GR 151821; (April, 2004) (Digest)
G.R. No. 151821 ; April 14, 2004
BANK OF THE PHILIPPINE ISLANDS, as Successor-in-Interest of BPI Investment Corporation, petitioner, vs. ALS MANAGEMENT & DEVELOPMENT CORP., respondent.
FACTS
Petitioner BPI Investment Corporation filed a complaint for a sum of money to recover its advance payment of ₱26,300.45 for the registration expenses of a condominium unit sold to respondent ALS Management & Development Corporation. Respondent refused payment, counterclaiming that petitioner, as developer, violated warranties under Presidential Decree No. 957. Respondent alleged that the delivered unit suffered from multiple defects and deficiencies contrary to representations in sales brochures, including insufficient balcony clearance, damaged fixtures, missing amenities like a closed-circuit TV, and rainwater leaks. Respondent also claimed delayed delivery of the unit.
The trial court ruled in favor of petitioner for the registration expenses but also awarded respondent ₱40,000 as temperate damages for repair costs and ₱50,000 as attorney’s fees. The Court of Appeals affirmed this decision in toto. Petitioner sought review, challenging the awards for temperate damages and attorney’s fees.
ISSUE
Whether the Court of Appeals erred in affirming the award of temperate damages and attorney’s fees to the respondent.
RULING
The Supreme Court modified the appellate decision. While factual findings of lower courts are generally respected, they may be reviewed if not conforming to law and evidence. The Court found the award of temperate damages improper. Temperate damages under Article 2224 of the Civil Code require that some pecuniary loss was suffered but its amount cannot be proven with certainty. Here, respondent failed to substantiate any actual pecuniary loss. Its claim for ₱40,000 in repair costs was unsupported by competent evidence, such as official receipts or a detailed statement of expenses. Mere testimony, without corroborating documentary proof, is insufficient to establish the fact of loss with a credible basis for its amount.
However, the award of attorney’s fees was upheld. The Court found it justified under Article 2208 of the Civil Code, as petitioner’s act of compelling respondent to litigate to protect its interest—by filing the collection suit despite the unresolved warranty issues—warranted the grant. The amount of ₱50,000 was deemed reasonable. Thus, the award of temperate damages was deleted, while the award for attorney’s fees was affirmed.