Soliven Realty Corp. v. Ong
REITERATIONFacts
The Antecedents: Respondent Luis Kung Beng T. Ong entered into a Contract to Sell with petitioner V.V. Soliven Realty Corp. for a parcel of land. Respondent fully paid the purchase price of ₱77,987.76, including down payment, monthly installments, and MERALCO shares, by July 20, 1989. Despite full payment, petitioner failed to execute a deed of absolute sale and deliver the title. Procedural History: Respondent filed a complaint with the Housing and Land Use Regulatory Board (HLURB) for the delivery of title and refund of excess payment. The HLURB ordered petitioner to execute a deed of sale and refund the overpayment. The HLURB Board of Commissioners affirmed this decision. Petitioner appealed to the Office of the President, arguing the lot was lost due to a levy on execution in Civil Case No. Q-42625. Unknown to respondent, the lot was indeed levied on execution in 1985, but petitioner redeemed it in 1999. Before redemption, petitioner subdivided the lot, and after redemption, sold one half to Rogelio Vizon Carpio, Jr. The Office of the President dismissed petitioner's appeal. The Court of Appeals denied petitioner's subsequent petition, ordering petitioner to return ₱350,000 for the sold half, execute a deed of sale for the remaining half, refund the overpayment, and pay damages and attorney's fees. The Petition: Petitioner filed a petition for review with the Supreme Court, questioning the award of damages and attorney's fees and the computation of legal interest.
Issue(s)
Whether the Court of Appeals erred in awarding damages and attorney's fees when the same were not specifically prayed for in the complaint or sufficiently substantiated, and whether nominal damages were appropriately awarded. Whether the Court of Appeals erred in holding that the computation of legal interest on the purchase price of one-half of the lot should commence from the filing of the complaint and not from the date of the second sale, and whether the respondent was entitled to legal interest from the filing of the complaint until the sale.
Ruling
The Supreme Court affirmed the Court of Appeals' decision with modification. The awards for moral and exemplary damages and attorney's fees were deleted. However, the Court awarded nominal damages of ₱100,000 to respondent's heirs and ₱23,279.35 as accumulated legal interest as of March 13, 2000. The legal interest on the ₱350,000 to be paid by petitioner to respondent was ordered to commence from March 13, 2000. The directive to execute a deed of absolute sale for the remaining half of the lot and to pay ₱350,000 for the sold half, along with the refund of overpayment, was affirmed.
Ratio Decidendi
On the award of damages and attorney's fees: The Court found that while respondent's substitute's affidavit and statements in the complaint and position paper could suffice as a claim for damages, there was insufficient proof of moral damages. Mere allegation is not proof; pleading and proof of moral suffering are required. Consequently, the Court deleted the awards for moral and exemplary damages and attorney's fees. However, the Court awarded nominal damages of ₱100,000 to vindicate the violation of respondent's right, given petitioner's failure to comply with its obligation to deliver the title promptly. The Court noted that petitioner's actions, including subdividing the lot and selling half of it after redeeming it from execution, despite respondent's full payment, demonstrated a failure to uphold its contractual and statutory obligations. The Court also found the award of attorney's fees to be without sufficient factual, legal, and equitable basis. On the computation of interest: The Court sustained petitioner's argument that the legal interest on the ₱350,000 due to respondent should commence from the date one-half of the lot was sold to Rogelio Vizon Carpio, Jr. (March 13, 2000), not from the filing of the complaint. The obligation to pay ₱350,000 arose only at the time of the second sale, and there was no evidence that the value of that half was already ₱350,000 when the complaint was filed. However, the Court ruled that respondent was entitled to legal interest on the value of one-half of the lot from the filing of the complaint (April 4, 1990) until the sale of that half (March 13, 2000). This accumulated legal interest was computed at ₱23,279.35.
Main Doctrine
While a buyer who has fully paid the purchase price is entitled to the delivery of the title, the seller's obligation may be modified if the property is subsequently levied on execution and later redeemed, necessitating a refund or transfer of a portion of the property, with interest computed from the time the seller's inability to deliver arose.