THIRD DIVISION
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RESORT HOTELS CORPORATION,
RODOLFO M. CUENCA and CUENCA INVESTMENT CORPORATION, Petitioners, - versus - DEVELOPMENT BANK OF THE Respondents. |
G.R.
No. 180439
Present:
Chairperson, VELASCO, JR., NACHURA, PERALTA, and Promulgated: December
23, 2009 |
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DECISION
NACHURA, J.:
Before us is a petition
for review on certiorari under Rule
45 of the Rules of Court, assailing the Court of Appeals (CA) Decision[1]
in CA-G.R. CV No. 81363, which reversed and set aside the Decision of the
Regional Trial Court (RTC), Branch 134, Makati City, in Civil Case Nos. 6342,
269-R, TG-799 and 9497.[2]
The long and arduous facts, as found by the CA, follow:
[Petitioner] Resort Hotel[s] Corporation (RHC for brevity), a corporation duly organized and existing in accordance with Philippine laws, was the previous owner and operator of several hotels located outside Metro Manila; namely Baguio Pines Hotel in Baguio City, Taal Vista Lodge Hotel in Tagaytay City, and Hotel Mindanao in Cagayan de Oro City. Among RHC’s stockholders were [petitioners] Cuenca Investment Corporation and Rodolfo Cuenca, who was the erstwhile President and Chairman of the Board of Directors of the said Corporation. On the other hand, [respondent] Development Bank of the Philippines (DBP), a government financial institution, was RHC’s major creditor that eventually foreclosed the disputed hotels upon the latter’s default. [Respondent] SM Investment Corporation (SMIC) was the subsequent owner of Taal Vista Lodge Hotel and Baguio Pines Hotel.
It appears that from 1969 up to
1981, RHC obtained from DBP several loans, aggregating approximately P157 million, for the purpose of
expanding hotel capacities, operations and services nationwide. To secure the payment of these loans, RHC
executed real estate mortgages in favor of DBP covering the following properties
of RHC: a) two (2) parcels of land
situated in
When the loans became due and
demandable, RHC failed to pay. Sometime
in the early ‘80S, RHC proposed to DBP that part of its obligations be
converted into equity inasmuch as it was experiencing financial
difficulties. DBP subsequently
acceded. With the approval of the Board of Directors of
RHC, which was then headed by its Chairman, Rodolfo Cuenca, DBP obtained
shareholdings, equivalent to 55% of RHC’s total stockholders’ equity, in
exchange for the reduction of RHC’s
obligation to DBP by [as] much as P47 million. As a result of the debt-to-equity
conversion, DBP acquired two (2) board seats in the eleven-member Board of
Directors of RHC.
As of January 10, 1984, RHC’s
outstanding obligation was pegged at P114,005,404.02 while its total
arrearages was P56,134,819.52 which was about 49% of its total
outstanding obligation. Consequently, DBP
applied for the extrajudicial foreclosure of the real estate and chattel
mortgages pursuant to Presidential Decree No. 385, also known as “The Law on Mandatory Foreclosure,”
mandating government financial institutions to foreclose mandatorily loans with
arrearages amounting to at least 20% of the total outstanding obligation.
Intending to block the impending foreclosure of the mortgaged personal properties, RHC filed on February 6, 1984 a Complaint x x x against DBP and the Sheriff of Rizal or Makati before Branch 148 of Regional Trial Court (RTC) of Makati, docketed therein as Civil Case No. 6342. With respect to the mortgaged real properties, RHC filed similar Complaints before Branch 7 of RTC of Baguio City x x x, Branch 18 of RTC of Tagaytay City x x x, and Branch 18 of RTC of Misamis Oriental
x x x, docketed as therein Civil Case Nos. 269-R, TG-799 and 9497, respectively. In Civil Case Nos. 6342 and 269-R, RHC specifically prayed for the issuance of restraining orders or preliminary injunctive writs to stop or enjoin the Sheriffs from conducting foreclosure proceedings.
By the Orders dated March 6, 1984 and March 21, 1984, the applications for restraining orders or preliminary injunctive writ were denied by the RTC of Makati x x x and Baguio City, respectively. Unsatisfied therewith, RHC filed separate petitions for certiorari, docketed as AC-G.R. Nos. SP-02939 and SP-03103 assailing the Orders of the lower courts with the then Intermediate Appellate Court. On both occasions, the then Intermediate Appellate Court sustained the Orders of denial of the two (2) lower court x x x.
As there were no restraining orders
or injunctive writs whatsoever issued by the lower courts, the foreclosure sale
of the mortgaged properties went through as scheduled. The auction sale of the mortgaged chattels
was conducted on
In all the foreclosure sales, DBP
emerged and was declared the highest and winning bidder. With regard to the foreclosed chattels, DBP
posted a bid price of P117,500.00 x x x.
With regard to the foreclosed real properties, DBP bought the Cagayan de
Oro properties for P7,440,565.00, the P32,158,515.00, and the P26,450,560.00. Subsequently, three (3) Certificates of Sale
were issued to evidence sale of the mortgaged real properties to DBP x x x.
Meanwhile, on P64,566,000.00
representing fire insurance proceeds was collected by DBP and applied to the obligation
of RHC x x x.
Thereafter, the one-year statutory period of redemption expired without
RHC exercising the right of redemption.
Consequently, title[s] to the foreclosed properties were consolidated in
the name of DBP.
By Resolution dated
On April 23, 1985, RHC filed the first Amended and Supplemental Complaint x x x pleading new and additional causes of action and enabling Rodolfo Cuenca to join the suit as co-plaintiff.
On May 26,1988, DBP sold
the P38,000,000.00 x x x.
On June 23, 1992, RHC and Rodolfo Cuenca filed their Second Amended and Supplemental Complaint x x x enabling Rodolfo Cuenca and CIC to prosecute the action as a derivative stockholder’s suit in behalf of RHC. On April 7, 1995, RHC, Rodolfo Cuenca and CIC x x x filed their Third Amended and Supplemental Complaint x x x impleading additional defendants; namely, SMIC in Civil Case No. 269-R, TTMC in Civil Case No. TG-799.
On February 5, 1996, [petitioners]
filed their Fourth Amended Complaint x x x asserting nine (9) causes of action
against DBP, SMIC and the Sheriffs responsible for the foreclosure proceedings,
with TTMC being dropped as defendant. In
their first cause of action, which was to declare the obligation extinguished,
they alleged, inter alia, that DBP
had no right to foreclose the mortgages since RHC’s obligation to DBP had been
extinguished by confusion or merger which occurred when shareholdings in RHC
were acquired by DBP in accordance with debt-to-equity conversion agreement. In their second cause of action, which was to
restructure the obligation, they asserted, inter
alia, that assuming RHC’s obligation to DBP had not been extinguished, RHC
was entitled to loan restructuring at the very least. In their third cause of action, which was to
ascertain and fix the amount of obligation, they insisted that DBP had no right
to foreclose the mortgages as the amount of the outstanding obligation had not
yet been liquidated or ascertained. In their
fourth cause of action, which was to annul the mortgages, the
plaintiffs-appellees claimed that DBP had no right to foreclose the mortgages
considering that DBP was in fact and in effect lending to itself to accompany
and carry into effect the Government’s purpose and policy, and that some of the
mortgages sought to be foreclosed` were not registered. In their fifth cause of action, which was to
annul the foreclosure sales, they insisted, inter
alia, that the required posting and publication of notices of extrajudicial
foreclosures had not been complied with, and there was gross inadequacy in the
purchase prices of the foreclosed properties.
In their sixth cause of action, which was to declare the Baguio Pines
Hotel effectively redeemed and the amount of refund due, they alleged that DBP
acquired Baguio Pines Hotel at the foreclosure sale for P32,158,515.00. While Baguio Pines Hotel was in the
possession of DBP, it was destroyed by fire.
However, DBP collected the insurance proceeds despite the fact that they
were more than the amount of the purchase price. In their seventh cause of action, they
alleged that in the event that judgment was not rendered declaring the Baguio
Pines Hotel redeemed, RHC’s total obligation to DBP should be declared to be fully
satisfied and DBP should be ordered to refund the difference between the
insurance proceeds and the correct outstanding obligation of RHC to DBP. In their eighth cause of action, which was to
declare Rodolfo Cuenca released or discharged from his joint and several
undertaking, they asseverated, inter alia,
that any joint and several undertaking of Rodolfo Cuenca to answer for the
obligation of RHC to DBP should be reformed on the ground of mistake, fraud,
inequitable conduct or accident since it was merely a formality to ensure the
payment of RHC’s obligations. Finally,
in their ninth cause of action, the plaintiffs-appellees alleged that they were
entitled to exemplary damages and attorney’s fees.
In its Answer thereto, DBP maintained that the [petitioners] had no cause of action considering that: a) there was no confusion or merger because the equity of the original stockholders was unimpaired, and control of the said corporation remained with the original stockholders; b) restructuring was not a matter of right for one party, but could arise only from the mutual agreement of the parties, restructuring in effect a novation of the loan contract; c) the obligations of RHC had been properly computed, and the computation already took into account the debt-to-equity conversion; d) DBP was an entity distinct and separate from RHC, and therefore, could not have possibly lent to itself; e) non-registration of mortgages did not render them invalid as between the parties; f) all requirements of the law regarding foreclosure were complied with; g) the insurance proceeds collected by DBP were credited to the account of RHC, but the said proceeds were still insufficient to discharge the obligation; h) the proceeds from the foreclosure sales did not even amount to one-half of the total obligations of RHC; i) Rodolfo Cuenca’s undertaking to be bound jointly and severally liable with RHC was not a mere formality but a contract defining his obligation in case RHC failed to pay; j) there was no legal ground to discharge Rodolfo Cuenca from his obligation; and k) DBP was not liable for any damages since it was RHC, Rodolfo Cuenca and CIC that had acted in bad faith x x x.
For its part, SMIC filed its Answer to Fourth Amended Complaint x x x averring that a) RHC, Rodolfo Cuenca and CIC had no cause of action against it; b) the RTC had no jurisdiction over the nature of the action or suit, it involving an intra-corporate; and c) it was a buyer in good faith in connection with its acquisition of Taal Vista Lodge Hotel and Baguio Pines Hotel.
On March 27, 1998, RHC, [CIC and
On March 13, 2000, [petitioners]
filed a Motion to Drop as Defendants x x x on the ground that the Sheriffs of
Rizal or
Thereafter, trial of the consolidated cases ensued.
During the hearing, [petitioners] presented as witnesses Bayani Santos, the Senior Manager of DBP, Roberto Cuenca and his father, Rodolfo Cuenca. Their testimonies were aptly summarized by the RTC, thus:
Bayani Santos, senior manager of
defendant DBP testified that he has been employed therein since
Witness Roberto Cuenca, son of Rodolfo Cuenca, the President and Chairman of plaintiff RHC, testified that he served the company as Vice President for operations and then Executive Vice President. He declared that his functions included the management of operations of the three (3) hotels of plaintiff RHC. He revealed that their business started sometime in 1960 and Cuenca Investment Corporation is a family corporation which owned shares in plaintiff RHC. He admitted that defendant DBP was their principal creditor particularly in the capital improvement of Pines Hotel, that their loans with defendant DBP were secured by real estate and chattel mortgages including the three (3) hotels and the personal properties found in the Makati Head office, that in 1984 defendant DBP foreclosed all the mortgaged properties for a claim of Php114,005,404.02 and that thereafter, assumed control of the management of the hotels. He likewise intimated that contrary to the claim of defendant DBP, plaintiff RHC’s books of account indicated merely a loan balance of Php84,000,000.00 with accounts receivables from their clients of about Php20-23 million. Hence, plaintiff RHC filed the cases before the court having jurisdiction over the mortgaged properties, fro (sic) injunction and declaratory judgment that defendant DBP was without right to foreclose the mortgages. He disclosed that despite of the applications for injunction pending before the trial courts, defendant DBP proceeded with the foreclosure of the mortgages without complying with the legal requirements of notice, posting and publication. He likewise disclosed that in October 1984, Pines Hotel was gutted by fire while in the hands of defendant DBP. Resultantly, defendant DBP collected the insurance proceeds of the hotel amount to Php50 million. When asked about the condition of the hotels, witness stated that in 1988, Pines Hotel and Vista Lodge were sold to defendant SMIC.
On cross-examination, witness Roberto Cuenca recounted that sometime in 1980 and 1982, there were conversion of the loans to equity of defendant DBP considering the default in the payment of the loan obligations.
On redirect-examination, witness
x x x x
Witness Rodolfo Cuenca’s testimonies merely corroborated the testimonies of witness Roberto Cuenca. x x x
Upon the other hand, [respondents] proffered in evidence the testimonies of Lourdes Frangue, the Administrative Officer of DBP, Dolores Santos, the Chief of the Transaction Processing and Retail Division, and Atty. Epitacio Borcelis, the corporate secretary of SMIC, which were narrated by the RTC in this wise:
Witness Lourdes Frangue, Administrative
Officer of DBP testified that she was employed by DBP on May 4, 1982 and was
assigned to the Litigation and Foreclosure Group in 1984. She recounted that her duties include
attending to foreclosure records and documents and that she encountered the
records of RHC when she undertook the foreclosure proceedings in 1984. She presented the certificates of sales of
the foreclosed properties particularly the Cagayan de Oro properties dated
On cross-examination, Witness Frangue denied any personal knowledge about the loan obligations of RHC stating that a different department handled the document of the subject loans.
Witness Dolores Santos, Chief of the Transaction Processing and Retail Division of DBP testified that she was with the bank since 1982 as a Senior Clerk of the Security and Transport Department. She revealed that she was promoted as a supervisor, she recounted that she handled the past due accounts and acquired assets of the bank and its records, as a custodian. She declared that she only knew about the accounts of RHC on August 8, 1992 on the Statement of Accounts.
On cross-examination, witness
x x x x
Atty. Epitacio Borcelis, corporate secretary of SMIC and lawyer-in-charge of the acquisition of real estate properties of SMIC testified that his duties include the keeping of all the corporate records, representing the company in the acquisition of properties like the Pines Hotel and the Taal Vista Lodge. When asked about notice of lis pendens, witness admitted having knowledge of the annotation in the title of Baguio Pines Hotel but denied as to the Taal Vista Property. Likewise, witness denied that SMIC bought RHC’s properties from DBP alleging that it bought the properties from Tagaytay Taal Management Corporation (TTMC for short). Witness brought up the court case between Robinsons and DBP. However, when the witness was confronted about the deeds of sale between DBP and TTMC and TTMC and SMIC, with the material dates stated therein where the supposed first sale that took place between DBP and TTMC was dated June 11, 1988, witness Borcelis explained that it was because there was [an] agreement between SMIC and TTMC that the full payment by TTMC of the purchase price of the properties will be taken from SMIC. When asked about the stated agreement, witness presented no document pertaining to it. x x x
In the Decision dated February 13, 2004, the RTC nullified the foreclosure sale of the disputed real and personal properties, and at the same time, discharged Rodolfo Cuenca from personal liability for lack of evidence. The RTC also found that SMIC acted in bad faith when it purchased the Taal Vista Lodge Hotel from TTMC, and Baguio Pines Hotel from DBP.[3]
The
RTC disposed of the case, to wit:
WHEREFORE, premises considered,
judgment is hereby rendered in favor of [petitioners] and against [respondents]
DBP and SMIC as follows[:]
(1) The
loan obligations of [petitioner] RHC to [respondent] DBP is hereby fixed at Php
114,005,404.02 from the date of this judgment with 12% interest per annum until
fully paid;
(2) The foreclosure of the real estate and
chattel mortgages executed by [petitioner] RHC in favor of [respondent] DBP are
declared void and without effect;
(3) The auction sales of the
subject mortgaged properties of [petitioner] RHC are likewise declared void;
(4) The fire insurance proceeds of the Pines
Hotel which was collected by [respondent] DBP shall be deducted from the total
loan obligations of [petitioner] RHC with the corresponding 12% interest per
annum from the time it was received until this judgment;
(5) Respondent] SMIC is
declared buyer in bad faith and bound by this judgment; and
(6) [Petitioner]
The
counterclaims of [respondents] DBP and SMIC are denied for lack of merit.[4]
Aggrieved, respondents questioned the
RTC decision before the CA. As previously adverted to, the CA reversed and set
aside the RTC decision, thus:
WHEREFORE,
the Decision dated February 13, 2004 of Branch 134 of the Regional Trial Court
of Makati City is hereby REVERSED and
SET ASIDE. A new one is hereby
entered DISMISSING Civil Case Nos.
6342, 269-R, TG-799 and 9497 and ORDERING
RHC and Rodolfo Cuenca to pay, jointly and severally, DBP the amount of P612,476,182.08,
inclusive of interest, representing deficiency balance as of
Hence,
the instant appeal taking exception to the appellate court’s disposition and
positing the following issues:
1. [WHETHER]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE TESTIMONIES
OF RODOLFO
2. [WHETHER]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE FORECLOSURE
PROCEEDINGS ARE VALID BASED ON THE CERTIFICATE OF
3. [WHETHER]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONERS
COULD NOT USE THE FIRE INSURANCE PROCEEDS TO REDEEM THE
4. [WHETHER]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN FIXING PETITIONERS’
OBLIGATION TO RESPONDENT DBP AT P612,476,182.08 INSTEAD OF P114,005,404.02.
5. [WHETHER]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING PETITIONER RODOLFO
In
all, petitioners persist in the correctness of the RTC’s disposition that: (1)
the extrajudicial foreclosure and the subsequent sale of the mortgaged
properties are null and void for non-compliance with the notice, posting and
publication requirements provided in Act No. 3135;[7]
(2) the loan obligation of petitioners to DBP is fixed at P114,005,404.02;
and (3) petitioner Cuenca is discharged from the obligations of petitioner RHC
to respondent DBP for lack of evidence pointing to his personal liability
therefor.
The
petition is partly meritorious.
We
are in complete accord with the appellate court’s ruling that the dearth of evidence
presented by petitioners inevitably failed to establish their claim that DBP
did not comply with the statutory requirements on the extrajudicial foreclosure
of mortgages. As plaintiffs before the trial court, petitioners rested the
burden to prove by a preponderance of evidence the numerous causes of action
they brought against herein respondents.
Section
1 of Rule 131 of the Rules of Court, in relation to Section 1 of Rule 133, unequivocally
provides:
SECTION 1. Burden of proof. – Burden of proof is the duty of a party to
present evidence on the facts in issue necessary to establish his claim or
defense by the amount of evidence required by law.
SECTION 1. Preponderance of evidence, how determined. – In civil cases, the
party having the burden of proof must establish his case by a preponderance of
evidence. In determining where the preponderance or superior weight of evidence
on the issues involved lies, the court may consider all the facts and
circumstances of the case, the witnesses’ manner of testifying, their
intelligence, their means and opportunity of knowing the facts to which they
are testifying, the nature of the facts to which they testify, the probability
or improbability of their testimony, their interest or want of interest, and
also their personal credibility so far as the same may legitimately appear upon
the trial. The court may also consider the number of witnesses, though the
preponderance is not necessarily with the greater number.
Petitioners
are adamant, however, that it was incumbent upon respondents to prove their
denial of petitioners’ claims; i.e.,
foreclosure proceedings were validly conducted consistent with Act No. 3135.
We
disagree. Ei incumbit probatio qui dicit,
non qui negat (he who asserts, not he who denies, must prove).[8]
The burden of proof that foreclosure proceedings on the subject properties were
not validly conducted lies with mortgagor-party litigant claiming such. We have
consistently applied the ancient rule that if a plaintiff, upon whom rests the
burden of proving his cause of action, fails to show in a satisfactory manner
facts on which he bases his claim, the defendant is under no obligation to
prove his exception or defense.[9]
On this score, we find no error in
the disquisition of the CA, to wit:
We
rule that the testimonies of Rodolfo and Roberto Cuenca were not sufficient to
successfully challenge the validity of the foreclosure proceedings. We agree
with the [respondents] that the testimonies of Rodolfo and Roberto Cuenca with
respect to the absence of posting and publication of notices of foreclosure
sale, consisting in the words “I don’t believe,” “I don’t remember,” “I don’t
think” and “if I recall,” without being supported by any convincing and
substantial evidence, were not sufficient to prove lack of compliance on the
part of DBP with the requirements of notice, posting and publication prescribed
in Act No. 3135. It must be emphasized that the allegation of Rodolfo and
Roberto Cuenca that they, as officers of RHC, failed to receive notices of the
foreclosure sale could not successfully defeat the validity of the foreclosure
proceedings. As held by the Supreme Court in Philippine National Bank v. Nepomuceno Productions, Inc., x x x personal
notice to the mortgagor is not necessary for the validity of the foreclosure
proceedings, thus:
“The
principal object of a notice of sale in a foreclosure of mortgage is not so
much to notify the mortgagor as to inform the public generally of the nature
and condition of the property to be sold, and of the time, place, and terms of
the sale. Notices are given to secure bidders and prevent a sacrifice of the
property. Clearly, the statutory requirements of posting and publication are
mandated, not for the mortgagor’s benefit, but for the public or third persons.
In fact, personal notice to the mortgagor in extrajudicial foreclosure proceedings
is not even necessary, unless stipulated.”
Likewise,
the [petitioners] could not impugn the validity of the foreclosure proceedings
by the mere fact that both Rodolfo and Roberto Cuenca could not recall whether
DBP applied for writs of possession and posted bond thereto during the
redemption period as mandated by Section 7 of Act No. 3135. In a civil case,
the burden of proof is on the plaintiff to establish his case through a
preponderance of evidence. If he claims a right granted or created by law, he
must prove his claim by competent evidence. He must rely on the strength of his
own evidence and not on the weakness of that of his opponent x x x. In the
instant case, We find that the testimonies of Rodolfo and Roberto Cuenca on the
matter could not be considered as competent evidence to prove that DBP took
possession of the disputed properties in blatant violation of Section 7 of Act
No. 3135. Their testimonies were at best self-serving and devoid of
corroboration as they did not bother to support the same with any documentary
evidence.
We
hasten to add that DBP did not merely rely on the weakness of the evidence of
[petitioners] in resisting the latter’s claim. DBP presented in court three (3)
Certificates covering the sale of the disputed properties to bolster its
assertion that it complied with the statutory requirements under Section 3 of
Act 3135. These Certificates of Sale, prepared by Sheriffs that conducted the
foreclosure proceedings, clearly reveal that DBP followed the mandate of Section
3 of Act 3135 when it foreclosed the disputed properties x x x.[10]
We
likewise agree with the CA’s holding that RHC cannot use the fire insurance
proceeds of the Baguio Pines Hotel to redeem the said property. The appellate
court, citing Development Bank of the
Philippines v. West Negros College, Inc.,[11]
correctly ruled that petitioners must pay respondent DBP the entire obligation
of RHC, and not merely the purchase price of the said hotel.
Nonetheless,
on the actual amount of RHC’s obligation to DBP, we find it proper to reinstate
the RTC’s holding thereon, i.e., the
loan obligation is fixed at P114,005,404.02 from the date of the RTC
judgment with 12% interest per annum until fully paid.
We
cannot subscribe to the CA’s computation of RHC’s indebtedness to DBP which was
pegged at P612,476,182.08, inclusive of interest. The CA set aside the
RTC’s holding thereon and based its finding on the Statement of Total Claim
prepared by DBP. These documents show that RHC’s deficiency balance as of August
31, 2002, after deducting the total purchase price of the subject properties
and the insurance proceeds plus the corresponding interest computed at 21% per
annum from 1984 to August 21, 2002, is P612,476,182.08. However, as
correctly pointed out by petitioners, these
documents are inadmissible and constitute hearsay evidence because the persons
who prepared the documents were not presented in court and subjected to
cross-examination.[12]
At
this point, we cite with favor the RTC’s holding:
After
a careful scrutiny of the records of the case, the court finds that the balance
loan obligation of [petitioner] RHC with [respondent] DBP was PHP114,005,404.02
as of January 11, 1984 as stated in the application for foreclosure submitted
by the parties to the court. Said amount was the basis of the protest of
[petitioner] RHC in filing its complaints for injunction and declaratory relief
principally relying on the principle of merger of rights or ownership of [respondent]
DBP of shareholdings of [petitioner] RHC.
With
the admission of witness Roberto Cuenca himself that the conversion of the loan
obligations to equity took place sometime in 1980 and 1982, the filing of the
complaints by [petitioner] RHC starting on February 6, 1984 protesting the
claims of the [respondent] DBP in its application for foreclosure of the
mortgages dated January 11, 1984 and relying on the aforesaid conversion of the
loans, the instances of burning of the Pines Hotel sometime in October 1984
under the administration of [respondent] DBP which was duly noted by the
Supreme Court in G.R. No. 68788, the foreclosure of all mortgaged real estate
and chattel properties of [petitioner] RHC that started on February 27, 1984 or
nearly one (1) month from the application of the foreclosures of [respondent]
DBP, the subsequent take over by [respondent] DBP of the management of the
assets of [petitioner] RHC and the sales therefrom while the cases of the
protest of [petitioner] RHC were pending, in the absence of any other competent
proof of proper accounting involving the loans of [petitioner] RHC, the court
deems it proper and just to fix the loan obligations of [petitioner] RHC at
Php114,005,404.02.[13]
Lastly,
on the issue of petitioner Cuenca’s joint and solidary liability for RHC’s loan
obligation to DBP, we sustain the RTC’s succinct holding discharging Cuenca
therefrom without evidence showing his undertaking to be personally and
solidarily liable for the loan obligations of RHC to DBP.
WHEREFORE, premises considered, the
petition is GRANTED IN PART. The Court of Appeals decision
in CA-G.R. CV No. 81363 is AFFIRMED with
the MODIFICATION that the following disposition
of the Regional Trial Court in Civil Case Nos. 6342,
269-R, TG-799 and 9497 is REINSTATED,
to wit:
1. The loan obligations of petitioner Resort
Hotels Corporation to respondent Development Bank of the Philippines is fixed
at P114,005,404.02 from the date of the RTC judgment with 12% interest
per annum until fully paid;
2. The fire insurance proceeds for the
Baguio Pines Hotel which was collected by respondent Development Bank of the
Philippines shall be deducted from the total loan obligations of petitioner
Resort Hotels Corporation with the corresponding 12% interest per annum from
the time it was received until this judgment;
3. Petitioner Rodolfo
No
pronouncement as to costs.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
RENATO C. CORONA
Associate
Justice
Chairperson
|
PRESBITERO J. VELASCO, JR. Associate
Justice |
DIOSDADO M. PERALTA Associate
Justice |
MARIANO C.
Associate
Justice
A T T E S T A T I O N
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.
RENATO
C. CORONA
Associate
Justice
Chairperson,
Third Division
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
* Additional member per Special Order No. 805 dated December 4, 2009.
[1] Penned by Associate Justice Jose C. Reyes, Jr., with Associate Justices Jose L. Sabio, Jr. and Arturo G. Tayag, concurring; rollo, pp. 8-48.
[2] Penned by Pairing Judge Rebecca R. Mariano; rollo, pp. 694-703.
[3] Rollo, pp. 10-23.
[4]
[5]
[6]
[7] Entitled “Act to Regulate the
[8] Homeowners Savings and Loan Bank v. Dailo, G.R. No. 153802,
[9] Castilex Industrial Corporation v. Vasquez, Jr., 378 Phil. 1009 (1999).
[10] Rollo, pp. 32-34.
[11] G.R. No. 152359, October 28, 2002, 391 SCRA 330 (2002).
[12] See RULES OF COURT, Rule 130, Sec. 36.
[13] Rollo, pp. 700-701.