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MCC v Ssangyong Actual Damages: This Court, however, finds that the award of actual damages is not in accord

with the evidence on record. It is axiomatic that actual or compensatory damages cannot be presumed, but must be proven with a reasonable degree of certainty.110 In Villafuerte v. Court of Appeals,111 we explained that: Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered. They arise out of a sense of natural justice and are aimed at repairing the wrong done. Except as provided by law or by stipulation, a party is entitled to an adequate compensation only for such pecuniary loss as he has duly proven. It is hornbook doctrine that to be able to recover actual damages, the claimant bears the onus of presenting before the court actual proof of the damages alleged to have been suffered, thus: A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him as he has duly proved. Such damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. We have emphasized that these damages cannot be presumed and courts, in making an award must point out specific facts which could afford a basis for measuring whatever compensatory or actual damages are borne. In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87 as actual damages. On appeal, the same was affirmed by the appellate court. Noticeably, however, the trial and the appellate courts, in making the said award, relied on the following documents submitted in evidence by the respondent: (1) Exhibit "U," the Statement of Account dated March 30, 2001; (2) Exhibit "U-1," the details of the said Statement of Account); (3) Exhibit "V," the contract of the alleged resale of the goods to a Korean corporation; and (4) Exhibit "V1," the authentication of the resale contract from the Korean Embassy and certification from the Philippine Consular Office. The statement of account and the details of the losses sustained by respondent due to the said breach are, at best,

self-serving. It was respondent Ssangyong itself which prepared the said documents. The items therein are not even substantiated by official receipts. In the absence of corroborative evidence, the said statement of account is not sufficient basis to award actual damages. The court cannot simply rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend on competent proof that the claimant had suffered, and on evidence of, the actual amount thereof. Furthermore, the sales contract and its authentication certificates, Exhibits "V" and "V-1," allegedly evidencing the resale at a loss of the stainless steel subject of the parties' breached contract, fail to convince this Court of the veracity of its contents. The steel items indicated in the sales contract114 with a Korean corporation are different in all respects from the items ordered by petitioner MCC, even in size and quantity. We observed the following discrepancies: From the foregoing, we find merit in the contention of MCC that Ssangyong did not adequately prove that the items resold at a loss were the same items ordered by the petitioner. Therefore, as the claim for actual damages was not proven, the Court cannot sanction the award. Nonetheless, the Court finds that petitioner knowingly breached its contractual obligation and obstinately refused to pay despite repeated demands from respondent. Petitioner even asked for several extensions of time for it to make good its obligation. But in spite of respondent's continuous accommodation, petitioner completely reneged on its contractual duty. For such inattention and insensitivity, MCC must be held liable for nominal damages. "Nominal damages are 'recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Accordingly, the Court awards nominal damages of P200,000.00 to respondent Ssangyong. As to the award of attorney's fees, it is well settled that no premium should be placed on the right to litigate and not every winning party is entitled to an automatic grant of attorney's fees. The party must show that he falls under one of the instances enumerated in Article 2208 of the Civil Code. In the

instant case, however, the Court finds the award of attorney's fees proper, considering that petitioner MCC's unjustified refusal to pay has compelled respondent Ssangyong to litigate and to incur expenses to protect its rights. Siga-an v Villanueva Interest: Article 2232 of the Civil Code states that in a quasicontract, such as solutio indebiti, exemplary damages may be imposed if the defendant acted in an oppressive manner. Petitioner acted oppressively when he pestered respondent to pay interest and threatened to block her transactions with the PNO if she would not pay interest. This forced respondent to pay interest despite lack of agreement thereto. Thus, the award of exemplary damages is appropriate. The amount of P50,000.00 imposed as exemplary damages by the RTC and the Court is fitting so as to deter petitioner and other lenders from committing similar and other serious wrongdoings.41 Jurisprudence instructs that in awarding attorneys fees, the trial court must state the factual, legal or equitable justification for awarding the same. 42 In the case under consideration, the RTC stated in its Decision that the award of attorneys fees equivalent to 25% of the amount paid as interest by respondent to petitioner is reasonable and moderate considering the extent of work rendered by respondents lawyer in the instant case and the fact that it dragged on for several years. 43 Further, respondent testified that she agreed to compensate her lawyer handling the instant case such amount.44 The award, therefore, of attorneys fees and its amount equivalent to 25% of the amount paid as interest by respondent to petitioner is proper. Finally, the RTC and the Court of Appeals imposed a 12% rate of legal interest on the amount refundable to respondent computed from 3 March 1998 until its full payment. This is erroneous. We held in Eastern Shipping Lines, Inc. v. Court of Appeals,45 that when an obligation, not constituting a loan or forbearance of money is breached, an interest on the amount of damages awarded may be imposed at the rate of 6% per

annum. We further declared that when the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether it is a loan/forbearance of money or not, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed equivalent to a forbearance of credit. In the present case, petitioners obligation arose from a quasi-contract of solutio indebiti and not from a loan or forbearance of money. Thus, an interest of 6% per annum should be imposed on the amount to be refunded as well as on the damages awarded and on the attorneys fees, to be computed from the time of the extra-judicial demand on 3 March 1998,46 up to the finality of this Decision. In addition, the interest shall become 12% per annum from the finality of this Decision up to its satisfaction. WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 71814, dated 16 December 2005, is hereby AFFIRMED with the following MODIFICATIONS: (1) the amount of P660,000.00 as refundable amount of interest is reduced to THREE HUNDRED THIRTY FIVE THOUSAND PESOS (P335,000.00); (2) the amount ofP300,000.00 imposed as moral damages is reduced to ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00); (3) an interest of 6% per annum is imposed on the P335,000.00, on the damages awarded and on the attorneys fees to be computed from the time of the extra-judicial demand on 3 March 1998 up to the finality of this Decision; and (4) an interest of 12% per annum is also imposed from the finality of this Decision up to its satisfaction. Costs against petitioner.

Mayo v People The well-entrenched principle is that moral damages depend upon the discretion of the trial courts based on the facts and circumstances of each case. (Prudenciado v. Alliance Transport System, supra; Pleno v. Court of Appeals, 161 SCRA 208 [1988]). This discretion is, however, conditioned in that the "amount awarded should not be palpably and scandalously excessive" so as to indicate that it was the result of prejudice or

corruption on the part of the trial court." (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; Sadie v. Bachrach Motors Co., Inc. 57 O.G. [4] 636; Prudenciado v. Alliance Transport System, Inc. supra; Pleno v. Court of Appeals, supra; Siguenza v. Court of Appeals, 137 SCRA 570 [1985]). In determining the amount of moral damages, the actual losses sustained by the aggrieved party and the gravity of the injuries must be considered. (Pleno v. Court of Appeals, supra; Prudenciado v. Alliance Transport System, Inc. supra; Siguenza v. Court of Appeals; supra) Finally, "moral damages are emphatically not intended to enrich a complainant at the expense of the defendant. They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant's culpable action." (R & B Surety & Insurance Co., Inc. v. Intermediate Appellate Court, 129 SCRA 736 [1984]; citing Grand Union Supermarket, Inc. v. Espino, Jr., 94 SCRA 953 [1979], citedin Prudenciado v. Alliance Transport System, Inc. supra) Applying these principles in the instant case, we rule that the award of P700,000.00 as moral damages in favor of complainant Linda Navarette is unconscionable and excessive. We rejected Navarette's claim for the amount of P1,000,000.00 as moral damages for the loss of her boyfriend. We note that she asked for the amount of P500,000.00 as moral damages due to her personal injuries. Therefore, the award for moral damages should not exceed the amount of P500,000.00 (Makabali v. Court of Appeals, 157 SCRA 253 [1988]) We rule that under the circumstances of the instant case, the amount of P200,000.00 as moral damages in favor of complainant Linda Navarette is reasonable, just and fair. One final consideration. In a resolution dated September 25, 1991, we required Atty. Evelyn Balgos-Guballa of the Acosta and Rico Law Offices, counsel for the private respondent, to show cause why disciplinary action should not be taken against her for failure to file the required memorandum within the extended period which expired on July 22, 1991 within ten days from notice.

In her "COMPLIANCE", Atty. Evelyn Balgos-Guballa stated that she finished the draft of the memorandum as early as the first week of July and submitted it to the partner-in-charge, Atty. Rex G. Rico; that it was only recently, that she discovered that the memorandum was inadvertently inserted by one of their secretaries (while fixing the table of Atty. Rex G. Rico) among the files of other cases of the law firm; that this unfortunate incident precluded the partner-in-charge to review, correct or modify the draft of the memorandum; and that after discovery of the incident they immediately finalized and filed the memorandum on October 8, 1991. We find the explanation of Atty. Balgos-Guballa unsatisfactory. The law firm should have adopted a more systematic procedure to handle pleadings required to be filed in court. In the instant case, the memorandum was due on July 22, 1991 yet and it would seem that the law firm, if believed, discovered the secretary's blunder two (2) months or more thereafter. Such inaction on the part of the law firm, specifically Atty. Rico and Atty. Balgos-Guballa to check whether or not the required memorandum has been filed with the Court within the reglementary period is equivalent to gross negligence on their part to comply with the directive of the Court. WHEREFORE, the instant petition is partly GRANTED. The questioned decision of the Court of Appeals is MODIFIED in that the amount of P700,000.00 as moral damages granted to complainant Linda Navarette is reduced to P200,000.00. Atty. Rex G. Rico and Atty. Evelyn Balgos-Guballa are hereby REPRIMANDED for non-compliance with theResolution dated September 25, 1991 with the warning that further gross negligence of this nature committed by them would be dealt with more severely.