Robes-Francisco Realty & Development Corporation vs.

Court of
First Instance of Rizal (Branch XXXIV)
No. L-41093 October 30, 1978
OBLICON CONCEPT: Contracts; Sale; Damages; A contract of sale which stipulate payment of inter est at 4% per annum in case vendor fails to issue a certificate of title to vendee is
not a penal clause because even without it vendee would be entitled to inter est at the legal rate of 6% per annum.
Nominal damages are not for indemnification of loss but vindication of right violated or invaded
FACTS ISSUES RULLING
• APPEAL from the decision of the Court of First W/N the petitioner may invoke the • The foregoing argument of petitioner is totally devoid of merit.
Instance of Rizal. application of Art. 1226 and demand
20,000 for exemplary damages. • Very obvious reasons, said clause does not convey any penalty, for even
• Petitioner corporation questions the award for without it, pursuant to Article 2209 of the Civil Code, the vendee would
nominal damages which are allegedly excessive be entitled to recover the amount paid by her with legal rate of
and unjustified. interest which is even more than the 4% provided for in the clause.
It is therefore inconceivable that the aforecited provision in the deed of
• In May 1962 Robes-Francisco Realty & sale is a penal clause which will preclude an award of damages to the
Development Corporation, now petitioner, vendee Millan.
agreed to sell to private respondent Lolita Millan
for and in consideration of the sum of P3,864.00, • In case of breach of contract, exemplary damages may be awarded
payable in installments, a parcel of land. if the guilty party acted in wanton, fraudulent, reckless, oppressive
or malevolent manner.

• Thereafter, Lolita Millan made repeated • Respondent Millan did not submit below any evidence to prove
demands upon the corporation for the that she suffered actual or compensatory damages.
execution of the final deed of sale and the
issuance to her of the TCT
• The Court ruled that (P10,000.00) by way of nominal damages is fair
• Six (6) months after, the corporation failed to and just because the Petitioner failed to convey the corresponding
issuance of TCT. TCT to Millan who accordingly was compelled to file the instant
complaint in August of 1974.
• Millan filed a complaint for specific performance
and damages.

✓ (1) ordering the reformation of the deed of

absolute sale;
 ✓ (2) ordering delivery of TCT free from any
lien or encumbrance; or, pay plaintiff the
value of the lot which should not be less than
P27,600.00.

✓ (3) ordering the defendant to pay plaintiff

damages, corrective and actual in the sum
of P15,000.00.

• Realty corporation failed to cause the issuance of

TCT, the said property was included among other
properties mortgaged to the GSIS to secure an
obligation of P10 million.

• Corporation was guilty of delay (Application of

Article 1170

• Presumably , petitioner in invoking Article 1226

of the Civil Code which provides that in
obligations with a penal clause, the penalty shall
substitute the indemnity for damages and the
payment of interests in case of
noncompliance, if there is no stipulation to
the contrary .