The propriety of claiming damages in administrative proceedings in the HLURB

Damages are an award of money made to compensate a claimant who has suffered loss or damage as a
result of a wrong for which the defendant is responsible.

A right to damages may arise under a statute as well as under the common law.

'Damages' can be defined as the pecuniary recompense given by process of law to a person in order to make good
the consequences of an actionable wrong that another has done to them.

The normal function of damages for breach of contract is the same as that in tort, namely,
compensatory. The aim being to compensate the true loss suffered by the innocent party and place
them in the same position, so far as it is possible to do so using only money, as if the contract had been
performed. There are, however, exceptional circumstances where the court may depart from this
general policy and award some greater sum, such as in cases of an award of gain-based damages.

Thus the overriding aim of an award of damages arising from a breach of a contractual obligation is to
put the innocent party 'so far as money can do it…in the same situation…as if the contract had been
performed' (Robinson v Harman). This differs from tort, where the aim is to put the injured party in the
same position they would have been in had the tort not occurred.

Note: unlike many torts, a breach of contract is actionable per se, therefore, in principle, a claimant who
proves a breach, even if they prove no recoverable loss at all, is entitled at least to a nominal award.

Specific performance is an equitable, discretionary remedy

which, if granted, compels a party to perform a contractual
obligation. It is only granted where it will ‘do more perfect and
complete justice than an award of damages’ and is not available in
respect of contracts of personal service or employment. It is a remedy
most usually employed in contracts for the sale of land or shares, or to
compel landlords to carry out their repairing obligations. There are a
large number of potential defences to a claim for specific performance
which need to be considered, as well as whether it is appropriate to
claim damages in the alternative.
ARTICLE 2199. Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages. G.R. No. 206806, June 25,
2014, ARCO PULP AND PAPER CO., INC. and CANDIDA A. SANTOS vs.DAN T. LIM, doing
business under the name and style of QUALITY PAPERS & PLASTIC PRODUCTS
ENTERPRISES.
 In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted
in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Article 2233. Exemplary
damages cannot be recovered as a matter of right; the court will decide whether or not they should
be adjudicated. Article 2234.

Actual or compensatory damages are those awarded in satisfaction of, or in recompense

for, loss or injury sustained. They simply make good or replace the loss caused by the
wrong. (Mariano Mendoza vs. Leonora Gomez, G.R. No. 160110, June 18, 2014)
Article 2229 of the Civil Code provides that 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. Article 2231 of the same Code further states that
in quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence. (Mariano Mendoza vs. Leonora Gomez, G.R. No. 160110, June 18, 2014)
Moral damages are awarded to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he has undergone, by reason of
the defendant’s culpable action. (Kierulf vs. Court of Appeals, G.R. No. 99301, 13 March
1997)

JURISPRUDENCE TO BE USED IN STAY V PAMBID LAGMAY

1.) G.R. No. 182201 UNIVERSAL INTERNATIONAL INVESTMENT (BVI) LIMITED,
Petitioner vs. RAY BURTON DEVELOPMENT CORPORATION, Respondent
G.R. No. 185815, UNIVERSAL INTERNATIONAL INVESTMENT (BVI) LIMITED, Petitioner,
vs. RAY BURTON DEVELOPMENT CORPORATION, Respondent.

Breach of Contract by RBDC

Both parties entered into a contract to sell, not a contract of sale. In the former
agreement, ownership is reserved by the vendor.45 Upon full payment of the purchase price,
the resulting duties of RBDC as vendor are found in Section 3 of the subject agreement, viz:
SECTION 3. TITLE AND OWNERSHIP OF UNIT.
a) Upon full payment of the BUYER of the above purchase price, including any and all
payments as provided herein, and upon full compliance by the BUYER of all his obligation as
contained in this contract, the SELLER shall deliver to the BUYER a Deed of Absolute Sale
conveying its rights, interests and title to the UNIT and the appurtenant undivided interest in the
common areas of the Project, and the corresponding Condominium Certificate of Title. The
BUYER shall give the SELLER reasonable time from date of completion of the Project to secure
the title to the UNIT. A copy of the Deed of Absolute Sale is attached as Annex A. x x x.
(Emphasis supplied)
RBDC only has two obligations specified by Section 3: (1) to deliver deeds of absolute
sale; and (2) to deliver the corresponding CCTs. Contrary to the demands of petitioner,
respondent did not have any contractual obligation to surrender possession of the properties.
Neither did the latter have to cause the transfer of the CCTs to petitioner's name.
In Chua v. Court of Appeals,46 we explained the nature and the incidents of a contract
to sell as follows:
In a contract to sell, the obligation of the seller to sell becomes demandable only upon
the happening of the suspensive condition. In this case, the suspensive condition is the full
payment of the purchase price by Chua. Such full payment gives rise to Chua's right to demand
the execution of the contract of sale.
It is only upon the existence of the contract of sale that the seller becomes obligated to
transfer the ownership of the thing sold to the buyer.
xxxx

In the sale of real property, the seller is not obligated to transfer in the name of the
buyer a new certificate of title, but rather to transfer ownership of the real property. There is a
difference between transfer of the certificate of title in the name of the buyer, and transfer of
ownership to the buyer. The buyer may become the owner of the real property even if the
certificate of title is still registered in the name of the seller. (Emphasis supplied)

Universal does not base its claim for damages on grounds supported by the Contracts to
Sell. Instead, it argues that respondent's failure to transfer the CCTs and convey possession of
the properties caused the depreciation of their market value. Hence, this Court rules that
petitioner's premise for its recovery of depreciation losses is misplaced.47

Proximate Cause of Universal's Losses

The act or omission of respondent must have been the proximate cause, as
distinguished from the remote cause, of the loss sustained by the claimant.48 Proximate cause -
determined by a mixed consideration of logic, common sense, policy, and precedent49 is that
cause which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred.50
Applying that definition to the case at bar, Universal must demonstrate that the
breaches of RBDC caused the depreciation of the condominium units; or conversely, that had
respondent performed its contractual obligations, the properties would not have diminished in
value.
Universal does not specify how RBDC's non-delivery of the properties resulted in the
depreciation of their value. Neither does petitioner prove that had it possessed the properties,
it could have avoided their decline in the real estate market. At most, it has only been able to
show that with the passage of time, its ₱57,146,483.72 investment in 1996 was reduced to
₱37,500,000 in 2005. Therefore, considering the dearth of proof of causality in this case, this
Court cannot justly exact the supposed ₱19,646,483.72 depreciated value of the 10
condominium units and 10 parking slots from RBDC.

Recovery from RBDC of Sums Paidby Universal to China Bank

As mentioned above, Universal seeks to recover from RBDC the additional sums paid by
the former to obtain the release of the properties from China Bank. Respondent counters that it
should not be made to pay the ₱770,613.68 condominium dues, ₱368,881.63 real estate taxes,
and ₱3,170,206.91 expenses, given that China Bank was the one obliged by the HLURB to
release the condominium units.
We agree with RBDC. Respondent correctly argues that it is not chargeable for the
alleged expense items. Clearly - and logically – the HLURB did not require any additional
payment for the fully paid buyers of the condominium units. Hence, Universal should not have
paid any additional amount to China Bank. In the final Judgment Upon Compromise dated 1
August 2002, the HLURB directed the bank to release the titles to all the units without
qualification:51
The affidavits of undertaking of the mortgagee bank are requirements in the issuance of
a clearance to mortgage as provided for under Section 18 of Presidential Decree No. 957 for the
protection of the buyers.
It is clear from the affidavits that the mortgagee bank undertook to cancel/release the
mortgage to fully paid units notwithstanding the non-payment of the total mortgage loan
incurred by the mortgagor. The mortgagee bank has to abide by this undertaking.
Moreover, Section 25 of Presidential Decree No. 957 substantially provides that the
titles to fully paid condominium units should be secured and delivered to the buyers.
 Therefore, the China Banking Corporation should release the titles to all fully paid
condominium units to the buyers whether they are its buyers or the buyers of Ray Burton
Development Corporation or Mercantile Investment Company, Inc.
Given that the sums expended by Universal should not have been incurred in the first
place, this Court finds no just reason for petitioner to demand the payment of the expenses,
association dues, and realty taxes from RBDC. Notably, as regards the payment of association
dues and realty taxes, the Contracts to Sell provide that these shall not be shouldered by
respondent seller.52
Universal's Entitlement to Damages on Account of RBDC's Breaches
As discussed respondent had two obligations specified in Section 3 of the Contracts to
Sell: (1) to deliver the deeds of absolute sale; and (2) to give the corresponding CCTs. RBDC
admittedly failed to perform these obligations, but invoked the excuse that Universal had
defaulted on the payment of transfer charges under Section 5(a) of the Contracts to Sell. The
provision reads as follows:53
SECTION 5. TAXES ASSESSMENTS AND EXPENSES.
a) Documentary stamp taxes, registration fees, taxes and assessments on transfer of
real properties and other necessary and incidental expenses and all other forms of taxes as
imposed by the government related to the acquisition of the property as well as other expenses
that may be incurred in connection with the execution of the Absolute Deed of Sale and the
conveyance/transfer of Title to the BUYER, shall be for the sole account and responsibility of
the BUYER.
In the event the SELLER agrees to handle the registration of the Deed of Sale and effect
title transfer in the name of the BUYER, the amount of taxes, fees, and expenses covering the
same shall be paid by the BUYER to the SELLER within five (5) days from receipt of the Notice of
Completion and Delivery of the Unit issued by the SELLER. (Emphasis supplied)
The excuse given by RBDC deserves scant consideration. In order that the debtor may be
held to be in default, the following requisite conditions must be present: (1) the obligation is
demandable and already liquidated; (2) the debtor delays performance of the obligation; and
(3) the creditor requires the performance judicially or extrajudicially.54
Nowhere in the records does this Court find a demand from RBDC for Universal to pay
any sum under the above provision. None of the letters of respondent to petitioner resembles a
notice requiring the latter to tender any payment for government charges and expenses
connected with the execution of the Deed of Absolute Sale or the transfer of titles. Moreover,
there is no liquidated demand to speak of, as there is no itemized final computation.55 All in all,
this Court does not consider Universal to have defaulted on the payment of transfer charges.
 Section 5(a) must be construed as a whole. Its first paragraph refers to the payment for
(1) government-imposed taxes, fees, and expenses related to the acquisition of the property;
and (2) expenses that may be incurred in connection with the execution of the Deeds of
Absolute Sale and the conveyance or transfer of titles to the buyer.
The second paragraph of Section 5 specifies that in the event the seller handles the
registration of the Deed of Absolute Sale and effects title transfer in the name of the buyer,
then that is the time that the buyer would have to give the seller the payment for those
transactions. Specifically, the buyer must tender payment within five days from receipt of the
seller's notice of completion and delivery of the unit.
We appreciate that the charges under Section 5(a) are sums to be expended for the
titling of the properties. However, the obligation to pay these charges - specifically to the seller
- arises only "in the event" that the latter elects to handle the titling of the properties. In this
case, RBDC has not averred that it has undertaken that responsibility. Consequently, Universal
cannot be obliged to pay the transfer charges to respondent. RBDC cannot demand
performance by Universal without offering to comply with its own prestation.56
RBDC is then left with no just reason not to perform its obligations to Universal. As early
as February 1999, respondent should have (1) executed deeds of absolute sale; and (2) given
the CCTs of the properties to petitioner. RBDC has not at all complied with its duties despite the
fact that Universal has already fully paid the purchase price of the properties.

Temperate Damages in lieu of Actual Damages

As explained above, Universal failed to prove its claims for actual damages, both as
regards the liquidated damages under Section 6 of the Contracts to Sell and the alleged losses
amounting to ₱19,646,483.72.
Nonetheless, petitioner may still be awarded damages in the concept of temperate or
moderate damages.1âwphi1 Temperate damages may be recovered when the court finds that
some pecuniary loss has been suffered but the amount cannot, from the nature of the case, be
proven with certainty.57 In this case, there is no doubt that Universal sustained pecuniary loss,
albeit difficult to quantify, arising from RBDC's failure to execute deeds of absolute sale and to
deliver the CCTs of the properties.
Had RBDC fulfilled these obligations, its transaction with Universal under the Contracts
to Sell would have been complete.58 After an absolute deed of sale has been signed by the
parties, notarized and hence, turned into a public instrument, then the delivery of the real
property is deemed made by the seller to the buyer.59 Consequently, the buyer would have
right away enjoyed the possession of the realties. Likewise, the titles thereto would have
permitted the use of the properties as collateral for further investments. Universal lost all of
these opportunities after RBDC failed to perform the latter's duties as a seller.
 Hence, this Court is empowered to calculate moderate damages, rather than let the
aggrieved party suffer without redress from RBDC 's wrongful act.60
The calculation of temperate damages is usually left to the sound discretion of the
courts.61 We observe the limit that in giving recompense, the amount must be reasonable,
bearing in mind that the same should be more than nominal, but less than compensatory.62 In
jurisprudence, this Court has pegged temperate damages to an amount equivalent to a certain
percentage of the actual damages claimed by the injured party.63
The plight of the petitioner in Pacific Basin Securities Co., Inc. v. Oriental Petroleum64 is
parallel to that of Universal. In that case, the petitioner was also not given transfer documents
for the properties it had purchased, and the respondent unjustifiably refused to record the
transfer of the ₱l 7,727,000 worth of shares purchased by the former. As a result, the petitioner
therein was prevented from reselling the subject shares in the stock market. For that
dereliction, this Court awarded the petitioner therein ₱l million for temperate damages
equivalent to 5% of the actual damages claimed.
Anent the failure to deliver the titles to a purchased property, Government Service
Insurance System v. Spouses Labung-Deang65 is instructive. Similar to petitioners herein,
Spouses Labung-Deang were deprived by the bank of copies of the title to the property that
they had purchased. Consequently, the spouses failed to mortgage it as security for a ₱50,000
loan that they could have utilized to renovate their house. As recompense, this Court awarded
them ₱20,000 temperate damages equivalent to 40% of the amount of their alleged injury.
Aside from those two analogous cases, this Court has reviewed other cases involving the
award of temperate damages for breaches of contract. We have considered the: (1) investment
to be lost by the injured party;66 (2) duration of suffering of the injured party;67 and (3) urgent
action undertaken by the party in breach to remedy the situation.68 Thus, we take into account
the following: (1) in 1999, Universal invested ₱52,836,781.50 for 10 condominium units and 10
parking slots of Elizabeth Place in Makati City; (2) Universal asked RBDC about the monthly
rental rates of each of the properties, which turned out be in the range of ₱20,000 to
₱48,000;69 (3) for six years, petitioner had no titles to or possession of the properties; and (4)
RBDC could have easily executed deeds of absolute sale as the templates of these contracts had
already been attached to the Contracts to Sell.70
Having laid down all the circumstances obtaining in this case, this Court is of the view
that an award for temperate damages equivalent to 15% of the ₱52,836,781.50 purchase value
of the properties, or ₱7,925,517.23, is just and reasonable.
Exemplary Damages and Attorney's Fees
Since petitioner is entitled to temperate damages, then the courts may also examine the
propriety of imposing exemplary damages on respondent.71 Exemplary damages are corrective
damages imposed by way of example or correction for the public good.72 The grant thereof is
intended to serve as a deterrent to or negative incentive for curbing socially deleterious
actions.73 Relevant to this case, this Court highlights that the State has an avowed policy to
protect innocent buyers in real estate transactions.74
Article 2232 of the Civil Code of the Philippines provides that in contracts, the court may
award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner. In this case, we find that respondent indeed acted in that manner when,
despite demand for and full payment of the properties,75 it refused to execute deeds of
absolute sale and release the CCTs to petitioner without any sound basis.76 As already
discussed, Universal' s nonpayment of transfer charges does not even serve as a potent excuse
for RBDC's refusal to execute deeds of absolute sale and to deliver the titles of the purchased
properties.
Moreover, there was no impediment to RBDC's issuance of deeds of absolute sale. As
the owner, it could have still sold the properties even if it mortgaged them to China Bank.77 As
for the CCTs, respondent need not cause their transfer to the name of petitioners. RBDC could
have simply turned them over to Universal in 1999, two years prior the foreclosure of the
securities by China Bank in 2001. To make matters worse, respondent did not categorically deny
that it had failed to disclose to petitioner that the lot of Elizabeth Place had been mortgaged to
China Bank prior the execution of the Contracts to Sell.78 This Court holds that the totality of
these circumstances justify the imposition of exemplary damages on RBDC.
In Cantemprate v. CRS Realty Development Corporation,79 which is fairly akin to the
case at bar, the developer did not deliver the titles to the buyers of the fully paid properties.
For failing to comply with its unequivocal duty, this Court affirmed the HLURB 's award of
₱30,000 exemplary damages and ₱20,000 attorney's fees to each of the buyers. Considering
that ruling vis-a-vis the dereliction of RBDC in the present case, which also involves the violation
of a straightforward obligation to execute the deeds of absolute sale and to deliver the CCTs for
the 10 condominium units and 10 parking slots, an award of ₱300,000 as exemplary damages is
justified to set an example.
Given the award of exemplary damages, this Court likewise finds it just and equitable
under the circumstances to award ₱200,000 as attorney's fees.80 In addition, all damages
awarded shall earn interest at the rate of 6% per annum from the date of finality of this
judgment until full payment.
WHEREFORE, premises considered, in G.R. No. 182201, the Court of Appeals Decision
dated 25 June 2007 and Resolution dated 14 March 2008 in CA-G.R. SP No. 89578 are
AFFIRMED. In G.R. No. 185815, the Court of Appeals Decision dated 31 July 2007 and Resolution
dated 11 December 2008 in CA-G.R. SP No. 89468 are AFFIRMED with the MODIFICATION that
₱7,925,517.23 as temperate damages, ₱300,000 as exemplary damages, and ₱200,000 as
attorney's fees are awarded to petitioner Universal International Investment (BVI) Limited. All
damages awarded shall earn interest at the rate of 6% per annum from the date of finality of
this judgment until full payment.

2.) G.R. No. 186976, December 07, 2016, PRYCE PROPERTIES

CORPORATION, Petitioner, v. SPOUSES SOTERO OCTOBRE, JR. AND HENRISSA A. OCTOBRE,
AND CHINA BANKING CORPORATION, Respondents.

The primary question is whether a breach of contract automatically triggers the award of
actual or compensatory damages.

On July 22, 1997, respondent Spouses Sotero Octobre, Jr. and Henrissa A. Octobre (Spouses Octobre)
signed a Reservation Agreement with petitioner Pryce Properties Corporation (Pryce) for the purchase
of two lots with a total of 742 square meters located in Puerto Heights Village, Puerto Heights,
Cagayan de Oro City.1 The parties subsequently executed a Contract to Sell over the lot for the price
of P2,897,510.00 on January 7, 1998.2

On February 4, 2004, Pryce issued a certification that Spouses Octobre had fully paid the purchase
price and amortization interests, as well as the transfer fees and other charges in relation to the
property, amounting to a total of P4,292,297.92.3 But Pryce had yet to deliver the certificates of title,
which prompted Spouses Octobre to formally demand its delivery. Despite repeated demands, Pryce
failed to comply.4 Thus, on May 18, 2004, Spouses Octobre filed a complaint before the Housing and
Land Use Regulatory Board (HLURB), Regional Office No. 10 for specific performance, revocation of
certificate of registration, refund of payments, damages and attorney's fees.5

It appears that the reason why Pryce was unable to deliver the titles to Spouses Octobre is because it
had previously transferred custody of the titles, along with others pertaining to the same development
project, to China Banking Corporation (China Bank) as part of the Deed of Assignment 6 executed on
June 27, 1996.7 Under this deed, Pryce agreed to assign and transfer its accounts receivables, in the
form of contracts to sell, in the Puerto Heights development project to China Bank as security for the
P200 Million credit facility extended by the latter. Pryce obligated itself to deliver to China Bank the
"contracts to sell and the corresponding owner's duplicate copies of the transfer certificates of title,
tax declaration, real estate tax receipts and all other documents and papers" 8 relating to the assigned
receivables until such receivables are paid or repurchased by Pryce. The titles to the lots purchased by
Spouses Octobre were among those held in custody by China Bank. 9 When Pryce defaulted in its loan
obligations to China Bank sometime in May 2002, China Bank refused to return the titles to
Pryce.10 For this reason, China Bank was also impleaded in the HLURB complaint.

The HLURB Arbiter rendered a Decision11 dated March 31, 2005 finding that Spouses Octobre had no
cause of action against China Bank and rescinding the contract between Pryce and Spouses Octobre. It
ordered Pryce to refund the payments made by the spouses with legal interest and to pay the latter
compensatory damages amounting to P30,000.00, attorney's fees and costs of suit.12

On appeal, the HLURB Board of Commissioners modified the Decision by ordering Pryce to pay the
redemption value to China Bank so that the latter may release the titles covering the lots purchased
by Spouses Octobre. In default thereof, Pryce shall refund the payments with legal interest. The
HLURB Board upheld the grant of compensatory damages, attorney's fees and costs to Spouses
Octobre.13 Pryce moved for reconsideration and to stay the proceedings on account of Pryce's ongoing
corporate rehabilitation.14 The HLURB Board, however, denied Pryce's motion considering that the stay
order of the rehabilitation court had already been reversed by the Court of Appeals. 15

Thereafter, Pryce appealed the case to the Office of the President, which affirmed 16 in full the HLURB
Board's Decision. Undeterred, Pryce elevated the case to the Court of Appeals which denied the
petition for review and affirmed the Office of the President's Decision. The Court of Appeals found that
Pryce acted in bad faith because it "did not disclose [that the titles were in the custody of China Bank]
to respondents Spouses Octobre until the latter demanded delivery of the titles." 17 The Court of
Appeals held that Pryce's contractual breach justified the award of compensatory damages as well as
the payment of attorney's fees and costs of suit.18

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.19 It also questions the award of attorney's fees and litigation costs because
there was allegedly no finding of bad faith.20 Additionally, as side issues, Pryce questions the Court of
Appeals' finding that the stay order had been reversed and its decision to uphold the finding by the
HLURB Board and Office of the President that the subject properties were mortgaged to China Bank.21

In response, Spouses Octobre maintain that the award of compensatory damages, attorney's fees and
costs were proper because they were forced to litigate to enforce their contractual right as a result of
Pryce's breach.22 With respect to the stay order, Spouses Octobre cite this Court's February 4, 2008
Decision in G.R. No. 17230223 which affirmed the appellate court's reversal of the stay order. Finally,
Spouses Octobre note that the characterization of the Deed of Assignment as a mortgage came from
Pryce's own appeal memorandum filed with the HLURB Board, and that, in any event, whether it is an
assignment or mortgage, the decisive fact is that the titles were delivered by Pryce to China Bank.24

In its comment, China Bank insists that Pryce only has itself to blame for failing to comply with its
obligation to remit the payments received from the various contracts to sell, including its obligation to
Spouses Octobre. Under the Deed of Assignment, China Bank is entitled to hold custody of the titles
surrendered by Pryce until the assigned receivables are paid or repurchased by Pryce, which to date
the latter has failed to do.25

II

Article 2199 of the Civil Code defines actual or compensatory damages:26

Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation

only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred

to as actual or compensatory damages. (Emphasis supplied.)

To be entitled to compensatory damages, the amount of loss must therefore be capable of proof and
must be actually proven with a reasonable degree of certainty, premised upon competent proof or the
best evidence obtainable. The burden of proof of the damage suffered is imposed on the party
claiming the same, who should adduce the best evidence available in support thereof. 27 Its award must
be based on the evidence presented, not on the personal knowledge of the court; and certainly not on
flimsy, remote, speculative and non-substantial proof.28

It is clear that the amount paid by Spouses Octobre to Pryce as purchase price for the lots has been
adequately proved. There is no dispute that Spouses Octobre are entitled to such amount with legal
interest. The issue being raised by Pryce is only with respect to the P30,000.00 awarded as
compensatory damages.29

The records of this case are bereft of any evidentiary basis for the award of P30,000.00 as
compensatory damages. When the HLURB Arbiter initially awarded the amount, it merely mentioned
that "[Spouses Octobre] are entitled to compensatory damages, which is just and equitable in the
circumstances, even against an obligor in good faith since said damages are the natural and probable
consequences of the contractual breach committed."30 On the other hand, the Court of Appeals
justified the award of compensatory damages by stating that "it is undisputed that petitioner Pryce
committed breach of contract in failing to deliver the titles to respondents [Spouses] Octobre which
necessitated the award of compensatory damages." 31 In their comment, Spouses Octobre emphasized
that they were "forced to litigate and seek the intervention of the courts because of Pryce's failure to
comply with its contractual and legal obligation"32 without so much as mentioning any proof that would
tend to prove any pecuniary loss they suffered.
In the absence of adequate proof, compensatory damages should not have been awarded.
Nonetheless, we find that nominal damages, in lieu of compensatory damages, are proper in this case.
Under Article 2221, nominal damages may be awarded in order that the plaintiff’s right, 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. Nominal damages are "recoverable where a legal
right is technically violated and must be vindicated against an invasion that has produced no actual
present loss of any kind or where there has been a breach of contract and no substantial injury or
actual damages whatsoever have been or can be shown."33 So long as there is a violation of the right
of the plaintiff—whether based on law, contract, or other sources of obligations34—an award of nominal
damages is proper.35 Proof of bad faith is not required.36 The HLURB Arbiter and the Court of Appeals
appear to have confused nominal damages with compensatory damages, since their justifications
more closely fit the former.

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 fine, contractual breach is sufficient to justify an award for nominal damages but not compensatory
damages.

III

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 2208,37 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.38 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 certificates 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 finding 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"39 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 first instance by the
Court of Appeals in CA-G.R. SP No. 88479, that stay order was automatically deemed vacated.40 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
Rehabilitation41 (which was then in effect when Pryce filed its petition for rehabilitation in 2004). We
affirmed the Court of Appeals' decision to set aside the stay order in the Decision dated February 4,
200842 and Resolution dated June 16, 2008.43 Although we later reconsidered the Decision on February
18, 2014,44 the same does not affect the validity of the proceedings already conducted before the
HLURB, Office 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 45 (FRIA), the stay order shall not apply to cases
already pending appeal in the Supreme Court. 46 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.47

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. 957.48 But Spouses Octobre's claim is precisely premised on its contract with
Pryce, not this specific 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 the Court of Appeals in
CA-G.R. SP N9. 103615 are MODIFIED in that nominal damages in the amount of P30,000.00 are
awarded in lieu of compensatory damages.

3.) GR No. 223637, Aug 28, 2019, ERIC STO. TOMAS v. ADORACION I.
DEL VALLE
On the question of whether or not the HLURB had basis to award moral and exemplary
damages and attorney's fees in favor of respondents, the Court finds no reason to depart from the
findings of Arbiter Melchor and the HLURB, as affirmed by the CA.

Moral damages may be awarded when there is willful injury to property if the court should find
that, under the circumstances, such damages are justly due.[48] Further, exemplary damages may be
awarded by way of example or correction for the public good, in addition to the moral damages.[49]
In this case, the CA aptly observed that petitioners violated respondents' property rights and acted
with discrimination and bad faith when they passed the June 21, 2009 Board Resolution[50] restricting
the construction of duplexes in Vermont after respondents were able to secure a building permit, and
despite the fact that some duplexes already existed therein prior to the issuance of the resolution.
Verily, the award of moral and exemplary damages in favor of respondents was proper.

Moreover, the award of attorney's fees and litigation expenses was in order. Recovery of
attorney's fees and expenses of litigation, other than judicial costs, may be allowed in cases where
"the defendant's act or omission has compelled the plaintiff x x x to incur expenses to protect his
interest."[51] Here, due to petitioners' prolonged refusal to allow respondents to construct the
proposed duplex on their own lot, respondents were compelled to litigate their claim before the HLURB
and to incur expenses to protect their rights and interests. Consequently, respondents' entitlement to
the recovery of attorney's fees and litigation expenses cannot be denied.

4.)