THIRD
DIVISION
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HONORIO C. BULOS, JR.,
Petitioner, - versus
- KOJI YASUMA, Respondent. |
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G.R. No. 164159 Present: YNARES-SANTIAGO, J., Chairperson,
AUSTRIA-MARTINEZ, CHICO-NAZARIO,
and NACHURA,
JJ. Promulgated: |
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CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari[1]
under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to set aside
and to declare null and void (1) the Decision,[2]
dated 5 January 2004, of the Court of Appeals in CA-G.R. CV No. 54969, which
affirmed the Decision,[3]
dated 30 August 1996, of the Makati City Regional Trial Court (RTC), Branch
148, in Civil Case No. 90-1053; and (2) the Resolution[4] of
the Court of Appeals, dated 11 June 2004, which denied the petitioner’s Motion
for Reconsideration.
Herein petitioner Honorio C. Bulos (petitioner)
was one of the defendants in a Complaint for collection of sum of money plus
damages with prayer for a writ of preliminary attachment, docketed as Civil
Case No. 90-1053, entitled, “Koji Yasuma
v. Ramon R. Lim, Honorio C. Bulos and Bede S. Tabalingcos,” filed with the RTC by herein respondent
Koji Yasuma, a Japanese national.
The controversy in the present case
arose from the following antecedents:
Petitioner, together with Dr. Ramon R.
Lim (Dr. Lim) and Atty. Bede S. Tabalingcos (Atty. Tabalingcos), obtained a loan
from Koji Yasuma (respondent) in the amount of P2,500,000.00, as
evidenced by a promissory note,[5]
dated P10,000.00. As a security for the said loan, both petitioner
and Dr. Lim executed Real Estate Mortgages[7]
over their respective properties.
On
After painstaking efforts to collect
the loan from the petitioner, Dr. Lim and Atty. Tabalingcos, respondent
requested Atty. Tabalingcos, who happened to be his legal adviser at that time,
to foreclose the Real Estate Mortgages executed by the petitioner and Dr. Lim
over their respective properties. Atty.
Tabalingcos failed to do so. Instead, he
made a proposal to respondent that the petitioner had certain properties in P1,630,750.00,
paid via a dacion en pago arrangement.
After the execution of the Deed of
Sale, all the parties agreed that there was still a balance of P2,240,000.00
owed to the respondent. In a Certification[10] dated
P1,500,000.00
obligation of Dr. Lim. The consideration
for the said assumption of obligation is the transfer[11]
of the shares of stocks of the Rural Bank of Parañaque to the respondent to
offset the obligation. Petitioner thus
offered the said shares of stocks to the respondent. Atty. Tabalingcos, for his part and in his
capacity as Chairman of the Board of the said bank, issued a certification[12]
to the effect that the respondent holds P1,250,000.00 worth of shares of
stocks, equivalent to 20% shareholdings in the Rural Bank of Parañaque. However, during that time, the Rural Bank of
Parañaque must first increase its authorized capital stock subject to the
approval of the Securities and Exchange Commission (SEC) because the original
shares had already been fully subscribed and fully paid. Because of this and of the information provided
by his then counsel, the late Atty. Bayani M. Timario, Jr. (Atty. Timario,
Jr.), that a foreigner cannot be a stockholder of a rural bank, the respondent
absolutely refused to accept the shares of stocks and demanded instead an
outright payment of the loan obligation.
As the shares of stocks were already assigned to the respondent via a certification issued by Atty.
Tabalingcos, the latter then issued a check[13]
in the amount of P2,240,000.00 to the order of the respondent, dated
Subsequently, the respondent sent a
demand letter[14] to each
of the borrowers -- the petitioner, Dr. Lim and Atty. Tabalingcos -- for the
full payment of their outstanding obligation; but, to no avail. This prompted the respondent to file with the
RTC a Complaint for Sum of Money with Damages and with Prayer for a Writ of
Preliminary Attachment against the petitioner, Dr. Lim and Atty. Tabalingcos. On P2,240,000.00.
By virtue of the said writ, several lots of the petitioner, and the house
and lot of Dr. Lim located in P2,240,000.00. Petitioner moved for the reduction of his
counter-bond to P770,000.00 considering that the respondent made an
admission that the petitioner partially paid the loan obligation in the amount
of P1,630,750.00. The said motion
was granted by the court a quo in its
Order dated
On
WHEREFORE, premises considered, and finding that [herein respondent] has fully established not only by preponderance of evidence by competent proof of his entitlement to his claims in the [C]omplaint, judgment is hereby rendered in favor of [respondent] and against [herein petitioner, together with Dr. Lim and Atty. Tabalingcos]. Ordering [the petitioner, Dr. Lim and Atty. Tabalingcos] to jointly and severally pay the [respondent] the following:
(1)
The amount of P2,240,000.00 plus interest of 21%
per annum as of April, 1990, the time of the filing of the [C]omplaint;
(2)
The sum equivalent to 20% of P2,240,000.00 plus P500.00
per appearance in the case, for and as attorney’s fees.
(3) Costs of the suit.
The cross-claim filed by [Atty. Tabalingcos] against the [petitioner] is hereby DISMISSED for reasons stated above.
Costs against [petitioner, Dr. Lim and Atty. Tabalingcos].[18]
Aggrieved by the aforesaid Decision of the trial court, the petitioner,
Dr. Lim and Atty. Tabalingcos appealed to the Court of Appeals. However, Atty. Tabalingcos did not file his
appellant’s brief. On
Hence, this petition by petitioner. However, Dr. Lim and Atty. Tabalingcos did
not appeal before this Court.
Petitioner submits the following
issues for this Court’s resolution:
I. Whether or not the obligation of petitioner to pay respondent has already (sic) fully extinguished.
II.
Whether or not the offer to purchase shares of stock of
Rural Bank of Parañaque amounting to P1,250,000.00 extinguished
petitioner Bulos’ obligation to pay the balance of the loan with (sic) respondent.
III. Whether or not petitioner Bulos is entitled to claim for damages.
IV.
Whether or not [the] imposition of 21% interest on P2,240,000.00
and 20% of the said amount as attorney’s fees has no legal and factual basis
(sic).
Petitioner argues that despite the
partial payment made by him in the amount P1,630,750.00, and in spite of
the respondent’s unequivocal admission of the same, still, the respondent did
not deduct the said amount from the total amount of the obligation due
him. Instead, the respondent
continuously claimed the amount of P2,240,000.00 as of
The petitioner likewise avers that his
obligation to pay the balance of the loan to the respondent had already been
extinguished when he offered to the respondent the shares of stocks of the Rural
Bank of Parañaque amounting to P1,250,000.00. Respondent’s assertion that he did not accept
the offer of the shares of stocks because of his nationality deserves scant
consideration as in fact, he had religiously followed up with petitioner and
Atty. Tabalingcos the issuance of the certificate for the said shares of stocks.
Petitioner further alleges that he is
entitled to claim damages for he had been subjected to ridicule, mental
anguish, besmirched reputation, and extreme anxiety as a result of the
respondent’s unfounded and malicious suit.
Petitioner lost business opportunities as a consequence of the
attachment made on his real properties in Tarlac; thus, respondent should be
made liable for the payment of damages for all that he had suffered. As to the imposition of 21% interest on the P2,240,000.00
outstanding loan obligation and 20% of the said amount as attorney’s fees,
petitioner asserts that the same has no legal and factual bases. The imposition of the said interest is highly
excessive and exorbitant in light of the dacion
en pago arrangement and the assignment of shares of stocks of the Rural
Bank of Parañaque.
It
is well-settled that the 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 be disturbed on appeal.
Such findings are binding and conclusive to the Court. Furthermore, it is not the Court’s function
under Rule 45 of the 1997 Revised Rules of Civil Procedure to review, examine
and evaluate or weigh the probative value of the evidence presented. The jurisdiction of the Court in a Petition
for Review under Rule 45 is limited to reviewing only errors of law.[19] Unless the case falls under the recognized
exceptions,[20] the
rule shall not be disturbed.
The following findings of fact,
properly supported by evidence, made by both the trial court and the appellate
court can no longer be modified and are binding on this Court: (1) the original
loan obtained by the petitioner, together with Dr. Lim and Atty. Tabalingcos, from
the respondent amounted to P2,500,000.00 with 4% interest for three
months, or from 11 October 1988 up to 10 January 1989, and in case of extension
of the loan, the interest of 5% per month will be imposed; (2) the obligation
of the petitioner, Dr. Lim and Atty. Tabalingcos was joint and solidary as
evidenced by the following acts:
(a) the promissory note was solely signed by Dr. Lim per agreement among the parties;
(b)
the act of Dr. Lim in executing a Deed
of Real Estate Mortgage in favor of respondent to cover the amount of the promissory
note;
(c)
the act of the petitioner in executing a
second Deed of Real Estate Mortgage as additional security to the loan; and
(d)
the act of Atty. Tabalingcos in issuing
a check in the amount of P2,
240,000.00 to cover the balance of the obligation;
(3) petitioner failed to pay the loan
by 10 January 1989; thus, from 11 October 1988 up to February 1989, the loan
obligation, including interest, reached a total amount of P2,700,000.00;
(4) petitioner made a partial payment via a dacion
en pago, amounting to P1,630,750.00, which was deducted from the
total loan obligation of P2,700,000.00 leaving a balance of P1,069,000.00
as of 24 February 1989; (5) by March 1989, the balance of the loan began
earning a 5% interest per month after
all the parties agreed to an increase in the interest rate during the extended
period; (6) taking into consideration the outstanding loan balance of P1,069,000.00,
plus interest, and minus a discount granted by respondent, the amount still due
respondent was determined by the parties to be P2,240,000.00; and (7) to
pay the remaining indebtedness, Atty. Tabalingcos issued a check covering the
amount but it was dishonored, therefore, the
indebtedness remains at P2,240,000.00.
When the existence of a debt is fully
established by the evidence contained in the record, the burden of proving that
it has been extinguished by payment devolves upon the debtor who offers such
defense. The debtor has the burden of
showing with legal certainty that the obligation has been discharged by
payment.[21] In the present case, the petitioner failed to
prove that indeed, his liability to pay the remaining balance of his obligation
with the respondent had been extinguished by his offer to transfer to
respondent his shares of stocks in the Rural Bank of Parañaque.
The defense of the petitioner that
the offer he made to respondent of his shares of stocks in Rural Bank of
Parañaque amounting to P1,250,000.00 had already extinguished his
obligation to pay the balance of the loan stands on hollow ground.
Section 4, Republic Act No. 7353,
otherwise known as “The Rural Banks Act of 1992,” provides:
Section. 4. x x x. With the exception of shareholdings of corporations organized primarily to hold equities in rural banks as provided for under Section 12-C of Republic Act No. 337, as amended, and of Filipino-controlled domestic banks, the capital stock of any rural bank shall be fully owned and held directly or indirectly by citizens of the Philippines or corporations, associations or cooperatives qualified under Philippine laws to own and hold such capital stock: x x x. (Emphasis supplied.)
Given the foregoing provision of law,
this Court agrees with the Court of Appeals that the respondent, being a
foreigner, is not qualified to own capital stock in the Rural Bank of
Parañaque. This renders the assignment of
shares of stocks in the Rural Bank of Parañaque in favor of respondent
void. As previously stated, the
assignment of the shares of stocks in the rural bank was not accepted by the
respondent precisely because of the prohibition stated under Republic Act No.
7353, which was explained[22]
to him by his counsel, the late Atty. Timario, Jr.
Moreover, petitioner mentioned in his
testimony before the trial court that all the shares of stocks of the Rural
Bank of Parañaque had already been fully subscribed and, for shares to be made
available, additional capital should be infused and the SEC should approved the
additional shares for subscription. Here
we quote that part of the petitioner’s testimony:
Q: Now, you have stated a while ago Mr. Witness, that the balance be paid by shares of stocks and as a matter of fact the [respondent] has accepted that preposition, what happened if any, afterwards?
A: In my case, I transferred 330 something shares of stocks in the name of [the respondent] and I believe [Atty.] Tabalingcos have done the same.
Q: Did you find out for yourselves what happened afterwards if any?
A: However we have transferred in their name however there are technicalities in the issuance, Central Bank technicalities.
Q: What are these Central Bank technicalities?
A: Issuance of shares of stocks certificate, during that period we have to increase our authorized capital stock with the [SEC] because the original one were already fully subscribed and fully paid. [Emphasis supplied].
Q: Then what happened?
A: The only way for us, for the bank to issue additional shares of stocks certificate is to wait for the approval of the increase of capitalization from the [SEC] so that these assigned shares to [Atty.] Tabalingcos can be lodge.
Q: What did you do if any afterwards?
A: We informed the [respondent] about that.
x x x x.
Q: What was his reply if any?
A: He started complaining and said, “just return to me my money” that is how it all started.[23]
From the
aforesaid testimony of the petitioner, it is highly impossible for respondent
to have acquired by assignment any shares of stocks in the Rural Bank of
Parañaque. Thus, the obligation of the
petitioner to pay the balance of the loan remains subsisting.
In the face of all of the above, this Court
nevertheless sustains the assertion of the petitioner that the imposition of
21% interest on the outstanding loan obligation of P2,240,000.00 has no
legal and factual bases.
According to
the promissory note executed by Dr. Lim, and agreed to by all the parties, in
case of the borrower’s failure to pay the loan obligation within the stipulated
period, the extended period shall be considered running monthly under the same
terms and rate of interest, which is 4% per month, until the principal has been
fully paid. Thus, the remaining balance of
P2,240,000.00 is still subject to the interest rate of 4% per month[24]
or 48% per annum. To our mind such rate
of interest is highly unconscionable and inordinate.
In the case of
Ruiz v. Court of Appeals,[25]
citing the cases of Medel v. Court of
Appeals,[26] Garcia v. Court of Appeals,[27] Spouses
Bautista v. Pilar Development Corporation[28]
and the recent case of Spouses Solangon v.
Salazar,[29]
this Court considered the 3% interest per month or 36% interest per annum as
excessive and unconscionable. Thereby,
the Court, in the said case, equitably reduced the rate of interest to 1%
interest per month or 12% interest per annum.
The Court also held that while the Usury Law has been suspended by
Central Bank Circular No. 905, s. 1982, effective on
In Eastern Shipping Lines, Inc. v. Court of
Appeals,[31] the
Court formulated the following rules of thumb to guide the lower courts in the
imposition of the proper interest on the amounts due, to wit:
I. x x x x.
II.
With regard particularly to an award of interest in the
concept of actual and compensatory damages, the rate of interest, as well as
the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2.
x x x x.
3.
When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the case falls
under paragraph 1 or paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of credit.[32] [Emphasis supplied].
The agreed interest rate of 4% per
month or 48% per annum is unconscionable and must be mitigated. Following established jurisprudence, the
legal interest rate of 12% should apply, computed from the date of judicial
demand, that is,
As regards the argument of the
petitioner that the award of attorney’s fees equivalent to 20% of P2,240,000.00
is excessive, this Court finds the same specious. The lower courts found that by reason of the
acts of the petitioner and his cohorts, the respondent had to secure the
services of counsel in order to preserve and protect his rights. If not for the refusal of the petitioner to
settle his obligation, the respondent would not have incurred expenses in
filing a case which dragged on for more than a decade in order to recover the
loan which he extended to the petitioner, Dr. Lim and Atty. Tabalingcos. Hence, the award of 20% of P2,240,000.00
as attorney’s fees is only reasonable. Conspicuously,
there appears to be a variation as to the percentage of attorney’s fees awarded
in the dispositive portion and in the body of the RTC decision. In the dispositive portion of the RTC decision,
the attorney’s fees awarded was 20% of P2,240,000.00; while in the body
of the same decision, the rate referred to 10% of P2,240,000.00.[33]
The general rule is that, where there is conflict between the
dispositive portion or the fallo and
the body of a decision, the fallo
controls. This rule rests on the theory
that the fallo is the final order
while the opinion in the body is merely a statement ordering nothing. However, where the inevitable conclusion from
the body of the decision is so clear as to show that there was a mistake in the
dispositive portion, the body of the decision prevails.[34] In his complaint before the RTC, the
respondent prayed for 20% of P2,240,000.00 as attorney’s fees. In the body of the RTC decision, the trial
court awarded outright respondent’s prayer for attorney’s fees without any
discussion that it found the 20% respondent prayed for as excessive and that it
was reducing the percentage of the attorney’s fees to 10%. This court is more inclined to believe that
the 10% attorney’s fees in the body of the RTC decision is merely a
typographical error. Consequently, the
general rule applies to this case, and the 20% attorney’s fees ordered paid by
the fallo of the RTC decision
controls.
WHEREFORE,
premises considered, the instant Petition is PARTIALLY GRANTED. The
Decision and Resolution of the Court of Appeals dated 5 January 2004 and 11
June 2004, respectively, in CA-G.R. CV No. 54969, which affirmed the Decision,
dated 30 August 1996, of the Makati City RTC, Branch 148, in Civil Case No.
90-1053, are hereby AFFIRMED with
the MODIFICATION that an interest
rate of 12% per annum shall be applied to the balance of the loan amounting to P2,240,000.00,
computed from the date of judicial demand, i.e.,
7 April 1990; and of 12% interest per annum on the amount due from the date of
the finality of this Decision until fully paid.
Costs against the petitioner.
SO ORDERED.
|
|
MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
CONSUELO YNARES – SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
ATTESTATION
I attest 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.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, 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.
REYNATO S.
PUNO
Chief Justice
[1] Rollo, pp. 31-55.
[2] Penned by Associate Justice Arsenio J. Magpale with Associate Justices Conrado M. Vasquez, Jr. and Bienvenido L. Reyes, concurring; id. at 8-19.
[3] Penned by Judge Oscar B. Pimentel; id. at 126-167.
[4]
[5]
[6] TSN,
[7] Rollo, pp. 82-85.
[8] Records, Vol. II, p. 444.
[9] Rollo, pp. 111-113.
[10]
[11] The petitioner, Dr. Lim and Atty. Tabalingcos are stockholders of the Rural Bank of Parañaque. However, Dr. Lim later on decided not to join the bank anymore.
[12] Rollo, p. 116.
[13]
[14]
[15]
[16]
[17]
[18]
[19] Culaba
v. Court of Appeals, G.R. No. 125862,
[20] Recognized exceptions to this rule are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the finding of facts are conflicting; (6) when in making the findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellee and the appellant; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents; (10) when the findings of facts are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which if properly considered, would justify a different conclusion. (Langkaan Realty Development, Inc. v. United Coconut Planters Bank, 400 Phil. 1349, 1356 [2000]; Nokom v. National Labor Relations Commissions, 390 Phil. 1228, 1242-1243 [2000]; Commissioner of Internal Revenue v. Embroidery and Garments Industries [Phils.], Inc., 364 Phil. 541, 546-547 [1999]; Sps. Sta. Maria v. Court of Appeals, 349 Phil. 275, 282-283 [1998]).
[21] Coronel v. Capati, G.R. No. 157836,
[22] TSN,
[23] TSN,
[24] In the promissory note which was signed solely by Dr. Lim per agreement among the petitioner, Dr. Lim and Atty. Tabalingcos, the stipulated rate of interest was 4%. When the loan obligation became due and demandable and the borrowers failed to pay on the agreed period they sought extension of their loan obligation and promised to increase the rate of interest to 5% to which the respondent agreed. But, when the respondent filed his Complaint for collection of sum of money, the rate of interest which he prayed for was 4% as what was stated in the promissory note.
[25] 449 Phil. 419, 433-434 (2003).
[26] 359 Phil. 820, 829-830 (1998).
[27] G.R. No. L-82282-83,
[28] 371 Phil. 533, 543-544 (1999).
[29] 412 Phil. 816, 822-823 (2001).
[30] Ruiz v. Court of Appeals, supra note 25 at 434.
[31] G.R. No. 97412,
[32]
[33] Rollo, p. 163.
[34] Poliand
Industrial Limited v. National Development Company, G.R. No. 143866,