oblicon - cases - 1240 to 1258
TRANSCRIPT
-
8/13/2019 ObliCon - Cases - 1240 to 1258
1/159
1
Republic of the Philippines
SUPREME COURTManila
FIRST DIVISION
G.R. No. 104612 May 10, 1994
BANK OF THE PHILIPPINE ISLANDS (successor-in- interest ofCOMMERCIAL AND TRUST CO.), petitioner,vs.
HON. COURT OF APPEALS, EASTERN PLYWOOD CORP. and BENIGNOD. LIM, respondents.
Leonen, Ramirez & Associates for petitioner.
Constante A. Ancheta for private respondents.
DAVIDE, JR.,J.:
The petitioner urges us to review and set aside the amended
Decision1
of 6 March 1992 of respondent Court of Appeals in CA- G.R.
CV No. 25739 which modified the Decision of 15 November 1990 of
Branch 19 of the Regional Trial Court (RTC) of Manila in Civil Case No.
87-42967, entitled Bank of the Philippine Islands (successor-in-interest
of Commercial Bank and Trust Company)versus Eastern Plywood
Corporation and Benigno D. Lim. The Court of Appeals had affirmed the
dismissal of the complaint but had granted the defendants'
counterclaim for P331,261.44 which represents the outstanding
balance of their account with the plaintiff.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
2/159
2
As culled from the records and the pleadings of the parties, the
following facts were duly established:
Private respondents Eastern Plywood Corporation (Eastern) and
Benigno D. Lim (Lim), an officer and stockholder of Eastern, held atleast one joint bank account ("and/or" account) with the Commercial
Bank and Trust Co. (CBTC), the predecessor-in-interest of petitioner
Bank of the Philippine Islands (BPI). Sometime in March 1975, a joint
checking account ("and" account) with Lim in the amount of
P120,000.00 was opened by Mariano Velasco with funds withdrawn
from the account of Eastern and/or Lim. Various amounts were later
deposited or withdrawn from the joint account of Velasco and Lim. The
money therein was placed in the money market.
Velasco died on 7 April 1977. At the time of his death, the outstanding
balance of the account stood at P662,522.87. On 5 May 1977, by virtue
of an Indemnity Undertaking executed by Lim for himself and as
President and General Manager of Eastern,2one-half of this amount
was provisionally released and transferred to one of the bank accounts
of Eastern with CBTC.3
Thereafter, on 18 August 1978, Eastern obtained a loan of P73,000.00
from CBTC as "Additional Working Capital," evidenced by the
"Disclosure Statement on Loan/Credit Transaction" (Disclosure
Statement) signed by CBTC through its branch manager, Ceferino
Jimenez, and Eastern, through Lim, as its President and General
Manager.4The loan was payable on demand with interest at 14%per
annum.
For this loan, Eastern issued on the same day a negotiable promissory
note for P73,000.00 payable on demand to the order of CBTC with
interest at 14%per annum.5The note was signed by Lim both in his
own capacity and as President and General Manager of Eastern. No
reference to any security for the loan appears on the note. In the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
3/159
3
Disclosure Statement, the box with the printed word "UNSECURED"
was marked with "X" meaning unsecured, while the line with the
words "this loan is wholly/partly secured by" is followed by the
typewritten words "Hold-Out on a 1:1 on C/A No. 2310-001-42," which
refers to the joint account of Velasco and Lim with a balance of
P331,261.44.
In addition, Eastern and Lim, and CBTC signed another document
entitled "Holdout Agreement," also dated 18 August 1978,6wherein it
was stated that "as security for the Loan [Lim and Eastern] have offered
[CBTC] and the latter accepts a holdout on said [Current Account No.
2310-011-42 in the joint names of Lim and Velasco] to the full extent of
their alleged interests therein as these may appear as a result of finaland definitive judicial action or a settlement between and among the
contesting parties thereto."7Paragraph 02 of the Agreement provides
as follows:
Eastply [Eastern] and Mr. Lim hereby confer upon Comtrust
[CBTC], when and if their alleged interests in the Account
Balance shall have been established with finality, ample and
sufficient power as shall be necessary to retain said AccountBalance and enable Comtrust to apply the Account Balance
for the purpose of liquidating the Loan in respect of principal
and/or accrued interest.
And paragraph 05 thereof reads:
The acceptance of this holdout shall not impair the right of
Comtrust to declare the loan payable on demand at anytime, nor shall the existence hereof and the non-resolution
of the dispute between the contending parties in respect of
entitlement to the Account Balance, preclude Comtrust from
instituting an action for recovery against Eastply and/or Mr.
Lim in the event the Loan is declared due and payable and
-
8/13/2019 ObliCon - Cases - 1240 to 1258
4/159
-
8/13/2019 ObliCon - Cases - 1240 to 1258
5/159
5
the "said claim cannot be awarded without disturbing the resolution" of
the intestate court.12
Both parties appealed from the said decision to the Court of Appeals.
Their appeal was docketed as CA-G.R. CV No. 25739.
On 23 January 1991, the Court of Appeals rendered a decision affirming
the decision of the trial court. It, however, failed to rule on the
defendants' (private respondents') partial appeal from the trial court's
denial of their counterclaim. Upon their motion for reconsideration, the
Court of Appeals promulgated on 6 March 1992 an Amended
Decision13wherein it ruled that the settlement of Velasco's estate had
nothing to do with the claim of the defendants for the return of thebalance of their account with CBTC/BPI as they were not privy to that
case, and that the defendants, as depositors of CBTC/BPI, are the
latter's creditors; hence, CBTC/BPI should have protected the
defendants' interest in Sp. Proc. No. 8959 when the said account was
claimed by Velasco's estate. It then ordered BPI "to pay defendants the
amount of P331,261.44 representing the outstanding balance in the
bank account of defendants."14
On 22 April 1992, BPI filed the instant petition alleging therein that the
Holdout Agreement in question was subject to a suspensive condition
stated therein, viz., that the "P331,261.44 shall become a security for
respondent Lim's promissory note only if respondents' Lim and Eastern
Plywood Corporation's interests to that amount are established as a
result of a final and definitive judicial action or a settlement between
and among the contesting parties thereto."15Hence, BPI asserts, the
Court of Appeals erred in affirming the trial court's decision dismissingthe complaint on the ground that it was the duty of CBTC to debit the
account of the defendants to set off the amount of P73,000.00 covered
by the promissory note.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
6/159
6
Private respondents Eastern and Lim dispute the "suspensive
condition" argument of the petitioner. They interpret the findings of
both the trial and appellate courts that the money deposited in the
joint account of Velasco and Lim came from Eastern and Lim's own
account as a finding that the money deposited in the joint account of
Lim and Velasco "rightfully belong[ed] to Eastern Plywood Corporation
and/or Benigno Lim." And because the latter are the rightful owners of
the money in question, the suspensive condition does not find any
application in this case and the bank had the duty to set off this deposit
with the loan. They add that the ruling of the lower court that they own
the disputed amount is the final and definitive judicial action required
by the Holdout Agreement; hence, the petitioner can only hold the
amount of P73,000.00 representing the security required for the note
and must return the rest.16
The petitioner filed a Reply to the aforesaid Comment. The private
respondents filed a Rejoinder thereto.
We gave due course to the petition and required the parties to submit
simultaneously their memoranda.
The key issues in this case are whether BPI can demand payment of the
loan of P73,000.00 despite the existence of the Holdout Agreement and
whether BPI is still liable to the private respondents on the account
subject of the Holdout Agreement after its withdrawal by the heirs of
Velasco.
The collection suit of BPI is based on the promissory note for
P73,000.00. On its face, the note is an unconditional promise to pay thesaid amount, and as stated by the respondent Court of Appeals,
"[t]here is no question that the promissory note is a negotiable
instrument."17It further correctly ruled that BPI was not a holder in
due course because the note was not indorsed to BPI by the payee,
CBTC. Only a negotiation by indorsement could have operated as a valid
-
8/13/2019 ObliCon - Cases - 1240 to 1258
7/159
7
transfer to make BPI a holder in due course. It acquired the note from
CBTC by the contract of merger or sale between the two banks. BPI,
therefore, took the note subject to the Holdout Agreement.
We disagree, however, with the Court of Appeals in its interpretation ofthe Holdout Agreement. It is clear from paragraph 02 thereof that
CBTC, or BPI as its successor-in-interest, had every right to demand that
Eastern and Lim settle their liability under the promissory note. It
cannot be compelled to retain and apply the deposit in Lim and
Velasco's joint account to the payment of the note. What the
agreement conferred on CBTC was apower, not a duty. Generally, a
bank is under no duty or obligation to make the application.18To apply
the deposit to the payment of a loan is a privilege, a right of set-offwhich the bank has the option to exercise.
19
Also, paragraph 05 of the Holdout Agreement itself states that
notwithstanding the agreement, CBTC was not in any way precluded
from demanding payment from Eastern and from instituting an action
to recover payment of the loan. What it provides is an alternative, not
an exclusive, method of enforcing its claim on the note. When it
demanded payment of the debt directly from Eastern and Lim, BPI hadopted not to exercise its right to apply part of the deposit subject of the
Holdout Agreement to the payment of the promissory note for
P73,000.00. Its suit for the enforcement of the note was then in order
and it was error for the trial court to dismiss it on the theory that it was
set off by an equivalent portion in C/A No. 2310-001-42 which BPI
should have debited. The Court of Appeals also erred in affirming such
dismissal.
The "suspensive condition" theory of the petitioner is, therefore,
untenable.
The Court of Appeals correctly decided on the counterclaim. The
counterclaim of Eastern and Lim for the return of the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
8/159
8
P331,261.4420was equivalent to a demand that they be allowed to
withdraw their deposit with the bank. Article 1980 of the Civil Code
expressly provides that "[f]ixed, savings, and current deposits of money
in banks and similar institutions shall be governed by the provisions
concerning simple loan." In Serrano vs. Central Bank of the
Philippines,21we held that bank deposits are in the nature of irregular
deposits; they are really loans because they earn interest. The
relationship then between a depositor and a bank is one of creditor and
debtor. The deposit under the questioned account was an ordinary
bank deposit; hence, it was payable on demand of the depositor.22
The account was proved and established to belong to Eastern even if it
was deposited in the names of Lim and Velasco. As the real creditor ofthe bank, Eastern has the right to withdraw it or to demand payment
thereof. BPI cannot be relieved of its duty to pay Eastern simply
because it already allowed the heirs of Velasco to withdraw the whole
balance of the account. The petitioner should not have allowed such
withdrawal because it had admitted in the Holdout Agreement the
questioned ownership of the money deposited in the account. As early
as 12 May 1979, CBTC was notified by the Corporate Secretary of
Eastern that the deposit in the joint account of Velasco and Lim was
being claimed by them and that one-half was being claimed by the heirs
of Velasco.23
Moreover, the order of the court in Sp. Proc. No. 8959 merely
authorized the heirs of Velasco to withdraw the account. BPI was not
specifically ordered to release the account to the said heirs; hence, it
was under no judicial compulsion to do so. The authorization given to
the heirs of Velasco cannot be construed as a final determination or
adjudication that the account belonged to Velasco. We have ruled that
when the ownership of a particular property is disputed, the
determination by a probate court of whether that property is included
-
8/13/2019 ObliCon - Cases - 1240 to 1258
9/159
9
in the estate of a deceased is merely provisional in character and
cannot be the subject of execution.24
Because the ownership of the deposit remained undetermined, BPI, as
the debtor with respect thereto, had no right to pay to persons otherthan those in whose favor the obligation was constituted or whose
right or authority to receive payment is indisputable. The payment of
the money deposited with BPI that will extinguish its obligation to the
creditor-depositor is payment to the person of the creditor or to one
authorized by him or by the law to receive it.25Payment made by the
debtor to the wrong party does not extinguish the obligation as to the
creditor who is without fault or negligence, even if the debtor acted in
utmost good faith and by mistake as to the person of the creditor, orthrough error induced by fraud of a third person.
26The payment thenby BPI to the heirs of Velasco, even if done in good faith, did not
extinguish its obligation to the true depositor, Eastern.
In the light of the above findings, the dismissal of the petitioner's
complaint is reversed and set aside. The award on the counterclaim is
sustained subject to a modification of the interest.
WHEREFORE, the instant petition is partly GRANTED. The challenged
amended decision in CA-G.R. CV No. 25735 is hereby MODIFIED. As
modified:
(1) Private respondents are ordered to pay the petitioner
the promissory note for P73,000.00 with interest at:
(a) 14%per annum on the principal, computed
from
18 August 1978 until payment;
(b) 12%per annum on the interest which had
accrued up to the date of the filing of the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
10/159
1
0
complaint, computed from that date until
payment pursuant to Article 2212 of the Civil
Code.
(2) The award of P331,264.44 in favor of the privaterespondents shall bear interest at the rate of 12%per
annum computed from the filing of the counterclaim.
No pronouncement as to costs.
SO ORDERED.
Cruz, Bellosillo, Quiason and Kapunan, JJ., concur
-
8/13/2019 ObliCon - Cases - 1240 to 1258
11/159
1
1
SECOND DIVISION
[G.R. No. 125862. April 15, 2004]
FRANCISCO CULABA and DEMETRIA CULABA, doing business underthe name and style Culaba Store,petitioners, vs. COURT OFAPPEALS and SAN MIGUEL CORPORATION, respondents.
D E C I S I O N
CALLEJO, SR.,J.:
This is a petition for review under Rule 45 of the Revised Rules of
Civil Procedure of the Decision[1]
of the Court of Appeals in CA-G.R. CV
No. 19836 affirming in toto the Decision[2]
of the Regional Trial Court of
Makati, Branch 138, in Civil Case No. 1033 for collection of sum of
money, and the Resolution[3]
denying the motion for reconsideration of
the said decision.
The Undisputed Facts
The spouses Francisco and Demetria Culaba were the owners and
proprietors of the Culaba Store and were engaged in the sale and
distribution of San Miguel Corporations (SMC) beer products. SMC
sold beer products on credit to the Culaba spouses in the amount of
P28,650.00, as evidenced by Temporary Credit Invoice No.
42943.[4]
Thereafter, the Culaba spouses made a partial payment ofP3,740.00, leaving an unpaid balance of P24,910.00. As they failed to
pay despite repeated demands, SMC filed an action for collection of a
sum of money against them before the RTC of Makati, Branch 138.
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn1 -
8/13/2019 ObliCon - Cases - 1240 to 1258
12/159
1
2
The defendant-spouses denied any liability, claiming that they had
already paid the plaintiff in full on four separate occasions. To
substantiate this claim, the defendants presented four (4) Temporary
Charge Sales (TCS) Liquidation Receipts, as follows:
April 19, 1983 Receipt No. 27331 for P8,000[5]
April 22, 1983 Receipt No. 27318 for P9,000[6]
April 27, 1983 Receipt No. 27339 for P4,500[7]
April 30, 1983 Receipt No. 27346 for P3,410[8]
Defendant Francisco Culaba testified that he made the foregoing
payments to an SMC supervisor who came in an SMC van. He was then
showed a list of customers accountabilities which included his account.The defendant, in good faith, then paid to the said supervisor, and he
was, in turn, issued genuine SMC liquidation receipts.
For its part, SMC submitted a publishers affidavit[9]
to prove that
the entire booklet of TCSL Receipts bearing Nos. 27301-27350 were
reported lost by it, and that it caused the publication of the notice of
loss in the July 9, 1983 issue of the Daily Express, as follows:
NOTICE OF LOSS
OUR CUSTOMERS ARE HEREBY INFORMED THAT TEMPORARY CHARGE
SALES LIQUIDATION RECEIPTS WITH SERIAL NOS. 27301-27350 HAVE
BEEN LOST.
ANY TRANSACTION, THEREFORE, ENTERED INTO WITH THE USE OF THE
ABOVE RECEIPTS WILL NOT BE HONORED.
SAN MIGUEL CORPORATIONBEER DIVISION
Makati Beer Region[10]
The Trial Courts Ruling
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn5 -
8/13/2019 ObliCon - Cases - 1240 to 1258
13/159
1
3
After trial on the merits, the trial court rendered judgment in favor
of SMC, and held the Culaba spouses liable on the balance of its
obligation, thus:
Wherefore, judgment is hereby rendered in favor of the plaintiff, asfollows:
1. Ordering defendants to pay the amount of P24,910.00 plus legal
interest of 6% per annum from April 12, 1983 until the whole amount is
fully paid;
2. Ordering defendants to pay 20% of the amount due to plaintiff as
and for attorneys fees plus costs.
SO ORDERED.[11]
According to the trial court, it was unusual that defendant Francisco
Culaba forgot the name of the collector to whom he made the
payments and that he did not require the said collector to print his
name on the receipts. The court also noted that although they were
part of a single booklet, the TCS Liquidation Receipts submitted by the
defendants did not appear to have been issued in their natural
sequence. Furthermore, they were part of the lost booklet receipts,
which the public was duly warned of through the Notice of Loss the
plaintiff caused to be published in a daily newspaper. This confirmed
the plaintiffs claim that the receipts presented by the defendants were
spurious ones.
The Case on Appeal
On appeal, the appellants interposed the following assignment of
errors:
I
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn11 -
8/13/2019 ObliCon - Cases - 1240 to 1258
14/159
1
4
THE TRIAL COURT ERRED IN FINDING THAT THE RECEIPTS PRESENTED
BY DEFENDANTS EVIDENCING HIS PAYMENTS TO PLAINTIFF SAN
MIGUEL CORPORATION, ARE SPURIOUS.
II
THE TRIAL COURT ERRED IN CONCLUDING THAT PLAINTIFF-APPELLEE
HAS SUFFICIENTLY PROVED ITS CAUSE OF ACTION AGAINST THE
DEFENDANTS.
III
THE TRIAL COURT ERRED IN ORDERING DEFENDANTS TO PAY 20% OF
THE AMOUNT DUE TO PLAINTIFF AS ATTORNEYS FEES.[12]
The appellants asserted that while the trial courts observations
were true, it was the usual business practice in previous transactions
between them and SMC. The SMC previously honored receipts not
bearing the salesmans name. According to appellant Francisco Culaba,
he even lost some of the receipts, but did not encounter any problems.
According to appellant Francisco, he could not be faulted for payingthe SMC collector who came in a van and was in uniform, and that any
regular customer would, without any apprehension, transact with such
an SMC employee. Furthermore, the respective receipts issued to him
at the time he paid on the four occasions mentioned had not yet then
been declared lost. Thus, the subsequent publication in a daily
newspaper declaring the booklets lost did not affect the validity and
legality of the payments made. Accordingly, by its actuations, the SMC
was estopped from questioning the legality of the payments and had nocause of action against the appellants.
Anent the issue of attorneys fees, the order of the trial court for
payment thereof is without basis. According to the appellant, the
provision for attorneys fees is a contingent fee, already provided for in
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn12 -
8/13/2019 ObliCon - Cases - 1240 to 1258
15/159
1
5
the SMCs contract with the law firm. To further order them to pay 20%
of the amount due as attorneys fees is double payment, tantamount to
undue enrichment and therefore improper.[13]
The appellee, for its part, contended that the primary issue in thecase at bar revolved around the basic and fundamental principles of
agency.[14]
It was incumbent upon the defendants-appellants to
exercise ordinary prudence and reasonable diligence to verify and
identify the extent of the alleged agents authority. It was their burden
to establish the true identity of the assumed agent, and this could not
be established by mere representation, rumor or general reputation. As
they utterly failed in this regard, the appellants must suffer the
consequences.The Court of Appeals affirmed the decision of the trial court, thus:
In the face of the somewhat tenuous evidence presented by the
appellants, we cannot fault the lower court for giving more weight to
appellees testimonial and documentary evidence, all of which establish
with some degree of preponderance the existence of the account sued
upon.
ALL CONSIDERED, we cannot find any justification to reject the factualfindings of the lower court to which we must accord respect, for which
reason, the judgment appealed from is hereby AFFIRMEDin allrespects.
SO ORDERED.[15]
Hence, the instant petition.
The petitioners pose the following issues for the Courts resolution:
I. WHETHER OR NOT THE RESPONDENT HAD PROVEN BY
PREPONDERANT EVIDENCE THAT IT HAD PROPERLY AND TIMELY
NOTIFIED PETITIONER OF LOST BOOKLET OF RECEIPTS
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn13 -
8/13/2019 ObliCon - Cases - 1240 to 1258
16/159
1
6
II. WHETHER OR NOT RESPONDENT HAD PROVEN BY PREPONDERANT
EVIDENCE THAT PETITIONER WAS REMISS IN THE PAYMENT OF HIS
ACCOUNTS TO ITS AGENT.[16]
According to the petitioners, receiving receipts from the privaterespondents agents instead of its salesmen was a usual occurrence, as
they had been operating the store since 1979. Thus, on four occasions
in April 1983, when an agent of the respondent came to the store
wearing an SMC uniform and driving an SMC van, petitioner Francisco
Culaba, without question, paid his accounts. He received the receipts
without fear, as they were similar to what he used to receive before.
Furthermore, the petitioners assert that, common experience will
attest that unless the attention of the customers is called for, theywould not take note of the serial number of the receipts.
The petitioners contend that the private respondent advertised its
warning to the public only after the damage was done, or on July 9,
1993. Its belated notice showed its glaring lack of interest or concern
for its customers welfare, and, in sum, its negligence.
Anent the second issue, petitioner Francisco Culaba avers that the
agent to whom the accounts were paid had all the physical andmaterial attributes or indications of a representative of the private
respondent, leaving no doubt that he was duly authorized by the
latter. Petitioner Francisco Culabas testimony that he does not
necessarily check the contents of the receipts issued to him except for
the amount indicated if [the] same accurately reflects his actual
payment is a common attitude of customers. He could, thus, not be
faulted for paying the private respondents agent on four
occasions. Petitioner Francisco Culaba asserts that he made the
payment in good faith, to an agent who issued SMC receipts which
appeared to be genuine. Thus, according to the petitioners, they had
duly paid their obligation in accordance with Articles 1240 and 1242 of
the New Civil Code.
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn16 -
8/13/2019 ObliCon - Cases - 1240 to 1258
17/159
1
7
The private respondent, for its part, avers that the burden of
proving payment is with the debtor, in consonance with the express
provision of Article 1233 of the New Civil Code. The petitioners
miserably failed to prove the self-serving allegation that they already
paid their liability to the private respondent. Furthermore, under
normal circumstances, an obligor would not just pay a substantial
amount to someone whom he saw for the first time, without even
asking for the latters name.
The Ruling of the Court
The petition is dismissed.
The petitioners question the findings of the Court of Appeals as to
whether the payment of the petitioners obligation to the private
respondent was properly made, thus, extinguishing the same. This is
clearly a factual issue, and beyond the purview of the Court to delve
into. This is in consonance with the well-settled rule that findings of fact
of the trial court, especially when affirmed by the Court of Appeals, are
accorded the highest degree of respect, and generally will not bedisturbed on appeal. Such findings are binding and conclusive on the
Court.[17]
Furthermore, it is not the Courts function under Rule 45 of
the Rules of Court, as amended, to review, examine and evaluate or
weigh the probative value of the evidence presented.[18]
To reiterate, the issue being raised by the petitioners does not
involve a question of law, but a question of fact, not cognizable by this
Court in a petition for review under Rule 45. The jurisdiction of the
Court in such a case is limited to reviewing only errors of law, unless thefactual findings being assailed are not supported by evidence on record
or the impugned judgment is based on a misapprehension of facts.[19]
A careful study of the records of the case reveal that the appellate
court affirmed the trial courts factual findings as follows:
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn17 -
8/13/2019 ObliCon - Cases - 1240 to 1258
18/159
1
8
First. Receipts Nos. 27331, 27318, 27339 and 27346 were included
in the private respondents lost booklet, which loss was duly advertised
in a newspaper of general circulation; thus, the private respondent
could not have officially issued them to the petitioners to cover the
alleged payments on the dates appearing thereon.
Second. There was something amiss in the way the receipts were
issued to the petitioners, as one receipt bearing a higher serial number
was issued ahead of another receipt bearing a lower serial number,
supposedly covering a later payment. The petitioners failed to explain
the apparent mix-up in these receipts, and no attempt was made in this
regard.
Third. The fact that the salesmans name was invariably left blank in
the four receipts and that the petitioners could not even remember the
name of the supposed impostor who received the said payments
strongly argue against the veracity of the petitioners claim.
We find no cogent reason to reverse the said findings.
The dismissal of the petition is inevitable even upon close perusal of
the merits of the case.
Payment is a mode of extinguishing an obligation.[20]
Article 1240 of
the Civil Code provides that payment shall be made to the person in
whose favor the obligation has been constituted, or his successor-in-
interest, or any person authorized to receive it.[21]
In this case, the
payments were purportedly made to a supervisor of the private
respondent, who was clad in an SMC uniform and drove an SMC van.
He appeared to be authorized to accept payments as he showed a list
of customers accountabilities and even issued SMC liquidation receiptswhich looked genuine. Unfortunately for petitioner Francisco Culaba,
he did not ascertain the identity and authority of the said supervisor,
nor did he ask to be shown any identification to prove that the latter
was, indeed, an SMC supervisor. The petitioners relied solely on the
mans representation that he was collecting payments for SMC. Thus,
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn20 -
8/13/2019 ObliCon - Cases - 1240 to 1258
19/159
1
9
the payments the petitioners claimed they made were not the
payments that discharged their obligation to the private respondent.
The basis of agency is representation.[22]
A person dealing with an
agent is put upon inquiry and must discover upon his peril the authorityof the agent.
[23]In the instant case, the petitioners loss could have
been avoided if they had simply exercised due diligence in ascertaining
the identity of the person to whom they allegedly made the payments.
The fact that they were parting with valuable consideration should have
made them more circumspect in handling their business transactions.
Persons dealing with an assumed agent are bound at their peril to
ascertain not only the fact of agency but also the nature and extent of
authority, and in case either is controverted, the burden of proof isupon them to establish it.
[24]The petitioners in this case failed to
discharge this burden, considering that the private respondent
vehemently denied that the payments were accepted by it and were
made to its authorized representative.
Negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something, which a
prudent and reasonable man would not do.[25]In the case at bar, the
most prudent thing the petitioners should have done was to ascertain
the identity and authority of the person who collected their payments.
Failing this, the petitioners cannot claim that they acted in good faith
when they made such payments. Their claim therefor is negated by
their negligence, and they are bound by its consequences. Being
negligent in this regard, the petitioners cannot seek relief on the basis
of a supposed agency.
[26]
WHEREFORE, the instant petition is hereby DENIED. The assailed
Decision dated April 16, 1996, and the Resolution dated July 19, 1996 of
the Court of Appeals are AFFIRMED. Costs against the petitioners.
SO ORDERED.
http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/125862.htm#_ftn22 -
8/13/2019 ObliCon - Cases - 1240 to 1258
20/159
2
0
Republic of the Philippines
SUPREME COURTManila
THIRD DIVISION
G.R. No. 172825 October 11, 2012
SPOUSES MINIANO B. DELA CRUZ and LETA L. DELA CRUZ,Petitioners,vs.
ANA MARIE CONCEPCION,Respondent.
D E C I S I O N
PERALTA,J.:
Assailed in this petition for review on certiorari under Rule 45 of the
Rules of Court filed by petitioners spouses Miniano B. Dela Cruz and
Leta L. Dela Cruz against respondent Ana Marie Concepcion are the
Court of Appeals (CA) Decision1dated March 31, 2005 and
Resolution2dated May 24, 2006 in CA-G.R. CV No. 83030.
The facts of the case are as follows:
On March 25, 1996, petitioners (as vendors) entered into a Contract to
Sell3with respondent (as vendee) involving a house and lot in Cypress
St., Phase I, Town and Country Executive Village, Antipolo City for a
consideration of P2,000,000.00 subject to the following terms and
conditions:
a) That an earnest money of P100,000.00 shall be paid
immediately;
b) That a full down payment of Four Hundred Thousand Pesos
(P400,000.00) shall be paid on February 29, 1996;
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt1http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt1http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt2http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt2http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt2http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt1 -
8/13/2019 ObliCon - Cases - 1240 to 1258
21/159
2
1
c) That Five Hundred Thousand Pesos (P500,000.00) shall be paid
on or before May 5, 1996; and
d) That the balance of One Million Pesos (P1,000,000.00) shall be
paid on installment with interest of Eighteen Percent (18%) perannum or One and a half percent (1-1/2 %) interest per month,
based on the diminishing balance, compounded monthly,
effective May 6, 1996. The interest shall continue to run until the
whole obligation shall have been fully paid. The whole One Million
Pesos shall be paid within three years from May 6, 1996;
e) That the agreed monthly amortization of Fifty Thousand Pesos
(P50,000.00), principal and interest included, must be paid to theVendors, without need of prior demand, on or before May 6,
1996, and every month thereafter. Failure to pay the monthly
amortization on time, a penalty equal to Five Percent (5%) of the
amount due shall be imposed, until the account is updated. In
addition, a penalty of One Hundred Pesos per day shall be
imposed until the account is updated;
f) That after receipt of the full payment, the Vendors shall executethe necessary Absolute Deed of Sale covering the house and lot
mentioned above x x x4
Respondent made the following payments, to wit: (1) P500,000.00 by
way of downpayment; (2) P500,000.00 on May 30, 1996; (3)
P500,000.00 paid on January 22, 1997; and (4) P500,000.00 bounced
check dated June 30, 1997 which was subsequently replaced by
another check of the same amount, dated July 7, 1997. Respondentwas, therefore, able to pay a total of P2,000,000.00.
5
Before respondent issued the P500,000.00 replacement check, she told
petitioners that based on the computation of her accountant as of July
6, 1997, her unpaid obligation which includes interests and penalties
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt4http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt4http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt4 -
8/13/2019 ObliCon - Cases - 1240 to 1258
22/159
-
8/13/2019 ObliCon - Cases - 1240 to 1258
23/159
2
3
b) P100,000 plus P2,000 per court appearance as attorneys fees.
SO ORDERED.15
The RTC noted that the evidence formally offered by petitioners havenot actually been marked as none of the markings were recorded. Thus,
it found no basis to grant their claims, especially since the amount
claimed in the complaint is different from that testified to. The court,
on the other hand, granted respondents counterclaim.16
On appeal, the CA affirmed the decision with modification by deleting
the award of moral damages and attorneys fees in favor of
respondent.
17
It agreed with the RTC that the evidence presented bypetitioners cannot be given credence in determining the correct liability
of respondent.18
Considering that the purchase price had been fully
paid by respondent ahead of the scheduled date agreed upon by the
parties, petitioners were not awarded the excessive penalties and
interests.19
The CA thus maintained that respondents liability is limited
to P200,000.00 as claimed by respondent and originally admitted by
petitioners.20
This amount, however, had already been paid by
respondent and received by petitioners representative.21
Finally, theCA pointed out that the RTC did not explain in its decision why moral
damages and attorneys fees were awarded. Considering also that bad
faith cannot be attributed to petitioners when they instituted the
collection suit, the CA deleted the grant of their counterclaims.22
Aggrieved, petitioners come before the Court in this petition for review
on certiorari under Rule 45 of the Rules of Court raising the following
errors:
I.
"THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON
THE GROUND THAT PLAINTIFF FAILED TO FORMALLY OFFER THEIR
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt15http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt15http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt15http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt16http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt16http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt16http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt16http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt15 -
8/13/2019 ObliCon - Cases - 1240 to 1258
24/159
2
4
EVIDENCE AS DEFENDANT JUDICIALLY ADMITTED IN HER ANSWER
WITH COMPULS[O]RY COUNTERCLAIM HER OUTSTANDING
OBLIGATION STILL DUE TO PLAINTIFFS AND NEED NO PROOF.
II.
THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT FOR
ALLEGED FAILURE OF PLAINTIFFS TO PRESENT COMPUTATION OF
THE AMOUNT BEING CLAIMED AS DEFENDANT JUDICIALLY
ADMITTED HAVING RECEIVED THE DEMAND LETTER DATED
OCTOBER 22, 1997 WITH COMPUTATION OF THE BALANCE DUE.
III.
THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE
GROUND THAT THE DEFENDANT FULLY PAID THE CLAIMS OF
PLAINTIFFS BASED ON THE ALLEGED RECEIPT OF PAYMENT BY
ADORACION LOSLOSO FROM ANA MARIE CONCEPCION
MAGLASANG WHICH HAS NOTHING TO DO WITH THE JUDICIALLY
ADMITTED OBLIGATION OF APPELLEE."23
Invoking the rule on judicial admission, petitioners insist that
respondent admitted in her Answer with Compulsory Counterclaim that
she had paid only a total amount of P2 million and that her unpaid
obligation amounts to P200,000.00.24
They thus maintain that the RTC
and the CA erred in concluding that said amount had already been paid
by respondent. Petitioners add that respondents total liability as
shown in the latters statement of account was erroneously computed
for failure to compound the monthly interest agreed
upon.25Petitioners also claim that the RTC and the CA erred in giving
credence to the receipt presented by respondent to show that her
unpaid obligation had already been paid having been allegedly given to
a person who was not armed with authority to receive payment.26
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt23http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt23http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt23 -
8/13/2019 ObliCon - Cases - 1240 to 1258
25/159
2
5
The petition is without merit.
It is undisputed that the parties entered into a contract to sell a house
and lot for a total consideration of P2 million. Considering that the
property was payable in installment, they likewise agreed on thepayment of interest as well as penalty in case of default. It is likewise
settled that respondent was able to pay the total purchase price of P2
million ahead of the agreed term. Afterwhich, they agreed on the
remaining balance by way of interest and penalties which is
P200,000.00. Considering that the term of payment was not strictly
followed and the purchase price had already been fully paid by
respondent, the latter presented to petitioners her computation of her
liabilities for interests and penalties which was agreed to by petitioners.Petitioners also manifested their conformity to the statement of
account prepared by respondent.
In paragraph (9) of petitioners Complaint, they stated that:
9) That the Plaintiffs answered the Defendant as follows: "if P200,000 is
the correct balance, it is okay with us." x x x.27
But in paragraph (17) thereof, petitioners claimed that defendants
outstanding liability as of November 6, 1997 was
P487,384.15.28
Different amounts, however, were claimed in their
demand letter and in their testimony in court.
With the foregoing factual antecedents, petitioners cannot be
permitted to assert a different computation of the correct amount of
respondents liability.
It is noteworthy that in answer to petitioners claim of her purported
unpaid obligation, respondent admitted in her Answer with Compulsory
Counterclaim that she paid a total amount of P2 million representing
the purchase price of the subject house and lot. She then manifested to
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt27 -
8/13/2019 ObliCon - Cases - 1240 to 1258
26/159
2
6
petitioners and conformed to by respondent that her only balance was
P200,000.00. Nowhere in her Answer did she allege the defense of
payment. However, during the presentation of her evidence,
respondent submitted a receipt to prove that she had already paid the
remaining balance. Both the RTC and the CA concluded that respondent
had already paid the remaining balance of P200,000.00. Petitioners
now assail this, insisting that the court should have maintained the
judicial admissions of respondent in her Answer with Compulsory
Counterclaim, especially as to their agreed stipulations on interests and
penalties as well as the existence of outstanding obligations.
It is, thus, necessary to discuss the effect of failure of respondent to
plead payment of its obligations.
Section 1, Rule 9 of the Rules of Court states that "defenses and
objections not pleaded either in a motion to dismiss or in the answer
are deemed waived." Hence, respondent should have been barred from
raising the defense of payment of the unpaid P200,000.00. However,
Section 5, Rule 10 of the Rules of Court allows the amendment to
conform to or authorize presentation of evidence, to wit:
Section 5. Amendment to conform to or authorize presentation of
evidence.When issues not raised by the pleadings are tried with the
express or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings. Such amendment
of the pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure to amend does not
affect the result of the trial of these issues. If evidence is objected to atthe trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and shall
do so with liberality if the presentation of the merits of the action and
the ends of substantial justice will be subserved thereby. The court may
grant a continuance to enable the amendment to be made.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
27/159
2
7
The foregoing provision envisions two scenarios, namely, when
evidence is introduced in an issue not alleged in the pleadings and no
objection was interjected; and when evidence is offered on an issue not
alleged in the pleadings but this time an objection was raised.29
When
the issue is tried without the objection of the parties, it should be
treated in all respects as if it had been raised in the pleadings.30
On the
other hand, when there is an objection, the evidence may be admitted
where its admission will not prejudice him.31
Thus, while respondent judicially admitted in her Answer that she only
paid P2 million and that she still owed petitioners P200,000.00,
respondent claimed later and, in fact, submitted an evidence to show
that she already paid the whole amount of her unpaid obligation. It isnoteworthy that when respondent presented the evidence of payment,
petitioners did not object thereto. When the receipt was formally
offered as evidence, petitioners did not manifest their objection to the
admissibility of said document on the ground that payment was not an
issue. Apparently, petitioners only denied receipt of said payment and
assailed the authority of Losloso to receive payment. Since there was
an implied consent on the part of petitioners to try the issue of
payment, even if no motion was filed and no amendment of the
pleading has been ordered,32
the RTC cannot be faulted for admitting
respondents testimonial and documentary evidence to prove
payment.33
As stressed by the Court in Royal Cargo Corporation v. DFS Sports
Unlimited, Inc.,34
The failure of a party to amend a pleading to conform to the evidenceadduced during trial does not preclude adjudication by the court on the
basis of such evidence which may embody new issues not raised in the
pleadings. x x x Although, the pleading may not have been amended to
conform to the evidence submitted during trial, judgment may
nonetheless be rendered, not simply on the basis of the issues alleged
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt29 -
8/13/2019 ObliCon - Cases - 1240 to 1258
28/159
2
8
but also on the issues discussed and the assertions of fact proved in the
course of the trial. The court may treat the pleading as if it had been
amended to conform to the evidence, although it had not been actually
amended. x x x Clearly, a court may rule and render judgment on the
basis of the evidence before it even though the relevant pleading had
not been previously amended, so long as no surprise or prejudice is
thereby caused to the adverse party. Put a little differently, so long as
the basic requirements of fair play had been met, as where the litigants
were given full opportunity to support their respective contentions and
to object to or refute each other's evidence, the court may validly treat
the pleadings as if they had been amended to conform to the evidence
and proceed to adjudicate on the basis of all the evidence before it.
(Emphasis supplied)35
To be sure, petitioners were given ample opportunity to refute the fact
of and present evidence to prove payment.
With the evidence presented by the contending parties, the more
important question to resolve is whether or not respondents obligation
had already been extinguished by payment.
We rule in the affirmative as aptly held by the RTC and the CA.
Respondents obligation consists of payment of a sum of money. In
order to extinguish said obligation, payment should be made to the
proper person as set forth in Article 1240 of the Civil Code, to wit:
Article 1240. Payment shall be made to the person in whose favor the
obligation has been constituted, or his successor in interest, or any
person authorized to receive it. (Emphasis supplied)
The Court explained in Cambroon v. City of Butuan,36
cited in Republic
v. De Guzman,37
to whom payment should be made in order to
extinguish an obligation:
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt35 -
8/13/2019 ObliCon - Cases - 1240 to 1258
29/159
2
9
Payment made by the debtor to the person of the creditor or to one
authorized by him or by the law to receive it extinguishes the
obligation. When payment is made to the wrong party, however, the
obligation is not extinguished as to the creditor who is without fault or
negligence even if the debtor acted in utmost good faith and by mistake
as to the person of the creditor or through error induced by fraud of a
third person.
In general, a payment in order to be effective to discharge an
obligation, must be made to the proper person. Thus, payment must be
made to the obligee himself or to an agent having authority, express or
implied, to receive the particular payment. Payment made to one
having apparent authority to receive the money will, as a rule, betreated as though actual authority had been given for its receipt.
Likewise, if payment is made to one who by law is authorized to act for
the creditor, it will work a discharge. The receipt of money due on a
judgment by an officer authorized by law to accept it will, therefore,
satisfy the debt.38
Admittedly, payment of the remaining balance of P200,000.00 was not
made to the creditors themselves. Rather, it was allegedly made to acertain Losloso. Respondent claims that Losloso was the authorized
agent of petitioners, but the latter dispute it.
Loslosos authority to receive payment was embodied in petitioners
Letter39
addressed to respondent, dated August 7, 1997, where they
informed respondent of the amounts they advanced for the payment of
the 1997 real estate taxes. In said letter, petitioners reminded
respondent of her remaining balance, together with the amount oftaxes paid. Taking into consideration the busy schedule of respondent,
petitioners advised the latter to leave the payment to a certain "Dori"
who admittedly is Losloso, or to her trusted helper. This is an express
authority given to Losloso to receive payment.
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt38http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt38http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt38http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt39http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt39http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt39http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt39http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt38 -
8/13/2019 ObliCon - Cases - 1240 to 1258
30/159
3
0
Moreover, as correctly held by the CA:
Furthermore, that Adoracion Losloso was indeed an agent of the
appellant spouses is borne out by the following admissions of plaintiff-
appellant Atty. Miniano dela Cruz, to wit:
Q: You would agree with me that you have authorized this Doiry
Losloso to receive payment of whatever balance is due you coming
from Ana Marie Concepcion, that is correct?
A: In one or two times but not total authority, sir.
Q: Yes, but you have authorized her to receive payment?
A: One or two times, yes x x x. (TSN, June 28, 1999, pp. 16-17)40
Thus, as shown in the receipt signed by petitioners agent and pursuant
to the authority granted by petitioners to Losloso, payment made to
the latter is deemed payment to petitioners. We find no reason to
depart from the RTC and the CA conclusion that payment had already
been made and that it extinguished respondent's obligations.
WHEREFORE, premises considered, the petition is DENIED for lack of
merit. The Court of Appeals Decision dated March 31, 2005 and
Resolution dated May 24, 2006 in CA-G.R. CV No. 83030, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTAAssociate Justice
http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt40http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt40http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt40http://www.lawphil.net/judjuris/juri2012/oct2012/gr_172825_2012.html#fnt40 -
8/13/2019 ObliCon - Cases - 1240 to 1258
31/159
3
1
Republic of the Philippines
SUPREME COURTManila
THIRD DIVISION
G.R. No. 72703 November 13, 1992
CALTEX (PHILIPPINES), INC., petitioner,vs.
THE INTERMEDIATE APPELLATE COURT and ASIA PACIFIC AIRWAYS,INC., respondents.
BIDIN,J.:
This is a petition for certiorari seeking the annulment of the decision
dated August 27,1985 of the then Intermediate Appellate Court in CA-
G.R. No. 02684, which reversed the judgment of the trial court andordered petitioner to return the amount of P510, 550.63 to private
respondent plus interest at the legal rate of 14%per annum.
The facts of the case are as follows:
On January 12, 1978, private respondent Asia Pacific Airways Inc.,
entered into an agreement with petitioner Caltex (Philippines) Inc.,
whereby petitioner agreed to supply private respondent's aviation fuel
requirements for two (2) years, covering the period from January 1,
1978 until December 31, 1979. Pursuant thereto, petitioner supplied
private respondent's fuel supply requirements. As of June 30, 1980,
private respondents had an outstanding obligation to petitioner in the
total amount of P4,072,682.13, representing the unpaid price of the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
32/159
3
2
fuel supplied. To settle this outstanding obligation, private respondent
executed a Deed of Assignment dated July 31, 1980, wherein it
assigned to petitioner its receivables or refunds of Special Fund Import
Payments from National Treasury of the Philippines to be applied as
payment of the amount of P4,072,682.13 which private respondent
owed to petitioner. On February 12, 1981, pursuant to the Deed of
Assignment, Treasury Warrant No. B04708613 in the amount of
P5,475,294.00 representing the refund to respondent of Special Fund
Import Payment on its fuel purchases was issued by the National
Treasury in favor of the petitioner. Four days later, on February 16,
1981, private respondent, having learned that the amount remitted to
petitioner exceeded the amount covered by the Deed of Assignment,
wrote a letter to petitioner, requesting a refund in the amount of
P900,000.00 plus in favor of private respondent. The latter, believing
that it was entitled to a larger amount by way of refund, wrote a
petitioner anew, demanding the refund of the remaining amount. In
response thereto, petitioner informed private respondent that the
amount not returned (P510,550.63) represented interest and service
charges at the rate of 18%per annum on the unpaid and overdue
account of respondent from June 1, 1980 to July 31, 1981.
Thus, on September 13, 1982, private respondent filed a complaint
against petitioner in the Regional Trial Court of Manila, to collect the
sum of P510,550.63.00.
Petitioner (defendant in the trial court) filed its answer, reiterating that
the amount not returned represented interest and service charges on
the unpaid and overdue account at the rate of 18%per annum. It was
further alleged that the collection of said interest and service charges is
sanctioned by law, and is in accordance with the terms and conditions
of the sale of petroleum products to respondent, which was made with
the conformity of said private respondent who had accepted the
validity of said interest and service charges.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
33/159
3
3
On November 7, 1983, the trial court rendered its decision dismissing
the complaint, as well as the counterclaim filed by defendant therein.
Private respondent (plaintiff) appealed to the Intermediate Appellate
Court (IAC). On August 27, 1985, a decision was rendered by the saidappellate court reversing the decision of the trial court, and ordering
petitioner to return the amount of P510,550.63 to private respondent.
Counsel for petitioner received a copy of the appellate court's decision
on September 6, 1985. On September 20, 1985 or 14 days after receipt
of the aforesaid decision, an Urgent Motion for extension of five days
within which to file a motion for reconsideration was filed by
petitioner. On September 26, 1985, the Motion for Reconsiderationwas filed. The following day, petitioner filed a motion to set the motion
for reconsideration for hearing.
In a Resolution dated October 24, 1985, the appellate court denied the
aforesaid three motions. The first motion praying for an extension of
five days within which to file a motion for reconsideration was denied
by the appellate courtciting the new ruling of the Supreme Court in
Habaluyas Enterprises Inc. vs. Japzon (138 SCRA 46 [1985]) as authority.The appellate court, following said ruling, held that the 15-day period
for filing a motion for reconsideration cannot be extended. Thus, the
motion for reconsideration filed on September 26, 1985 was stricken
from the record, having been filed beyond the non-extensible 15-day
reglementary period. The third motion was likewise denied for being
moot and academic.
On November 4, 1985, the prevailing party (respondent herein) filedUrgent Motion for Entry of Judgment. Two days latter, or on November
6, 1985, the petitioner filed a Motion for Reconsideration of the
Resolution dated October 24, 1985.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
34/159
3
4
The appellate court in a Resolution dated November 12, 1985 granted
the motion for entry of judgment filed by private respondent. It
directed the entry of judgment and ordered the remand of the records
of the case to the court of origin for execution.
On November 14, 1985, petitioner, without waiting for the resolution
of the appellate court in the urgent motion for reconsideration it filed
on November 6, 1985, filed the instant petition to annul and set aside
the resolution of the appellate court dated October 24, 1985 which
denied the Motion for Reconsideration of its decision dated August 27,
1985.
In a motion dated November 21, 1985, petitioner prayed of theissuance of temporary restraining order to enjoin the appellate court
from remanding the records of the case for execution of the judgment.
The petitioner also filed a Supplement to Petition for Certiorari, dated
November 21, 1985.
In a Resolution dated November 27, 1985, this Court, acting on the
petition, required private respondent to file its Comment; granted the
prayer of the petitioner in his urgent motion, and a temporaryrestraining order was issued enjoining the appellate court from
remanding the records of the case for execution of judgment.
Private respondent filed its COMMENT dated December 14, 1985.
In a Resolution dated January 27, 1986, the Court resolved to give due
course to the petition, and required the parties to submit their
memoranda. In compliance with the said Resolution, the parties filed
their respective memoranda.
On August 15, 1986, petitioner filed a Motion to Remand Records to
the Court of Appeals in view of the resolution of this Court dated May
30, 1986 in the Habaluyas case which considered and set aside its
-
8/13/2019 ObliCon - Cases - 1240 to 1258
35/159
3
5
decision dated August 5, 1985 by giving it prospective application
beginning one month after the promulgation of the said resolution. This
motion was opposed by private respondent. On September 22, 1986,
petitioner filed its Reply to Opposition to which private respondent
filed its rejoinder. In a Resolution dated December 3, 1986, the motion
to remand records was denied.
Petitioner's Brief raised six (6) assignment of errors, to wit:
I.
THE IAC ERRED IN APPLYING THE NEW POLICY OF NOT
GRANTING ANY EXTENSION OF TIME TO FILE MOTION FORRECONSIDERATION.
II.
THE IAC ERRED IN RULING THAT THE OBLIGATION OF
RESPONDENT WAS LIMITED TO P4,072,682.13
NOTWITHSTANDING THAT FACT THAT THE DEED OF
ASSIGNMENT (THE CONTRACT SUED UPON) ITSELF
EXPRESSLY AND REPEATEDLY SPEAKS OF RESPONDENT'S
OBLIGATION AS "THE AMOUNT OF P4,072,682.13 AS JUNE
30, 1980 PLUS APPLICABLE INTEREST CHARGES ON
OVERDUE ACCOUNT AND OTHER AVTURBO FUEL LIFTING
AND DELIVERIES THAT ASSIGNOR MAY FROM TIME TO TIME
RECEIVE FROM ASSIGNEE."
III.
THE IAC ERRED IN RULING THAT THE DEED OF ASSIGNMENT
SATISFIES THE REQUISITES OF DATION IN PAYMENT (WHICH
HAS THE EFFECT OF IMMEDIATE EXTINGUISHMENT OF THE
OBLIGATION) DESPITE THE FACT THAT SAID DEED OF
ASSIGNMENT (1) COVERS FUTURE OBLIGATION FOR
-
8/13/2019 ObliCon - Cases - 1240 to 1258
36/159
3
6
"APPLICABLE INTEREST CHARGES ON OVER DUE ACCOUNT
AND OTHER AVTURBO FUEL LIFTING THE DELIVERIES THAT
ASSIGNOR MAY FROM TIME TO TIME RECEIVE FROM
ASSIGNEES" AND (2) INCLUDES AN EXPRESS RESERVATION
BY ASSIGNEE TO DEMAND FULL PAYMENT OF THE
OBLIGATIONS OF THE ASSIGNOR "IN CASE OF
UNREASONABLE DELAY OR NON-RECEIPT OF ASSIGNEE OF
THE AFOREMENTIONED FUNDS AND/OR REFUND OF
SPECIAL FUND IMPORT PAYMENT FROM THE GOVERNMENT
DUE TO ANY CAUSE OR REASON WHATSOEVER.
IV.
THE IAC ERRED IN FAILING TO TAKE INTO ACCOUNT THE
CONTEMPORANEOUS AND SUBSEQUENT ACTS OF THE
PARTIES WHICH ALSO CLEARLY SHOW THAT THEY DID NOT
INTEND THE DEED OF ASSIGNMENT TO HAVE EFFECT OF
DATION IN PAYMENT.
V.
IF THE DEED OF ASSIGNMENT HAD THE EFFECT OF A DATION
IN PAYMENT, THEN THE IAC ERRED IN NOT RULING THAT
PETITIONER HAS A RIGHT TO RETAIN THE ENTIRE CREDIT
ASSIGNED TO IT IN LIEU OF PAYMENT OF RESPONDENT'S
OBLIGATION INSTEAD OF BEING REQUIRED TO RETURN
PORTION OF THE CREDIT WHICH IS CLAIMED TO BE IN
EXCESS OF RESPONDENT'S OBLIGATION.
VI.
ASSUMING THAT PETITIONER IS LIABLE TO MAKE A RETURN
OF A PORTION OF THE CREDIT ASSIGNED, THE IAC ERRED IN
AWARDING "INTEREST AT THE LEGAL RATE OF 14%PER
-
8/13/2019 ObliCon - Cases - 1240 to 1258
37/159
3
7
ANNUMFROM THE FILING OF THE LEGAL OF THE
COMPLAINT."
We find merit in the instant petition.
The two vital issues presented to the Court for resolution are, as
follows:
1. Whether or not the Urgent Motion for Extension of Time to File a
Motion for Reconsideration filed by petitioner on September 20, 1985,
as well as the Motion for Reconsideration filed on September 26, 1985
(within the period of extension prayed for), may be validly granted; and
2. Whether or not the Deed of Assignment entered into by the parties
herein on July 31, 1980 constituted dacion en pago, as ruled by the
appellate court, such that the obligation is totally extinguished, hence
after said date, no interest and service charges could anymore be
imposed on private respondent, so that petitioner was not legally
authorized to deduct the amount of P510,550.63 as interest and service
charges on the unpaid and overdue accounts of private respondent.
Anent the first issue, we rule in the affirmative.
We held in the case of Habaluyas Enterprises, Inc., et. al. vs. Japson et.
al. (138 SCRA 46 [1985], promulgated August 5, 1985), that the "15-day
period for appealing or for filing a motion for reconsideration cannot be
extended". Subsequently, the Court, acting on respondent's motion for
reconsideration in the same entitled case (142 SCRA 208 [1986]),
restated and clarified the rule on this point for the guidance of the
Bench and Bar by giving the rule prospective application in itsresolution dated May 30, 1986;
After considering the able arguments of counsels for
petitioners and respondents, the Court resolved that the
interest of justice would be better served if the ruling in the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
38/159
3
8
original decision were applied prospectively from the time
herein stated. The reason is that it would be unfair to
deprive parties of the right to appeal simply because they
availed themselves of a procedure which was not expressly
prohibited or allowed by the law or the Rules. On the
otherhand, a motion for new trial or reconsideration is not a
pre-requisite to an appeal, a petition for review or a petition
for review oncertiorari,and since the purpose of the
amendments above referred to is to expedite the final
disposition of cases, a strict but prospective application of
the said ruling is in order. Hence, for the guidance of the
Bench and Bar, the Court restates and clarifies the rules on
this point, as follows.
1.) Beginning one month after the promulgation of this
Resolution, the rule shall be strictly enforced that no motion
for extension of time to file a motion for new trial or
reconsideration may be filed with the Metropolitan or
Municipal Trial Courts, the Regional Trial Courts, and the
Intermediate Appellate Court. Such a motion may be filed
only in cases pending with the Supreme Court as the court
of last resort, which may in its sound discretion either grant
or deny the extension requested.
In Singh vs. IAC, (148 SCRA 277 [1987]), this Court applying the
aforesaid ruling in the Habaluyas case, held.
In other words, there is one month grace period from the
promulgation on May 30, 1986, of the Court's Resolution inthe clarificatory Habaluyas case, or up to June 30, 1986,
within which the rule barring extensions of time to file
motions for reconsideration is, as yet, not strictly
enforceable (Bayaca vs. IAC, G.R. No. 78424, September 15,
1986).
-
8/13/2019 ObliCon - Cases - 1240 to 1258
39/159
-
8/13/2019 ObliCon - Cases - 1240 to 1258
40/159
4
0
From the above, it is clear that a dation in payment does not
necessarily mean total extinguishment of the obligation. The obligation
is totally extinguished only when the parties, by agreement, express or
implied, or by their silence, consider the thing as equivalent to the
obligation.
In the instant case, the then Intermediate Appellate Court failed to take
into account the following express recitals of the Deed of Assignment
That Whereas,ASSIGNOR has an outstanding obligation with
ASSIGNEE in the amount of P4,072,682.13 as of June 30,
1980, plus any applicable interest on overdue account.(p. 2,Deed of Assignment)
Now therefore in consideration of the foregoing premises,
ASSIGNOR by virtue of these presents, does hereby
irrevocably assign and transfer unto ASSIGNEE any and all
funds and/or Refund of Special Fund Payments, including all
its rights and benefits accruing out of the same, that
ASSIGNOR might be entitled to, by virtue of and pursuant tothe decision in BOE Case No. 80-123, in payment of
ASSIGNOR's outstanding obligation plus any applicable
interest charges on overdue account and other avturbo fuel
lifting and deliveries that ASSIGNOR may from time to time
receive from the ASSIGNEE, and ASSIGNEE does hereby
accepts such assignment in its favor.(p. 2, Deed of
Assignment) (Emphasis supplied)
Hence, it could easily be seen that the Deed of Assignment speaks of
three (3) obligations (1) the outstanding obligation of P4,072,682.13
as of June 30, 1980; (2) the applicable interest charges on overdue
accounts; and (3) the other avturbo fuel lifting and deliveries that
assignor (private respondent) may from time to time receive from
-
8/13/2019 ObliCon - Cases - 1240 to 1258
41/159
4
1
assignee (Petitioner). As aptly argued by petitioner, if it were the
intention of the parties to limit or fix respondent's obligation to
P4,072.682.13; they should have so stated and there would have been
no need for them to qualify the statement of said amount with the
clause "as of June 30, 1980 plus any applicable interest charges on
overdue account" and the clause "and other avturbo fuel lifting and
deliveries that ASSIGNOR may from time to time receive from the
ASSIGNEE". The terms of the Deed of Assignment being clear, the literal
meaning of its stipulations should control (Art. 1370, Civil Code). In the
construction of an instrument where there are several provisions or
particulars, such a construction is, if possible, to be adopted as will give
effect to all (Rule 130, Sec. 9, Rules of Court).
Likewise, the then Intermediate Appellate Court failed to take into
consideration the subsequent acts of the parties which clearly show
that they did not intend the Deed of Assignment to totally extinguish
the obligation (1) After the execution of the Deed of Assignment on
July 31, 1980, petitioner continued to charge respondent with interest
on its overdue account up to January 31, 1981 (Annexes "H", "I", "J"
and "K" of the Partial Stipulation of Facts). This was pursuant to the
Deed of Assignment which provides for respondent's obligation for
"applicable interest charges on overdue account." The charges for
interest were made every month and not once did respondent question
or take exception to the interest; and (2) In its letter of February 16,
1981 (Annex "J", Partial Stipulation of Facts), respondent addressed the
following request to petitioner;
Moreover, we would also like to request for a consideration
in the following
1. Interest charges be limited up to December 31, 1980 only;
and
2. Reduction of 2% of 18% interest rate p.a.
-
8/13/2019 ObliCon - Cases - 1240 to 1258
42/159
-
8/13/2019 ObliCon - Cases - 1240 to 1258
43/159
4
3
Republic of the Philippines
SUPREME COURTManila
THIRD DIVISION
G.R. No. L-46658 May 13, 1991
PHILIPPINE NATIONAL BANK, petitioner,vs.
HON. GREGORIO G. PINEDA, in his capacity as Presiding Judge of theCourt of First Instance of Rizal, Branch XXI and TAYABAS CEMENTCOMPANY, INC., respondents.
The Chief Legal Counsel for petitioner.
Ortille Law Office for private respondent.
FERNAN, C.J.:p
In this petition for certiorari, petitioner Philippine National Bank (PNB)
seeks to annul and set aside the orders dated March 4, 1977 and May
31, 1977 rendered in Civil Case No. 244221of the Court of First
Instance of Rizal, Branch XXI, respectively granting private respondent
Tayabas Cement Company, Inc.'s application for a writ of preliminary
injunction to enjoin the foreclosure sale of certain properties in Quezon
City and Negros Occidental and denying petitioner's motion for
reconsideration thereof.
In 1963, Ignacio Arroyo, married to Lourdes Tuason Arroyo (the Arroyo
Spouses), obtained a loan of P580,000.00 from petitioner bank to
purchase 60% of the subscribed capital stock, and thereby acquire the
-
8/13/2019 ObliCon - Cases - 1240 to 1258
44/159
4
4
controlling interest of private respondent Tayabas Cement Company,
Inc. (TCC).2As security for said loan, the spouses Arroyo executed a
real estate mortgage over a parcel of land covered by Transfer
Certificate of Title No. 55323 of the Register of Deeds of Quezon City
known as the La Vista property.
Thereafter, TCC filed with petitioner bank an application and
agreement for the establishment of an eight (8) year deferred letter of
credit (L/C) for $7,000,000.00 in favor of Toyo Menka Kaisha, Ltd. of
Tokyo, Japan, to cover the importation of a cement plant machinery
and equipment.
Upon approval of said application and opening of an L/C by PNB in favorof Toyo Menka Kaisha, Ltd. for the account of TCC, the Arroyo spouses
executed the following documents to secure this loan accommodation:
Surety Agreement dated August 5, 19643and Covenant dated August
6, 1964.4
The imported cement plant machinery and equipment arrived from
Japan and were released to TCC under a trust receipt agreement.
Subsequently, Toyo Menka Kaisha, Ltd. made the correspondingdrawings against the L/C as scheduled. TCC, however, failed to remit
and/or pay the corresponding amount covered by the drawings. Thus,
on May 19, 1968, pursuant to the trust receipt agreement, PNB notified
TCC of its intention to repossess, as it later did, the imported machinery
and equipment for failure of TCC to settle its obligations under the
L/C.5
In the meantime, the personal accounts of the spouses Arroyo, whichincluded another loan of P160,000.00 secured by a real estate
mortgage over parcels of agricultural land known as Hacienda Bacon
located in Isabela, Negros Occ