G.R. No. L-45048. January 7, 1987.
BATONG BUHAY GOLD MINES, INC., petitioner, vs. THE COURT OF APPEALS and INC. MINING CORPORATION, respondents.

FACTS

The case originated from a dispute over the transfer of shares of stock. Francisco Aguac, legally married to Paula G. Aguac but separated for over fourteen years, sold 62,495 shares in Batong Buhay Gold Mines, Inc. to INC. Mining Corporation on December 16, 1969. The shares were covered by Stock Certificate No. 16807. Aguac executed a deed of sale without his wife’s knowledge or consent. Paula Aguac subsequently wrote to Batong Buhay, asserting the shares were conjugal property and requesting the transfer be withheld as she did not receive her share of the proceeds.
INC. Mining Corporation presented the endorsed certificate for transfer on January 5, 1970. Batong Buhay, through its transfer agent Del Rosario and Company, refused the transfer, citing the letter from Paula Aguac and expressing apprehension over potential liability under Article 173 of the Civil Code and relevant jurisprudence for dealing with conjugal property without the wife’s consent. This prompted INC. Mining to file an action for specific performance and damages. The trial court granted a writ of preliminary mandatory injunction, compelling the issuance of the new stock certificate to INC. Mining, and later made the injunction permanent.

ISSUE

The core issue before the Supreme Court was whether the Court of Appeals correctly awarded damages for unrealized profits (lucro cesante) to INC. Mining Corporation due to Batong Buhay’s initial refusal to transfer the shares.

RULING

The Supreme Court reversed the Court of Appeals’ award of damages. The legal logic centered on the requisite proof for recovering actual or compensatory damages. The Court held that claims for unrealized profits must be established by competent evidence and cannot be based on speculation, conjecture, or mere assumption.
The Court found that the record contained no evidence that INC. Mining Corporation intended to sell the shares at any specific time or price. While share values fluctuated—rising from 15 centavos to 23/24 centavos and later falling—any potential profit was deemed purely speculative. It was impossible to predict market movements with certainty, and it was equally plausible that the corporation might have held the shares for anticipated further gains. Consequently, the alleged loss of profit was not proven as a direct and foreseeable result of the delay in transfer. The Court reiterated the settled doctrine that speculative damages are not recoverable. Having resolved the damages issue, the Court found it unnecessary to address the petitioner’s other procedural arguments and reinstated the trial court’s decision, which only ordered the transfer of the shares.