Petitioner vs. vs. Respondents: Third Division
Petitioner vs. vs. Respondents: Third Division
Petitioner vs. vs. Respondents: Third Division
DECISION
JARDELEZA , J : p
Pryce is now before this Court primarily arguing that the Court of Appeals erred
in upholding the award of compensatory damages because Spouses Octobre failed to
present competent proof of the actual amount of loss. 1 9 It also questions the award of
attorney's fees and litigation costs because there was allegedly no nding of bad faith.
2 0 Additionally, as side issues, Pryce questions the Court of Appeals' nding that the
stay order had been reversed and its decision to uphold the finding by the HLURB Board
and Of ce of the President that the subject properties were mortgaged to China Bank.
21
It is undisputed that Pryce failed to deliver the titles to the lots subject of the
Contract to Sell even as Spouses Octobre had already fully settled the purchase price.
Its inability to deliver the titles despite repeated demands undoubtedly constitutes a
violation of Spouses Octobre's right under their contract. That Pryce had transferred
custody of the titles to China Bank pursuant to a Deed of Assignment is irrelevant,
considering that Spouses Octobre were not privy to such agreement.
In ne, contractual breach is suf cient to justify an award for nominal damages
but not compensatory damages.
III
CD Technologies Asia, Inc. 2017 cdasiaonline.com
Pryce questions the award of attorney's fees and costs of suit because no
exemplary damages were awarded. This contention, however, is clearly unmeritorious
because under Article 2208, 3 7 the award of exemplary damages is just one of 11
instances where attorney's fees and expenses of litigation are recoverable.
Article 2208 (2) allows the award of attorney's fees when the defendant's act or
omission has compelled the plaintiff to litigate with third persons or to incur expenses
to protect his interest. The Court has interpreted that this provision requires a showing
of bad faith and not mere erroneous conviction of the righteousness of a defendant's
cause. 3 8 In this case, the Court of Appeals found that Pryce acted in bad faith when it
did not disclose to Spouses Octobre the fact that the certi cates of title to the
properties purchased were in the custody of China Bank until Spouses Octobre had
fully paid the price and had demanded delivery of the titles. We agree with this nding
and therefore sustain the award of attorney's fees and costs of suit in favor of Spouses
Octobre.
IV
The other side issues raised by Pryce shall be disposed of swiftly since they have
no substantial bearing on the merits of this case. As admitted by Pryce itself; "it is not
the entire Decision that is being assailed" 3 9 but only the portion regarding the award of
compensatory damages, attorney's fees and costs of suit.
When the stay order being invoked by Pryce was reversed and set aside at the
rst instance by the Court of Appeals in CA-G.R. SP No. 88479, that stay order was
automatically deemed vacated. 4 0 By reversing the stay order of the rehabilitation court,
the Court of Appeals effectively enjoined the execution of such order as allowed by the
2000 Interim Rules of Procedure on Corporate Rehabilitation 4 1 (which was then in
effect when Pryce led its petition for rehabilitation in 2004). We af rmed the Court of
Appeals' decision to set aside the stay order in the Decision dated February 4, 2008 4 2
and Resolution dated June 16, 2008. 4 3 Although we later reconsidered the Decision on
February 18, 2014, 4 4 the same does not affect the validity of the proceedings already
conducted before the HLURB, Of ce of the President, and Court of Appeals during the
intermediate period that the stay order was vacated. Neither does it affect our
resolution of this petition for review because under the Financial Rehabilitation and
Insolvency Act of 2010 4 5 (FRIA), the stay order shall not apply to cases already
pending appeal in the Supreme Court. 4 6 Section 146 of the FRIA expressly allows the
application of its provisions to pending rehabilitation cases, except to the extent that
their application would not be feasible or would work injustice. 4 7
B
The characterization of the Deed of Assignment between Pryce and China Bank
as either an assignment of receivables or a mortgage of real property is irrelevant to
Pryce's obligation to Spouses Octobre. The principal reason why Pryce raises this
argument is to elude the applicability of Section 18 of Presidential Decree No. 957. 4 8
But Spouses Octobre's claim is precisely premised on its contract with Pryce, not this
speci c provision of law. Hence, even if the provision is inapplicable, Pryce's
contractual liability to deliver the titles to Spouses Octobre remains.
WHEREFORE , the petition is DENIED . The assailed Decision and Resolution of
CD Technologies Asia, Inc. 2017 cdasiaonline.com
the Court of Appeals in CA-G.R. SP No. 103615 are MODIFIED in that nominal
damages in the amount of P30,000.00 are awarded in lieu of compensatory damages.
SO ORDERED. ISHCcT
2. Id. at 86.
3. Id.
4. Rollo, p. 15.
5. Id.
6. Rollo, pp. 123-127.
7. Id. at 173-175.
8. Id. at 124.
9. Id. at 175.
10. Id. at 175-176.
11. Id. at 97-99.
23. Pryce Corporation v. Court of Appeals, G.R. No. 172302, February 4, 2008, 543 SCRA 657.
24. Rollo, pp. 201-202.
25. Id. at 180.
26. For brevity, the term "compensatory damages" instead of "actual or compensatory
damages" is used to be consistent with the phraseology of the rulings a quo.
27. Oceaneering Contractors (Phil.), Inc. v. Barretto , G.R. No. 184215, February 9, 2011, 642
CD Technologies Asia, Inc. 2017 cdasiaonline.com
SCRA 596, 606-607.
28. Adrian Wilson International Associates, Inc. v. TMX Philippines, Inc. , G.R. No. 162608, July
26, 2010, 625 SCRA 321, 339.
29. Rollo, pp. 41-43.
33. Francisco v. Ferrer, Jr. , G.R. No. 142029, February 28, 2001, 353 SCRA 261, 267-268.
Citation omitted.
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.
xxx xxx xxx
38. The President of the Church of Jesus Christ of Latter Day Saints v. BTL Construction
Corporation, G.R. No. 176439, January 15, 2014, 713 SCRA 455, 472-473;
Oceaneering Contractors (Phil), Inc. v. Barretto, supra note 27 at 610-611; ABS-CBN
Broadcasting Corporation v. Court of Appeals , G.R. No. 128690, January 21, 1999,
301 SCRA 572, 601-602.
39. Rollo, p. 41.
CD Technologies Asia, Inc. 2017 cdasiaonline.com
40. See Lee v. Trocino, G.R. No. 164648, August 6, 2008, 561 SCRA 178, 198.
47. See also Financial Rehabilitation Rules of Procedure (2013), A.M. No. 12-12-11-SC, Rule 1,
Sec. 2; and Majority Stockholders of Ruby Industrial Corporation v. Lim , G.R. No.
165887, June 6, 2011, 650 SCRA 461, 523.
48. Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for
Violations Thereof (1976).
Sec. 18. Mortgages. — No mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the Authority. Such approval shall not be
granted unless it is shown that the proceeds of the mortgage loan shall be used for
the development of the condominium or subdivision project and effective measures
have been provided to ensure such utilization. The loan value of each lot or unit
covered by the mortgage shall be determined and the buyer thereof, if any, shall be
noti ed before the release of the loan. The buyer may, at his option, pay his
installment for the lot or unit directly to the mortgagee who shall apply the payments
to the corresponding mortgage indebtedness secured by the particular lot or unit
being paid for, with a view to enabling said buyer to obtain title over the lot or unit
promptly after full payment thereto.