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32 Solid Homes Inc V Court of Appeals 275 SCRA 267 1997

This case involves a dispute between Solid Homes, Inc. and State Financing Center, Inc. over State Financing's failure to annotate Solid Homes' right to repurchase properties in consolidated titles. Solid Homes sought damages, claiming it was prevented from generating funds to redeem the properties. The Supreme Court ruled that Solid Homes failed to prove malice or bad faith by State Financing or actual damages suffered as a direct result. Furthermore, corporations cannot claim moral damages as they have no feelings. While exemplary damages do not require proof of amount, Solid Homes did not prove entitlement to actual or moral damages. The Court affirmed the lower courts' rulings.

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105 views1 page

32 Solid Homes Inc V Court of Appeals 275 SCRA 267 1997

This case involves a dispute between Solid Homes, Inc. and State Financing Center, Inc. over State Financing's failure to annotate Solid Homes' right to repurchase properties in consolidated titles. Solid Homes sought damages, claiming it was prevented from generating funds to redeem the properties. The Supreme Court ruled that Solid Homes failed to prove malice or bad faith by State Financing or actual damages suffered as a direct result. Furthermore, corporations cannot claim moral damages as they have no feelings. While exemplary damages do not require proof of amount, Solid Homes did not prove entitlement to actual or moral damages. The Court affirmed the lower courts' rulings.

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SAN SEBASTIAN COLLEGE-RECOLETOS

COLLEGE OF LAW
2114-A Claro M. Recto Avenue, Zone 040, Brgy. 390,
Quiapo Manila 1001 Philippines
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CORPORATION LAW & BASIC SECURITIES
1st SEM (SY. 2023-2024)

SOLID HOMES, INC., petitioner, vs. HON. COURT OF APPEALS, STATE FINANCING CENTER, INC.,
and REGISTER OF DEEDS FOR RIZAL, respondents.
G.R. No. 117501 July 8, 1997

PONENTE: PANGANIBAN, J.:

Doctrine:
we have held that a corporation — being an artificial person which has no feelings, emotions or
senses, and which cannot experience physical suffering or mental anguish — is not entitled to moral
damages.

FACTS:
Solid Homes raised a lone question contesting the denial of its claim for damages. Such
damages allegedly resulted from the bad faith and malice of State Financing in deliberately failing to
annotate Solid Homes' right to repurchase the subject properties in the former's consolidated titles
thereto. As a result of the non-annotation, Solid Homes claimed to have been prevented from generating
funds from prospective buyers to enable it to comply with the Agreement and to redeem the subject
properties.

ISSUE:
Whether or not Solid Homes, Inc. may recover damages.

RULING:
The only legal transgression of State Financing was its failure to observe the proper procedure in
effecting the consolidation of the titles in its name. But this does not automatically entitle the petitioner to
damages absent convincing proof of malice and bad faith on the part of private respondent and actual
damages suffered by petitioner as a direct and probable consequence thereof. In fact, the evidence
proffered by petitioner consist of mere conjectures and speculations with no factual moorings.
Furthermore, such transgression was addressed by the lower courts when they nullified the consolidated
of ownership over the subject properties in the name of respondent corporation, because it had been
effected in contravention of the provisions of Article 1607 20 of the Civil Code. Such rulings are consistent
with law and jurisprudence. Neither can moral damages be awarded to petitioner. Time and again, we
have held that a corporation — being an artificial person which has no feelings, emotions or senses, and
which cannot experience physical suffering or mental anguish — is not entitled to moral damages. While
the amount of exemplary damages need not be proved, petitioner must show that he is entitled to moral
or actual damages; but the converse obtains in the instant case. Award of attorney's fees is likewise not
warranted when moral and exemplary damages are eliminated and entitlement thereto is not
demonstrated by the claimant. Lastly, "(n)ominal damages are adjudicated in order that a right of the
plaintiff, 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 by him." As elaborated above and in the
decisions of the two lower courts, no right of petitioner was violated or invaded by respondent corporation.
WHEREFORE, the assailed Decision of the Court of Appeals is hereby AFFIRMED with the
MODIFICATION that the redemption price shall not include the registration and other expenses incurred
by State Financing Center, Inc. in the issuance of new certificates of title in its name, as this was done
without the proper judicial order required under Article 1607 of the Civil Code.

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