BIENVENIDO M. CASIÑO, JR., Petitioners,
VS
THE COURT OF APPEALS and OCTAGON REALTY DEVELOPMENT CORPORATION, Respondent.
G.R. No. 133803 [September 16, 2005]
Facts:
On October 2, 1991 in the Regional Trial Court at Pasig City, respondent Octagon Realty Development Corporation, filed a complaint for rescission of contract with damages against petitioner Bienvenido M. Casiño, Jr., owner and proprietor of the Casiño Wood Parquet and Sanding Services, relative to the parties’ agreement for the supply and installation by petitioner of narra wood parquet ordered by respondent. The trial court, upon a finding that petitioner is the one who breached the parties’ agreement, rendered judgment for respondent and awarded P2,111,061.69 by way of actual and compensatory damages; and P50,000.00, as attorney’s fees. On appeal, the Court of Appeals affirmed the trial court’s decision with the modification that the petitioner be made to pay the respondent as actual and compensatory damages, the amount of P1,662,003.80, with interest thereon at the legal rate from the finality of this judgment until fully paid.
Issue:
Whether or not the award for actual or compensatory damages, attorney’s fees and litigation expenses is proper in the case at bar.
Ruling:
There are two kinds of actual or compensatory damages: one is the loss of what a person already possesses, and the other is the failure to receive as a benefit that which would have pertained to him. In the latter instance, the familiar rule is that damages consisting of unrealized profits, frequently referred as ‘ganacias frustradas’ or‘lucrum cessans,’ are not to be granted on the basis of mere speculation, conjecture, or surmise, but rather by reference to some reasonably definite standard such as market value, established experience, or direct inference from known circumstances. The Court held that, clearly, respondent must be indemnified for the following damages it sustained by reason of petitioner’s breach of contract. Finding respondent’s claim justified, the Court awards the following: P912, 452.39, representing respondent’s estimated losses on new price, unliquidated damages and cost of money; and P 1,198,609.30, representing the cost incurred by respondent in engaging the services of Hilvano Quality Parquet and Sanding Services for the completion of the work unfinished by petitioner. On the matter of attorney’s fees, respondent’s entitlement thereto is beyond protest, what with the fact that respondent was compelled to litigate and incurred expenses relative thereto by reason of petitioner’s breach of his contractual obligations.
