This case has been cited 1 times or more.
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2013-06-05 |
PEREZ, J. |
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| In the absence of a showing that they expressly reserved the right to pay the penalty in lieu of the performance of their obligation under the Kasunduan, respondents were correctly ordered by the RTC to execute and deliver a deed of conveyance over their 60% share in the subject parcels in favor of petitioners. Considering that the Kasunduan stipulated that respondents would retain a portion of their share consisting of 1,700 square meters, said disposition should, however, be modified to give full effect to the intention of the contracting parties. Since the parties also fixed liquidated damages in the sum of P50,000.00 in case of breach, we find that said amount should suffice as petitioners' indemnity, without further need of compensation for moral and exemplary damages. In obligations with a penal clause, the penalty generally substitutes the indemnity for damages and the payment of interests in case of non-compliance.[68] Usually incorporated to create an effective deterrent against breach of the obligation by making the consequences of such breach as onerous as it may be possible, the rule is settled that a penal clause is not limited to actual and compensatory damages[69] | |||||