
In this appeal, petitioners
do not dispute the amount of the outstanding balance on the purchase
price
of the lots. Petitioners only seek a modification of the decision of
the
appeals court insofar as it upheld the trial court’s award of nominal
damages,
attorney’s fees, and 12% interest. We find their appeal to be without
merit
and, accordingly, affirm the decision of the Court of Appeals. chanrobles virtuallaw libraryred
First. Petitioners contend
that the trial court erred in awarding nominal damages in favor of
respondents
since there was no showing that they acted in an unfair, reckless or
malevolent
manner so as to justify such an award. chanrobles virtuallaw libraryred
Petitioners’ argument
is based on a misreading of the decision in FNCB Finance v. Estavillo.[11]
Contrary to petitioners’ claim, this Court did not award nominal
damages
to the respondent in that case because of petitioner’s reckless action,
malevolent manner and lack of regard to the feelings and reputation of
the other party. Such factors were cited in that case to justify the
award
of exemplary, not nominal, damages. chanrobles virtuallaw libraryred
Indeed, nominal damages
may be awarded to a plaintiff whose right has been violated or invaded
by the defendant, for the purpose of vindicating or recognizing that
right,
and not for indemnifying the plaintiff for any loss suffered by him.[12]
Its award is thus not for the purpose of indemnification for a loss but
for the recognition and vindication of a right.[13]
Indeed, nominal damages are damages in name only and not in fact. When
granted by the courts, they are not treated as an equivalent of a wrong
inflicted but simply a recognition of the existence of a technical
injury.[14]
A violation of the plaintiff’s right, even if only technical, is
sufficient
to support an award of nominal damages. Conversely, so long as there is
a showing of a violation of the right of the plaintiff, an award of
nominal
damages is proper. chanrobles virtuallaw libraryred
Applying such principles
to the instant case, we have on record the fact that petitioners have
an
unpaid balance on the purchase price of lots sold to them by
respondents.
Their refusal to pay the remaining balance of the purchase price
despite
repeated demands, even after they had sold the properties to third
parties,
undoubtedly constitutes a violation of respondents’ right to the said
amount
under their agreements. The facts show that the right of the vendor to
receive the unpaid balance to the lots sold was violated by
petitioners,
and this entitles respondents at the very least to nominal damages.chanrobles virtuallaw libraryred
Second. Petitioners
claim that the imposition of a 12% annual interest rate is erroneous
because
it is contrary to law and jurisprudence. According to them, the
applicable
rate is 6% since the case does not involve a loan or forbearance of
money.chanrobles virtuallaw libraryred
This contention is without
merit. Art. 2209 of the Civil Code provides: chanrobles virtuallaw libraryred
If the obligation consists
in the payment of a sum of money, and the debtor incurs in delay, the
indemnity
for damages, there being no stipulation to the contrary, shall be the
payment
of the interest agreed upon, and in the absence of stipulation, the
legal
interest, which is six per cent per annum. chanrobles virtuallaw libraryred
The contracts to sell
of the parties stipulated that the balance of the purchase price shall
earn an interest rate of 12% per annum upon signing of the contract.
Such
stipulations have the force of law between the contracting parties and
should be complied with by them in good faith.[15]
The interest in this case should be allowed to run from March 9, 1993,
respondents’ extrajudicial demand for payment of the remaining balance
plus interest having begun on said date.[16]chanrobles virtuallaw libraryred
In addition, in accordance
with our decision in Eastern Shipping Lines, Inc. v. Court of Appeals,[17]
when the judgment of the court awarding the sum of money becomes final
and executory, a 12% legal interest per annum shall also be imposed
from
such finality until satisfaction thereof, this interim period being
deemed
to be by then an equivalent to a forbearance of credit. chanrobles virtuallaw libraryred
Third. Nor is there
any basis for petitioners’ claim that the appellate court erred in
awarding
attorney’s fees in favor of respondents. Under the Civil Code,
attorney’s
fees and litigation expenses can be recovered in cases where the court
deems it just and equitable.[18]
We see no reason therefore to set aside the order of the trial court,
as
affirmed by the appeals court, granting to respondents attorney’s fees
in the amount of P15,000.00. chanrobles virtuallaw libraryred
Fourth. We observe that
this case has dragged on for more than a decade. While the records
reveal
that respondents engaged the services of two lawyers, petitioners had a
total of sixteen counsels starting from January 24, 1984 up to December
22, 1997. Of the sixteen, one lawyer served for more than 2 years,
another
for 8 days only, and still another entered his appearance and withdrew
it only to re-enter his appearance after some time. The records show
that
most of the lawyers who entered their appearances either filed only
motions
to cancel hearings or motions for postponements, claiming to have
misplaced
the calendar of court hearings or to be staying abroad. These unduly
delayed
the disposition of the case in violation of the right of respondents to
claim what is rightfully due them. This fact further justifies the
award
of nominal damages and supports the grant of attorney’s fees. chanrobles virtuallaw libraryred
WHEREFORE, the petition
for review on certiorari is DENIED and the decision of the Court of
Appeals
is AFFIRMED. Interest at the rate of twelve percent (12%) shall be
imposed
on the amount due upon finality of this decision until payment thereof.cralaw:red
SO ORDERED. chanrobles virtuallaw libraryred
Bellosillo, J.,
(Chairman),
Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.chan
robles virtual law library
____________________________
Endnotes:
[1]
Per Associate Justice Conchita Carpio-Morales (now Associate Justice of
the Supreme Court) and concurred in by Associate Justice Martin S.
Villarama,
Jr. and Associate Justice Sergio L. Pestano.
[2]
Per Judge Rodrigo V. Cosico.
[3]
Records, pp. 529-532.
[4]
TCT No. (T-2734) T-26454, Lot No. 2305; TCT No. (T-2735) T-26455, Lot
No.
2281; TCT No. (T-2732) T-26452, Lot No. 2282; TCT No. T-2727, Lot No.
2273;
TCT No. T-2722, Lot No. 3108; TCT No. T-2721, Lot No. 2269, TCT No.
(T-2730)
T-26450, Lot No. 3110; and TCT No. T-2733, Lot No. 2280.
[5]
Tax Declaration No. 12964, Cadastral Lot No. 2272; Tax Declaration No.
12972, Cadastral Lot No. 3109; and Tax Declaration No. 1037, Cadastral
Lot No. 2268.
[6]
Exh. D; Records, pp. 231-236.
[7]
Records, p. 240.
[8]
Exhs. D-1 and D-2; Records, pp. 237-239.
[9]
Notice of Death of Party with Motion for Substitution, dated Dec. 29,
1997;
CA Resolution, dated June 11, 1998, CA Records, pp. 44-45, 56.
[10]
Rollo, p. 14.
[11]
192 SCRA 514 (1990).
[12]
Civil Code, Art. 2221.
[13]
Francisco v. Ferrer, Jr., 353 SCRA 261 (2001) citing Cojuangco, Jr. v.
Court of Appeals, 309 SCRA 602 (1999) and Areola v. Court of Appeals,
236
SCRA 643 (1994).
[14]
Pedrosa v. Court of Appeals, 353 SCRA 620 (2001) citing PNOC Shipping
and
Transport Corporation v. Court of Appeals, 297 SCRA 402 (1998).
[15]
Civil Code, Art. 1159.
[16]
Records, pp. 241-244. See Keng Hua Paper Products Co., Inc. v. Court of
Appeals, 286 SCRA 257, 270 (1998).
[17]
234 SCRA 78 (1994).
[18]
Civil Code, Art. 2208. |