FIRST DIVISION
ROMUALDO
ANSELMO for G.R. No.
154339
himself and in representation of
his deceased wife,
EMERLINDA Present:
MERCADO-ANSELMO,
Petitioner, PUNO,
C.J., Chairperson,
SANDOVAL-GUTIERREZ,
-versus - CORONA,
AZCUNA,
and
GARCIA, JJ.
SPOUSES
WILLIAM HERNANDEZ
&
ROSEMARIE HERNANDEZ, Promulgated:
Respondents.
October
15, 2007
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X
DECISION
AZCUNA,
J.:
This is a petition for review[1] of
the Decision and Resolution of the Court of Appeals (CA), dated April 3, 2002
and July 11, 2002, respectively, in CA-G.R. CV No. 49437, entitled “Spouses
William G. Hernandez and Rosemarie Z. Hernandez v. Spouses Romualdo Anselmo and
Emerlinda Mercado-Anselmo.”
The facts appear as follows:[2]
Petitioner and his wife and the
spouses Manuel San Diego and Azucena Anselmo San Diego were the registered
owners of a 712-square meter lot covered by Transfer Certificate of Title No.
95064, located in San Francisco del Monte,
On P2,500,000 as evidenced by a
deed of absolute sale. The sale was registered and on
The sale allegedly came with an
understanding that petitioner and his wife, while searching for a place to
transfer, will be permitted to stay on the property temporarily or until
Consequently, on
In
their Answer with Counterclaim, petitioner and his wife contended: 1) that they
did not sell the subject property to respondents, and that the deed of sale and
other documents were obtained fraudulently; 2) that the sale is void for want
of consideration because their supposed transaction with respondents was for a
loan of money in the amount of P2,500,000; 3) that the house and lot served
as collateral for the loan; 4) that they
have received P300,000 from respondents; 5) that they paid the
corresponding interest on the loan; 6)
that contrary to respondents’ assertion, they did not have any business
transaction with or indebtedness to Boston Equity Resources, Inc. (hereafter,
Boston Equity); and 7) that respondents use Boston Equity, with intent to gain,
in their dealings with unsuspecting borrowers.
On
At
the outset, it must be pointed out that the defendants have the burden of proof
… to present evidence on the facts in issue necessary to establish their
defense … by preponderance of evidence. [T]here is a disputable presumption
that private transactions have been fair and regular, that the ordinary course
of business has been followed, and that
there is sufficient consideration for a contract (Sec. 3, Rule 131, Rules of
Court)…
A simple scrutiny of defendant’s
evidence will readily reveal that they have miserably failed to discharge or
fulfill their burden of proof. Defendant Emerlinda Mercado-Anselmo, in her own
testimony under cross-examination, admitted that plaintiff William Hernandez
paid her P350,000.00 in cash and assumed and actually paid her
obligation to a certain Mr. Choa. It is not true, therefore, that the Deed of
Absolute Sale was not supported by a sufficient consideration. Mrs. Anselmo
herself acknowledge[d] that Mr. Hernandez paid a total of P2,250,000.00
in connection with the Deed of Absolute Sale. The fact that the latter state[d]
[that] the consideration [was] P2.5 Million is of little moment. The
difference is so minute as to command an overpowering importance. Besides, Mr.
Hernandez testified that the obligation of the defendant which he settled
amounted to more than P2.2 Million.
The defendants insist that their
indebtedness (which Mr. Hernandez paid) was not to
In [the] light of the foregoing
findings of fact, there is no way by which the questioned Deed of Absolute Sale
can be categorized as void for want of consideration. Let us now examine if
defendant’s contention that it is invalid for being simulated and having been
secured through fraud and false representation has any factual and legal basis.
… In this case, the defendants claim
that the real agreement between them and the plaintiffs was one of equitable
mortgage but they were induced by the latter to sign a Deed of Absolute Sale
instead over the property intended to secure the loan on the pretext (albeit
false or fraudulent) that Mr. Hernandez needed such instrument to obtain from
his Chinese friends the money he was going to lend to them (the defendants).
This is of course strongly controverted and denied by the plaintiffs. But
granting arguendo that the said allegation of the defendants were
true, the resulting contract would not be simulated or fictitious but only
fraudulent (Pangadil v. CFI of Cotabato, 116 SCRA 347), pursuant to
Article 1338 of the Civil Code of the Philippines, which thus renders the said
Deed of Absolute Sale merely voidable at the most (Arts. 1334 and 1390, Civil
Code of the Philippines). As such, said Deed is valid until it is set aside,
and its validity may be assailed only in action for that purpose (Llacer v.
Muñoz, 12 Phil. 328), which shall be brought within four years from the
time of the discovery of the fraud (Art. 1591, ibid.).
In other words, the attack against
its validity must be directly made in an action or in a counterclaim for that
purpose…. In their “Answer with
Compulsory Counterclaim,” the defendants patently failed to allege and pray for
the annulment of the said Deed of Absolute Sale as a counterclaim, but limited
their allegations and prayer to actual, moral and exemplary damages.
To emphasize, the fraud and false
representation alleged by the defendants would not have rendered the questioned
Deed of Absolute Sale simulated and void, but only voidable, and only if they
had successfully proven the existence of the [said] fraud or false
representation, which they actually have not. While defendant Emerlinda Anselmo
testified on this matter, the probative value of her testimony does not
outweigh the contrary declaration of plaintiff Mr. Hernandez. Not only is the
latter more consistent with human behavior and ordinary experience, it
[plaintiff’s declaration] is more importantly supported by the documentary
evidence admittedly signed or executed by Mrs. Anselmo. In contrast, we only have
her naked assertion shot through and through with glaring inconsistencies. The
weak and puerile corroborative testimony of her sister-in-law miserably failed
to bolster Mrs. Anselmo’s case, proceeding as it was from a biased and polluted
source.
Because of the foregoing
considerations and conclusions, the first issue in this case is hereby resolved
in favor of the validity and legality of the Deed of Absolute Sale executed by
the parties herein on
As regards the third issue, suffice
it to state that plaintiffs’ version of the circumstances surrounding and
leading to the execution of the Deed of Absolute Sale conforms to usual
business practice much more than that of the defendants’. it is not uncommon
for debtors in default to sell their mortgaged property, rather than have it
foreclosed, so that they can fetch a higher price therefore. As Mrs. Anselmo
herself testified, she received P350,000 from Mr. Hernandez aside from
the latter’s assumption of her obligation to a certain Mr. Chua. Obviously, the
cash she received represented an additional amount over and above what would
have been realized [had the property been] foreclosed and sold at public
auction.
On the other hand, defendants’
version is simply incredible. This Court cannot imagine how a businesswoman of
Mrs. Anselmo’s stature and standing would willingly sign a document she fully
knew to be an Absolute Deed of Sale if her real agreement with Mr. Hernandez
was only for a loan secured by a real estate mortgage. The ploy supposedly
employed by Mr. Hernandez, that of using the
instrument to obtain the money to be loaned to the defendants from his
Chinese friends, is too pat and transparent as to deceive and mislead even an ordinary [man], much less
an established businesswoman engaged in the manufacturing and export of
garments like Mrs. Anselmo. If only on this score, the latter’s version must
perforce be rejected.
Accordingly, said third issue is resolved to the effect that the agreement between the parties was indeed a sale (of the property in question) and not merely an equitable mortgage. It necessarily follows [therefore] that the defendants are bound to deliver the possession of said property to the plaintiffs…. From all the above, it becomes obvious that the plaintiffs are the ones entitled to the reliefs prayed for in their Complaint… It goes without saying that the defendants wrongfully retained possession and use of subject property after the last demand of the plaintiffs, thereby entitling the latter to reasonable compensation for the deprivation of their right to the use and enjoyment thereof.
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, and against the defendants, as follows:
1) Ordering the defendants to forthwith deliver the physical possession of the subject property to the plaintiffs;
2) Ordering the defendants to pay to the plaintiffs the following:
(i)
Compensation at the rate of P2,000.00 a month,
with legal interest, for the use and occupation of subject property, computed
from
(ii)
P50,000.00 as moral damages;
(iii)
P30,000.00 as exemplary damages;
(iv)
P30,000.00 as and by way of attorney’s fees; and
(v) Costs of suit.
Defendants’ counterclaims are DISMISSED.
SO ORDERED.[4]
The
ruling of the RTC was affirmed by the CA in a Decision dated
“WHEREFORE,
premises considered, the Decision dated
SO ORDERED.[5]
I
WHETHER THE
II
WHETHER THE
III
WHETHER THE
IV
WHETHER
THE
Petitioner argues, as follows:
One, the transaction between the
parties was principally a loan with equitable mortgage, and that the sale was
merely a ruse to circumvent the prohibition against pactum commissorium;
Two, the deed of sale was executed on
P2,500,000
evidencing the indebtedness of petitioner’s deceased wife, Emerlinda, were executed
on
Three, notwithstanding the deed of
absolute sale, petitioner and his wife and respondent William, along with the
co-owners of the property, had a verbal agreement that the transaction was a
loan. Petitioner and his wife agreed to sign the deed of sale because,
according to respondent William, it would be easier for him to borrow money
from his Chinese friends, on petitioner’s behalf, if the title to the property
were in his name;
Petitioner never had the intention of
selling his property to respondents because the loan that he and his wife
wanted to obtain from respondent William was to be used for the expansion of their
garments business. They signed the documents in the name of Boston Equity under
the instruction of respondent William who likewise serves as President of
Boston Equity. Petitioner claims that he and his wife never received any amount
from Boston Equity. Their property was given as security for the loan of P2,500,000
that they obtained from respondent William;[7]
Four, respondents’ evidence made it
appear that petitioner and his wife were indebted to two parties: Mr. Bonifacio
Choa and Boston Equity. During the trial, respondents averred that petitioner
and his wife had to borrow money from Boston Equity in order to pay their
obligation to Mr. Choa. Respondents’ Exhibits “J” and “K” show on their face that
the obligation of petitioner and his wife was to a certain Mr. Bonifacio Choa
in whose favor the sum of P1,900,000 as loan granted by Boston Equity
was applied. This demonstrates that the property was not sold to respondents
but was mortgaged to Boston Equity. That the property was mortgaged to Boston Equity
is further bolstered by the fact that respondent William testified that petitioner
and his wife offered that he buy the subject property because they obtained a
loan from Boston Equity and they were unable to pay the interest so the latter
was going to foreclose the property;
Five, it is highly surprising that
the lower court dismissed “as of little moment” the difference (P250,000)
between what petitioner and his wife received (P2,250,000) as against
the consideration of the alleged sale (P2,500,000) as “so minute as to
command an overpowering importance.” The lower court should have held the
difference of P250,000 as evidence that respondents retained for
themselves a part of the purchase price indicative of an equitable mortgage.
Moreover, the peculiar circumstances surrounding the execution of the deed of
sale give rise to a fair inference that the real intention of the parties is
that the transaction shall secure the payment of a debt, evidencing equitable
mortgage rather than a contract of sale; and
Six, the appealed decisions should be
nullified for want of jurisdiction. The complaint should have been treated as
one for Unlawful Detainer. The pertinent allegations of the complaint are reproduced
as follows:
“7. However,
notwithstanding the lapse of four (4) months, more or less, from receipt of the
aforesaid demand letter (“to vacate the subject property and surrender
possession thereof”) … defendants still failed and/or refused to deliver the
subject property to plaintiffs.”
Section 1, Rule 70 of the Rules of Court,
provides:
… such
… vendee … may, at anytime within one year after such unlawful
deprivation or withholding of possession, bring an action in the proper Municipal
Trial Court against the person or persons unlawfully withholding or depriving
of possession … for the restitution of such possession together with damages
and costs.”[8]
The issue is whether the parties
truly entered into a contract of sale, a resolution of which requires an
examination of the facts and the evidence presented in the case.
This Court is not a trier of facts.[9]
The findings of facts of the CA, especially when these agree with those of the
trial court, are accorded respect and seldom disturbed.
From
the records, the Court considers the following: 1) the promissory note
evidencing a loan of P2,500,000[10]
prepared by Boston Equity was signed by petitioner and his wife on November 16,
1990; 2) a loan voucher issued by Boston Equity on November 16, 1990 showed
that petitioner and his wife received the total amount of P2,250,000 (P1,900,000 of which was indicated to have
been applied to petitioner and his wife’s indebtedness to Mr. Bonifacio M.
Choa); 3) petitioner’s wife Emerlinda wrote on March 12, 1991 and June 24, 1991
letters of extension for the payment of the loan, addressed to Boston Equity;
4) Boston Equity issued a Statement of Account in the name of petitioner’s wife
Emerlinda; 5) the Deed of Absolute Sale was executed on April 24, 1991; 6)
respondent William Hernandez was the President of Boston Equity at the time the
alleged loan was extended by the latter to petitioner and his wife, and when
the purported contract of sale was executed;
7) petitioner’s residence and garments business are situated in the lot covered
by the deed of sale; 8) no real estate mortgage was shown to have been executed
by petitioner in favor of Boston Equity to secure the loan; 9) petitioner
received P300,000
in cash from respondents; and 10) the San Diego spouses, the co-owners of the
property, did not receive anything from the proceeds of the sale.
While
the circumstances of the case and the parties’ testimonies may appear to give
various possibilities, it is not the Court’s function to speculate. The
evidence points to the fact that petitioner and his wife obtained a loan from
Boston Equity, and entered into a contract of sale with respondents.
The
Court finds no reason, therefore, to overturn the findings of the RTC and the
CA. Pertinent portions of the CA decision read:
[A] contract, according to Article 1305 of the
Civil Code, ‘is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some
service. Once the minds of the contracting parties meet, a valid contract
exists, whether it is reduced to writing or not. And, when the terms of an agreement have been reduced to writing,
it is considered as containing all the terms agreed upon and there can be,
between the parties and their successors-in-interest, no evidence of such terms
other than the contents of the written agreement, except when it fails to
express the true intent and agreement of the parties thereto, in which case,
one of the parties may bring an action for reformation of an instrument to the end that such true
intention may be expressed…
For
an action for reformation of an instrument as provided for in Article 1359 to
prosper, the following requisites must concur, to wit: (1) there must have been
a meeting of the minds of the parties to the contract; (2) the instrument does
not express the true intention of the parties; and (3) the failure of the
instrument to express the true intention of the parties is due to mistake,
fraud, inequitable conduct or accident…
In
the case at bench, appellants [petitioners] had not shown or established the
presence of the afore-stated requirements for the reformation of the deed in
question. In fact, as correctly pointed out by the court a quo, appellants
failed to allege and pray for the annulment of the deed of absolute sale as a counterclaim, but limited their
allegations and prayer to actual, moral and exemplary damages. As earlier
stressed, the subject deed of absolute sale was couched in clear terms and
conditions.
Finally,
the claim of the appellants that their indebtedness was not to Boston Equity
Resources, Inc. but to a certain Mr. Choa is unsubstantiated. It bears
stressing that said person was not presented to corroborate appellant’s bare
assertion, and besides, said claim is belied by the documents…admittedly signed
by appellant Emerlinda Anselmo, which either refer to Boston or written on its
stationery. Also, Mrs. Anselmo herself testified that she received P350,000.00
from Mr. Hernandez aside from the latter’s assumption of her obligation to Mr.
Choa…In light of the foregoing, it cannot be said that the deed of absolute sale can be categorized as
void for want of consideration. In addition, the voluntary, written and
unconditional acceptance of contractual commitments negated the theory of
equitable mortgage.[11]
With regard to the award of damages,
attorney’s fees and litigation costs, however, the Court believes that the same
is not warranted under the circumstances. Respondents failed to show proof or
factual basis of the alleged moral injury.[12]
Likewise, where there is no showing that petitioner acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner, the award of exemplary
damages cannot be granted.[13]
Finally, attorney’s fees and expenses of litigation cannot, according to
Article 2208 of the Civil Code, [14]
be recovered in this case, there being no stipulation to that effect and the
case does not fall under any of the exceptions provided by law.
WHEREFORE,
the petition is PARTIALLY GRANTED. The award of moral and
exemplary damages, and attorney’s fees and litigation costs is DELETED, and the Decision and Resolution of
the Court of
Appeals, dated
No costs.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA
Associate Justice
Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified 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] Under Rule 45 of the Rules of Court.
[2] Rollo, pp. 77-79.
[3] Docketed as Civil Case No. Q-92-11368.
[4] Rollo, pp. 116-125.
[5]
[6]
[7]
[8]
[9] Only in instances when a miscarriage of justice could probably result from the trial court’s and/or the Court of Appeals’ oversight of significant facts which could materially alter the determination of the case does this Court step in and evaluate evidentiary matters.
[10] Maturity date of the loan was
[11] Rollo, pp. 80-82.
[12] While no proof of pecuniary loss is necessary, it is essential that the claimant should satisfactorily provide factual basis for the alleged moral injury (People v. Villamor, G.R. Nos. 111313-14, January 16, 1988, 284 SCRA 184).
[13] Xentrex Automobile, Inc. v. Court of Appeals, G.R. No. 121559, June 18, 1998, 291 SCRA 66.
[14] 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;
…
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
…
(11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.