FIRST DIVISION
PILIPINAS
BANK, G.R. No. 148320
Petitioner,
Present:
PANGANIBAN,
C.J.
(Chairperson)
YNARES-SANTIAGO,
- versus - AUSTRIA-MARTINEZ,
CALLEJO,
SR., and
CHICO-NAZARIO,
JJ.
GLEE
CHEMICAL Promulgated:
LABORATORIES,
INC.,
Respondent.
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AUSTRIA-MARTINEZ, J.:
This resolves the petition for review
on certiorari seeking the reversal of the Decision[1]
of the Court of Appeals (CA) promulgated on
The antecedent facts are as follows.
Glee Chemical Laboratories, Inc. (respondent)
alleged that it applied for a loan with Pilipinas
Bank (petitioner) in the amount of P800,000.00, payment of which would
be secured, pursuant to a board resolution dated
Respondent claims, however, that
petitioner never delivered to it the loan proceeds and instead applied the
amount to a debt owed by a certain Rustica Tan from
petitioner. Petitioner insists that
payment of Rustica Tan’s debt was secured by the real
estate mortgage executed by respondent pursuant to a third-party liability
inserted therein. Since a balance of Rustica Tan’s debt in the amount of P3,586,772.98
still remained unpaid, petitioner, through its agent Business Assistance Group,
Inc., served on respondent a notice of foreclosure and auction sale of
respondent’s mortgaged lot. Respondent
then filed with the RTC a complaint for annulment of contract and damages with
preliminary injunction against herein petitioner.
However, respondent also filed a
Supplemental Complaint because petitioner was also attempting to foreclose a
chattel mortgage over certain chattels owned and possessed by respondent. Apparently, sometime in April of 1982, Rustica Tan executed a document described as an amendment
of real estate mortgage with chattel mortgage,[3]
as security for an additional loan of P1,200,000.00, thereby mortgaging
the aforementioned chattels of respondent.
The document did not bear the consent or conformity of respondent to the
mortgage as Rustica Tan stated that she owned said
chattels.
As prayed for in respondent’s original
and supplemental complaints, the RTC issued writs of preliminary injunction,
enjoining the sale at public auction of the lot as well as the chattels in
question.
After trial, the RTC rendered judgment
in favor of respondent. The dispositive portion of the Decision[4]
dated
WHEREFORE,
judgment is hereby rendered declaring the deed of real estate mortgage marked
Exhibits A and 2, and the amendment of
real estate mortgage with chattel mortgage marked as Annex “C” of the
Supplemental Complaint, null and void ab initio, and permanently enjoining defendants from
proceeding with the foreclosure and sale at public auction of the real property
covered by Transfer Certificate of Title No. 20610 of the Registry of Deed of Rizal and of the chattels described in Exhibit C; and
ordering defendant Pilipinas Bank to pay plaintiff
the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00), Philippine
Currency, as attorney’s fees; ONE HUNDRED THOUSAND PESOS (P100,000.00),
Philippine Currency, as moral damages; ONE HUNDRED THOUSAND PESOS (P100,000.00),
Philippine Currency, as moral damages, ONE HUNDRED THOUSAND PESOS (P100,000.00),
Philippine Currency, as exemplary damages; and to pay the costs. The counterclaims of defendants are hereby ordered
dismissed for lack of merit.
SO ORDERED.
Petitioner
then elevated the case to the CA. On
The main purpose of the loan secured by plaintiff-appellee (herein respondent) was for its own benefit. The unconsented insertion of the name of a third party effectively changed the nature of the instrument. Hence, there was no consent, so to speak, on the part of the plaintiff-appellee when the nature of the contract was altered without its knowledge and approval.[5]
Aggrieved by said decision, petitioner
filed the present petition for review on certiorari alleging that the
findings and conclusions of the CA, affirming those of the trial court, are not
in accord with law and jurisprudence and “grounded on mere speculations,
surmises and conjectures as well as inferences that are manifestly mistaken, absurb [sic], impossible or based on misapprehension of
facts and/or findings of fact that are premised on absence of evidence and
belied by evidence on record.”[6]
Petitioner first argues that the
stipulation pour autri should have been given
effect as the benefits thereof had already been accepted by the third person, Rustica Tan, when she received the proceeds of the loan
applied for by respondent. However, at
the outset, it should be noted that an acceptance, if any, would take effect
only if respondent, through its President, Cheng Yong, indeed intended to
insert or include a stipulation pour autri in
the Real Estate Mortgage. As held
in Bank of the Philippine Islands v. V. Conception e Hijos,
Inc., “to constitute a valid stipulation pour autri,
it must be the purpose and intent of the stipulating parties to benefit the
third person and it is not sufficient that the third person may be incidentally
benefited by the stipulation.”[7]
In
this case, the bone of contention is whether at the time Cheng Yong affixed his
signature on the Real Estate Mortgage, the blanks on the document had already
been filled up with the stipulation in favor of Rustica
Tan. Both Cheng Yong and respondent
manager Melecio Hernandez, who signed the document as
a witness, testified that such stipulation was not yet typewritten into the
blank spaces of the pre-printed, pro-forma document with the heading “Real
Estate Mortgage,”[8] at
the time they signed it;[9]
while Elpidio Guillermo, Senior Loans Clerk of
petitioner, testified that he typed in said stipulation on the document on
March 4, 1982, a day before he presented the same to Cheng Yong for the
latter’s signature.[10] Petitioner argues mainly that the CA erred in
giving more credence to the testimonies of Cheng Yong and Melecio
Hernandez. Petitioner insists that the testimony of its witness, Elpidio Guillermo, is more worthy of belief.
The
trial court, affirmed by the CA, found Cheng Yong to be more convincing and
believed his testimony that said stipulation was inserted only after he had
affixed his signature on the questioned document. Thus, the CA ruled that respondent did not
give its consent to the stipulation pour autri,
making the same null and void ab initio.
The well-settled rule, as reiterated by this Court in Child Learning Center, Inc. v. Tagorio,[11] is that:
Generally,
factual findings of the trial court, affirmed by the Court of Appeals, are
final and conclusive and may not be reviewed on appeal. The
established exceptions are: (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of discretion; (3) when the
findings are grounded entirely on speculations, surmises or conjectures; (4)
when the judgment of the Court of Appeals is based on misapprehension of facts;
(5) when the findings of fact are conflicting; (6) when the Court of Appeals,
in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee;
(7) when the findings of fact are conclusions without citation of specific
evidence on which they are based; (8) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and (9) when the
findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record. (Emphasis supplied)
A close
scrutiny of the records in this case leads to the conclusion that this case
does not fall under any of the above-mentioned exceptions to the general rule.
The success or failure of this
petition is rooted on the credibility of the witnesses. It should be borne in mind that the trial
court is the best judge of the credibility of witnesses because, as explained
in People v. Mendoza:[12]
[S]ince the
trial court has the best opportunity to observe the demeanor of witnesses while
on the stand, it can discern whether or not they are telling the truth.
The unbending jurisprudence is that its findings on the matter of credibility
of witnesses are entitled to the highest degree of respect and will not be
disturbed on appeal.[13]
(Emphasis supplied)
As to who between petitioner’s witness, Elpidio Guillermo, and respondent’s witnesses, Cheng Yong and Melecio Hernandez, are telling the truth, both the trial court and the appellate court found in favor of respondent’s witnesses. Now, petitioner again fails to present any circumstance, evidence, or argument that could persuade the Court to deviate from the above-quoted doctrine.
There is no merit to petitioner’s contention that because the document is notarized and had been registered with the Register of Deeds of Pasig, then there should no longer be any doubt as to its due execution. Note, however, that the presumption that official duty has been regularly performed is not conclusive. As provided under Section 3, Rule 131 of the Revised Rules of Court, such presumption is rebuttable.[14] In this case, the testimony of petitioner’s own witness, Elpidio Guillermo, destroyed this presumption by admitting that when the document was notarized, Cheng Yong and Melecio Hernandez did not appear before the notary public. Hence, the notary public did not witness Cheng Yong
affixing his signature on the document.[15] Verily, such notarization is useless since there is no truth whatsoever to the notary public’s statement or acknowledgment that the person who executed the document personally appeared before him and the same was his free and voluntary act. Such being the case, the Court must rely on the trial court’s observation and conclusions regarding which witnesses are telling the truth.
Considering that there is nothing in the records showing that the
findings of fact of both the trial court and the CA regarding the credibility
of the parties’ witnesses are incorrect, this case does not fall under any of
the enumerated exceptions to the general rule that factual findings of the trial court, affirmed by the
Court of Appeals, are final and conclusive and may not be reviewed on
appeal.
IN VIEW OF THE FOREGOING, the petition is DENIED for utter lack of merit.
Costs against
petitioner.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
ARTEMIO
V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA
V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Penned by Associate Justice Bernardo P. Abesamis (now retired) with Associate Justices Godardo A. Jacinto and Eliezer R. De Los Santos, concurring.
[2] Records, pp. 35-40.
[3] Exhibit “2”, id. at 79-84.
[4] CA rollo, pp. 78-81.
[5] Rollo,
p. 36.
[6]
[7] 53 Phil. 806, 817 (1928).
[8] Pertinent portions of said document containing the assailed stipulation are reproduced hereunder:
16. It is understood that the Mortgage over the properties herein described shall stand as security for any obligation and or credit accommodation extended to RUSTICA I. TAN and/or MORTGAGOR herein granted [by] or may hereafter be obtained from the MORTGAGEE.
17. If this mortgage cannot be recorded in the corresponding registry of deeds, the obligations herein secured shall immediately become due, payable and defaulted.
LIST OF PROPERTIES MORTGAGED
Transfer
Certificate of Title No. 20610
x x x x
THIRD PARTY LIABILITY
NOTWITHSTANDING the terms and conditions of the foregoing mortgage, it is understood that this mortgage shall stand as security for any indebtedness of RUSTICA I. TAN &/or MORTGAGOR in favor of the MORTGAGEE now existing or hereinafter incurred.
[9] TSN,
[10] TSN,
[11] G.R. No. 150920
[12] G.R. No. 142654,
[13]
[14] Section 3, Rule 131 of the Revised Rules of Court provides thus:
SEC. 3. Disputable Presumptions. - The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence:
x x x x
(m) That official duty has been regularly performed.
[15] Pertinent portions of the testimony
of Elpidio Guillermo, TSN,
Q: Now, there appears on this document a third party liability. Will you please tell us who typed this third party liability.
A: I was the one who typed that third party liability.
Q: When did you type this?
A: On
Q: After typing this Mr. Witness, what did you do, if any?
A: I went to the office of Glee Chemicals Laboratories, Inc. and requested its president, Cheng Yong to sign the mortgage contract including the witness Mr. Hernandez.
x x x x
Q: Now, after Mr. Melecio Hernandez and you, signed the real estate mortgage document, what did you do?
A: I proceeded to the Register of Deeds of Pasig Branch which is at the capitol and Atty. Romeo Perez have notarized the document.
COURT:
(to the witness)
Q: Where? At the capitol of
A: Yes, your Honor.
Q: So when this document was notarized, Cheng Yong and his witnesses were not around?
A: Yes, your Honor. Because Mr. Cheng Yong and his witness signed the document in the office and after they signed the document, I proceeded to the Notary Public to notarize the mortgage contract and after that I proceeded to the Registry of Deeds of Pasig which is also inside the capitol compound and presented the document for registration.