UNIVERSAL INTERNATIONAL
INVESTMENT v RAY BURTON DEV’T CORP
RBDC/ BURTON– Elizabeth Place developer
UNIVERSAL INT’L – Purchaser/Buyer
Facts: UNIVERSAL purchased 10 condo units and
10 parking slots from BURTON for P52.8M.
BURTON failed to deliver properties even upon
demand, and it was later discovered that the mother
title of ELIZABETH PLACE was mortgaged to
CHINA BANK.
BEFORE HLURB
UNIVERSAL filed for specific performance or
rescission of contract and damages before
EXPANDED NATIONAL CAPITAL REGION
FIELD OFFICE of HLURB imputing fraud for
concealing the mortgage. It also sought the delivery
of 1 CONDO unit and its two CCT otherwise; the
contract shall be rescinded with a refund of purchase
price plus penalty interest, 1.5% monthly interest on
the total PP computed from the date of cancellation
of the sale until full refund. It further moved to
attached Lapu-lapu property of RBDC as claim
security.
BURTON argued that UNIVERSAL should direct its
claim for delivery of titles to China Bank based on a
compromise agreement between BURTON and
CHINA BANK where the latter has to release titles
of units fully paid to respective buyers.
ENCRFO ruled in favor of Universal. Appeal by
RBDC to BOC of HLURB and moved to release lot
in Lapu-lapu which eventually allowed the
discharged.
UNIVERSAL assailed the discharge of Lapu-lapu lot
with the CA. While the case was pending, China
Bank released the properties and CCT. However,
IT STILL claimed for damages under SECTION 6 of
Contract of Sale for the delay in delivery of the
properties and compensation for property loss
amounting to P19.6M as depreciation costs of the
properties.
RBDC countered that it cannot deliver the same for
Universal did not pay the transfer charges.
ISSUE: WON UNIVERSAL IS ENTITLED TO:
1. Liquidated damages under Section 6 of the
Contract to Sell
2. Claims for losses
3. Damages from contractual breach
RULING:
1. No. Section 6 of the Contract of Sell
provides that the agreement shall be deemed
cancelled at the option of the buyer in case
of force majeure and substantial delay in
the condo project- Elizabeth Place.
Substantial delay is SIX months from the
date of estimated completion.
ITC, Universal merely alleged the failure of RBDC to
deliver the condo, parking slots, and CCT and failed
to assert either of the two circumstances provided in
the agreement. The cause of action was not grounded
on force majeure nor substantial delay.
2. No. Article 2200 applies to indemnify the
claimant for lost profits obtained other than
injury caused.
DAMAGES is the sum of money imposed as
pecuniary compensation, recompense or satisfaction
for an injury done or wrong sustained from
contractual breach or torts. The claimant must
therefore prove:
1. Injury or wrong
2. Breach of contract or tort
3. Caused by the party charge
UNIVERSAL invoked ARTICLE 2200 to recover
depreciation and other cost. However it failed to
allege that the properties are for lease or sale (for
profit). Therefore, ARTICLE 2200 is inapplicable.
National Power Corp. v. Philipp Brothers Oceanic,
Inc. in order to recover actual damages, the alleged
unearned profits must not be conjectural or based on
contingent transactions. Speculative damages are too
remote to be included in an accurate estimate of
damages.
3. In contract to sell, the obligation of the seller
becomes demandable only upon full
 payment of the purchase price, such that the
full payment gives the buyer the right to
demand the execution of contract of sale.
In contract of sale, the seller is required to transfer
ownership of the thing sold through delivery. In sale
of real property, the seller is OBLIGE TO
TRANSFER THE OWNERSHIP not the transfer
the name of the new buyer in the certificate of
title.
Section 3 of Contract to Sell, RBCD has to deliver
the DEEDS of absolute sale and to deliver the
corresponding CCTs.
3. EXEMPLARY DAMAGES
RULING: The grant of exemplary damages is to curb
socially deleterious actions. ITC, refusal of RBDC to
execute DEEDS warrants and nondisclosure of
mortgage to China Bank warrant exemplary damages.
NB: Since RBDC’s contention that nonpayment of
transfer charges is unmeritorious, it is not impeded to
issue the deeds of sale. That is why EXEMPLARY
DAMAGES ARE AWARDED. Universal was
purchaser in good faith.

ITC, the ground damages was RBDC’s failure to

transfer CCT and possession of the properties and not
that of CONTRACT TO SELL. RBDC has no
contractual obligation to neither surrender the
possession of the properties nor cause the transfer of
CCT to UNIVERSAL.

IN SUM, Universal is not entitled to damages. It did

not specify the non-delivery of properties resulted to
depreciation and had the properties been delivered,
IT could have avoided the losses.

INCIDENTAL ISSUES:

1. RBDC argument that Universal defaulted on

paying TRANSFER CHARGES

RULING: Universal doesn’t have to pay transfer

charges. Their agreement provided that the buyer
shall pay the charges only upon election that the
BUYER handles the titling of properties. The charges
are therefore lodged specifically to the SELLER.

2. UNIVERSAL is entitled to TEMPERATE

OR MODERATE DAMAGES.

RULING: Temperate damages are awarded when

some pecuniary loss has been suffered but the
amount cannot be proven with certainty. ITC,
UNIVERSAL sustained pecuniary loss from non-
delivery of CCTs and non-execution of DEED of
absolute sale.