SECOND DIVISION
[G.R. No. 119707.
November 29, 2001]
VERONICA PADILLO, petitioner, vs. COURT OF APPEALS and TOMAS AVERIA, JR., respondents.
D E C I S I O N
DE LEON, JR., J.:
Before us is a petition for review
on certiorari of the Decision[1] of the Court of Appeals dated November 22, 1994 in
CA-G.R. CV No. 40142 reversing the Decision[2] dated March 31, 1992 of the Regional Trial Court of
Lucena City, Branch 54 in Civil Case No. 9114 on the ground of res judicata.
Civil Case No. 9114, which found
its way to this Court via the instant petition, is a petition[3] for declaratory relief and damages initiated by
petitioner Veronica Padillo[4] on December 14, 1983. In the petition filed against respondent Tomas Averia, Jr. and
one Beato Casilang, petitioner Padillo alleged that she is the absolute owner
of a Two Hundred Fifty-One (251) square meter parcel of land with improvements
thereon located in Quezon Avenue, Lucena City, Quezon Province, covered and
described in Transfer Certificate of Title (TCT) No. T-9863, which she
purchased from Marina M. de Vera-Quicho and Margarita de Vera. Petitioner ascribed fault upon Averia and
Casilang with unlawful refusal to turn over the property in her favor; and that
respondent Averia even instituted Civil Case No. 1690-G,[5] a suit for rescission of two (2) deeds solely for
harassment and dilatory purposes although the suit actually established
petitioner’s right of ownership over the subject property.
Petitioner Padillo prayed for the
issuance of an injunctive writ to place her in the possession and use of her
said property, and prohibiting respondents from disturbing the same; and
ultimately, that judgment be rendered ordering respondent Averia and Casilang
to pay jointly and severally to petitioner Padillo: (a) One Hundred Fifty
Thousand Pesos (P150,000.00) annual unrealized income for the use of her
said property from January 4, 1982, (b) moral and exemplary damages the amount
of which she leaves to the court for proper evaluation and (c) attorney’s fees
of Eighty Thousand Pesos (P80,000.00) plus Six Hundred Pesos (P600.00)
per appearance in court.
In his Answer,[6] Casilang specifically denied the material allegations
of the petition. He alleged that as early as June 1, 1982, he vacated the
subject property and, thus, the case against him should be dismissed.
On March 2, 1984, respondent
Averia filed his Answer with Counterclaim and Motion to Dismiss[7] wherein he invoked the decision rendered in Civil
Case No. 1620-G, a suit for specific performance against Marina M. de
Vera-Quicho. He further raised the
defenses of litis pendencia, laches, estoppel, res judicata and
lack of cause of action, and prayed for the dismissal of the petition as well
as the grant of his counterclaims for damages.
It appears that prior to the
institution of Civil Case No. 9114, there were already three (3) actions which
involved the said property, namely, Civil Case No. 1620-G, M.C. No. 374-82, and
Civil Case No. 1690-G.
Civil Case No. 1620-G was
instituted by respondent Averia against Marina M. de Vera-Quicho and the Register
of Deeds of Lucena City for specific performance and/or damages which involved
the lot subject of the sale. A
subsequent decision dated June 2, 1983 rendered by the Regional Trial Court of
Gumaca, Quezon, Branch 62 in said Civil Case No. 1620-G ordered Marina M. de
Vera-Quicho to execute the necessary documents over the property covered by
said Transfer Certificate of Title (TCT) No. T-9863 and enjoined the Register
of Deeds of Lucena City to desist from entering any encumbrance or transaction
on said certificate of title and/or cancel the same except in favor of
respondent Averia.[8] The said decision became final and executory as no
motion for reconsideration or appeal was filed therefrom.[9]
M.C. No. 374-82,[10] was instituted by petitioner Padillo on July 6,
1982 to compel the Register of Deeds of
Lucena City to register the deed of sale dated February 10, 1982 wherein
Margarita de Vera[11]sold to petitioner Padillo her one-half (1/2)
pro-indiviso share of the lot and the building erected thereon, covered by TCT
No. T-9863, considering the refusal of the Register of Deeds to register said
deed of sale in view of a restraining order issued in Civil Case No.
1620-G. The petition to register the
deed was opposed by respondent Averia.
On July 7, 1983, during the
pendency of M.C. No. 374-82, Civil Case No. 1690-G was instituted by respondent
Averia against spouses Edilberto de Mesa and petitioner Padillo.[12] The said case is a complaint for rescission of two
(2) deeds of sale, namely: (a) the “Kasulatan ng Bilihan na may Pasubali” dated
January 5, 1982 wherein Marina M. de Vera-Quicho sold to petitioner Padillo her
one-half (1/2) pro-indiviso share over lot together with the house
thereon, subject of TCT No. T-9863, which was registered and annotated at the
back of said TCT on January 11, 1982 per Entry No. 54967, and (b) the deed of
sale dated February 10, 1982 subject of M.C. No. 374-82. Respondent Averia claimed ownership of the
same lot subject of TCT No. T-9863 by virtue of an unregistered contract to
sell dated January 5, 1982 executed in his favor by Marina M. de Vera-Quicho.[13] Petitioner Padillo sought the dismissal of the
amended complaint.[14] In an Order dated September 30, 1983, Civil Case No.
1690-G was dismissed by Branch 61 of
the RTC of Gumaca, Quezon Province for improper venue.[15] Respondent Averia interposed an appeal with the Court
of Appeals.[16]
In the meantime, a decision dated
September 23, 1983 was rendered in M.C. No. 374-82 wherein Branch 57 of the
RTC, Lucena City ordered the Register of Deeds to register the deed of sale
dated February 10, 1982.[17] Respondent Averia assailed the decision in M.C. No.
374-82 via a petition for certiorari and prohibition in G.R. No. 65129[18]with the Supreme Court contending that the trial court
has no jurisdiction to order the registration of a deed of sale which is
opposed on the ground of an antecedent contract to sell. In a Decision dated December 29, 1986, the
Supreme Court declared that the trial court has jurisdiction since Section 2 of
Presidential Decree No. 1529 (Property Registration Decree) eliminated the
distinction between the general jurisdiction and the limited jurisdiction of
the Regional Trial Court acting as a cadastral court under Section 112 of Act 496 (Land Registration Act).[19] The Supreme Court set aside the September 23, 1983
decision of the trial court and ordered a new trial where all parties
interested in the case may appear and be given opportunity to be heard.
Pursuant to the Supreme Court’s
decision, a new trial was conducted in M.C. No. 374-82. Following notice and hearing in the new
trial, the trial court rendered a Decision dated May 5, 1988, which declared
petitioner Padillo as sole and exclusive owner of the property in question and
ordered the Register of Deeds of Lucena City to register the questioned deed of
sale in favor of petitioner Padillo.
The decision of the RTC in M.C.
No. 374-82 was appealed to the Court of Appeals[20]which rendered judgment on December 28, 1990
sustaining the decision of the trial court.
Dissatisfied, respondent Averia appealed to the Supreme Court via a
petition for review on certiorari which was denied in a Resolution dated June
17, 1991 for failure to show that the Court of Appeals had committed any
reversible error in the questioned judgment.[21] Respondent Averia sought reconsideration but the same
was denied in a Resolution dated August 26, 1991.[22] A subsequent motion for leave to file a second motion
for reconsideration was likewise denied on October 21, 1991.[23]
While the foregoing proceedings
ensued in M.C. No. 374-82, the trial court in Civil Case No. 9114, issued an
Order dated March 20, 1984 wherein it deferred the resolution of respondent
Averia’s motion to dismiss and ordered the case temporarily archived in view of
the pendency in the Court of Appeals of the appeal of respondent Averia in
Civil Case No. 1690-G.[24]
When the Court of Appeals
subsequently affirmed, in a decision dated September 16, 1987, the dismissal of
Civil Case No. 1690-G for improper venue,[25] the hearing in Civil Case No. 9114 was resumed on
November 19, 1987[26]but resolution of respondent Averia’s November 18,
1987 Motion to Dismiss[27]was deferred in view of the pendency of M.C. No.
374-82.[28]
When M.C. No. 374-82 was finally
resolved in the decision dated May 5, 1988, the trial court in an Order dated
June 1, 1988 proceeded to deny respondent Averia’s Motion to Dismiss and Motion
to Suspend Further Proceeding in Civil Case No. 9114.[29]
Thereafter, respondent Averia
assailed the denial of his motion to dismiss in a petition for certiorari
and prohibition, docketed as CA-G.R. SP No. 15356, before the Court of Appeals,
which on December 21, 1989 rendered a decision therein ordering the suspension
of the proceedings in Civil Case No. 9114 to await the final termination of
M.C. No. 374-82 then pending appeal with the Court of Appeals.[30] No appeal was filed therefrom, hence, the decision of
the appellate court in CA-G.R. SP No. 15356 became final.[31]
With the Supreme Court denying the
petition to challenge the Court of Appeal’s affirmance of the decision in M.C.
No. 374-82,[32] the trial court rendered the assailed March 31, 1992
Decision[33]in Civil Case No. 9114, which reads:
WHEREFORE, in view of the foregoing considerations, judgment is rendered ordering Tomas Averia, Jr. or any persons claiming any right from him, to vacate and surrender the possession of the lot covered by TCT No. T-9863 of the Registry of Deeds of Lucena City and the building erected thereon, to Veronica Padillo and to pay the latter the following amounts:
1) Unrealized income from the lot and building in the sum of P150,000.00 every year from January 5, 1982 until Tomas Averia vacates the same;
2) Attorneys fees in the sum of P107,000.00 plus P1,000.00 per appearance in the hearing of the case and litigation expenses of P10,000.00;
3) Moral damages of P50,000.00;
4) Exemplary damages of P20,000.00; and
5) Costs of suit.
SO ORDERED.
On appeal to the Court of Appeals,
the appellate court in CA-G.R. CV No. 40142 rendered its subject decision on
November 22, 1994 reversing the trial court based on the ground of res
judicata. The appellate court
ratiocinated:
The Court finds that res judicata bars the appellee’s claims. MC No. 374-82 resolved the case on the merits. Civil Case No. 1620-G, dismissed on account of improper venue, may not – strictly speaking – be considered an adjudication of the case on the merits. xxx
xxx xxx xxx
Not having claimed the damages she supposedly suffered despite the
new trial ordered for MC No. 374-82, and the clarification of the expanded
jurisdiction of the court a quo, the appellee is correctly perceived by
the appellant to have already lost her right to recover the same in the instant
suit. In finding the decision in the
former case a bar to the latter, the Court is guided by the long-standing rule
that a final judgment or order on the merits rendered by a court having
jurisdiction over the subject matter and the parties is conclusive in a
subsequent case between the same parties and their successors-in-interest
litigating upon the same thing and issue (Vencilao vs. Varo, 182 SCRA 492,
citing Sy Kao vs. Court of Appeals, 132 SCRA 302; Carandang vs. Venturanza, 133
SCRA 344; Catholic Vicar Apostolic of the Mountain Province vs. Court, 165 SCRA
515). It matters little that the
instant case is supposedly one for declaratory relief and damages, while the
former case is one originally for registration of the appellee’s documents of
title. A party cannot – by varying the
form of action or adopting a different method of presenting his case – escape
the operation of the principle that one and the same cause of action shall not
be twice litigated between the parties and their privies (Filipinas Investment
and Finance Corp. vs. Intermediate Appellate Court, 179 SCRA 506; Bugnay
Construction and Development Corp. vs. Laron, 176 SCRA 804). On the principle, moreover, that res
judicata bars not only the relitigation in a subsequent action of the
issues raised, passed upon and adjudicated, but also the ventilation in said
subsequent suit of any other issue which could have been raised in the first
but was not (Africa vs. NLRC, 170 SCRA 776), the court a quo clearly
erred in not holding the instant action to be barred by prior judgment.[34]
Disagreeing with the foregoing
disquisition, petitioner sought reconsideration of the same but it proved
unavailing inasmuch as petitioner’s motion for reconsideration[35] was denied in a Resolution[36]dated April 7, 1995.
The Court of Appeals, in resolving petitioner’s motion for
reconsideration in the negative, rendered the following pronouncements:
Contrary, however, to [Padillo’s] position, the Court’s application of the principle of res judicata was neither based nor in any way dependent on the inaccuracies emphasized in the motion and incidents she filed. While it is readily conceded that the Court was obviously referring to Civil Case No. 1690-G as that which the Gumaca Court dismissed on account of improper venue, the passage which states that the self-same was filed ahead of MC No. 374-82 is one actually quoted from the trial court’s March 31, 1992 decision which [Padillo] did not and still does not contest. Corrected though the Court may stand on these particulars, however, it bears emphasis that the instant case was determined to be barred by res judicata not so much on account of the decision rendered in Civil Case No. 1690-G but by that rendered in MC No. 374-82. It consequently matters little that the latter case was originally filed ahead of the former as [Padillo] had been wont to stress. The fact that its new trial was only ordered on December 29, 1986 together with a clarification of the land registration court’s expanded jurisdiction under Section 2 of Presidential Decree No. 1592 effectively rendered the decision promulgated therein a bar to the claim for damages [Padillo] pursued in the instant case. It is, moreover, repugnant to the prohibition against multiplicity of suits to allow [Padillo] – or any party-litigant for that matter – to claim in a separate action the damages she supposedly suffered as a consequence to the filing of another.
Considering that the December 21, 1989 decision rendered in CA-G.R.
SP No. 15356 granted the petition then filed by [Averia] (p. 200, rec.), the Court,
finally, fails to appreciate the sapience of [Padillo’s] invocation thereof as
a bar to the appeal herein perfected by [Averia]. xxx[37]
Hence, petitioner interposed the
instant petition for review anchored on seven (7) assigned errors, to wit:
A. THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN ITS INCORRECT CITATIONS AND PERCEPTIONS OF FACTS UPON WHICH IT PREDICATED ITS DECISION.
B. THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISREGARDING THE EFFECT OF THE JUDGMENTS OF A CO-EQUAL COURT IN CA-G.R. CV NO. 18802 AND THAT OF THE SUPREME COURT IN G.R. NO. 96662 DECLARING PETITIONER THE ABSOLUTE OWNER OF THE COMMERCIAL PROPERTY UNDER TCT NO. T-9863.
C. THE RESPONDENT COURT OF APPEALS ERRED IN REVERSING THE JUST AND EQUITABLE JUDGMENT OF THE TRIAL COURT IN CIVIL CASE NO. 9114.
D. THE RESPONDENT COURT OF APPEALS ERRED IN NULLIFYING THE JUDGMENT OF THE APPELLATE COURT IN CA-G.R. NO. 15356 BETWEEN THE SAME PARTIES ON THE SAME CAUSE AND ISSUES.
E. THE RESPONDENT COURT OF APPEALS ERRED AMOUNTING TO GRAVE ABUSE OF DISCRETION IN FAILING TO NOTE THE BAD FAITH OF PRIVATE RESPONDENT IN MOST OF HIS ACTS TO POSSESS A PROPERTY NOT HIS OWN.
F. RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN FAILING TO NOTE AND OBSERVE THAT PRIVATE RESPONDENT INTENTIONALLY PROLONG THE UNDUE EXPLOITATION OF PETITIONER’S REALTY EVEN AFTER THE SUPREME COURT’S DECISION IN G.R. NO. 96662.
G. THE MEMBERS OF THE FIRST
DIVISION OF RESPONDENT COURT GRAVELY ABUSED THEIR DISCRETION IN VIOLATING THE
CONSTITUTIONAL MANDATE ON “CONSULATION” AS PROVIDED IN SECTION 13, ARTICLE VIII
OF THE FUNDAMENTAL LAW.[38]
Petitioner attacks the appellate
court’s posture that petitioner should have set up her claim for unrealized
income, litigation expenses and/or attorney’s fees, as well as moral and
exemplary damages, as a distinct cause of action in M.C. No. 374-82 for she
contends that it was not anticipated that respondent Averia would oppose M.C.
No. 374-82. Neither could she invoke
any counterclaim for damages in Civil Case No. 1690-G for the Regional Trial
Court of Gumaca, Quezon, Branch 61 promptly dismissed it. Furthermore, res judicata as a ground
for the dismissal of the instant case was already rejected by the Court of
Appeals in the December 21, 1989 decision promulgated in CA-G.R. SP No.
15356. Lastly, petitioner cites anew
the alleged inaccuracies in the finding that Civil Case No. 1690-G was filed
ahead of M.C. No. 374-82 and that Civil Case No. 1620-G was dismissed by the
Regional Trial Court of Gumaca, Quezon on the ground of improper venue.
The doctrine of res judicata
is embodied in Section 47, Rule 39 of the Revised Rules of Court,[39] which states:
Sec. 47. Effect of judgments or final orders. – The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
xxx xxx xxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity;
(c ) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.
Section 49 (b) refers to bar by
prior judgment while Section 49 (c) enunciates conclusiveness of
judgment.
Bar by prior judgment exists when, between the first case where the
judgment was rendered, and the second case where such judgment is invoked,
there is identity of parties, subject matter and cause of action. When the three (3) identities are present,
the judgment on the merits rendered in the first constitutes an absolute bar to
the subsequent action. It is final as
to the claim or demand in controversy, including the parties and those in
privity with them, not only as to every matter which was offered and received
to sustain or defeat the claim or demand, but as to any other admissible matter
which might have been offered for that purpose. But where between the first case wherein judgment is rendered and
the second case wherein such judgment is invoked, there is no identity of cause
of action, the judgment is conclusive in the second case, only as to those
matters actually and directly controverted and determined, and not as to
matters merely involved therein. This
is what is termed conclusiveness of judgment.[40]
Under ordinary circumstances, this
Court would have subscribed to the appellate court’s conclusion that M.C. No.
374-82 barred petitioner’s claim for damages in Civil Case No. 9114 since all
four (4) essential requisites in order for res judicata as a “bar by
prior judgment” to attach are present in the instant case, to wit:
1. The former judgment must be final;
2. It must have been rendered by a court having jurisdiction over the subject matter and the parties;
3. It must be a judgment or order on the merits; and
4. There must be between the first and
second action identity of parties, identity of subject matter, and identity of
cause of action.[41]
M.C. No.
374-82, as affirmed by the Court of Appeals and the Supreme Court, is a final
judgment.[42] Branch 57 of the Regional Trial Court of Lucena City,
in the new trial it conducted in M.C. No. 374-82, following clarification by
the Supreme Court of its expanded jurisdiction,[43] had obtained jurisdiction over the subject matter as
well as the parties thereto. The
judgment of Branch 57 of Lucena City in M.C. No. 374-82, as affirmed by the
Court of Appeals and the Supreme Court, is a judgment on the merits. A judgment is on the merits when it
determines the rights and liabilities of the parties based on the disclosed
facts, irrespective of formal, technical or dilatory objections.[44] Finally, there is identity of parties, subject matter
and causes of action. M.C. No. 374-82
and Civil Case No. 9114 both involved the petitioner and respondent
Averia. The subject matter of both
actions is the parcel of land and building erected thereon covered by TCT No.
T-9863. The causes of action are also
identical since the same evidence would support and establish M.C. No. 374-82
and Civil Case No. 9114.[45]
However, a different conclusion is
warranted under the principle of law of the case. Law of the case has been defined as
the opinion delivered on a former appeal.
More specifically, it means that whatever is once irrevocably
established as the controlling legal rule or decision between the same parties
in the same case continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court.[46] As a general rule, a decision on a prior appeal of
the same case is held to be the law of the case whether that question is
right or wrong, the remedy of the party deeming himself aggrieved being to
seek a rehearing.[47]
The concept of Law of the Case
was further elucidated in the 1919 case of Zarate v. Director of Lands,[48] thus:
A well-known legal principle is that when an appellate court has once declared the law in a case, such declaration continues to be the law of that case even on a subsequent appeal. The rule made by an appellate court, while it may be reversed in other cases, cannot be departed from in subsequent proceedings in the same case. The “Law of the Case,” as applied to a former decision of an appellate court, merely expresses the practice of the courts in refusing to reopen what has been decided. Such a rule is ‘necessary to enable an appellate court to perform its duties satisfactorily and efficiently, which would be impossible if a question, once considered and decided by it, were to be litigated anew in the same case upon any and every subsequent appeal.’ Again, the rule is necessary as a matter of policy to end litigation. ‘There would be no end to a suit if every obstinate litigant could, by repeated appeals, compel a court to listen to criticisms on their opinions, or speculate of chances from changes in its members.’ xxx
The phrase “Law of the Case” is described in a decision coming from the Supreme Court of Missouri in the following graphical language:
The general rule, nakedly and badly put, is that legal conclusions announced
on a first appeal, whether on the general law or the law as applied to the
concrete facts, not only prescribed the duty and limit the power of the trial
court to strict obedience and conformity thereto, but they become and remain
the law of the case in all after steps below or above on subsequent
appeal. The rule is grounded on
convenience, experience, and reason.
Without the rule there would be no end to criticism, reagitation,
reexamination, and reformulation. In
short, there would be endless litigation.
It would be intolerable if parties litigant were allowed to speculate on
changes in the personnel of a court, or on the chance of our rewriting
propositions once gravely ruled on solemn argument and handed down as the law
of a given case. An itch to reopen
questions foreclosed on a first appeal, would result in the foolishness of the
inquisitive youth who pulled up his corn to see how it grew. Courts are allowed, if they so choose, to
act like ordinary sensible persons. The
administration of justice is a practical affair. The rule is a practical and a good one of frequent and beneficial
use. xxx[49]
The appellate court apparently
overlooked the significance of this principle called the law of the case which
is totally different from the concept of res judicata. Law of the case does not have the
finality of the doctrine of res judicata, and applies only to that one
case, whereas res judicata forecloses parties or privies in one case by
what has been done in another case.[50] In the 1975 case of Comilang v. Court of Appeals
(Fifth Division.),[51] a further
distinction was made in this manner:
The doctrine of law of the case is akin to that of former adjudication, but is more limited in its application. It relates entirely to questions of law, and is confined in its operation to subsequent proceedings in the same case. The doctrine of res judicata differs therefrom in that it is applicable to the conclusive determination of issues of fact, although it may include questions of law, and although it may apply to collateral proceedings in the same action or general proceeding, it is generally concerned with the effect of an adjudication in a wholly independent proceeding.
Significantly
in the instant case, the law of the case on the matter of the pendency of M.C.
No. 374-82 to bar Civil Case No. 9114 has been settled in CA-G.R. SP No. 15356.
It is worthwhile to consider that
at the time this Court in G.R. No. 65129 ordered the new trial of M.C. No.
374-82, after clarifying the expanded jurisdiction of the trial court with
authority to decide non-contentious and contentious issues, Civil Case No. 9114
was already existent. When the issue of
the dismissal of Civil Case No. 9114 on the ground of pendency of M.C. No.
374-82 was raised before the trial court wherein the said Civil Case No. 9114
was docketed, the trial court chose to merely defer resolution thereof. And when the said issue of litis
pendentia was raised before the Court of Appeals via a special civil action
of certiorari in CA-G.R. SP No. 15356, the Court of Appeals, while agreeing
with respondent Averia’s arguments on the existence of litis pendentia,
which would ultimately result in res judicata, incorrectly ordered the
mere suspension of Civil Case No. 9114 to await the final termination of M.C.
No. 374-82, instead of dismissing the case and/or ordering that the claim for
damages be filed in M.C. No. 374-82.
The decision of the Court of
Appeals was promulgated on December 21, 1989 and by then, M.C. No. 374-82 had
long been resolved by the trial court and pending appeal with the Court of
Appeals. Since no appeal was filed from
the decision of the Court of Appeals in CA-G.R. SP No. 15356, the resolution
therein of the appellate court which ordered the suspension instead of
dismissal of Civil Case No. 9114, became final. Thus, even if erroneous, the ruling of the Court of Appeals in
CA-G.R. SP No. 15356 has become the law of the case as between herein petitioner
Padillo and respondent Averia, and may no longer be disturbed or modified.[52] It is not subject to review or reversal in any court.
Petitioner, therefore, should not
be faulted for yielding in good faith to the ruling of the Court of Appeals,
Fourteenth Division, in CA-G.R. SP No. 15356 and continuing to pursue her claim
for damages in Civil Case No. 9114. The
decision of the Court of Appeals in CA-G.R. SP No. 15356 on the matter of the
issue of existence of M.C. No. 374-82 as a bar to Civil Case No. 9114 should
dictate all further proceedings.
Notwithstanding the foregoing
conclusion, this Court is not inclined to sustain the monetary award for
damages granted by the trial court.
Concerning the alleged forgone
income of One Hundred Fifty Thousand Pesos (P150,000.00) per year since
1982 as testified on by petitioner as the income she could have realized had
possession of the property not been withheld from her by respondent Averia,[53] we consider such amount of expected profit highly
conjectural and speculative. With an
allegation that respondent made millions for the improper use and exploitation
of the property, petitioner’s testimony regarding the matter of unrealized
income is sadly lacking of the requisite details on how such huge amount of
income could be made possible.
Petitioner did not detail out how such huge amount of income could have
been derived from the use of the disputed lot and building. Well-entrenched is the doctrine that actual,
compensatory and consequential damages must be proved, and cannot be
presumed. If the proof adduced thereon
is flimsy and insufficient, as in this case, no damages will be allowed.[54] Verily, the testimonial evidence on alleged
unrealized income earlier referred to is not enough to warrant the award of
damages. It is too vague and
unspecified to induce faith and reliance.
The only amount of unrealized
income petitioner should be entitled to is the unrealized monthly rentals which
respondent Averia admits to be in the amount of Eight Hundred Pesos (P800.00)
a month or Nine Thousand Six Hundred Pesos (P9,600.00) a year during the
sixth (6th) to tenth (10th) year of the Contract of Lease between Marina de
Vera-Quicho, as Lessor, and respondent Averia, as Lessee, which fell on 1982 to
1986.[55] Inasmuch as respondent Averia had been in possession
of the property from January 1982 to February 1992 when he vacated the
property,[56] it is but just for him to pay petitioner the
unrealized rentals of Ninety-Seven Thousand Six Hundred Pesos (P97,600.00)
for that period of time. Furthermore,
said amount of Ninety-Seven Thousand
Six Hundred Pesos (P97,600.00) shall earn interest[57]at the legal rate[58] computed from the finality of this decision.[59]
On the award of moral and
exemplary damages in the amounts of Fifty Thousand Pesos (P50,000.00)
and Twenty Thousand Pesos (P20,000.00), respectively, we find that there
is no sound basis for the award. It
cannot be logically inferred that just because respondent Averia instituted
Civil Case No. 1690-G while M.C. No. 374-82 was pending, malice or bad faith is
immediately ascribable against the said respondent to warrant such an award.
The issue of whether the trial
court in M.C. No. 374-82 could adjudicate contentious issues was only resolved
by this Court in G.R. No. 65129 on December 29, 1986[60]long after the dismissal of Civil Case No. 1690-G
which was instituted by respondent Averia.[61] That respondent Averia instituted a separate suit
which was subsequently dismissed and all actions or appeals taken by respondent
Averia relative to M.C. No. 374-82 does not per se make such actions or
appeals wrongful and subject respondent Averia to payment of moral
damages. The law could not have meant
to impose a penalty on the right to litigate.
Such right is so precious that moral damages may not be charged on those
who may exercise it erroneously. One
may have erred, but error alone is not a ground for moral damages.[62]
In the absence of malice and bad
faith, the mental anguish suffered by a person for having been made a party in
a civil case is not the kind of anxiety which would warrant the award of moral
damages.[63] The emotional distress, worries and anxieties
suffered by her and her husband[64] are only such as are usually caused to a party hauled
into Court as a party in a litigation.
Therefore, there is no sufficient justification for the award of moral
damages, more so, exemplary damages, and must therefore be deleted.
With respect to attorney’s fees,
the award thereof is the exception rather than the general rule; counsel’s fees
are not awarded every time a party prevails in a suit because of the policy
that no premium should be placed on the right to litigate.[65] Attorney’s fees as part of damages are not the same
as attorney’s fees in the concept of the amount paid to a lawyer. In the ordinary sense, attorney’s fees
represent the reasonable compensation paid to a lawyer by his client for the
legal services he has rendered to the latter, while in its extraordinary
concept, they may be awarded by the court as indemnity for damages to be paid
by the losing party to the prevailing party.[66]
Attorney’s fees as part of damages
is awarded only in the instances specified in Article 2208 of the Civil Code.[67] As such, it is necessary for the court to make
findings of facts and law that would bring the case within the exception and
justify the grant of such award, and in all cases it must be reasonable. Thereunder, the trial court may award
attorney’s fees where it deems just and equitable that it be so granted. While we respect the trial court’s exercise
of its discretion in this case, we find the award of the trial court of
attorney’s fees in the sum of One Hundred Seven Thousand Pesos (P107,000.00)
plus One Thousand Pesos (P1,000.00) per appearance in the hearing of the
case and litigation expenses of Ten Thousand Pesos (P10,000.00), to be
unreasonable and excessive. Attorney’s
fees as part of damages is not meant to enrich the winning party at the expense
of the losing litigant. Thus, it should
be reasonably reduced to Twenty-Five Thousand Pesos (P25,000.00).
Because of the conclusions we have
thus reached, there is no need to delve any further on the other assigned
errors.
WHEREFORE, the instant petition is GRANTED. The Decision of the Court of Appeals dated November 22, 1994 in CA-G.R.
CV No. 40142 is REVERSED and SET
ASIDE and another in its stead is hereby rendered ORDERING respondent
Tomas Averia, Jr., to pay petitioner
Veronica Padillo the amounts of (a) Ninety-Seven Thousand Six Hundred Pesos (P97,600.00)
as unrealized rentals which shall earn interest at the legal rate from the finality
of the this decision until fully paid, and (b) Twenty-Five Thousand Pesos (P25,000.00)
as attorney’s fees.
SO ORDERED.
Bellosillo, (Chairman), Mendoza,
and Quisumbing, JJ., concur.
Buena, J., on official leave.
[1] Penned by Presiding Justice
Nathanael P. De Pano, Jr. and concurred in by Associate Justices Artemon D.
Luna and Ramon U. Mabutas, Jr., First Division, Rollo, pp. 56-67.
[2] Penned by Judge
Jaime D. Discaya, Rollo, pp. 45-54.
[3] Original Records,
Vol. I, pp. 1-5.
[4] Assisted by her
husband, Edilberto De Mesa.
[5] Entitled “Tomas T.
Averia, Jr., plaintiff, v. Spouses Edilberto De Mesa and Veronica Padillo,
defendants” for Rescission of Contracts with Damages, Original Records, Vol.
II, pp. 378-382.
[6] Original Records,
Vol. I, pp. 21-25.
[7] Original Records,
Vol. I, pp. 70-78.
[8] Original Records,
Vol. 1, pp. 79-99.
[9] Original Records,
Vol. 1, p. 100.
[10] Cadastral Case No.
I, GLRO Cad. Record No. 202, Lot No. 2810-B, Lucena Cadastre, M.C. No. 374-82,
Branch 8, later Branch 57, Original Records, Vol. II, pp. 398-402.
[11] Through Marina M. de
Vera-Quicho, as the attorney-in-fact of Margarita de Vera in a Special Power of
Attorney executed abroad on January 13, 1982.
[12] Original Records,
Vol. I, pp. 110-114.
[13] The complaint was
subsequently amended, Original Records, Vol. II, pp. 378-382.
[14] Original Records,
Vol. II, pp. 383-386.
[15] Penned by Judge
Andres C. Regalado, Original Records, Vol. II, pp. 389-393.
[16] Original Records,
Vol. I, p. 119-A.
[17] Penned by Judge
Milagros V. Caguioa.
[18] Entitled ‘Tomas
Averia, Jr., petitioner, v. The Honorable Milagros V. Caguioa, in her
capacity as Judge of the Regional Trial Court, Fourth Judicial Regional, Branch
LVII, Lucena City, and Veronica Padillo, respondents’.
[19] Penned by Associate Justice
Isagani A. Cruz and concurred in by Associate Justices Pedro L. Yap, Andres R.
Narvasa, Ameurfina Melencio-Herrera and Florentino P. Feliciano, First
Division, Original Records, Vol. II, pp. 410-414, 146 SCRA 459 [1986].
[20] Penned by Associate
Justice Filemon H. Mendoza and concurred in by Associate Justices Lorna S.
Lombos-De La Fuente and Celso Magsino, Eighth Division, in CA-G.T. CV No. 18802
entitled ‘Veronica Padillo, petitioner-appellee, v. Tomas Averia, Jr.,
oppositor-appellant’, Original Records, Vol. I, pp. 322-330.
[21] Docketed as G.R. No.
96662, entitled ‘Tomas Averia, Jr., petitioner v. Court of Appeals, et
al.’, Original Records, Vol. I, p. 318.
[22] Original Records,
Vol. I, p. 341.
[23] Original Records,
Vol. I, p. 353.
[24] Penned by Judge Benigno
M. Puno, Original Records, Vol. I, pp. 133-134.
[25] CA-G.R. CV No.
01931.
[26] Original Records,
Vol. I, p. 190.
[27] Original Records,
Vol. I, pp. 199-207.
[28] Original Records,
Vol. I, pp. 236-237.
[29] Issued by Judge
Rodolfo G. Palattao Original Records, Vol. I, pp. 255-256.
[30] Penned by Associate
Justice Arturo B. Buena (now Associate Justice of the Supreme Court) and
concurred in by Associate Justices Conrado T. Limcaoco and Jainal D. Rasul,
Fourteenth Division, in CA-G.R. SP No. 15356, Original Records, Vol. I, pp.
291-300.
[31] Original Records,
Vol. I, pp. 303.
[32] See Note Nos. 21-23,
supra.
[33] See Note No. 2, supra.
[34] Rollo, pp.
64-66.
[35] Rollo, pp.
68-78.
[36] Rollo, pp.
88-90.
[37] Rollo, pp.
89-90.
[38] Rollo, pp.
11-12.
[39] Now 1997 Rules of
Civil Procedure.
[40] Islamic Directorate
of the Philippines v. Court of Appeals, 272 SCRA 454, 466 [1997]; Mendiola v.
Court of Appeals, 258 SCRA 492, 499 [1996].
[41] Vda. de Salanga v.
Alagar, 335 SCRA 728, 736 [2000]; Gardose v. Tarroza, 290 SCRA 186, 193 [1998];
Carlet v. Court of Appeals, 275 SCRA 97, 106 [1997]; Allied Banking Corporation
v. Court of Appeals, 229 SCRA 252, 258 [1994].
[42] See Note Nos. 21-23,
supra.
[43] See Note No. 19, supra.
[44] Nabus v.
Court of Appeals, 193 SCRA 732, 740 [1991].
[45] Ramon D. Ocho v.
Bernardino Delfin, et al., G.R. No. 137908, November 22, 2000, pp.
10-11; Gutierrez v. Court of Appeals, 193 SCRA 437, 446 [1991];
Sangalang v. Caparas, 151 SCRA 53, 59 [1987].
[46] Ducat v.
Court of Appeals, 322 SCRA 695, 706-707 [2000]; Zebra Security Agency and
Allied Services v. NLRC, 270 SCRA 476, 485 [1997]; People v. Pinuila, et
al., 103 Phil 992, 999 [1958]; 21 C.J.S. 330.
[47] Ducat v.
Court of Appeals, supra; 5
C.J.S. 1276-1277.
[48] 39 Phil. 747,
749-750 [1919], penned by Justice George A. Malcolm.
[49] Italics supplied;
see note no. 48.
[50] 21 C.J.S. 331; 31
Words and Phrases, pp. 741-742.
[51] 65 SCRA 69, 80
[1975] citing 30 Am. Jur. 913-914.
[52] People v.
Olarte, 19 SCRA 494, 498 [1967], penned by Justice Jose B.L. Reyes.
[53] TSN, November 7,
1991, p. 3.
[54] Eduardo P. Lucas v.
Spouses Maximo C. Royo and Corazon B. Royo, G.R. No. 136185, October 30, 2000,
p. 9; Integrated Packaging Corporation v. Court of Appeals, 333 SCRA
170, 179 [2000]; Lucena v. Court of Appeals, 313 SCRA 47, 61-62 [1999].
[55] Original Records, Vol.
II, pp. 395-397.
[56] Original Records,
Vol. II, pp. 482-484, 510, 517-518.
[57] J.M. Tuason &
Co., Inc. v. Santiago, et al.,
99 Phil. 615, 632 [1956].
[58] Article
2209 of the Civil Code of the Philippines, which reads:
If the obligation consists in the payment of a
sum of money, and the debtor incurs in delay, the indemnity for damages, there
being no stipulation to the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the legal interest, which is
six percent per annum.
[59] Crismina Garments,
Inc. v. Court of Appeals, 304 SCRA 356, 362-363 [1999]; Eastern Shipping Lines,
Inc. v. Court of Appeals 234 SCRA 78, 95-97 [1994].
[60] See Note No. 19, supra.
[61] See Note Nos. 15, 16
and 25, supra.; Rollo, p. 182.
[62] Filinvest Credit
Corporation v. Mendez, 152 SCRA 593, 601 [1987].
[63] Philippine National
Bank v. Court of Appeals, 159 SCRA 433, 442 [1988].
[64] TSN, April 14, 1988,
pp. 12-16.
[65] Ibaan Rural Bank,
Inc. v. Court of Appeals, 321 SCRA 88, 95 [1999].
[66] Compania Maritima,
Inc. v. Court of Appeals, 318 SCRA 169, 175-176 [1999].
[67] Art.
2208. In the absence of stipulation,
attorney’s fees and expenses of litigation, other than judicial costs, cannot
be recovered except:
1) When exemplary damages are awarded;
2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
3) In criminal cases of malicious prosecution against the plaintiff;
4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
6) In actions for legal support;
7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
8) In actions for indemnity under workmen’s compensation and employer’s liability laws;
9) In a separate civil action to recover civil liability arising from a crime;
10) When at least double judicial costs are awarded;
11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.
In all cases, the
attorney’s fees and expenses of litigation must be reasonable.