G.R. No. 152143; January 13, 2003
ROMEL P. ALMEDA, in substitution of the late PONCIANO L. ALMEDA and/or ALMEDA, INC., petitioners, vs. LEONOR A. CARIÑO, the surviving spouse, and his children, namely: ROSARIO C. SANTOS, REMEDIOS C. GALSIM, RAMON A. CARIÑO, REGINALDO A. CARIÑO, RANIEELA C. DIONELA and RACHELLE C. SAMANIEGO, in substitution of the late AVELINO G. CARIÑO, respondents.

FACTS

On April 30, 1980, Ponciano L. Almeda and Avelino G. Cariño entered into two agreements to sell covering eight titled and three untitled properties in Biñan, Laguna. The agreements stipulated that the unpaid balances would earn 12% interest per annum. An amendment was executed on April 3, 1982, extending deadlines and providing for partial payments. At Almeda’s request, Cariño executed a Deed of Absolute Sale over the eight titled properties on May 3, 1982, in favor of Almeda, Inc., despite the purchase price not being fully paid. Deeds for two of the three untitled lots were also later executed. Cariño subsequently demanded payment of the remaining balance of P477,589.47. Despite demand letters sent on March 9, 1983, and July 20, 1983, Almeda and Almeda, Inc. refused to pay. Cariño filed a complaint. The Regional Trial Court ruled in favor of Cariño, ordering payment of the balance with 12% interest, P150,000.00 as nominal damages, and P15,000.00 as attorney’s fees. The Court of Appeals affirmed the decision. Ponciano Almeda died during the pendency of the case and was substituted by his heirs, with Romel P. Almeda as representative. In this petition, petitioners only seek a modification of the award of nominal damages, attorney’s fees, and the imposition of the 12% interest rate, not disputing the amount of the outstanding balance.

ISSUE

1. Whether the award of nominal damages in the amount of P150,000.00 was proper.
2. Whether the award of attorney’s fees in the amount of P15,000.00 was proper.
3. Whether the imposition of a 12% rate of interest per annum on the unpaid balance from the date of demand was proper.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals.
1. The award of nominal damages was proper. Nominal damages are awarded not for indemnification of a loss, but for the recognition and vindication of a right that has been violated. The petitioners’ refusal to pay the remaining balance of the purchase price despite repeated demands, even after selling the properties to third parties, constituted a violation of the respondents’ right to the said amount under their agreements. This technical injury justified the award.
2. The award of attorney’s fees was proper. The petitioners’ unjustified refusal to pay the respondents’ valid claim forced the respondents to litigate to protect their interests. The award of P15,000.00 was deemed reasonable and equitable. Furthermore, the petitioners’ conduct, evidenced by engaging sixteen different lawyers whose actions (such as frequent motions for postponement) unduly delayed the case for over a decade, further supported the grant of attorney’s fees.
3. The imposition of a 12% annual interest rate was proper. Article 2209 of the Civil Code provides that if the obligation consists in the payment of a sum of money and the debtor incurs delay, the indemnity shall be the payment of the interest agreed upon. The contracts to sell between the parties expressly stipulated that the balance of the purchase price would earn 12% interest per annum. This stipulation has the force of law between the parties. The interest should run from March 9, 1983, the date of the respondents’ extrajudicial demand for payment.