XENTREX AUTOMOTIVE, INC., PETITIONER VS. COURT OF APPEALS, MAC-ARTHUR M. SAMSON AND GERTRUDES C. SAMSON, RESPONDENTS.

This petition for review on certiorari seeks to reserve
respondent appellate court’s decision promulgated on July 31, 1995
affirming the judgment of the Regional Trial Court which ruled as
follows:

“WHEREFORE, judgment is hereby rendered in favor of plaintiffs and
against the defendant ordering the latter to pay the former, the
following:

1. Moral Damages of P100,000.00 for besmirched reputation, wounded
   feelings, moral shock, social humiliation, and the like suffered by the
   plaintiffs;
2. Nominal damages of P50,000.00 in order that the rights of the plaintiffs which have been violated may be vindicated;
3. Exemplary or corrective damages of P50,000.00 by way of example or correction for public good;
4. Attorneys fees of P20,000.00 and litigation expenses of P6,00.00;

In addition, defendant is ordered to re-imburse (sic) plaintiffs the
amount of P250,000.00 representing the advance payment of the car made
by the plaintiffs to the defendant, and to pay cost.

SO ORDERED.”^[1]

Petitioner is a dealer of motor vehicles. On October 25, 1991,
private respondents went to petitioner to purchase a brand new car, a
1991 Nissan Sentra Super Saloon A/T model, valued at P494,000.00.
Private respondents ,made an initial deposit of P50,000.00; petitioner
issued the corresponding official receipt (O.R. No. 6504). The balance
was to be paid thru bank financing. Pending the processing of their
application for financing, private respondents paid an additional
P200,000.00. to petitioner which was covered by another receipt (O.R.
NO. 6547). Eventually, due to the slow pace in the processing of their
application for financing, private respondents decided to pay the
remaining balance on November 6, 1991 by tendering a check in the amount
of P250,000.00. As it turned out however, to private respondent’s shock
and disappointment, the car had already been sold to another buyer
without their knowledge, prompting them to send a demand letter to
petitioner asking the latter to comply with its obligation to deliver
the car. Their demand unheeded, private respondents (plaintiffs below)
filed a suit for breach of contract and damages before the Regional
Trial Court of Dagupan City, Branch 42. Denying any liability,
petitioner (defendant below) alleged that the complaint stated no cause
of action. After trial, judgment was rendered by the trial court in
private respondents’ favor. On appeal by petitioner, the Court of Appeals
affirmed the decision of the trial court.^[2]

It is petitioner’s main contention that both the trial and the
appellate courts erred in adjusting it liable for breach of contract and
damages. Petitioner argues that there was no perfected contract of sale
between the parties due to private respondents’ failure to comply with
their obligation to pay the purchase price of the car in full. Thus,
petitioner asserts that it has no obligation to deliver the car to
private respondents and therefore could not be held liable for breach of
contract of sales as confirmed by the findings of the trial court and
in turn affirmed by the court of Appeals; hence, petitioner should be
held liable for breach of contract for failing to deliver the car to
them

We find that the instant petition lacks merit. The issues raised
by petitioner are essentially factual matters, the determination of
which are best left to the court below. Well-settled is the rule that
factual findings of the lower courts are entitled to great weight and
respect on appeal, and in fact accorded finality when supported by
substantial evidence on the record as in the case.^[3]
Undoubtedly, there was a perfected contract of sale between the
petitioner and private respondents as confirmed by the trial court when
it found that “[b] y accepting a deposit of P50,000.00 and by pulling
out a unit of Philippine Nissan 1.6 cc Sentra Automatic (Flamingo red),
defendant obliged itself to sell to the plaintiffs a determinate thing
of a price certain in money which was P494,000.00”.^[4]
Resultingly, petitioner committed a breach of contract when it allowed
the unit in question to be sold to another buyer to the prejudice of
private respondents. The Court of Appeals gave complete accord to the
aforementioned findings and affirmed the same in its decision.^[5]
In this regard it must be emphasized that the prevailing rule is that
the findings of fact of the trial court, particularly when affirmed by
the Court of Appeals, are binding upon this Court.^[6]
We have scrutinized the record of this case and found no reason to
deviate from the findings of the court a quo as they are consistent with
the law and the evidence on record. Article 1475 of the New Civil Code
is very explicit the “[t]he contract of sale is perfected at the moment
there is a meeting of the minds upon the thing which is the object of
the contract and upon the price. From that moment, the parties may
reciprocally demand performance, subject to the provision of the law
governing the form of contracts.” Contrary, therefore, to petitioner’s
assertion, both the trial court and the Court of Appeals did not commit
reversible error in declaring that there was indeed a perfected contract
of sale and that petitioner breached the same when it failed to deliver
the car to private respondents.

However, with respect to the damages awarded to private respondent, the Court cannot sustain the same in its entirety.

The award for exemplary damages in this case is unwarranted
because there is no showing that petitioner acted in wanton, fraudulent,
reckless, oppressive, or malevolent manner.^[7]
In the same vein, the grant of nominal damages must also be deleted
because the factual basis for such not has been established.

Nevertheless, We sustain the award of moral damages considering
private respondent Macarthur Samson’s testimony that he suffered from
shock and embarrassment as a result of petitioner’s failure to comply
with its obligation.^[8] This is consistent with our pronouncement in Tan vs. Court of Appeals^[9] and American Express International, Inc. vs. IAC^[10]
that “[w]hile petitioner was not in bad faith, its negligence caused
the private respondent to suffer mental anguish, serious anxiety,
embarrassment and humiliation, for which he is entitled to recover
reasonable moral damages (Art. 2217, Civil Code).” We however find the
amount of P100,000.00 as moral damages excessive and exorbitant in this
case, bearing in mind that these damages are not intended to enrich the
complainant at the expense of the defendant.^[11]
The amount of P10,000.00 as moral damages is herein deemed reasonable.
Anent the amount of attorney’s fees, We also find it proper to reduce
the same P10,000.00.

WHEREFORE, the dispositive portion of the
decision of the Court of Appeals dated July 31, 1995 is hereby MODIFIED
and judgment is herein rendered ordering herein petitioner to pay
private respondents the following amounts:

1. Moral Damages of 10,000.00 for the shock and embarrassment
   suffered by private respondent as a result of petitioner’s failure to
   comply with its obligation.
2. Attorney’s fees of P10,000.00 and litigation expenses in the sum of P6,000.00.
3. The amount of P250,000.00 representing the advance payment of
   the car made by private respondent to petitioner plus legal interest
   computed from the time of the filing of complaint.

Cost against petitioner.

SO ORDERED.

Davide, Jr. (Chairman), Bellosillo, Vitug, and Panganiban JJ., concur.

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^[1] Rollo pp. 39-40.

^[2] Rollo. p. 39.

^[3] Verdejo vs. CA. 238 SCRA 781 ^[1994]; Tan Chun Suy vs. CA, 229 SCRA 151 ^[1994]; Catapusan vs. CA, 264 SCRA 534 ^[1996].

^[4] RTC Decision pp. 11-12; Rollo p.80.

^[5] CA Decision p. 12; Rollo p. 50.

^[6] Fuentes vs. Court of Appeals, 268 SCRA 703 ^[1997] citing Juan Castillo and Maria Masangya-Castillo, et al. vs. Court of Appeals, 260 SCRA 374 ^[1996]

^[7] LBC Express, Inc.
vs. Court of Appeals, 236 SCRA 602 (1994); Plipinas Bank vs. Court of
Appeals, 234 SCRA 435 (1994); Filinvest Credit Corporation vs. Court of
Appeals, 248 SCRA 549 SCRA (1995).

^[8] TSN dated July 20, 1992. pp. 25-28.

^[9] 239 SCRA 310 (1994)

^[10] 167 SCRA 209 (1988)

^[11] Korean Airlines Co., Ltd. Vs. Court of Appeals. 234 SCRA 202 (1994).