Republic of the
SUPREME COURT
SECOND DIVISION
FERNANDO
Petitioner,
Present:
QUISUMBING,
J., Chairperson,
- versus - CARPIO,
CARPIO
MORALES,
TINGA,
and
VELASCO,
JR., JJ.
THE HONORABLE COURT OF
APPEALS, GOVERNMENT
SERVICE INSURANCE SYSTEM,
and SPOUSES RUSTICO AND Promulgated:
FE
Respondents. January 27, 2007
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO, JR., J.:
Challenged
in this Petition for Review on Certiorari is the June 25, 1996 Decision of the
Court of Appeals (CA) in CA-G.R. CV No. 32374, entitled Fernando Santiago v. Government Service Insurance System (GSIS), et al.,
which affirmed with modification the July 29, 1988 Decision of the Manila Regional
Trial Court (RTC), Branch XXVI in Civil Case No. R-81-616 for specific
performance and damages against GSIS and for ejectment and damages against
spouses
The Facts
On October 8, 1959, a Contract to Sell[1]
was entered into by and between petitioner Fernando Santiago, with residence at
756 Padilla St., San Miguel, Manila and respondent GSIS over Lot 15, Block 2,
Leonila Hills Subdivision, Baguio City, for a consideration of Thirty-three Thousand
Pesos (PhP 33,000.00), subject to the following terms and conditions, viz:
1.
The PURCHASER agrees to pay the CORPORATION, upon
signing this Agreement, the sum of (15% for Member and 25% for Non-Member) FOUR
THOUSAND NINE HUNDRED FIFTY PESOS ONLY (₧4,950.00)
Pesos, and the amount of THREE HUNDRED ELEVEN PESOS & 41/100 (₧311.41) Pesos, Philippine
Currency, monthly thereafter until the whole or full amount of the purchase
price hereinabove stipulated has been fully paid to the entire and full
satisfaction of the CORPORATION, with interest at the rate of Six Percent (6%)
per annum or Eight percent (8%) for Non-Member, said interest to be payable
monthly. Interest at the rate of 1% per
month, payable monthly, will be charged by the CORPORATION on all payments
delinquent for more than thirty (30) days.
x x x x
3. Possession
of the building, the improvements thereon and the parcel of land hereinby contracted
to be sold will be delivered to the PURCHASER by the CORPORATION, or its duly
authorized representative, after the approval of the application by the Board
of Trustees, the signing of this contract, and the payment of the down payment
of (15% for Member) (25% for Non-Member) ₧4,950.00
in the office of the CORPORATION at Manila.
x x x x
7.
No promises, verbal or written agreement, contracts or
stipulations entered into by the PURCHASER with third parties, contrary to any
of the contents of this agreement, shall in any way supersede, alter, modify or
nullify this contract, nor shall they be valid unless authorized herein.
8.
Should the PURCHASER fail to pay any of the monthly
installments herein provided within ninety (90) days of the date due, this
contract shall be deemed automatically cancelled and forfeited, of no force and
effect, and the CORPORATION shall have the complete, absolute, and boundless
power, authority, jurisdiction and discretion, and without reservation by the
PURCHASER, to dispose, sell, transfer, convey, assign and encumber the herein
mentioned properties to any other person or persons, natural or juridical, in
the same manner as if this contract or agreement has never been made, provided,
however, that extension has been authorized expressly in writing by the CORPORATION
or its duly authorized representative, may be allowed the PURCHASER upon proof
of extra-ordinary misfortune satisfactory to the CORPORATION.
9.
In the event of the cancellation and forfeiture
mentioned in the next preceding [sic] paragraph, all sums of money paid by or
due from the PURCHASER under paragraphs 1 and 2 of this contract shall be
considered as rental for the use of said property and the PURCHASER waives and
forfeits rights to ask or demand the return thereof.
x x x x
15. Any single violation of this agreement shall be sufficient and adequate reason to consider the contract forfeited and the PURCHASER agrees to leave or vacate the property, leaving all improvements made [thereon] in good and serviceable condition, after notice in writing have been made on PURCHASER that he violated this agreement and PURCHASER failed or refused to rectify or correct said violation of the agreement.
x x x x
17. The PURCHASER shall not sell, cede, encumber, transfer in any manner [nor] assign his rights under this contract without the express consent of the CORPORATION in writing and until all the stipulations of this contract shall have been fulfilled faithfully as of the date of the transfer, assignment, conveyance or resale.
x x x x
19. The PURCHASER hereby agrees to respect and abide [by] all rules that may be promulgated by the CORPORATION or its management for the protection of the property rights of the CORPORATION, the PURCHASERS and/or residents of the project; and for the enforcement of said rules and regulations, the CORPORATION shall have the right to bring court action which may be proper in the premises.
At the time petitioner
In 1963, petitioner became Chief of
the Agrarian Counsel. In 1970, he was
appointed Judge of the Court of First Instance of Quezon,
With regard to the
Sometime
in 1961, petitioner requested Mrs. Lydia B. Salonga, his first cousin and
immediate neighbor in
Likewise,
petitioner asked Mrs. Salonga to lease or sell the property in order to at
least recoup his investment. In summer of 1973, Dr. Jose De la Rosa, a resident
of
Meanwhile,
Dr. De la Rosa negotiated with Mrs. Salonga for the eventual sale of the
property to him. She apprised the petitioner of the developments. Thereafter,
petitioner sent Mr. Agustin Ortega to the GSIS to verify the records.
However, based on the GSIS records, petitioner
failed to pay the agreed monthly amortizations of the subject property. Consequently, the GSIS Acquired Assets
Department sent a
Meanwhile, the GSIS Claims Department
sent two letters dated
Sometime in October 1973, petitioner
thought that he had already fully paid for the property and even exceeded his
payments to GSIS. Thus, he sent a
representative to the GSIS to ask the latter to execute a final deed of sale
and to deliver the torrens title of the subject property to him, but he was
apprised by his representative that his GSIS account was in arrears.
On
With
regard to the rent of the premises, she tendered the payments of rentals to
GSIS corresponding to two (2) months pending the processing of her application to
purchase.[7]
Through a
On
On
Meanwhile, on
On
December 6, 1973, petitioner sent a letter to Atty. Marcelo, which was hand carried
by petitioner’s representatives, Ortega and Echevarria, enclosing the check in the
amount of PhP 17,024.71 as full payment of the alleged unpaid balance of the
purchase price.[13] The letter and check were presented to the
Manager of the Acquired Assets Department but these were transferred to his
Assistant Manager for comment and recommendation.[14]
It was only on
On
On
On
On
On
June 11, 1974, Atty. Manuel Lazaro, Assistant General Manager of the GSIS Legal
Affairs, recommended that the cancellation of the award of petitioner be set
aside but with conditions that he would hold GSIS free and unharmed from any
and all liability by reason of the cancellation, and to defend GSIS in any and
all suits connected or related to the return of the money of Fe Santos.[21] On
In
a letter dated
Through
a
On
On
On
1. Within a period of five (5) years from and after the issuance of a Certificate of Title in favor of the VENDEE, the latter agrees and obligates not to assign, sell, lease, sublease, or otherwise encumber the above-described property or any portion thereof in favor of any party except in case of hereditary succession or resale in favor of the VENDOR. In case of breach thereof, the VENDEE obligates to pay liquidated damages in the amount of ₧5,000.00 or to resell the property in favor of the VENDOR at the original price [at] which it was sold to the VENDEE, less the amount of ₧5,000.00 by way of liquidated damages, at the option of the VENDOR.
x x x x
6. The VENDEE agrees to finally and unconditionally abide by the interpretation or construction of the VENDOR of any term, condition, or stipulation contained in this deed including its implementation. Should the VENDEE violate this provision or any provision contained in this Deed, VENDEE agrees, warrants and obligates to pay liquidated damages in the amount of FIVE THOUSAND (₧5,000.00) PESOS.[32]
On August 25, 1975, petitioner filed a Complaint[33]
before the Manila RTC for specific performance to compel GSIS to execute a new
Deed of Absolute Sale without any onerous conditions as petitioner alleged, to
place him in peaceful possession of the premises, to refund to him the interest
charges he paid to GSIS, to pay him the rentals paid by Fe Santos to GSIS, and
for GSIS and Spouses Rustico and Fe Santos to pay damages and attorney’s fees.
On
WHEREFORE,
PREMISES CONSIDERED, judgment is hereby rendered DECLARING–
(1)
the Deed of
Absolute Sale executed by and between the GSIS and plaintiff Fernando A. Santiago
dated
and
ORDERS the following:
(2)
The GSIS to refund to the plaintiff the interest it
collected from the plaintiff for the months of
(3)
The GSIS to
deliver to the plaintiff all rentals it has received and paid by the defendants
Rustico and Fe Santos;
(4)
The defendants Rustico Santos and Fe Santos to
immediately vacate the premises, Lot No. 15, Block No. 2 with an area of four
hundred ninety four (494) square meters, together with the building and
improvements thereon and deliver the possession to the plaintiff;
(5)
The defendants
Rustico Santos and Fe Santos to pay the plaintiff the rentals for occupying the
house and lot from November 1973 to and until they have vacated the premises,
at the prevailing rate in the vicinity;
(6)
Defendants Rustico Santos and Fe Santos to pay the
plaintiff the amount of P200,000.00 as moral damages and P200,000.00 as
exemplary damages and P50,000.00 as attorney’s fees;
(7)
All improvements
introduced by the defendants Rustico Santos and Fe Santos as builders in bad
faith, to be forfeited in favor of the plaintiff; and
(8)
Defendants
Rustico Santos and Fe Santos to pay [the] costs of suit.
SO ORDERED.[34]
Unconvinced of the Decision, both petitioner
On
The CA upheld the validity of the
Deed of Absolute Sale executed by and between GSIS and petitioner on
With respect to Fe Santos’
application to buy the disputed property, the appellate court observed that
said application was received by GSIS on November 12, 1973, when the Contract
to Sell was already deemed automatically cancelled and of no force and effect pursuant
to paragraph eight (8) of the contract; hence, GSIS acted in good faith.
Likewise, it had no participation in placing
The CA however considered the award
of moral or temperate, exemplary damages, and attorney’s fee unwarranted
because the trial court failed to state any factual basis for the award.
After petitioner’s plea for
reconsideration was rejected in the
I
The
Court of Appeals’ ruling that respondent GSIS had acted in good faith is
contrary to the documentary evidence and the established facts on record.
II
The
Court of Appeals’ ruling that respondent
III
The
Court of Appeals’ reversal of the award of moral and exemplary damages is not
in accord with the rulings of this Honorable Supreme Court.[37]
The Court’s Ruling
Unfortunately, the petition has to
fail.
Factual Matters Subject of Issues I and II Barred
The
aforequoted grounds in petitioner’s issues I and II raise factual issues which
are precluded in this petition under the factual issue bar rule under Section
1, Rule 45 of the 1997 Rules of Civil Procedure, which provides that the
petition shall raise only questions of law.
Under the first ground, petitioner
claims GSIS acted in bad faith as shown by documentary evidence and the facts
extant on the record. The query whether GSIS
acted in bad faith is a question of fact as it will necessitate the examination
of the probative value of the evidence adduced before the Manila RTC. The Court is not predisposed to render a
review of such evidence as it is not a trier of facts.
Even
if we entertain the issue on whether GSIS acted in good faith in its dealings
with petitioner, we agree with the CA that the GSIS acted aboveboard with
regard to petitioner’s contract. We uphold
the ruling of the CA, thus:
We agree with the
trial court that appellee GSIS acted in good faith in its transaction with the
appellants regarding the properties in question.
Good faith is defined as an honest
intention to abstain from taking unconscientious advantage of another (Guzman
Bocalinga v. Bonnevie, 206 SCRA 668). On
the other hand, bad faith is a state of mind affirmatively operating with
furtive design or with some motive of self-interest or ill-will or for ulterior
purpose (Air France v. Carrascoso, 18 SCRA 155).
The undeniable fact is that appellant
Under
paragraph eight (8) of the Contract to Sell, GSIS had every right to cancel
petitioner’s contract for he was delinquent for five (5) years and eleven (11)
months, and still, respondent GSIS was even generous enough to reinstate
petitioner’s contract. GSIS’ act of
restoring petitioner’s contract is eloquent proof of its fairness to its
members like petitioner and the absence of bad faith on its part.
Moreover,
GSIS entertained
In
addition, GSIS neither assisted nor placed Fe Santos in possession of the
subject property. As a matter of fact,
it was petitioner who indirectly authorized
Furthermore,
Ortega and Echevarria, authorized representatives of petitioner, notified the
Manager of the GSIS Acquired Assets Departments, through a
GSIS was cautious in its dealings
with
It
is hard to believe that GSIS acted in bad faith by colluding with
Similarly,
the second ground to support the instant petition likewise pertains to a
factual issue—whether the possession of respondents spouses Rustico and Fe
Santos is in the nature of a lessee based on the evidence. Again, petitioner
would like the Court to evaluate and calibrate the evidence anew—a task already
accomplished by the Manila RTC and later by the CA. We deny petitioner’s request for it is not
the Court’s duty to analyze or weigh evidence all over again.
As
a rule, the findings of fact of the CA are final and conclusive and cannot be
reviewed on appeal by this Court.[41] More so, as in this case, when the findings
of fact of the trial court were affirmed by the CA, the Court perforce must
confirm and approve said findings. While
every rule has its exceptions, petitioner has not satisfactorily shown that his
appeal can lead to a departure from the aforementioned rule.
Even
if we consider the second issue as proper under Rule 45, still, the Court
agrees with the CA that respondent
3. The [respondent] GSIS to refund the amount of interest charges paid by the herein plaintiff to the [respondent] GSIS for the period covering December 11, 1973 to September 30, 1974 and to deliver to the plaintiff the amount of monthly rentals collected by the [respondent] GSIS from the [respondent] Fe Santos;[42]
Secondly,
the
Deletion of damages sanctioned
Anent
the third issue, the Court rules that no reversible error was committed by the
CA in recalling the award of moral and exemplary damages in petitioner’s favor.
In
awarding damages, it is settled principle that the trial court should state the
factual bases of the award of these damages and attorney’s fees.[44] A simple perusal of the July 29, 1988 Decision
of the Manila RTC easily reveals the absence of any basis for the award of PhP
200,000.00 as moral damages and PhP 200,000.00 as exemplary damages in petitioner’s
favor. Such being the case, the CA is
correct in disregarding said damages.
It
is also a firm rule that while no proof of pecuniary loss is necessary in order
that moral damages may be awarded, the amount of indemnity being left to the
discretion of the court, “it is, nevertheless, essential that the claimant
satisfactorily prove the existence of the factual basis of the damage and its
causal relation to defendant’s acts.”[45]
As
previously discussed, the Court has adopted the findings of fact of the CA,
more particularly, its finding that spouses
In
addition, Article 2234 of the Civil Code bars the award of exemplary damages
since respondent spouses were not held liable for moral damages.
From
the foregoing considerations, petitioner has not shown that the CA deviated
from applicable laws and pertinent Supreme Court rulings and hence, the Court
rules that the CA has not committed any reversible error in its
WHEREFORE, we DENY the petition for lack of merit and
AFFIRM the assailed CA Decision and
Resolution, with no costs.
SO ORDERED.
PRESBITERO
J. VELASCO, JR.
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
DANTE O. TINGA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief
Justice
[1] Records, pp. 599-604.
[2]
[3] Contract of Lease, id. at 715; Memorandum in Support of Judge Santiago’s Request to Set Aside Notice of Cancellation, id. at 611-617, 612.
[4]
[5]
[6]
[7]
[13]
[14]
[16]
[19]
[20]
[23]
[29]
[30]
[32]
[33]
[34] CA rollo, pp. 146-147.
[35] Rollo, pp. 41-49. The Decision was penned by Associate Justice Hilarion L. Aquino, and concurred in by Associate Justices Jainal D. Rasul and Conchita Carpio Morales (now a member of this Court).
[36]
[37]
[38]
[39] Records, pp. 612 & 621.
[42] Supra note 33, at 21.
[43] Supra note 40.