Mactan Cebu International Airport Authority (MCIAA) Vs. Heirs of Gavina Ijordan, et al.

G.R. No. 173140. January 11, 2016

Facts:
On October 14, 1957, Julian Cuizon (Julian) executed a Deed of Extrajudicial Settlement
and Sale (Deed) covering Lot No. 4539 (subject lot) situated in Ibo, Municipality of
Opon (now Lapu-Lapu City) in favor of the Civil Aeronautics Administration (CAA), the
predecessor-in-interest of petitioner Manila Cebu International Airport Authority
(MCIAA).

In 1980, the respondents caused the judicial reconstitution of the original certificate of
title covering the subject lot. Consequently, Original Certificate of Title (OCT) No. RO-
2431 of the Register of Deeds of Cebu was reconstituted for Lot No. 4539 in the names
of the respondents' predecessors-in-interest, the respondents. They asserted that they had
not sold their shares in the subject lot, and had not authorized Julian to sell their shares to
MCIAA's predecessor-in-interest.

The failure of the respondents to surrender the owner's copy of OCT No. RO-2431
prompted MCIAA to sue them for the cancellation of title in the RTC, alleging in its
complaint that the certificate of title conferred no right in favor of the respondents
because the lot had already been sold to the Government in 1957; that the subject lot had
then been declared for taxation purposes under Tax Declaration No. 00387 in the name of
the BAT; and that by virtue of the Deed, the respondents came under the legal obligation
to surrender the certificate of title for cancellation to enable the issuance of a new one in
its name.

The respondents argued among others that what MCIAA submitted was a mere
photocopy of the Deed; that even assuming that the Deed was a true reproduction of the
original, the sale was unenforceable against them because it was only Julian who had
executed the same without obtaining their consent or authority as his co-heirs; and that
the tax declaration had no probative value by virtue of its having been derived from the
unenforceable sale.

Issue
Whether or not the entire subject lot was validly transferred to the petitioner.

Held:

No, the CA and the RTC concluded that the Deed was void as far as the respondents'
shares in the subject lot were concerned, but valid as to Julian's share. Their conclusion
was based on the absence of the authority from his co-heirs in favor of Julian to convey
their shares in the subject lot. We have no reason to overturn the affirmance of the CA on
the issue of the respondents' co-ownership with Julian. Hence, the conveyance by Julian
of the entire property pursuant to the Deed did not bind the respondents for lack of their
consent and authority in his favor. As such, the Deed had no legal effect as to their shares
in the property. Article 1317 of the Civil Code provides that no person could contract in
the name of another without being authorized by the latter, or unless he had by law a right
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 to represent him; the contract entered into in the name of another by one who has no
authority or legal representation, or who has acted beyond his powers, is unenforceable,
unless it is ratified, expressly or impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting party.

But the conveyance by Julian through the Deed had full force and effect with respect to
his share of 1/22 of the entire property consisting of 546 square meters by virtue of its
being a voluntary disposition of property on his part. As ruled in Torres v. Lapinid:

x x x even if a co-owner sells the whole property as his, the sale will affect only
his own share but not those of the other co-owners who did not consent to the
sale. This is because the sale or other disposition of a co-owner affects only his
undivided share and the transferee gets only what would correspond to his grantor
in the partition of the thing owned in common.
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Pryce Properties Corporation vs. Sps. Sotero Octobre, Jr., et al.

G.R. No. 186976. December 7, 2016

Facts
Spouses Octobre signed a Reservation Agreement with petitioner Pryce Properties
Corporation (Pryce) for the purchase of two lots with a total of 742 square meters located
in Puerto Heights Village, Puerto Heights, Cagayan de Oro City. The parties
subsequently executed a Contract to Sell over the lot for the price of P2,897,510.00 on
January 7, 1998. On February 4, 2004, Pryce issued a certification that Spouses Octobre
had fully paid all necessary fees. But Pryce had yet to deliver the certificates of title,
which prompted Spouses Octobre to formally demand its delivery.After several demands
which Pryce failed to comply, Spouses Octobre then filed a complaint before the Housing
and Land Use Regulatory Board (HLURB), for specific performance, revocation of
certificate of registration, refund of payments, damages and attorney's fees.

Pryce was unable to deliver the titles to Spouses Octobre because it had previously
transferred custody of the titles, along with others pertaining to the same development
project, to China Banking Corporation (China Bank) as part of the Deed of Assignment
executed on June 27, 1996. The titles to the lots purchased by Spouses Octobre were
among those held in custody by China Bank. When Pryce defaulted in its loan obligations
to China Bank sometime in May 2002, China Bank refused to return the titles to Pryce.

The HLURB Arbiter ordered Pryce to refund the payments made by the spouses with
legal interest and to pay the latter compensatory damages.

On appeal, the HLURB Board of Commissioners modified the Decision by ordering

Pryce to pay the redemption value to China Bank. In default thereof, Pryce shall refund
the payments with legal interest. The HLURB Board upheld the grant of compensatory
damages, attorney's fees and costs to Spouses Octobre.

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 Thereafter, Pryce appealed the case to the Office of the President, which affirmed in. He
then elevated he case to the Court of Appeals which denied the petition for review and
affirmed the Office of the President's Decision.

Issue:
Whether or not failure to comply with the contract will automatically entitle the Spouses
Octobre the award of actual or compensatory damages.

Held:
No. To be entitled to compensatory damages, the amount of loss must therefore be
capable of proof and must be actually proven with a reasonable degree of certainty,
premised upon competent proof or the best evidence obtainable. The burden of proof of
the damage suffered is imposed on the party claiming the same, who should adduce the
best evidence available in support thereof.

It is clear that the amount paid by Spouses Octobre to Pryce as purchase price for the lots
has been adequately proved. There is no dispute that Spouses Octobre are entitled to such
amount with legal interest. The issue being raised by Pryce is only with respect to the
P30,000.00 awarded as compensatory damages.

The records of this case are bereft of any evidentiary basis for the award of P30,000.00 as
compensatory damages. When the HLURB Arbiter initially awarded the amount, it
merely mentioned that “[Spouses Octobre] are entitled to compensatory damages, which
is just and equitable in the circumstances, even against an obligor in good faith since said
damages are the natural and probable consequences of the contractual breach
committed.” On the other hand, the Court of Appeals justified the award of compensatory
damages by stating that "it is undisputed that petitioner Pryce committed breach of
contract in failing to deliver the titles 'to respondents [Spouses] Octobre which
necessitated the award of compensatory damages.

In the absence of adequate proof, compensatory damages should not have been awarded.
Nonetheless, we find that nominal damages, in lieu of compensatory damages, are proper
in this case. Under Article 2221, nominal damages may be awarded in order that the
plaintiffs right, which has been violated or invaded by the defendant, may be vindicated
or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered.
xxx xxx. So long as there is a violation of the right of the plaintiff-whether based on law,
contract, or other sources of obligations-an award of nominal damages is proper. Proof of
bad faith is not required. The BLURB Arbiter and the Court of Appeals appear to have
confused nominal damages with compensatory damages, since their justifications more
closely fit the former.

It is undisputed that Pryce failed to deliver the titles to the lots subject of the Contract to
Sell even as Spouses Octobre had already fully settled the purchase price. Its inability to
deliver the titles despite repeated demands undoubtedly constitutes a violation of Spouses
Octobre's right under their contract. That Pryce had transferred custody of the titles to
China Bank pursuant to a Deed of Assignment is irrelevant, considering that Spouses
Octobre were not privy to such agreement.
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 In fine, contractual breach is sufficient to justify an award for nominal damages but not
compensatory damages.
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Pentacapital Investment Corp. vs. Makilito Mahinay

G.R. No. 171736 July 5, 2010

Facts:
Petitioner filed a complaint for a sum of money against respondent Makilito Mahinay
based on two separate loans obtained by the latter, amounting to P1,520,000.00 and
P416,800.00, or a total amount of P1,936,800.00. These loans were evidenced by two
promissory notes dated February 23, 1996. Despite repeated demands, respondent failed
to pay the loans, hence, the complaint.

In his Answer with Compulsory Counterclaim, respondent claimed that petitioner had no
cause of action because the promissory notes on which its complaint was based were
subject to a condition that did not occur. While admitting that he indeed signed the
promissory notes, he insisted that he never took out a loan and that the notes were not
intended to be evidences of indebtedness. By way of counterclaim, respondent prayed for
the payment of moral and exemplary damages plus attorney’s fees. Hence, respondent's
contention were: that his obligation was subject to a condition that did not occur; that he
did not receive the proceeds of the loan.

Issue:
Whether or not the respondent is bound by the promissory note.

Held:
YES. To ascertain whether or not respondent is bound by the promissory notes, it must be
established that all the elements of a contract of loan are present. Like any other contract,
a contract of loan is subject to the rules governing the requisites and validity of contracts
in general. It is elementary in this jurisdiction that what determines the validity of a
contract, in general, is the presence of the following elements: (1) consent of the
contracting parties; (2) object certain which is the subject matter of the contract; and (3)
cause of the obligation which is established.

Under Article 1354 of the Civil Code, it is presumed that consideration exists and is
lawful unless the debtor proves the contrary. Moreover, under Section 3, Rule 131 of the
Rules of Court, the following are disputable presumptions: (1) private transactions have
been fair and regular; (2) the ordinary course of business has been followed; and (3) there
was sufficient consideration for a contract. A presumption may operate against an
adversary who has not introduced proof to rebut it. The effect of a legal presumption
upon a burden of proof is to create the necessity of presenting evidence to meet the legal
presumption or the prima facie case created thereby, and which, if no proof to the
contrary is presented and offered, will prevail. The burden of proof remains where it is,
but by the presumption, the one who has that burden is relieved for the time being from
introducing evidence in support of the averment, because the presumption stands in the
place of evidence unless rebutted.
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In the case at bar, as proof of his claim of lack of consideration, respondent denied under
oath that he owed petitioner a single centavo. He added that he did not apply for a loan
and that when he signed the promissory notes, they were all blank forms and all the blank
spaces were to be filled up only if the sale transaction over the subject properties would
not push through because of a possible adverse decision in the civil cases involving them
(the properties). He thus posits that since the sale pushed through, the promissory notes
did not become effective. Contrary to the conclusions of the RTC and the CA, we find
such proof insufficient to overcome the presumption of consideration. The presumption
that a contract has sufficient consideration cannot be overthrown by the bare,
uncorroborated and self-serving assertion of respondent that it has no consideration. The
alleged lack of consideration must be shown by preponderance of evidence.

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