Republic of the
Supreme Court
THIRD DIVISION
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MARIA
Petitioner, -versus
- ATTY.
JOSE TOMIMBANG, Respondent. |
G.R.
No. 165116 Present:
Ynares-Santiago, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., nachura, and PERALTA, JJ. Promulgated:
August 4, 2009
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I O N PERALTA, J.: |
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This
resolves the petition for review on certiorari under Rule 45 of the
Rules of Court, praying that the
Decision[1]
dated
The
antecedent facts are as follows.
Petitioner
and respondent are siblings. Their
parents donated to petitioner an eight-door apartment located at
In
1995, petitioner applied for a loan from PAG-IBIG Fund to finance the
renovations on Unit H, of said apartment which she intended to use as her
residence. Petitioner failed to obtain a
loan from PAG-IBIG Fund, hence, respondent offered to extend a credit line to
petitioner on the following conditions: (1) petitioner shall keep a record of
all the advances; (2) petitioner shall start paying the loan upon the
completion of the renovation; (3) upon completion of the renovation, a loan and
mortgage agreement based on the amount of the advances made shall be executed
by petitioner and respondent; and (4) the loan agreement shall contain
comfortable terms and conditions which petitioner could have obtained from
PAG-IBIG.[3]
Petitioner
accepted respondent's offer of a credit line and work on the apartment units
began. Renovations on Units B to G were
completed, and the work has just started on Unit A when an altercation broke
out between herein parties. In view of
said conflict, respondent and petitioner, along with some family members, held
a meeting in the house of their brother Genaro sometime in the second quarter
of 1997. Respondent and petitioner
entered into a new agreement whereby petitioner was to start making monthly
payments on her loan. Upon respondent's
demand, petitioner turned over to respondent all the records of the cash
advances for the renovations.
Subsequently, or from June to October of 1997, petitioner made monthly
payments of P18,700.00, or a total of P93,500.00. Petitioner never denied the fact that she
started making such monthly payments.
In
October of 1997, a quarrel also occurred between respondent and another sister,
Maricion, who was then defending the actions of petitioner. Because of said incident, they had a hearing
at the Barangay. At said hearing, respondent had the occasion
to remind petitioner of her monthly payment.
Petitioner allegedly answered, “Kalimutan mo na ang pera mo wala
tayong pinirmahan. Hindi ako natatakot sa 'yo!” Thereafter, petitioner left Unit H and could
no longer be found. Petitioner being the
owner of the apartments, renovations on Unit A were discontinued when her
whereabouts could not be located. She
also stopped making monthly payments and ignored the demand letter dated
On
P3,989,802.25 plus interest of 12% per
annum from date of default.
At
the pre-trial conference, the issues were narrowed down as follows:
1. Whether or not a loan was duly constituted between
the plaintiff and the defendant in connection with the improvements or
renovations on apartment units A-H, which is in the name of the defendant
[herein petitioner];
2. Assuming that such a loan was duly constituted in
favor of plaintiff [herein respondent], whether or not the same is already due
and payable;
3. Assuming that said loan is already due and
demandable, whether or not it is to be paid out of the rental proceeds from the apartment units mentioned, presuming
that such issue was raised in the Answer of the Defendant;
4. Assuming that the said loan was duly constituted in
favor of plaintiff [herein respondent], whether or not it is in the amount of
P3,909,802.20 and whether or not it will earn legal interest at the rate of 12%
per annum, compounded, as provided in Article 2212 of the Civil Code of the
Philippines, from the date of the extrajudicial demand; and
5. Whether or not the plaintiff [herein respondent] is
entitled to the reliefs prayed for in his Complaint or whether or not it is the
defendant [herein petitioner] who is entitled to the reliefs prayed for in her
Answer with Counterclaim.[4]
On
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff and against the defendant ordering the
latter to pay the former the following:
1. The sum of P3,989,802.25 with interest
thereon at the legal rate of 12% per annum computed from the date of default
until the whole obligation is fully paid;
2. The sum of P50,000.00 as and by way of
attorney's fees; and
3. The cost of suit.
SO
ORDERED.[6]
Petitioner
appealed the foregoing RTC Decision to the CA, but on
Hence,
this petition where petitioner alleges that:
I.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW
AND APPLICABLE JURISPRUDENCE OF THE SUPREME COURT WHEN IT AFFIRMED THE
II.
THE COURT OF APPEALS ERRED BY
DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS – OF
AFFIRMING THE DUE AND DEMANDABILITY OF THE LOAN CONTRARY TO THE EVIDENCE
PRESENTED IN THE LOWER COURT – AND
SANCTIONING SUCH DEPARTURE BY THE LOWER COURT IN THE INSTANT CASE.
III.
THE COURT OF APPEALS ERRED FROM
THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS – OF AFFIRMING THE AWARD
OF ATTORNEY'S FEES TO THE RESPONDENT WITHOUT ANY BASIS – AND SANCTIONING SUCH
DEPARTURE BY THE
The
main issues in this case boil down to (1) whether petitioner's obligation is
due and demandable; (2) whether respondent is entitled to attorney's fees; and (3)
whether interest should be imposed on petitioner's indebtedness and, if in the
affirmative, at what rate.
Petitioner
does not deny that she obtained a loan from respondent. She, however, contends that the loan is not
yet due and demandable because the suspensive condition – the completion of the
renovation of the apartment units - has not yet been fulfilled. She also assails the award of attorney's fees
to respondent as baseless.
For
his part, respondent admits that initially, they agreed that payment of the
loan shall be made upon completion of the renovations. However, respondent claims that during their
meeting with some family members in the house of their brother Genaro sometime
in the second quarter of 1997, he and petitioner entered into a new agreement
whereby petitioner was to start making monthly payments on her loan, which she
did from June to October of 1997. In respondent's
view, there was a novation of the original agreement, and under the terms of
their new agreement, petitioner's obligation was already due and demandable.
Respondent
also maintains that when petitioner disappeared from the family compound
without leaving information as to where she could be found, making it
impossible to continue the renovations, petitioner thereby prevented the
fulfillment of said condition. He claims
that Article 1186 of the Civil Code, which provides that “the condition shall
be deemed fulfilled when the obligor voluntarily prevents its fulfillment,” is
applicable to this case.
In
his Comment to the present petition, respondent raised for the first time, the
issue that the loan contract between him and petitioner is actually one with a
period, not one with a suspensive condition.
In his view, when petitioner began to make partial payments on the loan,
the latter waived the benefit of the term, making the loan immediately
demandable.
Respondent
also believes that he is entitled to attorney's fees, as petitioner allegedly
showed bad faith by absconding and compelling him to litigate.
The
Court finds the petition unmeritorious.
It
is undisputed that herein parties entered into a valid loan contract. The only question is, has petitioner's
obligation become due and demandable?
The Court resolves the question in the affirmative.
The
evidence on record clearly shows that after renovation of seven out of the
eight apartment units had been completed, petitioner and respondent agreed that
the former shall already start making monthly payments on the loan even if
renovation on the last unit (Unit A) was still pending. Genaro Tomimbang, the younger brother of
herein parties, testified that a meeting was held among petitioner, respondent, himself and their
eldest sister Maricion, sometime during the first or second quarter of 1997,
wherein respondent demanded payment of the loan, and petitioner agreed to
pay. Indeed, petitioner began to make
monthly payments from June to October of 1997 totalling P93,500.00.[8]
In fact, petitioner even admitted in her Answer with Counterclaim that she had
“started to make payments to plaintiff [herein respondent] as the same was
in accord with her commitment to pay whenever she was able; x
x x .”[9]
Evidently,
by virtue of the subsequent agreement, the parties mutually dispensed with the
condition that petitioner shall only begin paying after the completion of all
renovations. There was, in effect, a
modificatory or partial novation, of petitioner's obligation. Article 1291 of the Civil Code provides,
thus:
Art. 1291.
Obligations may be modified by:
(1) Changing
their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the
creditor. (Emphasis supplied)
In Iloilo Traders Finance, Inc.
v. Heirs of Sps. Soriano,[10]
the Court expounded on the nature of novation, to wit:
Novation may either
be extinctive or modificatory, much being dependent on the nature of the change and
the intention of the parties.
Extinctive novation is never presumed; there must be an express
intention to novate; x x x .
An extinctive
novation would thus have the twin effects of, first, extinguishing an existing
obligation and, second, creating a new one in its stead. This kind of novation presupposes a
confluence of four essential requisites: (1) a previous valid obligation; (2)
an agreement of all parties concerned to a new contract; (3) the extinguishment
of the old obligation; and (4) the birth of a new valid obligation. Novation is merely modificatory where the
change brought about by any subsequent agreement is merely incidental to the
main obligation (e.g., a change in
interest rates or an extension of time to pay); in this instance, the new
agreement will not have the effect of extinguishing the first but would merely
supplement it or supplant some but not all of its provisions.[11]
In Ong
v. Bogñalbal,[12]
the Court also stated, thus:
x x x the
effect of novation may be partial or total.
There is partial novation when there is only a modification or change in
some principal conditions of the obligation.
It is total, when the obligation is completely extinguished. Also, the term principal conditions in Article
1291 should be construed to include a change in the period to comply with the
obligation. Such a change in the period
would only be a partial novation since the period merely affects the
performance, not the creation of the obligation.[13]
As can be
gleaned from the foregoing, the aforementioned four essential elements and the requirement that there be total
incompatibility between the old and new obligation, apply only to extinctive
novation. In partial novation, only the
terms and conditions of the obligation are altered, thus, the main obligation
is not changed and it remains in force.
Petitioner
stated in her Answer with Counterclaim[14]
that she agreed and complied with respondent's demand for her to begin paying
her loan, since she believed this was in accordance with her commitment to pay
whenever she was able. Her partial
performance of her obligation is unmistakable proof that indeed the original
agreement between her and respondent had been novated by the deletion of the
condition that payments shall be made only after completion of
renovations. Hence, by her very own
admission and partial performance of her obligation, there can be no other
conclusion but that under the novated agreement, petitioner's obligation is
already due and demandable.
With
the foregoing finding that petitioner's obligation is due and demandable, there
is no longer any need to discuss whether petitioner's disappearance from the
family compound prevented the fulfillment of the original condition,
necessitating application of Article 1186 of the Civil Code, or whether the
obligation is one with a condition or a period.
As
to attorney's fees, however, the award therefor cannot be allowed by the
Court. It is an oft-repeated rule that
the trial court is required to state the factual, legal or equitable
justification for awarding attorney's fees.[15] The Court explained in Buñing v. Santos,[16]
to wit:
x
x x While Article 2208 of the Civil Code allows
attorney's fees to be awarded if the claimant is compelled to litigate with
third persons or to incur expenses to protect his interest by reason of an
unjustified act or omission of the party from whom it is sought, there
must be a showing that the losing party acted willfully or in bad faith and
practically compelled the claimant to litigate and incur litigation
expenses. In view of the declared policy
of the law that awards of attorney's fees are the exception rather than the
rule, it is necessary for the trial court to make express findings of facts and
law that would bring the case within the exception and justify the grant of
such award. x x x.
Thus,
the matter of attorney's fees cannot be touched upon only in the dispositive
portion of the decision. The text itself
must state the reasons why attorney's fees are being awarded. x
x x [17]
In the above-quoted case, there
was a finding that defendants therein had no intention of fulfilling their
obligation in complete disregard of the plaintiff’s right, and yet, the Court
did not deem this as sufficient justification for the award of attorney's
fees. Verily, in the present case, where
it is understandable that some misunderstanding could arise as to when the
obligation was indeed due and demandable, the Court must likewise disallow the
award of attorney's fees.
We now come to a
discussion of whether interest should be imposed on petitioner's
indebtedness. In Royal Cargo Corp. v.
DFS Sports Unlimited, Inc.,[18]
the Court reiterated the settled
rule on imposition of interest, thus:
As to computation of legal interest, the seminal
ruling in Eastern Shipping Lines, Inc. v. Court of Appeals controls, to
wit:
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 an 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.
When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code),
but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment
of the court is made (at which time the quantification of damages may be deemed
to have been reasonably ascertained). The actual base for the computation of legal interest
shall, in any case, be on the amount finally adjudged.
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.
The
foregoing rule on legal interest was explained in Sunga-Chan v. Court of Appeals,[19]
in this wise:
Eastern
Shipping Lines, Inc. synthesized
the rules on the imposition of interest, if proper, and the applicable rate, as
follows: The 12% per annum rate under CB Circular No. 416 shall apply only
to loans or forbearance of money, goods, or credits, as well as to judgments
involving such loan or forbearance of money, goods, or credit, while the 6%
per annum under Art. 2209 of the Civil Code applies “when the transaction
involves the payment of indemnities in the concept of damage arising from the
breach or a delay in the performance of obligations in general,” with
the application of both rates reckoned “from the time the complaint was filed
until the [adjudged] amount is fully paid.” In either instance, the reckoning
period for the commencement of the running of the legal interest shall be
subject to the condition “that the courts are vested with discretion, depending
on the equities of each case, on the award of interest.”[20]
In accordance with the above
ruling, since the obligation in this case involves a loan and there is no
stipulation in writing as to interest due, the rate of interest shall be 12%
per annum computed from the date of extrajudicial demand.
IN
VIEW OF THE FOREGOING, the petition is AFFIRMED
with the MODIFICATION that the award for attorney's fees is DELETED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
|
MINITA V. CHICO-NAZARIO Associate Justice |
PRESBITERO J. VELASCO, JR. Associate Justice |
|
ANTONIO EDUARDO B. NACHURA Associate Justice |
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ATTESTATION
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.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Third
Division, Chairperson
Chief Justice
[1] Penned by Associate Justice Japar B. Dimaampao, with Associate Justices Josefina Guevara-Salonga and Edgardo F. Sundiam (now deceased), concurring; rollo, pp. 27-36.
[2]
[3] Rollo, pp. 136, 156.
[4] Records, p. 153.
[5] Rollo, pp. 100-107.
[6]
[7]
[8] TSN,
[9] Record, p. 109. (Emphasis supplied).
[10] 452 Phil. 82 (2003).
[11]
[12] G.R. No. 149140,
[13]
[14] See note 8.
[15]
Zacharias De los Santos v. Consuelo B. Papa, et al., G.R. No. 154427, May
8, 2009; Sebastian Siga-an v. Alicia Villanueva, G.R. No. 173227, January 20, 2009.
[16] G.R. No. 152544,
[17]
[18] G.R. No. 158621,
[19] G.R. No. 164401,
[20]